Checking compliance with our requirements
We review sustainable compliance with the obligations and principles of the Code of Conduct using the following methods:
Risk-based approach
Incident-related inspection
Supplier quality audits
Risk-based strategy
Our risk-based strategy is used to identify risks related to sustainability in our supply chain. This framework allows us to focus our resources and measures to reduce risk in those areas where we see the greatest need.
All suppliers identified in this context will be treated individually in a clarification process, in order to determine further courses of action. Possible courses of action are the initiation of a development plan, sustainability audits or even a phasing out of suppliers.
Internal risk-based strategy
The internal strategy systematically identifies those suppliers with potential risks that are dealt with in the context of our supplier qualification process and our regular supplier quality audit. Suppliers whose results are below a defined limit will automatically be placed on a list of suppliers with potentially increased risk. The list will be handed over to the relevant purchasing units of the United Grinding Group, so that they can take further steps in the clarification process.
External risk-based strategy
External sources are also used to identify risks, such as databases from non-governmental organizations, media reports or information that we receive through contact networks. Notifications of potential violations of our corporate values go through a clarification process, which decides on further courses of action, such as a case-based inspection. For a complete risk assessment of our purchasing portfolio, a risk comparison framework was developed based on external data. This consists of a country and material group risk allocation.
Country risk allocation
An overview of sustainability-related risks has defined different sustainability-related risk indicators for each country. Examples of these indicators are water availability, corruption potential and respect for human rights.
Material group risk allocation
In order to identify the risks associated with the production of different material groups, each material group is allocated to the risks related to sustainability. Risks may be, for example, environmental protection and occupational health and safety.
Incident-related inspection
In the event of non-compliance with the requirements for suppliers, incident-related inspections are carried out to minimize risks in the supply chain.
Process
An incident-related inspection is an on-site inspection that is specifically related to the investigation of specific breaches of our corporate values .
During this inspection, an expert mandated for the relevant topics will review the situation at the supplier's site and will find the relevant actions leading to the sustainable implementation of the requirement in conjunction with the supplier. These measures shall be immediately initiated for implementation and shall be checked after a reasonable period of time for the correction to be determined by the mandated experts.
The mandated expert of the topics is a member of staff that has received training internally on these topics, or an expert from an external, certified company that works on behalf of Blohm Jung GmbH.
Focus
Incident-related inspections are carried out by suppliers when there is a strong suspicion of a serious breach of the supplier's requirements (e.g. media reports, information from recognized reliable sources).
Measures
If the mandated expert finds that the conditions on site are irreparable, the proposed measures have failed to be implemented, or there is no willingness to improve conditions, this mandated expert will issue a recommendation to block the supplier. As a last resort, we will then terminate the purchase contracts.
Supplier quality audits
Sustainability requirements are also part of the regular supplier quality audits.
Process
The regular supplier quality audit examines compliance with the requirements of the Code of Conduct with integrated sustainability issues.
Focus
The relevant sustainability issues will be queried in all quality audits, the country's risk rating is equally valid.
Measures
The increase in the agreed corrective actions will continue to strengthen our commitment to audits with our supplier.
The agreed corrective actions do not primarily reflect deviations from the requirements of the Code of Conduct, but rather they primarily relate to structural improvements in sustainability management, such as missing or incomplete policies, guidelines, information and training or organizational regulations.