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Responsible sourcing

As a global company with manufacturing and sales operations across the world, we are reliant on many of our suppliers to ensure timely delivery to our customers. Our suppliers are the “extended operation” from our very own production facilities and infrastructure, and we therefore, expect the same high level of commitment from our suppliers; above all, in the area of code of conduct and environmental commitment.

To effectuate the communication of our requirement and expectation upon our suppliers, we issued the SKF Code of Conduct for Suppliers and sub-contractors, where a clear reference to this code is made in the SKF General Conditions of Purchase. 

From words to actions

Every year we source direct and indirect material – equivalent to over SEK 40 billion every year. 

About five percent of SKF ‘s spend comes from raw materials, the rest comes from components or traded products with many intermediaries. About 1,200 suppliers account for around 80% of our spend and the Group’s overall approach is to attract and develop suppliers reflecting our global manufacturing footprint.

SKF’s responsible sourcing programme exists to make sure suppliers work according to SKF’s social, environmental and ethical standards. This helps to develop well-managed local suppliers and reduce the total cost of operations over time.

Our strategy for responsible sourcing can be summarized in two main approaches:

  1. Redefined risk based management – we focus on evaluating risks from supplier self-evaluations, screening during quality audit and other site visits, we also make over 100 in depth site audits every year.
  2. Supplier development - Responsible sourcing is part of supplier development and this is where the real improvements are made. Finding deviations at suppliers is not the end-goal of responsible sourcing but solely a means to drive improvements. When assessing which suppliers to develop, we look at a wide range of aspects of supplier performance concerning quality, cost, delivery, innovation and management, including environment and human rights management
For detailed data on risks and non-conformances, please see our latest Annual Report on page 141.

A Responsible Sourcing Committee was established in 2009 to define strategy and determine appropriate actions when critical deviations are identified at suppliers. A responsible sourcing system was also introduced in 2009 and further developed in 2010, to enhance the process of enforcing the Code of Conduct.

With more than 10,000 suppliers located across the world, we regard responsible sourcing as a journey than a destination. Only by working step by step, continuously improving our existing processes, we can make steady progress in sharing with our suppliers our commitment to a sustainable and responsible business growth and development. 

The SKF Code of Conduct for Suppliers and Sub-contractors is the foundation of SKF's responsible sourcing programme. Read more about this on SKF Supplier Portal.

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