The first step in the assessment is identifying suppliers who need to be evaluated. We use the following criteria to select our suppliers for evaluation:
purchase value
high business impact
high risk likelihood
Our suppliers are screened for the above criteria and classified accordingly using a matrix.
A simple 2x2 matrix is used to categorise the suppliers. Each quadrant in the matrix specifies the set of actions that need to be undertaken. The subsequent course of action is determined depending on which quadrant the supplier occupies in the matrix.
1. Purchase value
The minimum purchase value is approx 35,000 Euros, which means that we only evaluate suppliers from whom we purchase goods worth more than 35,000 Euros.
2. Business impact is regarded as high if
the supplier is a single-source supplier of materials, machinery or services that impact the quality of the finished product
it requires more than one year to replace an existing supplier
the supplier provides products or services worth more than 1.3 million Euros/year.
3. Risk likelihood is considered high if
the production takes place in countries where enforcement of national regulations on environmental or human rights issues is considered weak.
