Supply chain news
May 30, 2023 Outokumpu seeks to strengthen the supply chain of sustainable nickel, acquires a share in FPX Nickel
Dec 16, 2022 Raw material supplier requirements published
Nov 1, 2022 Outokumpu visited suppliers in Colombia
July 20, 2022 Outokumpu's Supplier Code of Conduct published
May 24, 2022 Outokumpu's Human Rights Policy published
May 4, 2022 Assessment on the allegations toward our supplier in Guatemala has been completed – purchasing remains suspended
March 6, 2022 Outokumpu acts firmly on allegations in Guatemala, placing new orders from Guatemala stopped
Feb 25, 2022 Outokumpu's human rights impacts published
Jan 31, 2022 Site visit to Onca Puma site in Brazil conducted
Oct 29, 2021 Outokumpu launches sustainable sourcing initiative in raw material procurement
Oct 29, 2021 Supplier requirements amendment has been published
Aug 27, 2021 Updated Modern Slavery Statement has been published
June 4, 2021 Outokumpu's supplier requirements have been updated
May 10, 2021 Outokumpu’s Code of Conduct revised – All personnel to be trained
Mar 25, 2021 Outokumpu to develop its supplier monitoring and transparency in sourcing
Mar 12, 2021 Supplier Assessment Questionnaire published
Feb 23, 2021 Outokumpu's response to Finnwatch report
Feb 23, 2021 Press release: Outokumpu expects its suppliers to act responsibly
Global operations, local suppliers
Our procurement activities are divided into general procurement and procurement of raw materials. Raw materials are all ingredients that are in the steel we produce. General procurement purchases everything that is needed for our production activities and everything else we do at Outokumpu.
In 2022, we had
- Over 6,000 suppliers globally, local suppliers account for about 45% of purchases
- Raw material suppliers in 49 countries and General Procurement suppliers in 48 countries
- 61 raw material suppliers operating in countries with an assessed increased risk, covering 13% of the total spend on raw materials.
- Only a few of general procurement suppliers operating in countries with increased risk with negligible combined spend.
Outokumpu supplier countries, including raw material, service and other material suppliers in 2022
Requirements on our suppliers
As our customers require a lot from us as a supplier, we place the most stringent requirements on ourselves, and require the same from our suppliers.
Outokumpu's supply chain activities are guided by our Supplier Code of Conduct, Supplier Requirements and our Corporate Responsibility Policy. We are committed to the Modern Slavery Act and take into account the OECD Due Diligence Guidance for Responsible Supply Chain. We have started to implement the UN Guiding Principles on Business and Human Rights into our operations and supply chain.
All Outokumpu suppliers will have to commit and comply with following requirements:
- Supplier Code of Conduct: All suppliers and subcontractors are expected to comply with our Supplier Code of Conduct or similar standards. Outokumpu's Supplier Code of Conduct covers the following topics: Safe and healthy workplace, Sustainable future, Human rights and dignity, and Good corporate citizenship.
- Raw Material Supplier Requirements and General Procurement Supplier Requirements: Suppliers need to act according to the applicable laws and regulations. Outokumpu Supplier Requirements sets forth the minimum criteria regarding Sustainability and Ethical Standards, Safety, Environmental Considerations, Quality Management, Supply and Production Control, Product Liability, Financial Statement, Intellectual Property Rights, Confidentiality and Security, Audits, and Business Contacts.
- Quality management system: Suppliers need to maintain a quality management system.
- Supply and production control: Suppliers need to clearly define, document and share their processes including material traceability.
- Outokumpu’s general terms and conditions
Additional requirements for suppliers of conflict minerals
All supplies of conflict minerals shall meet the requirements of the OECD Due Diligence Guidance, the Regulation (EU) 2017/821 of the European Parliament and the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act. Suppliers of conflict minerals shall confirm to Outokumpu via the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI) the supply chain regarding mineral country of origin and that only approved smelters and refiners being utilized.
Supply chain due diligence
Outokumpu applies a risk-based approach in supplier management. A supplier shall be qualified before they can be approved and added to the Outokumpu supplier portfolio. In the qualification process, the potential risks and/or opportunities are identified and evaluated. This ensures that the suppliers comply with the Outokumpu Supplier Requirements and can provide conforming raw materials, products, or services on a consistent basis.
Outokumpu monitors its suppliers through self-assessments, screenings and audits. Most of suppliers are also going through a monthly compliance screening for sanctions. Raw material procurement uses EcoVadis for self-assessments, which focus on environment, labor & human rights, ethics, and sustainable procurement. In the supplier performance assessment questionnaire used by general procurement, suppliers are assessed using the following criteria: technology, quality, supply, cost, safety, environment, and financial risk. As a result of the self-assessments, improvement opportunities and requirements can be identified and agreed with the suppliers.
In raw material procurement, the countries in which our suppliers operate are mapped against country-based risk indices, against the countries listed in the Dodd Frank Act Section 1502, conflict-affected and high-risk areas (CAHRAs) as published by the European Union, as well as TDi Sustainability’s Alert Index for Responsible Sourcing (AIRS).
In addition to EcoVadis and the country-risk, raw material suppliers are assessed also based on e.g. available certifications, spend, previous audit results, and overall performance scorecard results. Based on these indicators, raw material suppliers are selected for on-site reviews. Those reviews vary from site visit, to audit to human rights impact assessment depending on the perceived risk. The below diagram describes the process in more detail. If you would like to know more about the conducted on-site reviews, please go to Site visits page.
Supply chain grievances
SpeakUp channel is an externally operated channel for Outokumpu employees and external stakeholders to report misconduct in our suppliers’ operations (as well as in Outokumpu’s own operations). This can be done confidentially and anonymously, if allowed by the local laws and regulations.
Sustainability contacts
Sustainable sourcing at Outokumpu: sustainable.sourcing@outokumpu.com
Juha Erkkilä
VP – Sustainability, Excellence and Reliability
Pia Lindqvist
Interim Head of Supplier Sustainability