At Philips, we are committed to leading the change towards a more sustainable supply chain by going even further than auditing compliance. To this end, we have developed a new approach – Supplier Sustainability Performance (‘Beyond auditing’) – that focuses on, among other things:
- taking a systematic approach to improving the sustainability of our supply chain
- driving continuous improvement and measuring impact through a structural, phased approach
- promoting collaboration, with increased transparency, clear commitments and effective metrics to gauge suppliers’ success in meeting agreed targets.
In this way, the focus is on ensuring structural, proactive improvement rather than simply reacting to issues that arise, underscoring Philips’ desire to invest in relationships with suppliers who provide a safe working environment, treat workers with respect, and work in an environmentally sound way.
If we notice a delay in the implementation of an improvement plan, we apply a stratified approach for consequence management. In exceptional cases where a supplier is unwilling to commit to eliminate a zero tolerance or to structurally improve as agreed, we end the business relationship.
To prevent audit fatigue and limit the burden of additional audit preparations and follow-up at a single supplier site, Philips aims to share its developed SSP approach with industry peers. By providing access to a dedicated platform, for example, RBA members can first assess the SSP results and agreed improvement plan before initiating an audit. This eliminates the need for multiple audits and enables a stronger focus on structural improvements and their follow-up due to higher levels of supplier commitment.
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