An attractive range based on solid knowledge and an efficient purchasing process in combination with long-term relationships with the right supplier base. Purchasing operations are key to being able to offer quality assured and sustainable products with good sales margins.
Long experience and efficient processes
Group purchasing is pursued within the division and category organizations by knowledgeable category managers and strategic purchasers with long experience. Together with efficient processes, sound knowledge about ranges, certifications and suppliers is crucial in being able to best match purchasing requirements. Purchasing work is a team process with short decision paths which means spotting changes in sales patterns can be picked up at an early stage and purchasing then modified accordingly. A system for monthly results analysis at product level was introduced in late 2018, which means the role of individual products in the big picture can be evaluated. The aim of the purchasing organization is to obtain the right products at the right price while at the same time gaining reliable suppliers that enable high stock availability combined with a good rate of stock turnover. The purchasing picture differs between the two group divisions. Within Workwear and Personal Protection, own brands comprise around half the range and production is primarily outsourced to Asia, which increases the importance of requirements specification and monitoring of suppliers. Within Tools and Supplies, there is a higher proportion of external brands, a broader supplier base and production is done to a greater extent in Europe, compared to Workwear and Personal Protection. During the course of the year, Swedol revised its purchasing policy with the aim of creating groupwide parameters for both divisions.
Right supplier base
The right supplier base is a must for successful purchasing and range work. When working to develop the group supplier base, product quality, reliable deliveries, sales margin and sustainability are prime criteria. The balance in the supplier base in terms of number of suppliers and their share of the total purchase volume for instance, is important in combating risks in the goods flow and ensuring the group’s negotiation strength. Quality, responsibility and profitability go hand in hand in long-term and close cooperation between Swedol and prioritized suppliers.
Responsibility in the supplier chain
Swedol’s responsibilities extend further than its one enterprise. Clear demands are therefore specified to suppliers that manufacture products the group sells to take their corporate social and environment responsibilities with
the utmost gravity. This is a particularly prioritized area as Swedol imports products from countries where there are risks that such requirements are not met. The group is a member of the amfori Business Social Compliance Initiative (amfori BSCI), a global business initiative that works to ensure responsible supplier chains. Within the parameters of amfori BSCI, a common code of conduct and a common system for monitoring the supplier chain and its continued development are employed. The code of conduct specifies requirements on compliance with internationally acknowledged conventions on human rights and decent working conditions and contains principles on good business ethics and reduced environment impact.
Before any agreement is signed for new supplier cooperation, Swedol performs an assessment of the supplier’s ability to make reliable deliveries of quality and value for money products and its ability to live up to the requirements set out in the code of conduct. Within our Workwear and Personal Protection Division, suppliers of own label products are required to sign the amfori BSCI code of conduct. Suppliers of external brands can be approved if they can present their own code of conduct with a corresponding content. The Tools and Supplies Division will apply the Swedol code of conduct to suppliers that all suppliers are required to sign up to, until further notice. In cases where the group enters into contracts with agents, these are required to further communicate and monitor corresponding requirements.
The goal is for all group suppliers to be compliant with amfori BCSI or a corresponding third party audit. In 2018, all new suppliers of own label products have signed the amfori BCSI code of conduct and Swedol is in the process of getting all existing suppliers to sign up to this.
Monitoring and cooperation
Supplier visits provide a good insight into a supplier’s business and are an important part of ongoing development work. Swedol aims to visit all significant suppliers at least once every three years. If deviations from the Swedol requirements are discovered during a supplier visit, in the first instance, a joint plan of action is to be established and then with the aid of support and training, compliance with the code of conduct can then be assured. In the event of gross or repeated deviations from the code of conduct, cooperation can, however, be terminated.
Ethical behavior and good business practice are key to Swedol’s development and profitability. Swedol will not accept any form of corruption and adheres to the Swedish Anti-Corruption Institute code on gifts, rewards and other benefits in the enterprise sector. To minimize the risk of irregular conduct arising, all purchasing and supplier contacts are to adhere to the group purchasing procedures. Via close cooperation, Swedol takes a proactive approach to minimize risks of agents and business partners contributing to corruption or acting in ways other than in line with the code of conduct.