Encouraging continuous improvement is an important basic principle in supplier follow-up. Orkla’s responsible purchasing principles require at-risk suppliers to be monitored through requirements, dialogue, inspections and, if necessary, orders to make improvements.
For example, Orkla companies may demand access to the premises of manufacturers who supply goods to them, in order to carry out inspections. Such inspections may be made by the companies’ own employees or by external auditors. An improvement plan must be drawn up in connection with inspections and must include a schedule for the implementation of improvement measures.
The Orkla companies have many suppliers, and monitoring compliance with Orkla’s Supplier Code of Conduct is therefore a time-consuming task. Moreover, due to the Group’s diversified structure, the companies use suppliers in very different sectors and countries, necessitating different follow-up and improvement measures.
Orkla’s suppliers are of three main types: contract manufacturers, direct suppliers of raw materials and inputs, and complex supply chains in which social challenges may lie with suppliers several links further up the supply chain.
Contract manufacturers and direct suppliers can be followed up directly. Orkla companies have less influence in the case of product categories with more complex supply chains, and follow-up can often be difficult. Cocoa is an example of this type of product category, which requires special follow-up measures. This is the reason for Orkla’s initiative focused on cocoa production in the Republic of Côte d’Ivoire.