Procurement is organized globally at Evonik and comprises direct procurement (raw materials, logistics, and packaging) and indirect procurement (general and technical goods and services). Both are subdivided into strategic and operational procurement activities. Global procurement is managed from Germany, with the support of regional units in Asia and North and South America.
PROCUREMENT MANAGEMENT at Evonik
Validation and evaluation of suppliers
We expect our suppliers to share our principles and act correctly in all respects, which means accepting responsibility towards their employees, business partners, society, and the environment. Validation is the first step in every new supply relationship. For this purpose, we use a validation process based on the values defined in our code of conduct for suppliers. Alongside quality, environmental protection, safety, health, and energy management, the assessment of potential risk factors includes corruption prevention, cybersecurity, labor and social standards (the right to freedom of association and collective bargaining), human rights (compulsory, forced, or child labor), conflict minerals, and responsibility within the supply chain. All details are entered online and evaluated using a validation matrix. The initial validation is a country-based process and does not include a separate review of the location of operations. The values and expectations set out in our code of conduct for suppliers are communicated to all suppliers in our general terms and conditions of purchase. In 2022, we evaluated 1,804 new suppliers. That was over 93.2 percent of new suppliers.
Successfully completed TfS assessments can also be used as evidence of validation. Overall, suppliers are evaluated using a method that identifies and quantifies risk factors as a basis for risk mitigation. This safeguards the supply of raw materials and technical goods to Evonik and enables us to gain access to new procurement markets and suppliers. In the reporting period, TfS assessments were performed on 118 new suppliers of raw materials, technical goods, and services.
We apply the same care to the evaluation of existing relationships with suppliers. In addition to the annual evaluation of all significant supplier relationships, a more detailed review of strategic suppliers is undertaken. On the basis of the findings, measures are initiated as required. To minimize the risk to Evonik, as part of our management of contractors, we obtained and evaluated evidence and self-assessments on compliance with the relevant German legislation.