Kuehne + Nagel requires our suppliers to adhere to compliance obligations, relevant regulations, rules, work instructions and safety measures at all times. Therefore, to safeguard our customers’ trust, we ensure to work only with authorised and reliable business partners which comply with global, regional and local legal regulations.
Kuehne + Nagel manages its suppliers through the so-called Supplier Management Tool (SMT). The SMT is a web-based application of suppliers across Kuehne + Nagel's business units covering operational, legal and compliance criteria. The SMT helps us to identify the most suitable suppliers and business partners on the basis of individual customer requirements and their unique supply chains.
The tool allows all business units to evaluate and qualify their supplier base in order to ensure both compliance and service quality. Reducing the quantity and increasing the quality of Kuehne + Nagel’s supplier data results in increased operational efficiency, reduced costs and minimised risk. At the end of 2018, Kuehne + Nagel could identify as much as 50,000 business related suppliers globally; and a few more are to be accounted once the full implementation is concluded.
As of December 2018, a total of 40 percent of the suppliers were approved in SMT; the remaining ones are either in verification status or were rejected due to lack of evidences when responding the SMT questionnaires, or they did not renew key documents relevant in the evaluation process.
Sustainable Supply Chain
Kuehne + Nagel’s supply chain capabilities enable customers to improve and evolve their own supply chains by leveraging our expertise and network. This supports our customers to manage their risks and improve their global sourcing and manufacturing, while designing and executing supply chain optimisation techniques that have a direct impact on product availability, cost, capital and compliance.
KEY BENEFITS OF KUEHNE + NAGEL'S SUPPLY CHAIN CAPABILITIES
Kuehne + Nagel standards, other than mentioned in Supplier Code of Conduct, are not shared with the Supplier in any SMT questionnaire but e.g. in Terms & Conditions which are attached to transport orders. Kuehne + Nagel standards are agreed in SLAs or contracts between supplier and Kuehne + Nagel, not for all suppliers but only a minority compared to the total number of suppliers we work with.
Supplier Code of Conduct
A significant number of Kuehne + Nagel’s business transactions and activities are performed by business partners; including suppliers or subcontractors that work with us or on our behalf. To protect Kuehne + Nagel from harm caused by such third parties, we expect our business partners and subcontractors to operate within the limits of our Ethics and Compliance Standards. As a minimum they are required to sign the Kuehne + Nagel Supplier Code of Conduct. The Supplier Code of Conduct touches topics such as child labour, forced labour, compensation and working hours, freedom of association and collective bargaining and diversity.
To emphasise our expectations with our business partners, we introduced a policy called “Doing business with integrity – jointly against corruption” which is communicated and shared with all our subcontracted partners.
The total number of business partners evaluated through “Integrity Due Diligence” has grown steadily with an increasing proportion of annual renewals in the recent years. For the past years, the level of annual completion and approval ratio exceeded 50%.
Total number of business partners evaluated through Integrity Due Diligence
As a minimum requirement suppliers must sign the Kuehne + Nagel Supplier Code of Conduct.
We have issued our own Purchasing Guideline that provides the fundamental regulations for the sourcing of goods and services. The purpose of this guideline is to reach uniformity and transparency regarding the processes and the assignment of purchasing responsibility within Kuehne + Nagel in order to identify costs saving potentials. The procedures are communicated to all participants of the purchasing process and are easily understandable and usable in daily business. Our procurement team is responsible for the selection of suppliers, tender process, negotiations, prices, delivery and contractual agreements with suppliers.
On all levels, Kuehne + Nagel monitors and evaluates the performance of suppliers. The evaluation process is conducted by questionnaires which contain relevant criteria for suppliers’ selection and evaluation.