“Suppliers and outside workers play a key role in improving the competitiveness of the business. While seeking the keenest competitive edge, the Group bases it relations with suppliers and outside workers on fairness, impartiality, and ensuring equal opportunities for all parties concerned. The Pirelli Group requires that its suppliers and outside workers comply with the principles and rules in this Code.”
(Ethical Code – Suppliers and Outside Workers).
|Sustainability of Supply Chain||Mapping of Purchases||Dialogue|
Relations with suppliers are defined and enforced by specific Company processes. There are two fundamental underlying phases to supplier management:
- approval of new suppliers;
- monitoring of vendor (Vendor Rating).
The vendor’s sustainability is assessed in an independent audit, as illustrated in detail elsewhere in this section.
The Vendor Rating covers all merchandise and geographical areas of purchase and is used as an integral component of commercial negotiations. These procedures are supported by a special website available online through the Purchasing Portal. This website supports the Regulations (including the Purchasing Manual, General Conditions to be applied to suppliers), the Vendor List, surveys, Vendor Rating with feedback and the definition of support actions. This portal provides both an assurance of process uniformity and a guarantee of transparency, in addition to being a communications, on-going training and knowledge sharing tool.
In view of shared development, the processes of dialogue and interaction with suppliers are the object of process improvement, in terms of both quality and tools. Specifically, the Vendor Rating results are regularly revised and commented on by the Purchasing Department. This process involves meetings organised with the vendors, aimed at identifying any corrective actions or measures to improve performance. Each purchase contract includes the name of the buyer contact, to provide the vendor with a company channel that is always available for any feedback.
In 2014, following the training project for strategic suppliers provided via e-learning in 2012 and 2013, Pirelli extended the same training sessions to all security service providers of the Group. The activity involved elements of labour law, human rights, respect for the environment and business ethics. The tool used for training was a platform specifically developed for this purpose by the Pirelli Group.
After receiving a personal ID and password, the supplier could connect with the online platform and participate in training activities at any time. The course included very practical examples to allow participants to easily check their company level of compliance with the various ESG issues. To determine the effectiveness of e-learning, a mandatory test was also included, which the participants had to pass at the end of the session.
Independent audits of vendor sustainability
The Company commissions independent audits from leading specialised firms to review compliance by Pirelli vendors with their ethical, social and environmental responsibilities, as provided inter alia in the sustainability clauses that they sign.
The independent audits were carried out both at the Pirelli sites, where the suppliers provide services with their own personnel, and at their administrative facilities. Workers, supervising managers and union representatives are interviewed on specific issues as part of these audits. The auditors use a checklist of sustainability parameters based on the SA8000® standard, the Pirelli Health, Occupational Safety, Environment and Social Responsibility Policy and the Pirelli Ethical Code, and thus in compliance with the provisions of the Group’s sustainability clauses signed by the vendors. At the central level, a team comprised by the Group Sustainability and Purchasing Departments defines the guidelines for selection of the vendors to be audited, while supporting the corresponding local departments that will manage the process, training and informing them about the purpose and procedures of the audit.