At one of our business groups, Lifting Solutions, the largest part of the offering comes from premium suppliers from leading brands. However, the companies within Lifting Solutions also sell products under private label or as non-branded products. These parts of the product range are usually sourced from independent manufacturers based in China, a risk area when it comes to compliance with product quality and sustainability standards.
Axel Johnson International took a long-term strategic decision to systematically work with minimising risks related to product quality and sustainability, and it was logical to focus on Chinese suppliers when addressing potential business risks in the supply chain.
To cater for the need to ensure compliance with product quality and sustainability standards throughout the supply chain and to coordinate the supply chain management with local presence, a new company, SCM Citra, was formed in 2017. SCM Citra has its seat in Finland but operations mainly take place in the sourcing office in China.
The office in China is located in Ningbo, near Shanghai, which is the area where the majority of our suppliers have their facilities. During the first year, the demand for audits in China increased within our entire group and today the sustainability auditors in China perform audits for all our business groups. Compliance with local regulations and our Code of Conduct is ensured through inspections and audits of the suppliers by local auditors onsite. By having in-house auditors that speak Chinese, we can gain full control over the quality and the results of the sustainability audits.
Follow-up of our Code of Conduct
If suppliers do not fulfill the demands in our Code of Conduct, we work out an action plan on how they can improve. Another important goal with the audits is to raise awareness among our suppliers around issues like health and safety, labour rights, environmental aspects and fire safety. Therefore, training and thorough follow-up after the audit is crucial.
“We are auditing suppliers for compliance with environmental and social responsibility. We set high standards and accept no compromises”, says Jorma Tuominen, Managing Director of SCM Citra.
Besides assuring product quality of non-branded and private label products, SCM Citra also makes sure that the products Lifting Solutions sources comply with European standards and regulations.
The specifications and the demands of the products are based on international and European regulations, for example the Machinery Directive (Directive 2006/42/EC), RoHS Directive (2011/65/EU), REACH (EC 1907/2006) and upcoming regulation about conflict minerals. We want to make sure that all our non-branded or private label products supplied to the market are of high quality and are produced under good working conditions.