An efficient supply chain for metal purchases ensures that Gränges has access to the right raw materials at the right time, which is vital for the company to meet its customers’ needs. Optimized sourcing is essential to buy the right raw materials with proper documentation. This enables Gränges to make efficient use of surplus materials from production processes and to maximize recycling.
The production facility in Finspång has around 30 suppliers of ingots, slabs, alloy components and scrap metal, one third of which are categorized as strategic suppliers.1) Gränges’ production facility in Shanghai has seven large suppliers of ingots, slabs and alloys, of which three are categorized as strategic suppliers and three are traders. Gränges’ production facilities in the US buy primary and scrap aluminium through metal commodity traders and aluminium producers.
To ensure sustainable behaviour, all suppliers of raw materials are to comply with and sign Gränges’ Supplier Declaration. In doing so, the suppliers undertake to comply with all applicable laws and regulations, including the 10 principles of the UN Global Compact, and to observe responsible, ethical, and sound business and commercial principles.
Gränges’ Supplier Declaration states that suppliers are to have zero tolerance for all types of bribes and corruption and for collaborating in violation of competition laws. They are also to avoid conflicts of interest, provide reasonable working conditions, promote good health and safety at their workplaces, and respect human rights, such as not accepting child labour or any form of forced labour, and to respect the environment by, for example, minimizing harmful emissions and waste. Suppliers must also ensure that the principles in the Supplier Declaration are in turn adhered to by their own suppliers.
To ensure that suppliers comply with the Supplier Declaration and are behaving in a sustainable manner, Gränges performs supplier audits. Gränges’ production facilities in Finspång and Shanghai aim to audit all strategic suppliers before entering into a contract with them and then perform regular audits of these suppliers. Each year Gränges’ production facility in Shanghai evaluates traders who supply the company. The focus is on quality and delivery precision, but issues relating to the environment, labour laws, health and safety, and human rights are also covered. Gränges also checks to ensure that suppliers’ management systems meet Gränges’ criteria.
Indirect materials and suppliers
Gränges’ purchasing of indirect materials and services is mainly done at the local level in the different regions. This includes buying materials such as spare parts and packaging materials, and maintenance services for the production facilities. The suppliers of indirect materials are audited in varying degrees.
1) A strategic supplier to Gränges’ production facility in Finspång is a supplier that is critical to Gränges and has a direct impact on the properties of the end products. A strategic supplier to Gränges’ production facility in Shanghai is a supplier that is vital to Gränges’ long-term growth and profitability and accounts for a large portion of the volume.