Responsible sourcing

We own and operate around 100 manufacturing sites around the world. Our suppliers make up our extended operations and we expect the same high level of commitment from them as we do from ourselves. This is what being the undisputed leader in the bearing business means and part of the deal.

We issued the SKF Code of Conduct for Suppliers and sub-contractors to effectively express the demands we have, and the code is an integral part of our contractual agreement. Please find the full scope of the Code at the SKF Supplier Portal.

From words to actions

From words to actions
Every year we source direct and indirect material – equivalent to over SEK 40 billion every year.

About five percent of SKF ‘s spend comes from raw materials, the rest comes from components or traded products with many intermediaries. About 1,200 suppliers account for around 80% of our spend and the Group’s overall approach is to attract and develop suppliers reflecting our global manufacturing footprint.

SKF’s responsible sourcing programme exists to make sure suppliers work according to SKF’s social, environmental and ethical standards. This helps to develop well-managed local suppliers and reduce the total cost of operations over time.

Our strategy for responsible sourcing can be summarized in two main approaches:

1. Redefined risk based management – we focus on evaluating risks from supplier self-evaluations, screening during quality audit and other site visits, we also make over 100 in depth site audits every year.
2. Supplier development - Responsible sourcing is part of supplier development and this is where the real improvements are made. 

Finding deviations at suppliers is not the end-goal of responsible sourcing but solely a means to drive improvements. When assessing which suppliers to develop, we look at a wide range of aspects of supplier performance concerning quality, cost, delivery, innovation and management, including environment and human rights management
Every year, we conduct over 100 audits for sustainability performance. 
Most deviations found are dealt with in the normal operations and in collaboration as business partners do. 
In some case, when the deviations are more serious, the cases are escalated to the Group's Responsible Sourcing Committee headed by our Chief Purchasing Officer. 

For detailed data on risks and non-conformances, please see our latest Annual Report on page 145, search for "Supplier assessments".

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