Centralized procurement and supplier management ensure highest standards

PwC EN 32

At the operational level, the Corporate Procurement organization supports the divisions in purchasing high quality goods and services, reducing spending and making cost-effective investments in a way that is both in line with our Group policies and regardful of environmental and social aspects. Annual procurement expenses in 2016 amounted to €10 billion. This includes the costs involved in upgrading our fleets and sites.


Corporate Procurement is also responsible for centralized supplier management, which starts right at the beginning of the value creation chain. This ensures that our standards are applied and adhered to along the entire supply chain, increases supply security and creates value through trust-based collaboration and long-term business relationships with our suppliers. And because we see our suppliers as more than just transport service providers or external agents who deliver the goods we need, we also enable them to bring innovative ideas to Deutsche Post DHL Group.

We support our suppliers with our knowledge and expertise, and we offer them an interactive training module on our Supplier Code of Conduct and environmental and social standards. We also give our road freight subcontractors access to our procurement contacts to assist them, for example, in the procurement of new, more efficient vehicles.

Procurement platform for greater transparency


We strive to make our procurement processes more efficient and more transparent. In the reporting year, we integrated additional procurement processes into the existing purchasing platform and simplified their use. The platform, to which our supplier management system is linked, enables Group-wide strategic management of procurement processes and supports the company’s standardized supplier monitoring and evaluation process.

Supplier evaluations include a third-party due diligence screening for suppliers who meet certain risk criteria contained in our Anti-corruption Policy. By taking this approach, we ensure that they meet the Group’s supplier selection requirements and support us in reaching our environmental goals and maintaining our social standards.

"Environment & Solutions" chapter, we report in detail on the environmental aspects of various procurement activities, including the global procurement of electricity from renewable energy sources.

Raising employee awareness


Following the successful rollout of our Security and ComplianceThe adherence to laws and regulations, standards, company policies and self-commitments. Awareness Workshop (SCAW) in the reporting year, we will integrate the workshop into our training offerings for our procurement employees in the coming year. The workshop will also become part of our Group-wide Certified initiative training for this target group.

The workshop, which was jointly developed by Corporate Procurement, Corporate Security and Corporate Compliance, is designed to sensitize procurement staff to certain risks, such as corruption and anti-competitive practices, so they can identify and resolve conflicts quickly and in a policy-compliant way. The workshop and subsequent refresher courses are mandatory for all procurement staff.

Ensuring ethical supply chain standards


The Supplier Code of Conduct is an integral part of our supplier management system and of the contracts we enter into with suppliers. It applies to suppliers as well as to transportation subcontractors and other services providers. The Code explicitly calls on suppliers to ensure that their own business partners and subcontractors adhere to our standards as well.

We are developing and enhancing our Supplier Code of Conduct as part of an ongoing process. In the reporting year, we revised the Supplier Code of Conduct, honing its treatment of human rights protection and fair working conditions. New compliance-related topics were added to the Code, including trade regulations and the handling of conflicts of interest. These changes have been integrated into the interactive training module which our suppliers can use to familiarize themselves with our standards before entering into contract negotiations. Suppliers can access both the training module and our Code of Conduct in the most frequently used languages.

Tendering process standardized Group-wide


We select our suppliers and transport service providers by way of a multi-step tendering process. In addition to our own evaluation process, we also look at independent, external supplier reviews. As a result, we work solely with suppliers with whom we have gained positive experience in evaluating our own sustainability performance and whose processes we believe to be credible and trustworthy. We want to use our findings to further enhance the supplier evaluation process by, for example, taking account of factors specific to the countries in which our suppliers operate.

Entering into dialogue with our suppliers


Some of our suppliers possess competencies that are of strategic importance for our current or future business. These include innovators from the fields of green technologies and IT. We confer regularly with these partners, exchanging ideas and information about current developments, and collaborate on projects focused on driving innovation and developing new business models.

Responding to non-compliance


We trust our suppliers and business partners to comply with the terms of our contractual agreements, and conduct compliance tests on a random basis. Suppliers are selected on the basis of their economic significance and the results of a risk assessment. To enable informed decisions, key Group departments such as HR and Compliance are involved in the process.

If a violation of our Supplier Code of Conduct is suspected, the matter is investigated and if confirmed, the supplier in question must bindingly commit to address and remedy noncompliant behavior as quickly as possible. Follow-up evaluations are conducted. If the supplier fails to meet our requirements, either in part or in full, further action is taken; in some cases, this can mean the termination of a business relationship.