Philips’ Supplier Sustainable Performance Programme

What is Philips’ Supplier Sustainable Performance Programme, and how does it change supplier auditing?

The Philips Supplier Sustainable Performance Programme is a strategy followed by the electronics giant to help its procurement network meet sustainability goals. The company believes the programme replaces ‘the traditional approach of supplier auditing’ as it can be insufficient in bringing about sustainability improvements and can also lead to ‘audit fatigue’.  

The Philips SSP programme is part of a comprehensive initiative aimed at promoting sustainability and responsible business practices throughout the company's supply chain and network of collaborating suppliers.

How the Philips SSP programme works 

Supplier Evaluation: The programme involves the evaluation of suppliers based on various sustainability criteria, including environmental impact, labour practices, human rights, ethics, and compliance. Suppliers are assessed on their performance in these areas, and their sustainability practices are monitored continuously.

Collaboration and Engagement: Philips works closely with suppliers on collaboration and engagement in sustainability efforts. This includes providing guidance, resources, and support to help suppliers improve their sustainability performance.

Continuous Improvement: The SSP programme emphasises continuous improvement, encouraging suppliers to set and achieve sustainability goals, implement best practices, and innovate in ways that reduce environmental impact and promote social responsibility.

Transparency and Reporting: Transparency is a key component of the SSP program. Philips requires suppliers to disclose relevant information about their sustainability performance, and the company regularly reports on its progress and achievements in supplier sustainability.

Risk Management: The programme also helps Philips identify and mitigate risks associated with sustainability issues in its supply chain. By working closely with suppliers to address these risks, Philips aims to build a more resilient and sustainable supply chain.

Certifications and Standards: Philips may require suppliers to adhere to specific certifications or standards related to sustainability.

Continuous improvement in Philips sustainable supply chain 

By working with suppliers to improve sustainability practices, Philips aims to create shared value, reduce environmental impact, and promote social welfare across its business ecosystem.

“One of the most important behaviours we’re trying to drive is the focus on continuous improvement,” explains Bob Ruers, Philips Supplier Sustainability Director. He says this means spotting and addressing the root cause of process issues.

“If something's not right, you need to take time and analyse the problem,” he says. “There's no point in keeping the train running on a broken track. We need to normalise fixing the root cause.”

“Our SSP approach is long-term and relationship-driven,” he says. “We explain the reasoning behind the plan. At the beginning it may be, ‘I have a policy,’ but the larger aim is to build mature and sustainable supplier management.”

Reurs says implementing sustainable, people-centred practices in a company’s supply chain takes an all-hands-on-deck approach. “We invest in suppliers who provide a safe working environment, treat workers with respect, and work in an environmentally sound way. When problematic practices surface, that’s okay. Because identifying an issue is the first step towards making an improvement – and we do that together.”

Each year, over 200 suppliers actively engage in the SSP program, with additional suppliers joining annually. In 2020, around 302,000 workers experienced positive outcomes from the programme, including improved labour conditions, reduced risk of serious injury, and decreased environmental impact from suppliers. Philips measures and monitors the impact of SSP engagement through a year-on-year improvement rate, ensuring continuous progress in sustainability and social responsibility efforts with its procurement network.

Read more about how Philips works with its procurement partners here.

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