Implementing our standards

We have established a clear responsible procurement process to help our procurement teams communicate with suppliers, implement our standards, and assess and monitor supplier performance.

Key steps of our responsible procurement process:

Risk assessment

We review potential new suppliers against our Global Standards as part of our established sourcing processes.

We continue to risk assess all existing suppliers, and categorise them as low or high risk, taking into account the supplier’s location and the type of product or service they supply and the potential impact on our business. See the Our performance section for information on the number of assessments to date.

Our buyers and supplier managers regularly reassess the risk level of the suppliers they manage.
 

Due diligence

We check if suppliers are applying our standards through a combination of supplier questionnaires and onsite audits. We identify potential areas of concern early in our relationship with a supplier and we work with them to improve performance over time.

Supplier contracts

Responsibility clauses, improvement plans and audit requirements are included in supplier contracts. Responsibility clauses are also part of our requests for information (RFIs) used in the tender process.

Monitoring & support

We check that suppliers are meeting our standards through a programme of audits. We use a combination of internal and external resources to conduct the audits. Existing suppliers are monitored on a rolling basis. See the ‘Our Performance’ section for information on the number of audits and progress this year.

Audit results are shared between AstraZeneca and our suppliers and we work with them to agree improvement plans and monitor their progress. Where necessary, follow up audits are used to verify that improvements are being made to meet our expectations in a timely way.

How do you know if your standards are being met across your supply chain?

We communicate regularly with suppliers so they understand and meet our standards. Local procurement professionals hold regular review meetings, agree improvement plans and help them achieve their goals.

The audit programme described above helps us understand in more detail what is going well and where there may be more work needed to help a supplier improve.

Our audits routinely assess our suppliers against AstraZeneca, International and Local requirements in Labour Standards, Wages and Working Hours, Health and Safety, Environment, Integrity (Anti Bribery and Corruption), Data Privacy, and Competition and the Management Systems that support them. At specialised sites the audit will also include Business Continuity and specialised process and procedural hazards. Research and Development ethics are excluded from this programme being covered by the specialised monitoring and assessment procedures executed by the relevant AstraZeneca Function.

We continually review our protocols to ensure they remain current and aligned to our Supplier Expectations.

What happens if a supplier doesn’t meet your standards?

Our response depends on the issue identified and the willingness and ability of the supplier to meet our standards. For suppliers who generally perform well but need to improve in some areas, we use our influence positively to help them improve. This benefits AstraZeneca, the supplier and their employees. We support suppliers who are transparent about problems they face and who are working to improve standards within their business and their own supply chain.

Our approach is to work with suppliers to help them improve their standards, rather than automatically exclude them from our supply chain, but we will not use suppliers who are unable or unwilling to meet our expectations in a timely way.

In some cases we may need to continue working with a supplier for longer than we would like in order to protect the supply of our medicines. For example, due to regulatory requirements it can take up to twelve months to recruit a new supplier of active pharmaceutical ingredients. These decisions are taken at a senior level within the relevant area of our business.

Is it ever possible to know exactly what’s going on inside a suppliers’ business? Are audits enough?

We recognise that in a complex, global supply chain like ours, there may be some suppliers who do not meet our standards. And we know that some markets pose an increased risk of unethical behaviour such as bribery and corruption. As we expand our procurement to markets where we are less familiar with the cultural and legislative environment, a consistent approach to all suppliers is critical.

We believe that clear standards, good communication with suppliers and our programme of audits is the best way to tackle this challenge. Our local buyers and supplier managers have an ongoing relationship with the businesses they buy from, communicating changing requirements and helping suppliers improve over time. Regular site visits and meetings with suppliers mean our procurement team can identify potential problems that may arise. 
 

What's next in this section

Training and awareness

Employees and suppliers need to understand what we expect from them and what will happen if a supplier doesn’t meet our standards.

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Supplier diversity

Our supplier diversity programme helps small businesses understand our requirements and build their capabilities.

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