A sustainable supply chain brings a multitude of advantages. It creates innovation and drives the development of new management and production methods forwards. In addition, it improves reputation, strengthens customer relationships, and increases the interest of investors. A sustainable supply chain furthermore provides business benefits, since it improves the control of costs and resources and can thus lead to savings.
Nevertheless, negative effects can also occur due to risks within the supply chain. This concerns ecological aspects such as Scope 3 emissions as well as human rights violations. We are conscious of this challenge and strive for a higher transparency and duty of care with our suppliers.
The COVID-19 pandemic has made us aware of further direct and indirect effects during the past two years. The tail of the COVID-19 pandemic as well as the war in Ukraine made 2022 a year with multiple challenges in respect to the supply chain as well as energy prices. In this respect, we have intensified our efforts to cover the total requirements of value added. The context of procurement and supply chain not only comprises the total direct material (all materials that enter inventory through purchasing and procurement) but also indirect material such as tools and equipment, consultation and rent.
We preferably work with suppliers from the EU or the EEA; ideally with companies from countries in which Arbonia is active with production sites. In the reporting year, 78% of the purchasing volume was procured locally. This makes it possible to shorten transport distances and minimise the environmental impact. It additionally improves the control of production means compared to a partnership with suppliers from remote regions.
The topic of procurement and supply chain at Arbonia comprises on the one hand the procurement management for the most used materials and semi-finished goods – in other words, wood, steel, glass, and aluminium. On the other hand, the assessment of suppliers according to ecological and social criteria is also a part of this. At the same time, respect for human rights in the supply chain is of decisive importance. Since more than 95% of used materials are sourced from suppliers in Europe, a high standard is enshrined in law.