How to evaluate supply chain risk according to ESG criteria and create an auditing process to certify suppliers.
Carmen García Rodríguez,
Head of Sustainability and Corporate Ethics at Telefónica
Supply chain risk management was a top priority for Telefónica. Why? Because this was one of the internal requirements of its strategic plans. However, the company struggled to meet this requirement due to a series of challenges:
As a large company, Telefónica operates all around the world and lacked a centralised tool to unify the various countries where it operates, its many services and volume of turnover.
Additionally, the company has a vast number of service providers and suppliers, not all complying with their ESG standards.
They lacked complete and accurate information to evaluate the risks in their supply chain.
They lacked an agile and auditable communication channel with their suppliers.
A huge diversity and dispersion of suppliers
1.
Sygris was linked to Telefónica’s purchasing system and incorporated all the information on the company’s acquisitions. With the data, we made a first ESG risk analysis, taking into account the country, type of service and invoicing volume. In this way, we detected which suppliers have a higher inherent risk
and their classification.
2.
Based on the result, the suppliers with the highest risk underwent an audit process. To this end, Sygris generated two types of access to the platform:
– Auditors: they generated Observations, Non-conformities and Action Plans.
– Audited suppliers: they could fill in questionnaires, consult the results or add required documents.
3.
Based on the automatic results
of the audits, we knew the detailed risk level of each supplier. The company was then able to make decisions about contracting them and include them in the Integrated Report.
Sygris has enabled Telefónica to now have a global view of the risk level of its suppliers. In addition, it ensures that it only works with those that meet its ESG standards.
We streamline processes. By including all types of data in a single platform, we have automated steps that help keep supplier information up to date.
This allows us to be faster in checking and making decisions.
We improve data quality. By obtaining all the information from the risk analysis and audits and linking it together, we obtain much more accurate and complete information to be able to carry out the evaluations.
Increases alignment with business strategy. Managing supplier risks, according to the company’s internal requirements, allows us to meet the objectives within Telefónica’s Strategic Plan.
Savings in development costs
Capacity for project growth
Savings in process management time
