With more than 70 per cent of our manufacturing costs in our external supply chain and more than 15,000 suppliers in more than 70 different countries our suppliers make a vital contribution to our performance. We encourage them to work openly and collaboratively with us to ensure we can continually improve our operations.
Rolls-Royce has taken a leading role in the establishment of the Aerospace Engine Supplier Quality Committee, established with the aim of agreeing a set of common industry wide standards. This will help remove variability and waste, helping our supply chain to become leaner and more competitive.
We expect our suppliers to support us in to being “Trusted to deliver excellence” and support them to do so through our Global Supplier Code of Conduct. This sets out the minimum behaviours we expect from our suppliers. We expect them to be ethical, responsible and to fully comply with all applicable laws and regulations.
We manage the risks associated with supply continuity, in the short and long term, through the requirements set out in our Supplier Advanced Business Relationship (SABRe) quality system.
An online questionnaire allows suppliers to share their business continuity plans with us and help us to understand potential business continuity risks associated with geographic location, facilities and people.
Our selection policies identify the most globally capable suppliers in a fair, open and transparent way. We seek to foster both competitive and collaborative relationships throughout our global supply chain.
Supplier approvals are carried out in full accordance with the relevant regulatory authorities. We operate a global sourcing process which assesses a supplier’s overall capability. This includes considering economic, environmental and social factors.
We work closely with our suppliers to help them to develop the right capabilities in areas such as quality management, HS&E and manufacturing.
We are consistently striving to improve the sustainability of our procurement practices and to support our supply chain.
Our Global Supplier Code of Conduct helps our suppliers to understand and manage their risks.
We also encourage strategic suppliers to seek certification to international environmental standard ISO14001 to help them to mitigate their environmental impacts and associated costs. Suppliers are also involved in our Revert programme of metal recycling.
We are working with our suppliers to help them to meeting their obligations under the REACH (Registration, Evaluation and Authorisation of Chemicals) regulations with a focus on the managed reduction and phase out of the use of targeted substances that are hazardous to health and dangerous to the environment. Through our active participation in the IAEG we are also helping to introduce new standards to facilitate efficient data sharing, focused on hazardous substances, across the aerospace supply chain.
We recognise the role we have to play in minimising the risk of armed conflict and human rights abuse related to the mining of Conflict Minerals. In response to the Dodd-Frank Act and emerging EU legislation we have established a global programme team and are developing a programme and policy based on the OECD’s framework for managing conflict minerals in the supply chain. Early work with our raw material supply chains, where we are close to smelters and refiners, has not identified any issues.
Our supplier finance programmes enables suppliers to benefit from Rolls-Royce’s superior credit rating and access funds at lower interest rates.
We also support SME’s through our Supplier Diversity Programme to help support them in becoming part of our supply base. More than 200 small and medium sized companies are registered with the programme.