Responsible supplier management

  • For the past many years, Danfoss has worked systematically with risk assessment and supplier management. In addition to following the Code of Conduct, suppliers of goods used directly in Danfoss products are subject to an audit in which they are assessed by Danfoss’ own specialists, or an external independent consultant if the supplier operates in a country that Danfoss believes represents a substantial risk of human rights abuses or such like.

    Danfoss Procurement has set up a dedicated organization to handle supplier management and assessment; thereby taking responsibility to ensure that our supply chain complies with the principles in the Global Compact.

    In order to ensure that the Danfoss supply chain prioritizes areas where the Company has the most influence, Danfoss has adapted its risk assessment model to focus on measures at individual suppliers. The risk assessment includes the supplier’s location of production facilities, meaning that suppliers in areas posing the greatest risk of non-compliance are given the highest priority.

    Danfoss continually adapts its procurement organization and its supplier management tools. As a result, the procurement organization was expanded to cover the entire Group, including Danfoss Power Solutions, effective from July 2013.

    In 2013, a total of 809 Danfoss suppliers signed the Code of Conduct, and 134 audits were conducted to verify supplier compliance with the guidelines, of which 44 were first-time audits and 90 follow-up audits.

    Totally, 2,080 suppliers of direct materials and 2,380 suppliers of indirect materials have signed the Code of Conduct.


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