Linde Material Handling manufactures important components for its forklift trucks and warehouse trucks at its own production facilities. This relates in particular to lift masts, axles, counterweights and chassis. Customers are therefore able to rely on a high level of quality and certainty of supply, as well as reliable availability of spare parts. Other components – such as electronic modules, rechargeable batteries, engine components and industrial tyres – are purchased through a global procurement system. Linde Material Handling purchases components with an annual value of more than € 1,3 billion* worldwide from more 3,000 suppliers. Less than 10% of these components come from emerging economies or developing countries. Depending on the business location, Linde sources 15 to 100%* of its components locally, in other words from the country where it is located.
Linde Material Handling was itself certified – as a supplier – in 2014 in accordance with the independent Audit EcoVadis and received the level of “Silver”. The sustainability analysis system underlying the audit comprises 21 criteria from the four topic areas of environment, fair working practices, ethics and fair business practices, and procurement chain. The methodology is based on international sustainability standards such as the Global Reporting Initiative, the United Nations Global Compact and the ISO 26000 sustainability guideline.
Code and audits for suppliers
Monitoring compliance with fundamental human rights and minimum social standards has always been a top priority in the purchasing function for companies in the KION Group and Linde Material Handling. This is also expected from our business partners. To satisfy its own requirements and the wish of many key accounts customers for end-to-end monitoring of the supply chain, the Group developed the Principles of Supplier Conduct in 2013. This framework for suppliers forms the platform for integrating environmental and ethical measures in supplier management.
This also contains the requirement for suppliers to comply with international social standards. These include the prohibition on child labour and forced labour in accordance with the conditions of the International Labour Organization (ILO) and minimum standards for workplace safety. A standardised process for implementation and follow-up measures after audits is currently being worked out by Linde purchasing. The first audits are scheduled to take place in 2016.
Compliance in purchasing and procurement
The Code of Compliance of the KION Group includes a section with specific rules on conduct for the area of purchasing and procurement. These state that purchasing decisions must be made strictly in the interests of the Company.
Such decisions should be based solely on objective criteria like quality, engineering, price, production requirements and logistics. Personal benefits for employees involved in purchasing activities in return for preferential treatment are explicitly prohibited, and the acceptance of gifts and invitations is restricted to an absolute minimum.