Capitals:

GRI Index: G4-EC9

  • G4-DMA Procurement practices

Responsibility towards Suppliers

Suppliers are one of the key groups of stakeholders. Under the CSR Strategy for 2015–2017 the Company’s suppliers are required to meet specific criteria relating to ORLEN values and social responsibility. The Procurement Area cooperates closely with stakeholders, analyses their needs, puts forward common priorities, plans, KPIs and improvements.

In 2015, the rules of cooperation with suppliers changed. The administrative and support function gained a proactive and business-minded role. To achieve our strategic objectives we are chiefly focused on implementing a method of comprehensive management of procurement categories, a supplier management model (its elements include segmentation, classification, management rules) and global procurement standards.

Also, rules of cooperation within the Group were defined and have been consistently implemented. Internal cooperation is facilitated by establishing and following common standards covering procedures, processes, tools, systems and procurement structures. The most important element in that area is the deployment of the Connect Procurement Platform at the ORLEN Group companies, which promotes uniform and consistent procurement processes across the Group, transparency of operations, knowledge sharing and better communication with suppliers.

In 2016, we will continue to implement fundamental changes related to the procurement category strategy, establishment of a supplier classification and assessment system and integration of procurement tools. A new supplier profile will be launched on the Connect Procurement Platform, thanks to which suppliers will find the system more user-friendly. The new functionality also reflects the latest trends in application development. Most of all, it addresses the requests made by suppliers in satisfaction surveys. The respondents expected the platform to be more intuitive and easier to use.

Various initiatives and best practices are implemented across the entire ORLEN Group. The key element contributing to a more efficient procurement process is the strategy related to procurement categories developed and implemented together with trade partners. Strategic management of procurement categories facilitates incorporation of development directions specified in the Company’s Strategy in operating activities, which are adjusted to the specific nature of each procurement category. This approach is aimed at developing new solutions, process streamlining and cutting costs.

The ORLEN Group cooperates with a group of carefully selected suppliers. As part of an effort to continuously improve procurement processes, the Group enhances and seeks to ensure greater consistency of supplier selection processes. A supplier classification and assessment model was worked out. The criteria established based on the best market practices, among other things, make it possible to mitigate reputation, financial and process risks, and ensure a high quality of cooperation with trade partners.

We attach particular importance to engaging with local businesses, based in the County of Płock and the Province of Warsaw. By using the services of local suppliers the ORLEN Group reinforces the market and business in its close neighbourhood. Such suppliers know the local market and are often well aware of the needs and expectations of the ORLEN Group companies. Their close proximity also reduces costs, e.g. of transport and accommodation. In 2015, PKN ORLEN spent roughly 4% of its total expenditure on products and services offered by Płock-based companies, which marks a 1pp increase compared with 2014. By cooperating with suppliers from close neighbourhood the Company supports the growth of the local market and implements the objectives of its CSR strategy within the supply chain.

At key foreign ORLEN Group companies – Unipetrol (Litvínov) and ORLEN Lietuva (Mažeikiai), spending on the services provided by local suppliers in 2015 was 9% and 7%, respectively, of their total expenditure.

We put a strong emphasis on achievement of our strategic objectives and meeting global standards keeping in mind that our most important asset are People. That is why as part of the Procurement Academy we improve professional qualifications and soft skills, including in the area of leadership, communication, promotion of positive relations between employees, which contributes to higher quality of cooperation and professionalism of the procurement process.

Chartered Institute of Procurement & Supply logo

In 2015, PKN ORLEN received the CIPS Certificate (Chartered Institute of Purchasing and Supply) awarded by the world’s largest organisation in the procurement sector. The Certificate attests to the international standards applied by the company in procurement processes.

A form of dialogue with the stakeholders was the second satisfaction survey on the cooperation with the Procurement Area, carried out in 2015. The respondents included trade partners and suppliers. The survey covered many aspects of cooperation, including competences of employees, their communication skills and commitment. Respondents could also express their opinion on tools used by PKN ORLEN, including the CONNECT Procurement Platform. The results of the survey demonstrated that the quality of cooperation is considered to be high. The overall satisfaction index increased compared with 2014.

Supplier Code of Conduct

PKN ORLEN embodied the responsible business and sustainable growth criteria in its procurement management standard. The Company promotes social responsibility among its suppliers and seeks to cooperate with trade partners that respect human rights and operate in compliance with the law, ensure safe and fair working conditions, follow the best standards of ethical conduct and care for the environment. These criteria have been compiled into a single document entitled 'Supplier Code of Conduct'. As of April 2016, compliance with the Code is mandatory in the process of trade partner qualification.

See also

SuppliersThe ORLEN Group and its environment

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Summary of strategy implementation in 2015Our ORLEN Strategy

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Indirect economic impactsResponsible company

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