52 Sourcing From sourcing to supply
From sourcing to supply Maximising value with suppliers Our suppliers are genuine partners and we work with them towards mutual value creation. Liaising with each division to optimise the sourcing process in line with business requirements and within given constraints, our Procurement teams ensure the continuous supply of purchased materials and services at the most competitive and optimal quality. These teams are trusted advisors involved in the Company’s markets, capable of adapting to rapidly changing environments. Within these partnerships, which are based on mutual value creation, we seek to maximise value with our suppliers to create a differentiating and profitable business. We are committed to working together to generate long-term benefits for both, and view our suppliers as genuine partners – an extension of our business. Through supplier enabled innovation, suppliers tap into their innovative resources and together we achieve a level of innovation that is beyond what we can do on our own. In 2019, we also set out a strategic innovation agenda with our partners called ‘Connect to Win’. This agenda aims at capitalising on our existing relationships to create a pipeline of technological innovations to differentiate us in the market. Through this collaboration with strategic suppliers we are able to develop ideas in the key areas of increasing importance for Givaudan such as a responsible and sustainable future, efficiency improvements, healthier and happier lives, new individual customer experiences, and better food performance. One illustration of successful collaboration is our partnership with the industrial bioscience company Amyris. We further strengthened this collaboration in 2019 with innovative advances including a new business line that is expected to be fully commercialised in 2020 and which will provide Givaudan with a superior competitive edge. We hold regular commercial
Givaudan – 2019 Integrated Annual Report
and technical reviews with Amyris to explore areas of possible benefit, for example in developing a second biobased active ingredient for our Active Beauty business, and in the flavour side, supporting Amyris with the development of a new tabletop sweetener. All new relationships between Givaudan and its suppliers are developed using vendor requirement guidelines as reference material. We encourage selected suppliers to continuously improve their performance, and one way we do this is by inviting suppliers to register with Sedex; the percentage of suppliers assessed to date is 80%.
Supply risk Events that could threaten the supply of raw materials and indirect materials and services are risks we must manage each day. If we do not receive the goods or services we need for our manufacturing processes, we cannot supply our customers, so risk management is as important as buying at the right price. We are limiting our exposure to supply risks by adopting complimentary approaches, including reducing our dependency on single-source suppliers and strengthening our risk management approach and governance. We protect our customers' brands by minimising supply risks, and have for some time been moving from reactive and costly ‘firefighting’ to proactive planning for the unknown.
