KONE 2013 | CORPOR ATE RESPONSIBILIT Y REPORT
DELIVERY AND SUPPLY CHAIN
3 4
Our suppliers and their sub-tier suppliers are an
integral part of KONE’s delivery chain. They play
a key role in the task of delivering high-quality
solutions to our customers. Just as internal
efficiency is essential, so is working effectively
with the 20,000 suppliers who provide us with
raw materials, manufacture components and
modules, transportation services, and install our
products.
KONE purchases 80% of its raw materials,
components, and systems supply for new
equipment production from approximately
100 suppliers located in the vicinity of our
production centers. The close location of many
of our suppliers has a positive impact on both
our flexibility and environmental footprint.
We ensure supplier excellence by auditing
our suppliers, assessing and mitigating
supplier related risk, employing standardized
contractual agreements that include the KONE
Supplier Code of Conduct, assessing supplier
performance, and certifying key suppliers.
Supplier Audits
We audit all of the main suppliers that deliver
direct materials to KONE distribution centers
or factories on a regular basis. All of KONE’s
strategic suppliers were audited in 2013.
We review our audit plan every year to
prioritize and schedule audits according to our
business needs. Audits can be scheduled to
check on changes in products or production
processes, to validate follow-through on
improvement initiatives, to assess quality and
environmental management systems especially
when suppliers are not ISO certified, or to pre-
audit the suitability of potential suppliers.
Assessing supplier risks
KONE’s sourcing risk monitoring system is
based on a thorough assessment of suppliers,
including analyses of their financial and
business viability, and their dependence on
business from KONE. We also work closely with
our strategic suppliers to secure competitive
raw material price levels.
Actively developing supplier
excellence
Supplier Code of Conduct
All KONE suppliers must comply with our
Supplier Code of Conduct, which sets out
KONE’s global values. Suppliers are expected
to adhere to this Code in their dealings with
KONE, their own employees and suppliers, as
well as third parties. KONE may terminate all
contracts with suppliers who breach this code.
KONE prohibits any kind of unethical business
practices.
KONE’s Supplier Code of Conduct focuses on
issues including:
Ethics
– complying with local laws; intellectual
property rights; improper payments; conflict of
interest
Environment
– complying with environmental
laws and regulations and obtaining
environmental permits; continuously reducing
harmful environmental impacts by minimizing
the amount of waste, waste water, air
emissions, greenhouse gas emissions, chemicals
and hazardous substances.
Labor
– non-discrimination, and fair and equal
treatment of all employees; prohibition of child
or forced labor; maintaining a safe and healthy
working environment; complying with wage-
related laws and regulations
Health and Safety
– managing exposure
to potential safety hazards and physically
demanding tasks; implementing emergency
plans and response procedures; managing
occupational injuries and illnesses
Management systems
– identifying, monitoring
and understanding applicable laws, regulations
and customer requirements; identifying
and controlling supplier risks related to
environment, health and safety and labor
practices.
Assessing supplier performance
The performance of KONE’s main suppliers
for direct production materials is monitored
through a monthly KPI measurement and
Strategic suppliers with
ISO 9001 certification:
100%
Strategic suppliers with
ISO 14001 certification:
90%
Strategic suppliers
audited in 2013:
100%
