A SUSTAINED SUPPLIER BASE
Santam is committed to a diversified supplier base that is transformed and demonstrates the profile expected from a world-class short-term insurer. As a short-term insurer that spends substantial amounts on repairs and replacements for clients, the quality and cost of procurement are highly material to our business. Our suppliers also represent the business at critical moments; it is therefore important that we ensure they are able to meet our high standards of quality and service delivery.
We are in a position to use our significant spending power to effect transformation. We see this as a business imperative but acknowledge that we are also obligated to do so in terms of the Financial Sector Charter (FSC) and the dti Codes. Until now, we have recorded our performance against both the FSC and dti Codes. However, due to uncertainty about the future of the FSC, our 2009 figures reflect our performance against the dti Codes only.
Our approach - click to view text
What we did during 2009 - click to view text
Our performance - click to view text
It is in both our and our policyholders’ interest that our suppliers conform to recognised health, safety, environmental and quality standards. Adherence to such standards will lead to trusted and enduring supplier relationships. At Santam we intend to use our influence to ensure that suppliers operate according to the same principles and standards that we apply within our own business. More specifically, we intend aligning our procurement processes to the Santam Environmental Policy in accordance with our internal focus on environmental stewardship.
What we did during 2009:
In 2009 we initiated a process with the Quality Assurance (QA) department to develop an environmental framework for procurement and to align this framework with our newly-designed Santam supplier selection process. The outcome of this process will be an interaction model between the Procurement department and QA which conforms to the Santam Environmental Policy. During the year we made some progress in aligning the framework to the supplier selection process. This is currently being circulated to ensure alignment with amendments to existing contracts and the renegotiation of contracts where necessary. The process is still in a developmental phase. To this end, the relevant legislation (Occupational Health and Safety and Waste Management Acts) is also being incorporated into all our supplier agreements.
During the year we also supported the Group Sourcing unit in incorporating and introducing Santam's environmental policies and values to the Santam supplier base. With the help of the Sustainability unit, Santam intends incorporating this aspect into our business-as-usual process, to be driven by the Quality Assurance department. The Sustainability unit’s environmental consultant provided supplier compliance criteria which are being incorporated into supplier agreements.
We are also conducting ongoing research to determine which institutions can best assist the QA department to equip our evaluators appropriately so that they can evaluate the safety, health and environmental (SHE) compliance of our suppliers.