Supplier management
BASF aims to optimize its supply chain in a sustainable manner through its industry collaborations and digitalization approaches.
BASF is committed to improving sustainability in the overall supply chain of the chemical industry by getting our suppliers to adhere to the internationally recognized environmental, social, and governance (ESG) standards and regulations. In 2021, BASF launched the Supplier CO2 Management Program and invited suppliers, including those from China, to join the program. By sharing our knowledge of Product Carbon Footprint valuation methodologies and tools with our suppliers, we hope to achieve greater transparency on the product-related CO2 emissions of our acquired raw materials. This makes it possible for our suppliers to identify medium-term measures for optimization.
The responsible sourcing of mineral raw materials is important to BASF. In 2021, we introduced a group-wide Supply Chain Policy for Conflict Minerals. It contains expectations for our suppliers from conflict-affected and high-risk areas and outlines voluntary commitment. Up to 5,900 new suppliers globally committed to our Supplier Code of Conduct in 2021, of which 3,200 are from the Asia-Pacific region, including 115 logistic service providers in Greater China.
Under the Together for Sustainability (TfS) initiative, BASF continues to conduct supplier assessments and training based on the established high standards of the sustainability framework. At the end of 2021, a total of 284 audits and 5,817 online assessments were performed by TfS members. BASF received sustainability evaluations for 701 suppliers. A total of 86 raw material supplier sites were audited on sustainability standards on our behalf. In Greater China, BASF conducted 215 sustainability assessments and 64 on-site audits of local suppliers.
We also continued to work with the East China University of Science and Technology to conduct the annual sustainability training on procurement and operations for our local suppliers to achieve better performance. In 2021, we trained 60 participants from 31 Chinese suppliers.
The implementation of the AGV tractor became fully operational at the Shanghai Pudong Innovation Park mid-2021.
Digitalization enables us to better support our customers with improved efficiency in manufacturing and logistics operations.
Digital technologies with Artificial Intelligence (AI) solutions helps BASF to steer logistics operations at sites with improved efficiency, safety, and security. A hybrid solution was implemented to resolve the issues of traffic congestion and loading capacity in the warehouse at the Shanghai Pudong Innovation Park. These included streamlining the operation procedure, covering the assets management, truck safety inspection, depot traffic safety, and emergency response. Additionally, the Yard Management System was also rolled out to ease the logistics pressures at the site by enabling truck pre-registration, an automated gate system, automated weighing, e-truck safety inspection, time slot management, smart filling, and several other features.
Instead of diesel vehicles, the Automated Guided Vehicle (AGV) tractor is used for onsite transportation. The AGV tractor was fully operational at the Shanghai Pudong Innovation Park in June 2021. It allows for an automated transportation system on designated routes at the location. Apart from the improved efficiency in operations, the implementation of AGV has resulted in cost savings and a reduction in carbon emissions.
