Delivery times as a challenge

In 2018, the long delivery times of components were the most significant challenge in sourcing. Even though component manufacturers invested in increasing their production capacity, the capacity was still too low to meet the market demand. Challenges in the availability of passive components are expected to continue throughout 2019.

Introducing the software robot

Efficient planning of the future in a challenging supply environment means that the master data for items to be purchased must be accurate and reliable. Keeping up excellent data quality also requires continuous maintenance. In summer 2018, Teleste started using a software robot that assists with operational purchasing and updates parameters of the ERP system. Delegating recurring manual tasks to the robot has made work more rewarding and decreased the possibility of human error. Operational purchasing can use more time on expert work, making use of their professional skills.

Teleste sourcing academy

Teleste Sourcing Academy was established as part of the sourcing development action plan launched in 2017. It was evident that sourcing skills had to be significantly developed in order for sourcing to respond to the expectations and to achieve the strategic targets.

Teleste Sourcing Academy is an investment in Teleste’s future. It is a training programme for those engaged in sourcing, aiming for broad-ranging development of professionals skills and expertise. The global training programme provides the entire team with the same level of know-how, inspires to exchange ideas, strengthens the joint operating models and promotes co-operation.

International carefully supervised supplier network

Suppliers are crucially important for Teleste. Our international supplier network consists of suppliers from more than 20 countries. In direct purchases, 20 per cent of suppliers account for 80 per cent of all sourcing. Co-operation with suppliers is based on annual contracts and a long-term approach. The co-operation is steered and monitored through the Code of Conduct, guidelines concerning functions such as logistics and order processing, supplier evaluations, supplier self-evaluations, meetings and audits.

Teleste’s sourcing is divided into strategic sourcing and operational purchasing. Strategic sourcing selects suppliers, negotiates contracts and is responsible for supplier relationship management. Operational purchasing places orders with suppliers and is responsible for daily supplier interaction. The sourcing organisation actively develops operations by harmonising ways of working and by sharing information throughout the organisation. 

Strict selection criteria

Supplier selection is based on Teleste’s values: customer centricity, respect, reliability and result orientation. When selections are made, the aspects evaluated include, among other things, technological know-how, the quality of products and deliveries, delivery reliability, operational ethics and cost efficiency. The Teleste Supplier Code of Conduct was updated in 2018 to better meet the needs expressed by Teleste’s customers. Teleste categorises suppliers into key, primary, approved and new suppliers. The category specifies the relationship and management model between Teleste and the supplier. Key suppliers and primary suppliers are evaluated annually, approved suppliers at three-year intervals and new suppliers at the beginning of the supplier relationship. The evaluation model is updated when necessary. Active evaluation of the supplier base and reviews of suppliers’ business continuity plans are part of the supplier-related business continuity risk management.

Comprehensive self-evaluation

Before engaging in more active co-operation, each new supplier fills in Teleste’s comprehensive self-evaluation that consists of approximately 100 questions related to corporate governance, information security, occupational safety, corporate responsibility, compliance with law and environmental regulations as well as the organisation and its know-how and ability to innovate. What is important in the answers is not only how the supplier describes their operations and what kind of evidence they provide, but also how the supplier’s supply chain works, how they steer it and how this steering can be verified. 

Responsible supply chain

Direct sourcing consists of different categories, such as components, products and services provided for customers. Indirect sourcing consists of goods and services that we use for our own business operations. The requirements for suppliers are based on the category and the volume of sourcing. The typically long life cycle of Teleste’s products sets high requirements for components with regard to their life cycle, life cycle cost development and agility of delivery. Teleste always strives to ensure that materials come from ethically and environmentally responsible sources. 

The company uses a third-party service to maintain the necessary information pertaining to the legitimate trade of natural resources and supply chains in line with sustainable development. The third-party service monitors the origin of the raw materials used in standard components (conflict minerals, 3TG). Teleste only purchases products and components that fulfil the requirements of the RoHS directive. There are also counterfeit components available on the market. Teleste promotes anti-counterfeiting by committing to four basic principles (Teleste’s Anti-Counterfeiting Statement) and by requiring that its suppliers also promote these principles through their own actions. 

 

Updated 2019