Managing risk - RP practice in action
Novartis engages thousands of new suppliers each year, across a supply chain which extends into almost every country in the world. Being able to quickly pinpoint areas of high risk is crucial.
Our RP practice is designed to provide that speed and accuracy and give us a clear view of where potential issues exist or standards may be compromised. It quickly filters out the approximate 95% of suppliers who present little or no ethical risk, allowing us to concentrate our efforts on the small number of suppliers where a significant risk exists or where we can influence change. Most importantly, it gives us this clear insight before we buy. We call it "buying with our eyes open".
RP practice involves three distinct stages:
- Risk indication
- Risk evaluation
- Engagement, collaboration and development
In stage 1: risk indication, we assess for potential RP risk in the areas of Labor Rights, HSE, Animal Welfare, Anti-Bribery and Fair Competition, and Data Privacy. This assessment covers all new suppliers, and existing suppliers who either provide new products or services or have a new site. For 95% of suppliers, that's where the RP practice ends.
The remaining 5% who register a potential risk, will be referred on to stage 2: risk evaluation. The risk will be explored in more detail with the supplier by the appropriate RP Expert Team. Action will depend on the seriousness of the risk.
Stage 3: engagement, collaboration and development takes place after buying and focuses on implementing improvement plans and other targeted initiatives to help suppliers improve their standards and ethical business practices.
