Supplier Risk Assessment
In all sourcing decisions, compliance with Rentokil Initial standards for a responsible and sustainable business approach is used as a go/no-go gate rather than as a weighting factor for decision-making. Once the relationship has been established, suppliers are audited on a prescribed frequency based on their performance trend and level of risk. The risk assessment considers manufacturing location, product criticality, supplier reliability, management capability and previous audit results, and varies from a one-year to four-year audit cycle. We classify our suppliers as Critical, Major and Local for the purposes of audit, compliance and management control.
Suppliers that do not conform to required standards during the pre-selection evaluation are eliminated from the tender process. If an area of non-compliance is discovered at a new or existing supplier, they are given the opportunity to address and resolve the issue, with our support where required. This is especially regarding non-compliance to our corporate social responsibility (CSR) standards. It is important that suppliers are made aware of the specific issue and the actions considered necessary to remedy the situation. Penalising the supplier directly by removing business, or not awarding a contract, is most likely to harm their employees who we are trying to help.
External suppliers are classified as:
Critical Suppliers (38 in 2019) – representing a high proportion of category spend, supplying unique products to multiple company markets or requiring a long lead time to substitution if required;
Major Suppliers (146) – with a significant proportion of spend in a single country (over £0.5 million) or region and/or suppliers of generic products that can be substituted at short notice; and
Minor Local Suppliers (c.2,800) – representing the majority of suppliers in number, but a lower proportion of the category spend.