CASE STUIDIES
Supporting a German OEM to meet regulatory alignment and source responsibly
Kumi supported an innovative German Original Equipment Manufacturer (OEM) as it electrified its product range of vehicles to help the company align with the LkSG and other relevant regulations, such as the EU Corporate Sustainability Due Diligence and EU Corporate Sustainability Reporting Directives.
The project
We worked with the client to understand its existing procurement processes, supplier relationships, and responsible sourcing accountabilities and with stakeholders to map the different types of supply chains related to the company’s business. Specific challenges we identified include:
- The geographic distance between where products are manufactured and the markets they are sold in with two different company cultures and understanding of responsible sourcing expectations.
- Overlooking parts of the business in the scope of LkSG.
- Lack of internal accountability or ownership over processes in Germany.
- A young and inexperienced procurement team with little understanding of responsible sourcing expectations.
Our recommendations
Based on our findings, we developed a simple and easy-to-implement responsible sourcing framework for the company’s European operations.
Commercial teams within the organisation managed the system we developed rather than a standalone responsible sourcing team. Therefore, to support procurement teams without experience in delivering responsible sourcing activities, Kumi delivered in-person training at the company’s headquarters. In these interactive workshops, buyer feedback was used to tweak approaches to meet business objectives and enhance alignment with working methods.
Ongoing advisory calls complemented this training during supplier onboarding. As it turns out, the young team were keen to learn and understand how in their roles they could support the process and have a positive impact.
The outcome
Within the tools provided by us, the risk assessment and prioritisation processes were key. These have led to targeted identification of suppliers who must undergo risk-based assurance assessments. Prior to these, Kumi identified key risks for the country and sector and assessments focused on these risks alone. To date, Kumi has delivered on-site assessments at a trucking company, a port terminal, a customer service centre, and a spare parts supplier.
Our work has ensured the company aligns with LkSG and can demonstrate that it assesses and addresses risks on an ongoing basis. Furthermore, our site-based assessments have directly led to improved conditions in the supply chain on issues including occupational health and safety to grievance mechanisms.
