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Supplier health and safety for procurement teams: everything you need to know

News
|4/15/2024
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Byline: Ashley Cooper, Operations and Supply Chain Director

Onboarding new sellers is a complex process for an organisation of any size.

For enterprises, you need to ensure that any new suppliers adhere to company policies, are selected fairly, and meet complex needs across multiple departments.

For smaller businesses, the supplier selection process can be even more difficult: without the buying power and clout of the corporate behind you, it can be hard to find sellers that are willing to ‘jump through the hoops’.

HSS ProService is a marketplace that connects sellers and buyers simply, efficiently, and frankly without the fuss involved in the traditional process. With over 550 sellers and counting in one place, we know a few things about robust selection and procurement risk management. We’re sharing those considerations here.

Health and safety

Evaluating sellers for defined health and safety policies, up-to-date risk assessments, and employee training processes is a mammoth undertaking in itself. And while enterprise organisations have the ‘luxury’ of greater buying power, smaller companies sometimes struggle to gain support from across the supply chain if sellers are reluctant to hand over sensitive information. We talk more about this in How to Keep Track of Procurement Emissions Targets.

Supply chain support is key, because looking into the health and safety of suppliers requires detail, specifics and site visits. Employee training, competency and protection should be regularly reviewed, as should policy and risk assessment, in line with ISO 45001 or OHSAS 18001.

When selecting a new supplier, you should be able to see their policies in action first-hand. That means getting on-site to carry out pre-arranged health and safety reviews when requested.

Questions to ask to minimise procurement risk:

  • Which health and safety standards do you adhere to?
  • What is your drugs and alcohol policy?
  • Have you had any RIDDOR incidents or near misses in the last twelve months?
  • Are all employees provided with suitable PPE?
  • Do you have written procedures for the safe handling of goods?
  • Do you use any third parties? If so, how are they vetted?
  • Do you hold any FORS accreditation? If so, to what standard?

Business continuity

It’s obviously important to understand the strength and stability of any supplier you’re engaging; especially if you’re planning to work with them on a long-term basis. These days, that means more than asking to see their business continuity plan (although you still should!) and getting a deep understanding of their supply chain and any weak links within it.

Questions to ask to minimise procurement risk:

  • Do you use third parties for any product or transportation? If so, how are they vetted, and what protections do you offer in the event they fall through?
  • Can you share your annual turnover and employee number?

Environmental considerations

It’s increasingly important that sellers have a robust ESG vision and strategy that must evolve and improve over time, with a particular focus on reducing emissions and improving societal impact. Businesses have a huge role to play in the journey towards net zero, and a strong ESG agenda should play to their competitive advantage.

The first step to validating whether a potential supplier is taking ESG seriously is to look at what accreditations they hold. ISO:14001:2015 is a great place to start and is the international standard for an Environmental Management System (EMS), but you could also look to se if they are rated by the Carbon Disclosure Project (CDP), EcoVadis or are members of the Science Based Targets initiative (SBTi).

Then, go deeper. Understand what they do about their energy use, what their energy sources are, their waste management processes and people policies for example – all these things help to paint a full picture of their ESG maturity and commitment.

For sellers whose activities include the use of solvents, producing cement, or metal production and processing, you’ll need evidence of a valid Pollution Prevention Control permit. And for those processing waste on your behalf, ensure they have a waste management licence from the NIEA or SEPA in place. If they can provide reports on how your waste is disposed of, even better!

These are just some of the steps you can take to start mapping your supply chain and ensure you’re partnering with appropriate sellers.

Questions to ask to minimise procurement risk:

  • Have you ever been served with any enforcement notices under environmental legislation?
  • Have you ever been served an improvement or prohibition notice or been prosecuted under health and safety legislation?
  • Do you have a documented policy for the correct handling and disposal of waste? How often is this reviewed?
  • Do you know what your carbon footprint is, and how do you plan to reduce it?
  • What percentage of electricity comes from renewable sources?

Product quality

Naturally, you need to know if the equipment and materials you buy or hire are going to be up to the job. There are some obvious questions to ask here around inspection and maintenance, as listed below. But also think about issues linked to handling and use by your own colleagues. Will equipment supplied be provided with written operating and safety guides describing the operation of equipment in line with HASWA 1974? Lifting equipment has its own set of rules, regulations and inspections in line with LOLER.

Questions to ask to minimise procurement risk:

  • Are all items supplied CE-marked?
  • What procedures are in place to ensure products provided are fit for purpose?
  • Do you keep an up-to-date service history and/or maintenance logs for equipment?
  • How do you prevent the hire or use of equipment pending inspection or repair?

Dealing with data

Data is currency for any business, and the more of it we store and process, the greater the responsibility we have to protect security and privacy. With cybercrime costing UK businesses an estimated £21 billion a year, seller data policies and processes must be vetted to minimise procurement risk.

Customer data must only be used for the purposes of the contract in place, in line with GDPR legislation, and defined in an organisation's own information security policy.

Questions to ask to minimise procurement risk:

  • Who is your data security manager or data governance officer?
  • How are applications and systems protected?
  • What firewalls and perimeter security measures do you have in place?

Protecting people

Most importantly, health and safety extends beyond the physical well-being of people to their mental health and social and economic protections.

This is reflected in the way employees are treated in terms of payment and benefits, as well as the processes and systems in place to ensure they have the tools and information to do their jobs safely.

Questions to ask to minimise procurement risk:

  • What’s your CSR policy?
  • Are all employees paid the minimum living wage?
  • What safeguards are in place to protect the physical and mental health of employees?

Insurance

Finally, you’ll want to see current insurance documentation across a number of areas in order to feel confident your investments are protected in the event something goes wrong.

  • Public and products Liability insurance
  • Employers liability insurance
  • Hired in plant insurance
  • Professional indemnity insurance
  • Contractors all risk insurance
  • Goods in transit insurance

Pre-approved sellers

The entire seller base of HSS ProService is pre-vetted against the rigorous guidelines outlined above, and each seller undergoes a site visit so we can verify all selection criteria are met. In this way, we hope to easily connect sellers and buyers in a way that saves time, stress and mountains of paperwork.

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