Sembcorp Marine is committed to manage the environmental, social and economic impacts across its value-supply chain.
Effective value chain management is essential for business sustainability and customer satisfaction. Value inputs are proactively managed across Sembcorp Marine’s project life cycle processes – from design, engineering, procurement, construction and commissioning through to delivery – to fulfil customers’ specifications, delivery timelines and budgets. Beyond project fulfilment, the Group aims to exceed customers’ expectations towards its practices in managing quality, health, safety and environment as well as business performance.
Supply Chain Management
Steering the Group’s supply chain management strategy is the Sembcorp Marine Procurement and Outsourcing Resources Committee (SPORC). Led by the Head of Supply Chain, SPORC plays a key role in creating value from supply chain synergies through economies of scale and enhanced competitiveness.
Effective material management processes ensure that suppliers provide timely delivery of products and services; comply with quality, safety, environmental standards; as well as align with the Group’s Code of Business Conduct and sustainability requirements.
A vital part of Sembcorp Marine’s supply chain value management is the due diligence processes for identifying and assessing critical vendors, and managing these processes through close monitoring and periodic evaluations. Critical vendors include those providing crucial materials, equipment, components and services that may significantly influence project deliveries.
To mitigate procurement-related risks, Sembcorp Marine actively engages and monitors suppliers to ensure that they comply with stipulated delivery schedules, specification standards as well as ethical codes of conduct. Suppliers who have significant impact on project outcomes, including those providing critical materials, equipment and parts, are identified early and monitored closely throughout the project.
Sustainable and Responsible Supply Chain
Sembcorp Marine embeds sustainability practices across its value chain, operations and the lifecycle phases of its products and solutions, so as to minimise environmental, social and economic impacts. The Group manages its operational impacts through sustainable resource and material management as well as responsible procurement.
The Group adopts energy-saving equipment and devices; controls wastage and disposes of wastes responsibly through licensed vendors; and uses environmentally-friendly paints and coatings in its operations.
To protect the environment and marine ecosystem and help mitigate climate change, Sembcorp Marine avoids products containing harmful chemical substances. In compliance with environmental and public health requirements by IMO, Montreal Protocol provisions and Singapore’s National Environment Agency, the Group does not procure materials, parts, equipment or products containing asbestos and ozone-depleting substances such as chlorofluorocarbons (CFCs), hydrochlorofluorocarbons (HCFCs) and halon.
The Group also practises ethical sourcing and makes every effort to prevent conflict minerals from entering its supply chain. Conflict minerals are defined as tin, tantalum, tungsten and gold originating from conflict-affected or high-risk areas where the mining of these minerals is exploited by armed groups which perpetuate violence and human rights abuses. Sembcorp Marine’s suppliers are required to declare that they and their upstream partners do not use or procure the said substances and materials.
Supply Chain Due Diligence
Recognising suppliers as important partners in value creation, the Group has in place due diligence measures and internal controls to ensure on-time delivery while meeting standards of quality, safety and reliability.
As part of the qualification process for inclusion into Sembcorp Marine’s Approved Vendor List, companies are required to declare and provide supporting documentation that demonstrate compliance with the Group’s standards, and for assessment by a review panel. Sembcorp Marine has also expanded its focus to include sustainability criteria, such as responsible labour management, human rights and environmental practices, in its review process.
Companies in the Approved Vendor List are selected based on their quality and service track record as well as ability to operate responsibly over a long term. Suppliers are subject to Sembcorp Marine’s tender regulations and codes of conduct for fair competition during the bidding process. In the area of manpower supply, Sembcorp Marine’s resident contractors are required to have at least bizSAFE Level 4 certification and externally audited safety risk management systems as an endorsement of their workplace safety and health capabilities.
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