Supplier Management

The Procurement department of the Volkswagen Group makes a key contribution to meeting the company’s goals – not only its economic objectives, but also in terms of pursuing sustainable development in environmental protection and ensuring minimum social standards. The integrated approach characterising all three areas has long been a significant element of our corporate strategy and is more important than ever as globalisation extends its reach. To this end, it is essential that all Volkswagen AG business partners support our environmental and sustainability standards. Only by working together in this way can we fulfil our social responsibilities and secure the future of our partners along the value chain. All our partners are called upon to make their own contribution to sustainable development throughout the entire product creation process. In this way, the partnership- based development process already in place in the production sector is being extended to include production and plant-related environmental and social standards.

Environmental issues, such as regulations governing the use of materials, are therefore incorporated into business relations at an early stage in the form of company or industrywide standards and guidelines. At the same time, another research project has been looking into the scope for futureproof development along the full length of the value chain. The “Sustainability in Supplier Relations” concept was developed jointly with the University of Oldenburg, and involves the introduction of shared environmental and social standards for suppliers around the world. The Volkswagen Group sees this as a key building block in ensuring the competitiveness of suppliers going forwards. Indeed, experience has shown that an environmentally aware and socially responsible supplier more often than not also makes a better and more reliable partner from an economic point of view. All of this is in keeping with the Procurement department’s vision of “Together – best in class, in customer value and cost.”

The Procurement department ensured that all the suppliers affected were well informed before the systematic implementation of the concept got underway. The “Sustainability in Supplier Relations” concept was then introduced to our suppliers at the fourth International Supplier Exchange (IZB) in 2006, where Francisco Javier Garcia Sanz, Member of the Board of Management of Volkswagen AG for Group Procurement, underlined that: “For us it is important that our partners not only deliver flawless quality, but that they also work to minimum environmental and social standards around the world.” The Volkswagen stand at the IZB was staffed by experts from all the Group’s specialist areas. At the same time, the subject was also discussed with over 260 of the other companies represented at the event. Suppliers can find detailed information on Volkswagen’s requirements of its environmentally conscious and socially committed business partners either on the B2B supplier platform or in our brochure “Sustainability in Supplier Relations at Volkswagen.”

"Sustainability in Supplier Relations" Concept


Since November 2006 we have been asking our main suppliers to take note of the Volkswagen Group’s sustainability requirements. This involves engaging each supplier plant in our sustainability dialogue. Volkswagen provides suppliers who do not yet fully satisfy the Group’s requirements with support as part of an extensive supplier development programme. Deviations identified by quality assurance teams during visits to supplier plants are reported to an ad hoc team of experts, who then draw up improvement measures that will remain effective in the long term. The same team is called into action whenever our early warning unit identifies suspect cases which might involve suppliers. However, to date there have been no such confirmed cases linked to Volkswagen suppliers.

In another supplier development initiative, an information event entitled “Sustainability and social responsibility – opportunities for suppliers in the automotive industry” was held in 2006 in cooperation with the Regional Centre for the State of Lower Saxony operated by Internationale Weiterbildung und Entwicklung GmbH (InWent). Experts from various branches of industry presented examples of the support available to small and medium-sized companies and highlighted examples of good practice from the supply chains on dealing with various environmental and sustainability issues.

For a long time now, the Volkswagen Group has been running supplier training courses as one way of meeting its social and environmental responsibilities. More than ten years ago we initiated a dialogue with business partners on the subject of environmental protection. These talks focused on developing joint measures aimed at meeting environmental goals and were broadened to embrace the topic of sustainability in 2003. Communications and the exchange of experiences between the Volkswagen Group and its suppliers on the subject of sustainability are grouped together under the logo “Priority A – partners for the environment and sustainability.” So far, over 150 training events have taken place involving more than 1,500 participants.