Colgate has business relationships with numerous suppliers and contract manufacturers around the world. Colgate's aim in conducting procurement operations is to ensure continuing, reliable sources of supply. Honest dealing with suppliers is essential to sound, lasting relationships. Thus, we view our suppliers as partners and expect them to make a reasonable profit. We give all potential suppliers fair and uniform considerations.
Colgate's commitments to suppliers are the following:
- We will proactively facilitate the participation of diverse suppliers in our competitive bid processes
- We will effectively communicate our needs and expectations to suppliers
- We will provide timely and objective feedback to suppliers on their performance in bid processes and as ongoing suppliers
Colgate makes very limited use of contract manufacturers. In 2008, more than 90% of Colgate's products were made in Colgate facilities. The use of contract manufacturers allows us to optimize our supply chain capabilities, deliver innovative technologies, provide a strategic alternative to in-house manufacturing, increase speed to market, reduce capital investment and manufacturing costs as well as increase flexibility in a rapidly changing marketplace. While contract manufacturers and suppliers are not Colgate employees, we consider them partners and crucial to our business success. As such, we expect every organization that we do business with to share our values and maintain the same high ethical, social and environmental standards as our own employees. These are defined by our Global Contract Manufacturing Standards, our Code of Conduct and local regulations.
The Global Contract Manufacturing Standards serve as a basis for developing successful relationships with contract manufacturers. They include information on our business practices and how Colgate selects and manages suppliers and contract manufacturers. For example, in addition to meeting quality and safety requirements, the Standards explain that Colgate considers human rights and Environmental, Occupational Health and Safety (EOHS) in the decision-selection process and that the Company expects that suppliers and contract manufacturers have appropriate programs and policies in place to meet such requirements.
Colgate gives all potential suppliers fair and consistent consideration. Decisions are based on objective criteria, such as price and quality as well as reliability and integrity. A selection process includes use of a multi-functional team, who ensures that all commercial, financial, technical and supply chain requirements are considered. The final contenders may be audited, and the selection team reviews all information before making a single recommendation for management approval.
Before suppliers or contract manufacturers are approved, they are provided a copy of the Colgate Code of Conduct, which reinforces our corporate culture and addresses issues of law, ethics and fairness. In addition, the following Code of Conduct clause is included in supply contracts and purchase orders: "Supplier agrees to comply with Buyer's Code of Conduct as it may be amended from time to time." If they fail to adhere to the policies, they risk losing the business.
Managing our supply partners is an ongoing process that includes actions for establishing expectations, operational management and continuous improvement. This includes monitoring systems and reporting the results. Colgate reserves the right to conduct quality audits of suppliers and contract manufacturers' facilities, and does so as part of our Enhanced Supplier Management program.
Learn more about the Colgate global procurement team's mission, goals and policies.
Encouraging a Diverse Supplier Base
Colgate's commitment to diversity goes beyond Colgate employees extending also to its business partners. In North America, our supplier diversity initiatives continue to build relationships with diverse suppliers. From 1998 to 2006, Colgate's spending through small and medium-sized enterprises owned by minorities and women had more than doubled, including direct and indirect spending with our prime suppliers.
Read more about supplier diversity.