Procurement process
Rio Tinto's procurement process is built around:
- Developing consistent data around the sourcing of goods and services. This has resulted in identifying around 150 sourcing categories that cover the approximately 35,000 suppliers to the Group. This categorisation allows a much more focused approach to identifying health, safety, environment, climate change and community requirements that can be consistently applied.
- Tailoring sourcing activities to meet the specific needs of the business units for specific sourcing categories. The process of selection also allows us to work with suppliers who will engage on specific aspects. For example to work with mobile equipment manufactures to improve the safety design and performance of their equipment. Another example is that prospective suppliers are informed that Rio Tinto views favourably those suppliers with proactive programmes on the issues addressed in The way we work, Rio Tinto's statement on business practice. Exact language included in bid instructions varies by sourcing category and the requirements of the business units.
- Performance monitoring of the contract whether for goods or the provision of onsite work. An example of this type of monitoring includes fuel suppliers' performance in safe transport and delivery of fuels. The ongoing development of specific performance measures that can be audited and linked to contract renewal is an area of focus for the Group.
- Ongoing management of suppliers is undertaken through the management of the contracts. Contracts are awarded for up to three years, which allows regular review of the suppliers performance and assessment of the Group's needs.
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