Writing a sustainability report means drawing a balance of where we stand. What did we achieve in the year under review? What do we need to focus more on in the future? When we wrote our first sustainability report two years ago, we knew that it would only be the starting point for engaging in an open and challenging dialogue on the environmental and social impact of our business activities.
The industry in which we work is in the midst of transition. An environmental turnaround in transportation can only succeed if private transport – a major carbon emitter – shifts to alternative drive technologies. As a close partner to the automotive industry, we consider creating the conditions for sustainable manufacturing and logistics and proactively developing solutions as our responsibility too. To this end, we are involved in research and pilot projects relating to the life cycle of battery-powered vehicles.
On top of that, we keep a constant watch on our own emissions – as the quality and efficiency of our processes is key. To reduce CO2 emissions, we also use electric pool cars and industrial vehicles. Many of our branches also have efficient LED lighting and energy-saving heating systems. But we also want to report here on the limits on and factors involved in our environmental activities.
In order to live up to our claim of operating responsibly as a company, we have focused in the past two years on our most important resource –the skills and motivation of our employees. For example, we have launched an employee app to create important means of business participation. We have also opened up new job opportunities for junior staff via training programmes and cooperation with colleges and universities.
Against this backdrop, we do not feel any need to gloss over the balance we have drawn of our accomplishments to date. We are proud to transparently and clearly present in this Sustainability Report our efforts and successful achievements towards more sustainable automotive logistics, and remain open to constructive criticism for further improvement.
We know that sustainability is an on-going challenge that can only be mastered by combined effort. In this sense, we hope you find our report insightful and look forward to hearing your comments!
Dr. Marcus Ewig and Thomas Bernhardt,
Managing Directors of Rhenus Automotive SE
The logistics industry is visible everywhere one looks. Lorries rolling along roads, delivery vehicles hauling items across cities and towns, freighters floating down rivers and cargo planes flying through the sky. Goods are transported along the various stages of the value chain, as finished products to retailers, and ultimately making their way to customers for purchase. This is logistics in action on the front stage – large-scale movement of goods in the sense of transport.
Rhenus Automotive – a subsidiary of the Rhenus Group – operates in a different and narrower sense of logistics, performing a more nuanced role. One that is less visible, but much closer to the product.
The core business takes place on the factory premises
Rhenus Automotive provides intralogistics, the optimal supply and delivery of all required goods and materials and their installation in the production processes – just in time and just in sequence. Stated another way: wherever automobiles or automotive parts are manufactured, the right components must be available, installed and processed in the right sequence at the right time in the right place. Rhenus Automotive’s core business comprises the activities performed between delivery of material to and removal of empty load carriers from the factory gate. Rhenus Automotive’s own services are provided predominantly on the factory premises.
Such a specific logistics role results in a much closer connection to the customer – the manufacturing company. It becomes interconnected with the customer’s own value creation, with its processes and requirements. This type of logistics provider can actually relieve the automotive manufacturer of related tasks enabling the manufacturer to concentrate on its finished product.
Efficiency and precision – but no waste
In complex manufacturing, efficiency and precision in collaboration constitute operational business factors as well as drivers of sustainability. Every trip, transport route and minute saved equate to saved energy. And every bit of energy once spent on production is better invested the fewer breakdowns and damage there are and the longer the life of the end product is.
This is the essence of Rhenus Automotive’s corporate environmental responsibility to support customer processes as efficiently as possible and in a way that conserves resources. That is the fundamental obligation. The special skill demanded on top of that is understanding the customer’s needs beyond the contractually agreed cooperation and developing sustainable solutions to its problems.
Both production and logistics concepts are oriented to the manufacturing cycle and are aimed at delivering the right quantity of a product at the right time without building up inventory. The difference between ‘just in sequence’ (JIS) and ‘just in time’ (JIT) is that JIS takes into account the sequence in which components are processed in assembly.
In the automotive industry, where custom configuration of a car is becoming increasingly important, JIS pairs the sequence of delivery to the station with the sequence of production, thus reducing floor space and condensing routes. This lowers throughput times and makes overall production is leaner; there is less bound capital.
In turn, JIS production requires very precise coordination and communication as well as a stable infrastructure between the suppliers and logistics providers and the vehicle manufacturer.
More significant factors and greater leverage lie in the consumption of materials, the energy infrastructure of the factory premises, and transport back and forth between locations – all these are then on the side of and in the hands of the customer. Rhenus Automotive’s scope for exerting influence is limited and action can only be taken in reliance on and agreement with the automotive company.
Sustainability management of Rhenus Automotive is caught between only having an indirect influence on the environmental impact of the customer and its economic consideration on the one hand, and its aspiration to effectively implement improvements on the other hand.
In her function as Head of Corporate Social Responsibility of Rhenus Automotive, Stefanie is responsible for and coordinates SCR and heads the Rhenus Group Steering Committee.
The SDGs: climate action, decent work and economic growth, good health and well-being, and industry, innovation and infrastructure make up four areas of action that form the core of Rhenus’ sustainability strategy and in which the company strives for improvement.
Alina, as part of your master’s thesis, you developed a forecasting tool for project-specific CO2 emissions in logistics. What was the main question you wanted to find an answer to?
Summed up, it goes something like this: How can CO2 emissions or CO2-equivalent emissions be calculated and forecast as accurately as possible for projects that have not yet been awarded and will only be carried out in the future? After all, always determining after the fact what level of emissions was generated does not help to effectively manage projects and achieve reduction targets. You can’t manage what you can’t measure.
And at the same time, the CO2 tool ought to be user-friendly with a high degree of accuracy, so that it can be used without any special prior knowledge and without great effort.
What were the biggest challenges?
In the conceptual design, first of all, that there are no uniform and mandatory compliance standards in the calculation of emissions. System boundaries need to be set and reference frameworks defined. In the Rhenus Group, the Green House Gas Protocol applies to accounting, but this relates to emissions that have already been generated, which brings us to the next challenge.
A forecast always involves additional uncertainties. Instead of using estimates, I wanted to work with data that was as close to reality as possible, so I immersed myself in the practice. I looked at the various projects at Rhenus Automotive, classified them and compared them in detail to the energy management system and also studied them on site at the premises. The questions I asked myself were: What causes CO2e emissions? What are the energy sources used?
I also analysed data from completed projects to generate historical values and use them to create reference values for all areas that emit CO2. These are stored in the tool. In this way, even without substantiated data for planned projects, good approximate values can be obtained, on the basis of which decisions can be made.
What observations did you make during your investigation with regard to sustainable logistics?
Rhenus Automotive is on the right track, but the decarbonisation of logistics is subject to external influences, which makes it complicated. There are unavoidable CO2e emissions generated by the business; emission sources that can only be addressed by or with the customer, and very complex supply chains. I see potential for improvement primarily in investing in solar energy and sourcing green electricity so that the energy for the already electrified industrial trucks is even cleaner.
Energy management at the sites
Rhenus Automotive has set up a central energy management system (EMS) that is ISO 50001-certified, into which the consumption of all sites and branches can be entered and tracked. The EMS helps to clearly record energy sources, to implement energy efficiency measures in a targeted manner and network sites with regard to possible approaches. Rhenus Automotive also operates an ISO 14001-certified environmental management system at some of its sites and performs standard and needs-based audits with the aim of having a measurable basis for the evaluation and further development of measures.
Where diesel vehicles used to predominate, electric forklifts and electric tow tractors have long been standard at Rhenus Automotive.
is one of Rhenus Automotive’s central quality and energy managers. Together with the local energy managers of the sites and branches, Joan-Philip monitors the respective consumption and uses centralised data and scenario checks to implement energy efficiency measures.
The warm air that has risen to the top is drawn in by large, slowly rotating ceiling fans and distributed back down. This raises the temperature at floor level without having to use more heating energy.
The decision has been taken to end the combustion engine era and a definite time limit set on when this will be. The ban on fossil fuel cars will apply to newly registered vehicles in Germany from 2035. Even if the desired outcome of which technology will come to the fore as practical and sustainable is not that clear – electric, hybrid or hydrogen vehicles will prevail on the market – the automotive industry is now under immense pressure to change. The entire industry is in the midst of a total transformation driven by disruptive forces. Everything is being turned upside down.
Production sites, supply chains and manufacturing processes dedicated over the years to perfecting production of combustion engines and transmission systems throughout all work stages must now be converted, expanded and supplemented. After all, many components in the manufacture of the end product – the automobile – will no longer exist in ten years. In the current phase of transition, automotive manufacturers and suppliers are even often operating several production lines in parallel. Existing production structures for conventional drive types are having electric cars integrated, which makes material procurement and cycles, production itself, and logistics more complex.
As Sales Manager in Sales & Engineering at Rhenus Automotive, Frank’s responsibilities include new tender projects, maintaining existing customer relationships, project forecasting – also for resources and service components offered, and calculating costs.
On the one hand, Rhenus Automotive is only indirectly affected by the changes. Components will continue to be moved and installed between production steps. But on the other hand, it’s the details that count. It makes a big difference to us – as a JIT and JIS logistics provider that not only delivers goods in the right quantities at the right time but that also syncs the deliveries with the assembly sequence – whether or not, instead of the highly resource-intensive logistics processes for manufacturing engines and transmissions, we will only be required to support the much leaner battery production in future.
Part of the solution: develop business opportunities
And fundamentally, Rhenus Automotive does not see itself and its role in the industry as that of a passive spectator. Rather, it considers its task to be anticipating early on how customer requirements and Rhenus’ own range of services will shift, which solution offerings are viable for the future, and how existing gaps can be meaningfully closed for customers.
For Rhenus Automotive, changes also generate opportunities. For example, the opportunity to rethink business models and expand the existing portfolio of services.
For electromobility to actually harness sustainability’s potential, the electricity used must be green – i.e. generated from renewable energy sources – and, above all, the battery problem has got to be solved.
The ‘battery problem’ is this: What actually happens to electrically powered vehicle batteries when they reach the end of their life, become defective or when accidents occur? How can these batteries be reused or their individual components recycled and valuable raw materials reused? And what factors must be ensured for their environmentally friendly storage and transport?
The Battery Lifecycle Company GmbH (BLC) was founded by sister companies Rhenus and TSR with the aim of providing an integrated recycling of batteries along the entire value chain. From its site in Rheda-Wiedenbrück, BLC handles all the processing steps for lithium-ion batteries, most of which come from the automotive industry: Functional batteries whose performance is no longer sufficient for use in vehicles are prepared for reuse in new applications. Batteries that are irreparably damaged and no longer usable are discharged and dismantled.
Second life and second use
Technological developments focus on safety of battery storage, handling, transport and reuse. This ensures that the energy used in production is utilised as long as possible and thus sustainably. For example, old batteries could be used to store electricity in power plants or in logistics, giving them a second use. To date, around 10-20 per cent of batteries in automotive production are treated as rejects and disposed of due to defective components. This wastes potential and detracts from their value. In the end, the value lost from a car battery to a power storage unit is considerable.Treated appropriately, batteries can also be reused for their original purpose as car batteries. The energy and time investment required for this confirms that remanufacturing, refurbishment or repair is worth it, both in terms of cost and sustainability. Nevertheless, this rarely happens. What does happen instead of repairing batteries is frequent treatment as economic write-offs because of the high initial investment required and the lack of expertise.
Automobile manufacturers have their work cut out for them at the moment assessing and converting their production processes for the new end product – the electric car. So they often fail to look at downstream processes or those not considered priority or not part of their core business, which creates blind spots. We see it as our responsibility to remove such blind spots where we can and to think of solutions for the needs of our customers – in the spirit of sustainability.
Transparency and take-back obligation
For automotive manufacturers, extending the battery life cycle is a step that makes sense both economically and in terms of sustainability – regulators have also made it obligatory. The German Supply Chain Due Diligence Act (LkSG) and extended producer responsibilities oblige distributors to practice transparency about raw materials and respect their take-back policies. It is therefore in the interest of and an obligation for automotive manufacturers to indicate which elements have been installed and used, and to secure access to recycled materials in order to meet recycling quotas.
For original equipment manufacturers (OEMs), investing time and resources in developing battery expertise – safety in storage, transportation and handling and in technological measures to extend their life – is risky and unprofitable at this time. Rhenus Automotive is closing this gap and investing in the know-how and the capacities to design and implement safe and efficient battery life cycles.
Besides specialisation in batteries, Rhenus Automotive, Remondis and TSR can share this additional advantage. As a JIS logistics provider for several OEMs at a variety of different locations, Rhenus Automotive can combine decentralisation and short distances – both key requirements for the safe and sustainable handling of batteries – with high volumes and thus operate economically.
is Project Manager at Rhenus Automotive and Managing Director of The Battery Lifecycle Company joint venture. He is particularly committed to developing and expanding battery expertise in automotive logistics and, in collaboration with research and practice partners, to holistic, sustainable battery life cycle management.
Stephanie, why is the battery head unit Kamenz a special site for Rhenus Automotive?
Kamenz is Daimler AG’s largest battery site. The Daimler subsidiary Accumotive manufactures drive batteries for hybrid and electric vehicles for car brands Mercedes Benz and Smart here. The plant is extremely important for the OEM, as the majority of the Group’s batteries are made in Kamenz. The company’s own stated mission is to help shape the future of the automotive industry here in Kamenz. The plant itself conveys this aspiration – simply by virtue of the 80,000 m2 of production area and the extensive open space surrounding it. At this site, you have the sense that there is plenty of room for growth here.
What does this mean for Rhenus Automotive’s work?
As a service provider, we share the OEM’s mission of helping to shape the future of the automotive industry. This requires two things: experience in plant logistics and the willingness to rethink logistics and chart new territory. We are high-profile as an experienced service provider in plant logistics anyway, but our power of innovation was also a major reason for being selected for the site.
What are the special logistics challenges for this battery head unit?
The production of batteries differs from that of combustion engines in a number of ways, and these differences are accompanied by specific challenges. First and foremost, working with batteries harbours a greater potential for danger. The cells are live; short circuits can occur; and in the worst case scenario, the batteries can ignite – so more comprehensive safety measures are required. For example, the trailers that transport the batteries to the plant must be cooled continuously – even when they are on the plant premises, of course.
The plant is also highly automated in order to minimise risks to employees – in other words, most of the transport on the plant premises is carried out by driverless transport systems. What is more, potential delays due to battery incidents must be taken into account in planning operations. The plant has its own fire department for such incidents. Also, employees and managers have to be regularly instructed and trained in handling hazardous materials. So far, there have not been any long-term empirical values to rely on in addressing all these challenges.
How did you specifically address these challenges then?
I am convinced that the best way to deal with a disruptive change like this is to take a disruptive approach. So the main thing we did was put together a Scrum team for Kamenz management. Colleagues from different areas and from different Rhenus Automotive sites met in Saxony to share their specific skills set for the benefit of this location. This was a novelty for us, but it proved successful. For one thing, it ensured that we got the ideal combination of skills needed for handling the logistics at Kamenz. And for another, taking this approach also sent a message to the OEM: We have the courage to change and dare to try something new when the previous solutions are no longer an optimal fit. In my opinion, the OEM should not underestimate the impact of such messages. They confirm that Rhenus Automotive is the right partner for this important site.
How else did you indicate this?
We have mastered the complex and often unanticipated developments that have affected the battery industry in the past two years. For example, working time models changed very quickly in some cases due to the coronavirus pandemic, and there were also supply bottlenecks for semiconductors. We too clearly felt the pressure that the OEM was under. However, the Rhenus Automotive team at the Kamenz site has demonstrated time and again that it can withstand such pressure to change and find solutions.
We don’t want to give the impression that we are purely reacting to change. On the contrary, we are consciously driving transformation forward. For example, we have a 100% electric vehicle fleet here at the site, which I believe is logical for a battery site. We support the OEM with state-of-the-art technology at all times. Just one example of that – we recently upgraded our scanner technology, from classic handhelds to ring scanners. And we never give the impression of sitting back and taking it easy.
Swen, how does a lean manager contribute to sustainability?
Quite simply, in that we devote ourselves to our core task – optimising processes and providing colleagues with the right tools and methods for them to improve processes independently. As a logistics service provider, Rhenus Automotive is characterised above all by the quality of its processes – and this depends very fundamentally on how lean those processes are. After all, if there are no unnecessary steps, there is no unnecessary consumption of resources, no unnecessary emissions, and so forth.
What is the basic idea behind CIP at Rhenus Automotive and how does it work?
The continuous improvement process, or CIP, is based on the Japanese business philosophy of kaizen and is the practice of continuous improvement of everything by everyone. An improvement process is therefore not something that is centrally controlled and completed at some point, but is based instead on collective intelligence and iterative development. In my work as overall CIP coordinator, this means ensuring that every colleague feels called upon to make suggestions for improvement where they think it makes sense – whether it concerns saving time, communication, maintaining order and cleanliness, energy consumption and environmental protection, or safety matters. And it is my responsibility to ensure that the CIP site coordinators process and implement these suggestions following clear guidelines, and to monitor targets and quotas.
How do you go about this? What is important to you?
It is also important to me to constantly assess and optimise our own processes. CIP is therefore on my radar screen all the time. There are two key factors to optimising the CIP. One is maintaining the lowest threshold possible to submitting a suggestion and the other is ensuring that processing, systematising and implementing suggestions are as uncomplicated as possible.
Digital tools are extremely helpful in tuning both these factors. To submit a suggestion, we have a QR code that directs employees to a user-friendly submission form. Then, after submitting their suggestion form, the employee receives a new individual QR code they can scan to track the implementation of their suggestion and see what reward they get for it.
After improvements have been effectively put into practice, they are evaluated by Performance Management in our CIP app especially developed for this purpose. Particularly noteworthy improvements and/or improvements with added value for other branches are entered in the CIP database, which CIP coordinators regularly review. The aim is to use the know-how gained across all branches. In short, we have set up the CIP to be fully digital, making it a lot leaner and faster.
is Lean Manager and overall CIP coordinator on the central Performance Management team. He is responsible for the CIP process, shop floor management and 5S. Swen also leads Lean trainings at all Rhenus Automotive sites in Germany.
Is there a current example from the CIP that particularly comes to mind?
A particularly valuable suggestion for improvement is one that adds value for other sites as well and optimises processes there too. A promising current suggestion that comes to mind in this regard is one submitted for a digital tool that can be used to report damage to trailers and vehicles and arrange appointments for repair. We have a large number of vehicles at each site, so damage is bound to occur during operations. Reporting damage, making appointments with the garage, and transporting vehicles to and from the garage has been a fairly fiddly process so far, involving numerous interfaces and different means of communication. The improvement suggested pooling all these separate steps on a platform that all parties can access. So, we are now at work on an app which can map the entire process and be accessed via smartphone. Starting with the photo taken for reporting the damage to the vehicle, to making an appointment with the garage, to picking up the repaired trailer or vehicle – everything can be handled online. No one has to call anyone and jot down an appointment. If the system proves successful at one model site, we could implement it for the forklift fleet throughout the company. This would save us huge amounts of work.
As a logistics service provider, Rhenus Automotive’s value creation primarily comes from the people who provide these services of warehousing, picking and assembling individual parts, and also planning and checking workflows and processes.
As the automotive industry changes, each of these activities is changing in its own way – and with this the demands on those who perform the tasks. On the one hand, increasing automation is simplifying individual steps, but on the other, the shift to globalisation and digitalisation – in short, to Logistics 4.0 – also requires higher technical and IT skills in order to meet customer requirements.
As an employer, Rhenus Automotive is aware of its responsibility to actively and diligently shape these complex dynamics of change in order to ensure a good and healthy work environment for its employees. And it has been rewarded for its successful efforts – those who have started working for Rhenus Automotive usually stay for years. Nevertheless, in times of skilled worker shortages, such a good and healthy working environment is only a basic but not a sufficient condition to inspire and attract people to work for an employer. The declining number of applicants in all areas of the company has challenged Rhenus Automotive to take a close look at its role as an employer and to develop it further.
As a result, Rhenus Automotive has drawn up a number of different guidelines and launched projects over the past two years that hone its profile as an employer and have further professionalised and digitised its HR management processes.
As regards sustainability, Rhenus Automotive’s basic principle is that the efficiency of logistics processes is one of the key factors in sustainable business. This is where decisions are made about the optimal use of resources – or about their unnecessary consumption.
The Online Application Portal neologist-bei-automotive.de
With its landing page neologist-bei-automotive.de, Rhenus Automotive is breaking new ground in facilitating industrial employees’ access to jobs at the company. The conventional process of a written application form has always been a hurdle for this group of employees – and an unnecessary one at that, since a pack of application documents provides little information about the prospective employee’s qualifications for an industrial job.
So, Rhenus Automotive offers the option of applying via its neologist-bei-automotive.de landing page for a job in production, driving a forklift or working in the warehouse. Interested parties can indicate online which job and which locations they are applying for, their previous experience and which shifts they would like to take on – all with just a few clicks.
QR codes on printed products make the landing page accessible in a few simple steps, thus paving the way to a job interview.
Responding adequately to the current changes in the automotive and logistics industry is a complex process. It requires a different mind-set, a new corporate culture that cultivates more independence, innovative spirit and creativity. A culture in which especially those people with a flexible mind-set who want to help shape change feel at home. A culture that allows and even encourages agility and curiosity.
is Head of HR Development at Rhenus Automotive in Mannheim. Together with her team, she oversees the “Neologist – Rethinking logistics” campaign, which conveys to employees the meaning and the context of their work and boosts their sense of factory pride, as well as encouraging them to challenge processes and structures to which there previously seemed no alternative.
About two years ago, Rhenus Automotive began to further develop its own self-image as a company and as an employer, as well as to refine its corporate culture. What the process revealed was the need for a target image, one that employees could identify with, a positive point of reference for their own behaviour and their dealings with one another. Rhenus Automotive immediately rose to this challenge of creating such a positive identity by coining a new word “neologist” – and actively shaping the corporate culture so that all employees of Rhenus Automotive consider themselves as neologists and are proud to be one.
Starting in 2022, Rhenus Automotive is offering all employees NeoApp – a digital tool to improve the flow of information within the company. The app is the gateway to the intranet. It can be used to view the current shift schedule and track changes to it in real time, thus supplementing the traditional bulletin board in the plant. The app also displays all current announcements by company management as well as from the company’s own site. This is a huge gain in information, especially for industrial employees, as this group of forklift drivers, order pickers and others manufacturing specialist employees do not have work e-mail addresses and therefore no access to Rhenus Automotive’s intranet. All information is now available to them on the app, and they can also submit suggestions for improvement via the company suggestion scheme, and sign up for benefits, such as a company-leased bicycle.
Options to register for further training and e-learning as well as participation in surveys and maybe even online reward shops are features under consideration for future app versions.
Lena, what are the goals of the Talent Programmes department?
In recent years, fewer people have applied to Rhenus Automotive than before. This decline in applications is a general trend not only affecting the logistics industry. We are consequently faced with a two-fold challenge – firstly, attracting people to a job at Rhenus Automotive, and secondly, ensuring that they stay with us for the long term. The Talent Programmes department has been further expanded to meet these two demands.
How are you specifically addressing these challenges?
First of all, the idea is to create more apprenticeships. This may sound counterintuitive, but it is logical if you think about the large number of sites we have. There are definitely people interested in working at certain sites, but sometimes these sites cannot fully offer everything included in the outline plan which is the prerequisite for apprenticeships. In this case, we talk to the sites and together look at which options and sites could be considered in order to fully meet framework plan requirements.
We are also improving access to training at Rhenus Automotive in a number of different ways. For example, we often offer apprenticeships to employees who started with us as lateral entrants and have since proven themselves. We also want to step up our visits to schools and advertise our apprenticeships at Rhenus Automotive there.
And – we are increasingly going digital, because that is important to the younger generation in particular. We are active in social media; we are working with a training management system where, for example, report notebooks can be processed online; and we are converting more and more HR processes so that they can be bundled and managed via an app. We are also planning a landing page to make it even easier to apply for an apprenticeship. Like the landing page for industrial employees, this new page will make it possible to submit online applications without any paperwork.
How are applicants and apprentices responding to these initiatives?
They have responded very positively to our concept of creating prospects. This means, for one thing, our offer of apprenticeships to career-switchers and at schools of different ways to get started in employment at Rhenus Automotive. For another, it means the many different and sound career paths possible after completing an apprenticeship, like further training to become a master craftsman, business administrator or economist, and lots more.
In my opinion, creating prospects also means increasing flexibility within the company. Those who have trained at several different sites have a better insight into company structures and are generally better connected within the overall company. These employees are more likely to transfer to other positions within the company when they are looking for a new professional challenge, instead of leaving.
The German Supply Chain Due Diligence Act is making headway. After a representative survey of companies by the German government found that only a small proportion of companies were complying with their voluntary commitment to human rights due diligence, it was enshrined in law.
This law establishes a duty of care. This means that it does not require companies to guarantee that human rights violations will be prevented in every case. However, companies affected must demonstrate that they have done everything in their power to prevent human rights risks in the supply chain, applying the principle of reasonableness. This includes risk assessment and management, definition of responsibilities, regular risk analyses, and anchoring relevant preventive and remedial measures and control processes, and adoption of a policy statement.
For big companies affected by the law, this also means responsibility for ensuring that suppliers can provide the required evidence; otherwise they could be excluded from the supply chain.
is Head of Procurement at Rhenus Automotive. Together with his team, Holger is responsible for the different procurement areas in the automotive sector, both in DirectedBuy and in indirect purchasing, as well as for coordinating the supply chain for automotive customers. He is also responsible for expansion of the purchasing organisation, supply chain and risk management, and compliance.
What options does Rhenus Automotive have for auditing its own supply chain or that of its car-maker customers?
We use two main monitoring and analysis tools. Risk Methods, a risk management platform that allows us to monitor supplier financial and local risks in real time, as well as track disruptions throughout the supply chain. And with Integrity Next, a second complementary platform, we manage suppliers by their classification, with a particular view to issues relevant to collaboration. Companies have to answer assessment questionnaires, for example, on minimum wage and equality. Relevant certificates must also be uploaded. If questions are left answered or are answered inadequately, we follow up with audits performed by our own competent staff. We assess a total of more than 1,600 suppliers with regard to country risk for the country in which they operate and the goods in question.
What are the supply chain’s biggest challenges?
In structural terms, one challenge is that we have no influence on the selection of suppliers in DirectedBuy. By this I mean that the customer transfers responsibility for a functioning and sustainable supply chain to us. In the event of a conflict, however, we as Rhenus Automotive are not at liberty to decide the consequences and to respond by terminating the supply relationship as a last resort. What we can do instead is, first of all, point out the grievances to the automotive manufacturer and mediate them. In terms of the risks themselves, particularly supplier relationships in countries where, for instance, child labour occurs and monitoring bodies are less established, tend to be potentially problematic.