- Stakeholders, Memberships, & Partnerships
- Procurement for Client Projects
- Procurement for Operations
- Business Partnerships
Supply Chain: Purchasing for CH2M Operations
CH2M actively manages our supply chain for environmental, social, and economic sustainability issues, as described in Supply Chain: Procurement for Client Projects. Our procurement organization separates management of direct (client) project firmwide agreements from indirect (overhead) procurement firmwide agreements. For our environmental procurement program within our EMS, we focus on indirect procurement because we have substantial control over these agreements rather than acting through client contracts. These agreements are international and the scope of this disclosure is companywide.
In a global supply chain, consisting of hundreds of supplier relationships, we focus on suppliers that are willing to partner with us to reduce our environmental impact. These suppliers work with us to establish meaningful, effective, and industry-relevant contractual metrics that define specific sustainability objectives. The Indirect Procurement group segments suppliers into four tiers:
- Tier 1 – Strategic: Long-term, high-volume agreements
- Tier 2 – Preferred: Long-term, but lower-volume agreements
- Tier 3 – Value Add: Shorter-term, lower-volume agreements with infrequently used suppliers
- Tier 4 – Tactical: Typically a one-time procurement with no ongoing relationships or expenditures
Tier 1 and 2 agreements reflect those supplier relationships with significant spend, transaction volume, and business impact. Accordingly, these are our most important indirect supply chain relationships and are the focus of our management approach.
Since 2010, we have been adding sustainability clauses to our major agreements to finally reach 100 percent of Tier 1 and 2 supplier agreements having sustainability language included in 2015. The sustainability clause requires suppliers to participate in the defined level of sustainability program. We use four sets of sustainability metrics of increasing rigor with our Tier 1 and 2 suppliers.
In 2015, our indirect spend with Tier 1 and 2 suppliers, with sustainability metrics in their agreements, was US$189.1 million. This is an increase of US$17.3 million over the previous year.