Strategic Procurement & Responsible Sourcing
Our commitment to helping our customers successfully navigate the energy transition and meet their sustainability objectives depends upon strong relationships up and down our value chain.
Supplier relationships have always been important for product quality, manufacturing excellence, customer service and financial performance. Today, sourcing strategic components and materials essential to advanced technologies makes these relationships even more important.
We recognize the importance of supplier relationships and actively engage in programs to strengthen them. These include advisory and safety councils, certification programs and excellence awards. As we strengthen relationships with suppliers, we are better positioned to improve product quality, operational efficiencies, business competitiveness and crisis response, accelerate innovation, manage costs and profitability, and mitigate risk. We leverage our supplier advisory councils to continue to grow the relationships. In 2023, we formed our first enterprise supplier advisory council with 10 supplier representatives.
Responsible Sourcing
We pursue suppliers and business allies who demonstrate strong values and commit to the ethical principles outlined in the Caterpillar Supplier Code of Conduct, which is available in 18 languages. We expect suppliers to comply with the sound business practices we embrace and follow the law and conduct activities in a manner that respects human rights. Caterpillar asks priority suppliers to complete a self-assessment to confirm their alignment with the Code. Suppliers are provided with access to the same ethics reporting channels as employees and encouraged to report any concerns or behaviors that violate our Supplier Code of Conduct.
Our Conflict Minerals Position Statement contains clear expectations for our suppliers regarding their sourcing of these materials. We have established a process that identifies areas of risk and corrective action plans to mitigate or remediate such risks relating to conflict minerals. A supplier’s failure to take corrective actions when required may lead to additional actions, up to and including the termination of our business relationship. Caterpillar supports the Responsible Minerals Initiative to help influence smelters’ engagement to support supply chain transparency and leverage industry collaboration toward greater business intelligence.
Supplier Diversity
Supplier diversity continues to be a focus for our strategic procurement team. With a strong base of diverse suppliers already in place, we are investing in tools to help identify diverse suppliers for new business opportunities. This is key to delivering on our commitment to foster and increase business purchases with diverse suppliers.
We are members and serve on boards of organizations that certify, develop and advocate for diverse suppliers. In 2023, Caterpillar was honored to be inducted into the Billion Dollar Roundtable (BDR), a corporate advocacy organization that promotes supply chain diversity excellence. BDR member companies commit to a documented supply chain spend of $1 billion or more annually on a first-tier basis with diverse suppliers as a condition of membership.
