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| Collaborative Sustainability |
| We work with a wide variety of business partners from large organisations to SMEs. We motivate all our partners through policy and governance, standardisation and metrics, operations and optimisation, knowledge sharing and training. This enables us to pursue more sustainable processes, which in turn helps to raise each other’s sustainability quotient and build stronger partnerships. |
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The foundation of a successful relationship is dependent on how well you know your partner. While KYC (Know-Your-Customer) is a prevalent practice in most businesses, we have gone a step ahead and established a comprehensive system of KYV (Know-Your-Vendor). This helps us identify gaps and provide bespoke support to enhance the sustainability performance of each vendor. |
Risk assessment, in the context of Dr. Reddy's, is a systematic and scientific process of quantifying the tangible as well as intangible risks posed by business partners to the organisation. This is the first step in analysing the degree of risk posed by different partners and how best to mitigate them. Towards this end, a Customised Risk Assessment Framework for vendors has been developed in collaboration with Dun & Bradstreet India.
A pilot assessment of five vendors in each category was done and based on the findings the framework was reinforced and fine-tuned. Vendors were categorised based on their level of preparedness, past history and local knowledge.
The scope of the risk assessment process includes evaluating the financial stability, management control systems and sustainability practices in place at the partners' facility. Details such as employee recruitment policies, labour practices, safety measures and redundancy provisions are all part of the assessment criteria.
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We have a comprehensive training and induction programme for vendors. Efforts are underway to train all our existing business partners. Supplier Induction Training has been made mandatory for all new vendors wherein they are sensitised to our business processes and culture. We also review existing vendor processes and their financial stability. Furthermore, we provide guidance to vendors on ways by which they can streamline their processes and increase their efficiency.
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Our contracts specify that all our business partners need to ensure payment of minimum wages, Provident Fund, ESI / group insurance and that no child labour is employed. We require these directives to be followed stringently.
We are also in the process of introducing a Code of Conduct for all partners to inculcate high ethical standards and enhance sensitivity to issues such as human rights, corruption, and behavioural code for the treatment of knowledge, among others.
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We lay strong emphasis on quality. We understand that every lapse in quality equates to a huge loss in terms of opportunity cost and credibility. Keeping this in mind, we have introduced a program called QUEST (QUality Enhancement and SustainabiliTy). We are developing a micro-site dedicated to this agenda and once online, we intend to conduct webinars on sustainable methods through it.
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As part of encouraging sustainability and strengthening our ties with our partners, we also conduct a Global Supplier's Meet. Through this platform we facilitate the sharing of knowledge between our partners, align our visions by helping them understand the future that we foresee, and provide a forum where operational issues can be aired and resolved. This year's meet was held in Bangkok.
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| Supporting Compliance |
| We function in a highly regulated business environment, which is compounded by the fact that different markets have different regulations and compliance norms. For us to abide by these regulations, it is imperative that our suppliers and vendors also comply with them. To achieve total compliance we regularly help our vendors to understand the requirements for various certifications. We empower them by providing access to our technology systems and help them make their processes and systems more efficient. |
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| Many of our business partners are WHO GMP certified, and ISO compliant. We audit business partner compliances and are more appreciative of business partners who demonstrate their concern for the environment. |
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| We have also created a data bank on our Safety, Health and Environment (SHE) infosite to send mail alerts to our business partners flagging off imminent deadlines for the expiry / non-receipt of their licenses. We also conduct periodic safety audits at vendors’ facilities to check infrastructure improvement and systems implementation. In the reporting period, 18 SHE audits were conducted and 70 observations (41%) were closed. |
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| As part of process technology outsourcing to Strategic Business Partners (SBPs), we conduct risk analysis and implement the findings so that risk is mitigated. |
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| SHE related trainings are conducted at SBP-sites so that a culture of proactive SHE-practice is inculcated. The belief of "Together, forever...." drives us to actively pursue this endeavour. |
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| Proximity Builds Sustainability |
| Dr. Reddy’s actively engages with its suppliers for decisions on their facility location. From the viewpoint of sustainability, we realise that it makes sense for our major and long-term suppliers to have a manufacturing base in the vicinity of our own production zone. This cuts down on not only the carbon footprint but also on transportation and inventory costs. Moreover, it enables quick response times and enhanced collaborative working. |
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| A case in point is: over a period of time, we have shifted our production capacities from Hyderabad to Vishakhapatnam. At the same time our base in Baddi (Himachal Pradesh) is also developing. Hence, it makes economic sense for our packaging vendor to have a facility there as well. During the reporting year, one of our vendors shifted to our premises. |
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| We have created a vendor lab, through which our business partners can manage processes faster, validate new sources and technologies, speed up implementation and conserve resources. |
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