Supplier Management and Contracts

Signing supplier contracts is the primary condition for cooperation between Arçelik and its suppliers. Suppliers are obliged to fully comply with the terms of the contract. Contracts are also the commitment of long-term cooperation between the two parties. Supplier contracts include business ethics, environmental and quality requirements, as well as commercial matters.

After our suppliers are approved, the quality and shipment performances are closely monitored and the performance results are shared with the suppliers through the supplier portal. According to the performance results, audits carried out within the scope of improvement studies are carried out by employees who have received auditor training within Arçelik.

Our suppliers are obliged to query the policy, contract and quality conditions at their suppliers. Arçelik revises the conditions of its sub-supplier, if necessary, or checks it on site.

Our suppliers are analyzed and classified according to the royal method and play an active role in determining our overall supplier strategy. In the Kraljic methodology, the following criteria are taken into consideration;

• Supplier annual purchase cost

• Supplier performance (Quality, Shipment)

• Supplier dependency level

• The price level of the supplier according to its alternatives

• Technical and innovation expertise of the supplier

• Supplier's response and cooperation speed

• Supplier ESG Score

In the supplier selection process, all potential suppliers are assessed by a limited survey that covers quality, environment and business ethics aspects. For contract rewarding to the existing significant suppliers, quality, timely delivery and ESG score determined based on the Supplier Sustainability Index are considered. Based on the methodology explained in detail in the Supplier ESG Program, minimum 20% of ESG score is weighted in the final score of the supplier to be selected for contract awarding.