Orion systematically promotes sustainability in its supply chain
Orion provides training and support to its suppliers, in addition to monitoring and assessing their operations. The company also addresses any issues immediately.
“In 2018, we asked our stakeholders what they expect of Orion in terms of sustainability,” says Noora Paronen, Head of Corporate Responsibility at Orion.
“Based on the responses, we identified four key themes: patient safety and ensuring a reliable supply of medications; well-being at work at Orion; ethical and transparent business operations; and environmentally sustainable manufacturing. These clearly defined key themes enable us to develop and assess sustainability even more systematically than before.”
Patient safety is at the core of Orion’s corporate responsibility, and ensuring patient safety requires continuous work.
“We have achieved good results. For example, the number of product recalls has been declining over the past five years. In addition, serialisation and anti-tampering features have minimised the entry of falsified medicinal products into the legal pharmaceutical distribution chain,” says Paronen.
Serialisation means ensuring the traceability of medicinal products by adding a unique identifier to product packaging.
Major developments also include the integration of corporate responsibility into Orion’s supply chain. This began with direct purchases: raw materials, packaging materials, medicinal products and self-care products. Next, the related operating methods will be expanded to cover indirect purchases, such as the purchase of services.
“Responsibility is not an additional aspect of our operations. Instead, it is taken into account in each stage of the procurement process and in all decisions – just like quality requirements,” Paronen points out.
Even though sustainability aspects within the supply chain have been considered important for a long time, they have been handled independently and separately by various departments. A more systematic approach has now been introduced to bring people together from different parts of the organisation to develop corporate responsibility. Employees have also been provided with training on the new principles.
Within the supply chain, sustainability is considered as early as when looking for a new supplier.
“A risk assessment is always carried out based on the supplier’s country of operation, their industry or the criticality of the product or the service, for example,” says Carolina Sved, Head of Indirect and Sustainable Procurement at Orion.
All partners must commit to compliance with Orion’s Third Party Code of Conduct. Based on the risk assessment, the supplier may also need to complete a self-assessment questionnaire, and an on-site audit may be carried out as well, if necessary.
“After a supplier has been selected, sustainability is reviewed on a regular basis to assess which commitments they meet and where they have room for improvement,” says Sved.
Today, sustainability processes – such as self-assessments and audits – within the supply chain also focus more extensively on ethical business operations.
“We pay attention to the working conditions and hours of our suppliers’ employees, for example,” says Paronen.
EHS aspects continue to be important as well, meaning environmental impacts and occupational health and safety, which involve the most significant risks in our industry.
Suppliers are supported in implementing improvements, but if they continuously fail to meet the requirements, we will discontinue cooperation.
“Of course, it’s always better if we can help suppliers to meet the goals and improve their sustainability level,” says Paronen.
In addition to implementing internal reforms, Orion has joined forces with other companies in its sector. In 2018, the Orion Group joined the Pharmaceutical Supply Chain Initiative (PSCI), which promotes sustainability within supply chains across the industry.
The members of the network commit to joint operating principles and have access to shared tools.
“A consistent message is key. It’s easier for suppliers when the same requirements and assessments apply to all suppliers,” Paronen points out.
“This also enables us to share audit results between companies. The need for audits decreases, and we can focus on the most important aspect: improving operations.”
Internationally, Orion is a relatively small operator in the pharmaceutical industry, which is why network support is a valuable addition to sustainability work.
“For example, through the PSCI, we are able to provide our suppliers in China with sustainability training in Mandarin Chinese, which we would not have resources to do without support from the network,” says Paronen.
Last year, 26 of Orion’s suppliers participated in training provided by the PSCI, and the feedback was good.
“We have also noticed improvements during audit visits. This is, of course, due not only to Orion’s impact, but also to the further development of the entire industry, and suppliers are increasingly realising that sustainability concerns everyone,” Paronen explains.
According to Sved, more in-depth dialogue is necessary for the achievement of common goals.
“Addressing issues on both sides makes business operations more sustainable.”
Text: Sanna Jäppinen