CSL has an active program of supplier selection and management. In many cases, the selection of suppliers is primarily driven by stringent quality, regulatory or reliability constraints.
Economics are also a very important driver in supplier selection as we continually strive to improve our operational efficiency. This helps us optimise the supply of our life - saving therapies to patients and to meet our fiscal responsibilities to shareholders. While geography is not part of our selection criteria, a significant portion of our inputs come from local suppliers. This helps avoid higher costs associated with using distant suppliers and enables CSL to contribute to local economic development.
It is CSL Policy to encourage competition and fair access to our business. In most cases, major sourcing decisions follow a formal competitive bidding process. Vendor - agnostic technical specifications are produced and issued as part of a Request for Proposal. Three bidders are typically invited to submit proposals which are evaluated thoroughly against our criteria by a sourcing panel.
For key and critical suppliers, our management process includes ongoing dialogue, formal performance reviews and quality audits. Audits can take the form of either an onsite visit or a desk based quality system review. An audit report is prepared and used to communicate the outcome to the supplier. Where deficiencies are detected, the supplier is asked to undertake corrective actions and the completion of these is followed up by CSL during subsequent inspections. Any deficiencies are risk rated and may lead to a supplier being suspended from supplying to CSL.
New suppliers are also required to demonstrate ability to comply with CSL’s CRBP and / or evidence of similar codes of conduct within their businesses. The CRBP covers aspects of organisational governance, workplace, social and environmental practices. Included in the CRBP is our approach to product safety and quality; safe, fair and rewarding workplace; community involvement; and environmental management. Existing suppliers are also required to sign up to these principles when existing supply agreements are updated or renewed.
In 2018, CSL’s Board of Directors approved our third Statement on the Prevention of Human Trafficking, Slavery and Forced Labour. The Statement details steps taken across the organisation to address modern slavery. CSL published its first statement in 2016.
Security of Supply of Critical Products
The security of the supply of critical products is key to CSL’s ability to supply life - saving therapies to patients. Through a complete understanding of the sourcing, origin and supply chain risks of all materials required to manufacture CSL’s products, CSL can ensure a continuity of supply. Maintaining the security of supply is a continuous process where both new and existing supplies are reviewed and actions taken to mitigate any risks to supply that are identified.
To mitigate the likelihood of critical shortages in our products, CSL has:
- A watch list of CSL’s essential drugs
- Established a robust monitoring system to prevent and predict possible shortages of CSL’s essential drugs
- Processes in place for the notification of hospitals and other relevant bodies in the event of drug supply shortages.