Page 18 - RAFI_ESG_20230919_eng

18 GOVERNANCE

2.2.2 Supplier audits and evaluation and provide them with compatible spare parts over an
extended period of time. In the case of products sub-
ject to approval in the automotive industry or medical
technology, component changes must be reported to
STRATEGIC PARTNERS LEVEL 4 customers or approval bodies and may require exten-
Strategic
partners sive, costly validation procedures right up to complete
re-approval. Due to more restrictive material approv-
als, additional restrictions on availability are emerging.
KEY SUPPLIERS Preferred suppliers LEVEL 3 After RoHS and REACH, the EU has further tightened
the requirements with its SCIP regulation. Manufactur-
ers will be required to report the use of substances of
very high concern in a Europe-wide database. This
APPROVED Mandated New/under LEVEL 2 concerns not only electronic components but also syn-
suppliers evaluation
thetic materials, metals, paints, and much more. Final-
ly, production outages related to the pandemic have
Blocked
Phase-out suppliers severely affected traditional supply chains, leading to
PHASE OUT suppliers LEVEL 1 ongoing supply shortages that further limit component
availability in a procurement market that was already
fragile.

[GRI 308, 414 ] To evaluate business relationships,
RAFI operates an active supplier management system
that classifies suppliers into four categories. New or
standard suppliers, preferred suppliers, and strategic To proactively counter such obsolescence risks and
partners are assigned to levels 2 to 4. Business rela- ensure that our products remain highly available, we
tionships assigned to level 1 are not continued. Re- joined the Component Obsolescence Group Germany
sponsibility for supplier selection lies with Strategic
Purchasing, which uses our requirements profile to
evaluate suitability in coordination with Development,
Quality Management, and Logistics. In order to objec-
tively evaluate our supplier relationships, we have im-
plemented a scoring system and a risk analysis pro-
cess in line with the statutory duty of care in the sup-
ply chain. We also query quality requirements, reliabili-
ty and other economic factors, valid certification in ac-
cordance with DIN ISO 14001, existing compliance
guidelines, and policies on conflict materials. Verifica-
tion is carried out by our independent supplier man-
agement team, which conducts supplier assessments
and on-site audits throughout the world at regular in-
tervals. We store the results of these evaluations in
our ERP system along with the certification informa-
tion. Due to GDPR regulations, this data is only partly
accessible across locations. RAFI Electronics largely
applies its own approach to the assessment and quali-
fication of its suppliers.

2.2.3 Life cycle and obsolescence management
[GRI 301 ] As a leading manufacturer of electronic
products, RAFI is confronted with ever-shorter prod-
uct lifecycles for electronic components and assem-
blies. Rapid discontinuation of older components in-
creases the effort required to supply identical systems