CNCo continues to grow and now operates over 125 vessels worldwide. At the beginning of 2018, the Procurement Department re-positioned themselves as the Group Procurement Office to gain leverage, improve global standards for efficiency, build up competitive advantage and mitigate supply chain risks. CNCo undertook a review of our procurement systems and processes to identify gaps and opportunities.
The outcomes of these were:
As a result of this review CNCo recruited a Global Head of Procurement who started in 2019. She is currently designing the new structure to further strengthen CNCo’s procurement systems and processes and better understand our spend profile.
We continue to use the SAP Enterprise Resources Planning system, which established the critical foundation of procurement “procure-to-pay” process and supplier database.
The following systems were introduced and in operation within 2018:
In light of the upcoming regulations for the sulphur content of bunker fuel and the need to manage marine fuel environment holistically, CNCo also introduced a robust bunker procurement end-to-end supply chain process and enhanced our data analytics capability.
CNCo works with thousands of diverse suppliers globally, with the majority located in Australia, China, New Zealand, Papua New Guinea and Singapore. Together with our key internal stakeholders, Group Procurement aims to build stronger partnership with suppliers and ensure that they adhere to the same environmental, social and governance standards as CNCo.
CNCo's supply chain covers:
CNCo developed the audit process for our high risk / high value suppliers to ensure full compliance with our Supply Chain Sustainability Code of Conduct and Modern Day Slavery Act requirements. Over the past few years we focused on auditing our bunker suppliers as a priority group. Understanding our supply chain risks, conducting due diligence on our suppliers and supply chain partners to ensure that our supply chain is fully compliant with any regulatory, environmental and H&S requirements as well as free of human rights violations and modern slavery. We have in place Supply Chain Sustainability Code of Conduct.
In 2018 we implemented a project with ELEVATE Limited (an independent sustainability and supply chain services provider with global reach). The project developed a robust supply chain segmentation framework to assess and gain a better understanding of CNCo’s supply chain. The results of the work provided an important insight to design a programme that is based on risk and driven by supplier leverage. We collected and evaluated data from 4,996 vendors across the 108 countries in which we operate, and developed CNCo specific segmentation methodology (though participatory stakeholder engagement process) to provide insight on thoughtful customisation of programme activities with suppliers and built on the fundamental understanding that CNCo cannot have the same amount of influence across all its suppliers. We are in the process of designing a programme strategy for CNCo to take a proactive approach in demonstrating business competitiveness, sustainability performance, and thoughtful supply chain management. This work will take place in 2019-2020, championed by our new Global Head of Procurement.
We outsource a low percentage of our ship management services to third parties. All subcontracts are carefully selected following a thorough due diligence process before we enter into any contractual relationships with them. The due diligence covers background checks during tendering exercise, ensuring that their policies are aligned to those of CNCo and we carry out regular monitoring to ensure that their practices do not deviate from our policies and Safety Management System (SMS). We also use a number of manning agents in various countries around the world. We do full due diligence on each one of them and follow up with annual internal Document of Compliance (“DOC”) audits (as required under IMO / ILO regulations).