Schlumberger Supply Chain Services provides our field and manufacturing locations with supplier management, strategic sourcing, logistics, and inventory management. Supply chain processes are regularly reviewed to ensure quality in our services and products. Every supplier we select must comply with Schlumberger standards.
Acquiring goods and services from local suppliers is a legal and contractual obligation in many countries where we work, but we also view it as a way to maximize our positive impact in communities where we live and work. We contribute to the social and economic development of these communities by supporting initiatives that improve living conditions, providing business and growth opportunities, developing and fostering long-term relationships, recruiting and training where we work, and buying local services and products.
We expect the highest ethical standards of business conduct and compliance with local laws and regulations from our suppliers. By helping local suppliers meet our industry requirements, we seek to promote innovation through the sourcing of new products and services. This helps to develop alternative channels for procuring goods and services and creates new business opportunities in the locations where we operate.
In today’s competitive global economy, we know that strong relationships with our suppliers are essential to meeting our own needs, the needs of our customers, and national content. We only procure goods and services from financially stable, technically qualified, and reliable sources. Our preferred suppliers are those who work with us in a professional, ethical, competitive, and cost-effective manner consistent with Schlumberger policies, procedures, and business objectives. When evaluating potential suppliers, Schlumberger considers delivery, price, reliability, operational costs, and after-sales support.
We invest time and resources to help local suppliers meet our stringent quality and HSE standards. Our investment in things such as safety training, driver training, installation of in-vehicle monitors, and vehicle maintenance standards helps build the competitiveness of local vendors. All our social investments in local suppliers are underpinned by core principles: they must be connected to our business and rooted in the communities where we work; and they must be focused, streamlined, and accountable.
Schlumberger maintains a Supplier Management Dashboard that analyzes our spending by supplier, commodity, geography, business segment, legacy company, and trends over time. Schlumberger supplier managers are responsible for evaluating suppliers against our established performance metrics for them to be included in our approved supplier list. The analysis includes a tally for total procurement spending.
Suppliers are classified as critical if they provide materials, components, or services that may significantly influence one or more aspects of Schlumberger products and service performance. This includes elements such as safety, technology, and competitiveness as well as compliance with operations integrity, HSE, and ethics standards.
Comprehensive audits of our critical suppliers are conducted per a defined schedule and may incorporate supplier performance, finance, contract, HSE, Quality, and Ethics and Compliance components, including human rights and labor questions.
Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) is an European Union regulation that covers the manufacturing, importing, placement, and use of chemical substances. It provides a high level of protection to human health and the environment by making people responsible for understanding and managing the risks associated with chemical use. In 2017, Schlumberger continued to develop new chemicals and technologies that comply with REACH regulations in Europe. Furthermore, we reviewed our European chemicals portfolio to reduce our REACH registration costs.
Schlumberger is committed to purchasing only those parts and products containing minerals that have been procured through a validated conflict-free supply chain, avoiding the use of minerals that have financed conflict in the covered countries, and we expect our suppliers to abide by the same standard. When a validated conflict free supply chain or a robust mineral-tracing program is established, we expect our direct suppliers to procure minerals using only that validated supply chain. If a direct supplier provides us with minerals that have not been procured through a validated supply chain or that are found to have financed conflict, we will recommend that the supplier seek an alternative means of sourcing to prevent possible termination of our relationship with that supplier.
Schlumberger is committed to, and expects from its suppliers, the highest ethical standards of business conduct and compliance with laws and regulations in the countries where we operate. We require that all work is voluntary and that workers are free to leave upon reasonable notice. We prohibit the use of forced, bonded, indentured, or involuntary prison labor.
Working in 85 countries presents several logistical challenges, one of which is difficult geographies. Success in these jurisdictions depends on having supply chain professionals capable of dealing with our complex operations. To enable a strong pipeline of people who have these skills, Schlumberger has partnered with top-tier supply chain training programs to assist our team members in geographies where supply chain training is not widely available. In 2017, these team members focused on learning and building expertise with the intention of returning to their markets and increasing the level of supply chain performance.
During the past 10 years, many countries with oil and gas activities have introduced requirements for local or national content into their regulatory frameworks. These requirements seek to create jobs, promote enterprise development, and accelerate the transfer of skills and technologies to the benefit of local industries and populations.
Our supply chain plays a key role in national content development through supplier sourcing, tendering, contract awarding, and spend management. We recognize that there are various aspects to national content, including development of national businesses through the purchase of goods and services manufactured within the country, or through goods and services purchased from firms owned by nationals of the country.
To help ensure that local communities benefit from our activities, Schlumberger developed and tested a process in 2017 through which our supply chain teams can prioritize and manage our supplier base with respect to national content requirements. The process was piloted in three countries within our Sub-Saharan Africa GeoMarket region—Mozambique, Tanzania, and Uganda—and is now being reviewed for implementation in other countries.
Supply Chain Program for First Australians
In 2017, Schlumberger launched a local suppliers’ development program for First Australians that is intended to drive improvements in our own supply chain performance and in the capacity of local suppliers. The program is initially supporting 23 Indigenous Australian suppliers in the categories of facility management, staffing, marketing, relocation, freight forwarding, and logistics. Our Supply Chain Program for First Australians is bringing educational, employment, and traineeship opportunities to numerous local communities in Australia and was designed to empower and upskill the local workforce, helping them become more self-sustainable over the long term.