Supply chain

Pandox’s biggest suppliers are companies within the construction industry and property management, and those providing goods and services for hotel operation. The construction industry is the industry identified as having the highest risk for Pandox. Of Pandox’s 4,404 suppliers, 632 are related to the construction industry.

Screening of new and existing suppliers

Pandox has developed its process for screening new and recurring suppliers with the help of a new user-friendly system. New for 2022 was that suppliers above a certain annual minimum amount that had not been screened previously within Property Management are to be screened according to the new process. This means that existing suppliers go through the same process as new suppliers until these are in the system. In 2022 a total of 48 (82) Pandox suppliers were audited.

1. Sourcing and procurement
The first step of the process involves screening new suppliers above a certain minimum amount. This involves verifying that the company exists and is active, then screening the company against sanction lists. If the company cannot be verified or is on a sanction list, the supplier is no longer
eligible to participate in the procurement process. The suppliers that can be verified and are not on a sanction list go on to the next step in the process. This involves an internal risk analysis based on a number of risk parameters such as industry, country, size of annual purchases and contract
length. Companies identified as high or medium risk must complete a brief digital self-assessment form to give Pandox a better basis on which to make a decision.

2. Requirements
Under the terms of their contract, all new suppliers must approve Pandox’s Code of Conduct for
business partners regardless of the contract amount.

3. Monitoring activities
All suppliers defined as high or medium risk at the procurement stage must complete a longer
self-assessment form within six months. This follow-up process is to ensure that they are meeting the terms of the contract. In addition to these measures, random checks are made of low-risk suppliers, who must also complete the longer selfassessment form.

4. Supplier development
Where a non-conformance is discovered in the self-assessment form, a dialogue begins with the supplier to ensure that they remedy this. The suppliers are asked to submit a proposed action plan for Pandox to approve. Pandox follows up to ensure that actions decided on are implemented within the set schedule. Suppliers that do not remedy the non-conformances identified may be terminated, depending on the level of seriousness.

5. Site visits
Starting in 2023, at least half of the suppliers where the most serious non-conformances have been identified in the self-assessment form will be further scrutinised through site inspections carried out by an independent external party.

Exemption
Suppliers may be granted exemption from the process described above if special circumstances exist, such as if there is only one supplier in the market. Exemption may only be granted by the newly formed purchasing council consisting of representatives from the executive management team. Individual purchasers may submit an inquiry regarding exemption to the council. Each individual case is to be documented and archived. No cases needed to be escalated to the council in 2022.