Big tick winner

British American Tobacco - Supply Chain Programme

John Lewis and Waitrose Supply Chain Award 2007 supported by the Department for Environment, Food and Rural Affairs

BAT’s supply chain programme helps increase the productivity of their leaf suppliers through the development of good agronomy practices, and enables them to purchase from responsible and sustainable sources.  In return BAT encourages suppliers to offer farmers the highest standards of labour, welfare and employment conditions through a programme of continual employment.  The programme has generated higher crop yield and economic benefits for suppliers and BAT.

Processes

As a very large international business, British American Tobacco’s, supply chain is made up of around 250,000 farmers of which 175,000 are directly contracted to grow tobacco leaf and other suppliers internationally from whom they buy other raw materials such as packaging and paper

With growing expectations that businesses should encourage good standards of corporate responsibility in their supply chain, British American Tobacco has developed a supply chain programme.  Its supply chain programme includes BEST, their Business Enabler Survey Tool, which sets out in detail the standards they expect of the suppliers from whom they buy raw materials, including leaf. 

Social Responsibility in Tobacco Production (SRTP) is a significant programme that aims to ensure that they only purchase tobacco leaf from responsible and sustainable sources, by working to address the agricultural, environmental and social issues associated with tobacco leaf growing and processing.

The programme focuses on delivering mutual financial value by implementing best practices in agricultural production and processing. In addition to mutual financial value, the SRTP programme brings both social and environmental benefits.
 
BEST assesses suppliers across 102 performance criteria, covering, for example, suppliers’ business ethics; environment, occupational health and safety (EHS) management; employee rights; procedures for quality production; effective cost controls and the supplier’s ability to trace the sources of raw materials, including sourcing wood from certified forestry.
 
The BEST process includes issuing improvement guidelines and roadmaps to suppliers, and continuously reviewing them against the criteria through an international pool of trained reviewers.  All suppliers are scored and must achieve Approved, Qualified or Certified status to be retained as suppliers to their business. 

Impact

  • 140 SRTP reviews carried out at the end of 2006, with a target to carry out 20-25 reviews per year to ensure a 2-5 year review cycle
  • Technological packages and effective training for farmers resulting in increased yields. Since the start of the SRTP programme tobacco yields have increased by 22% (2000 – 2006) throughout the group
  • Effective management of pest and disease through integrated pest management have resulted in economic and environmental company benefits. The three year average amount of active chemicals per hectare in tobacco being grown for British American Tobacco is 1.5 Kg/ha which is below that of many other cash crops
  • Suppliers in countries where there are limited environmental laws and enforcement have adopted international standards and many have implemented and attained ISO 14000 requirements.

See also