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“You can’t achieve sustainability all alone”

As Head of Procurement Strategy, Marco Philippi has his hand on an important sustainability lever — establishing a future proof supply chain.

09/17/2021 Text: AUDI AG Photo: Dirk Bruniecki – Video: Nadia Hallgren Reading Time: 6 min

Marco Philippi is Head of Procurement Strategy at Audi.
Marco Philippi, Head of Procurement Strategy at Audi.

Mr. Philippi, you recently spoke with Stella McCartney about sustainability for the “Let’s make sense” video. As a business administration graduate, could you have imagined ten years ago that you would one day be in front of the camera with a fashion designer?

Not really, but I have to say it was an exciting experience. We found a lot to talk about, so it was a lively exchange. Like Stella McCartney, who champions responsible fashion, both Audi as a company and my work in the organisation have a strong focus on sustainability. In fact, this is extremely important for my area of responsibility - procurement strategy. We truly believe that, together with our partner companies, we can have a positive impact on the entire supply chain and achieve a great deal.

 

How do you build a more sustainable supply chain?

Since 2019, we have awarded contracts solely to direct suppliers who earn a positive sustainability rating from us. Achieving this requires extensive self-disclosure, completing a questionnaire and providing a certificate testifying to the company’s socially and environmentally responsible activities as well as its integrity for verification purposes. A specialist service provider’s certified auditors review the self-disclosure and documents submitted. If, after evaluating the questionnaire, the need arises, we conduct a site visit to ensure compliance with the standards laid out in our Code of Conduct. All these findings contribute to a rating. Any supplier with a negative rating is not permitted to do business with Audi. That said, we are happy to work with suppliers in the weeks - or even months - following their initial rating so that they can improve sufficiently to meet our standards and receive a contract. In 2020 alone, we trained more than 950 supplier company employees.

We’re not just toying with theories here. What we do can make a real difference and effect change.”

Marco Philippi

Marco Philippi

What is the biggest challenge?

Ensuring and continually enhancing transparency and traceability. We work with more than 14,000 direct suppliers. In some areas, suppliers have as many as nine upstream partners. In other words, we’re dealing not just with original equipment manufacturers but also a large number of sub-suppliers. So it’s almost impossible to achieve full transparency at every level.

 

How do you deal with that?

One solution entails making greater use of technology, such as our pilot project drawing on artificial intelligence for risk analysis. It scours online platforms, including social media. We then receive an alert whenever an article or post indicates that a partner company cannot or will no longer be able to adhere to the guidelines agreed on with us. This gives us the opportunity to dig deeper and ask questions in order to determine whether something is really afoot and if we can help out. If we succeed in achieving transparency where it makes sense, then we will have taken another step on the road to a more sustainable world.

 

In the push for a more sustainable world, will we have to compromise on quality or design in order to benefit from greener solutions?

I firmly believe you can have both - sustainability and all the properties required of traditional materials. Sometimes, this involves investing in a new solution and breaking new ground.

Marco Philippi

The business administration graduate was born in Munich in 1977. In 2019, he stepped up as Head of Procurement Strategy at Audi, a role which includes ensuring a sustainable supply chain and supplier innovation management. Marco Philippi joined the Volkswagen Group in 2004, working first at Volkswagen Consulting before moving to corporate strategy for the VW brand and subsequently Group procurement. From 2017, he had been in charge of the newly created Procurement Strategy area for both the Volkswagen Group and the Volkswagen brand before joining Audi.

Can you give us an example?

Sure. For instance, as part of a pilot project, we’re sourcing 20-inch rims made from low-emissions aluminum for the Audi e-tron GT quattro and Audi RS e-tron GT. To reduce greenhouse gases, the supplier company uses its own specially developed smelting process, which releases oxygen instead of carbon dioxide. It goes to show that while sustainable solutions may call for more compelling evidence on the strength of the business case, there’s no need to cut corners.

 

What is the appeal for you personally of integrating sustainability into procurement?

To be honest, stepping up to take on this issue is the high point of my career to date. My day-to-day work has a whole new impact. This work gives me great pleasure and it is very fulfilling.

 

Plus, it’s also of great significance for the company?

Yes, sustainability is tremendously important to us, not only in the new products we sell but also in every other area within the company. Take recruitment, for one. Young people have a different view of the world, as I know from my own children. Sustainability is not just an added extra for them. They see it as the central purpose that should drive our efforts. Over the past two to three years, it has also become many companies’ USP and, unsurprisingly, an arena for competition. But the reality is that no organisation can overcome the challenges faced on this front all alone. I feel very strongly that this calls for cooperation across company lines.

Audi e-tron GT quattro: Power consumption, combined*: 19.6–18.8 kWh/100km (NEDC); 21.8–19.9 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

Audi RS e-tron GT: Power consumption, combined*: 20.2–19.3 kWh/100km (NEDC); 22.5–20.6 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

Stated specifications apply only in Germany and are not applicable in other regions.

Audi e-tron GT quattro: Power consumption, combined*: 19.6–18.8 kWh/100km (NEDC); 21.8–19.9 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

Audi RS e-tron GT: Power consumption, combined*: 20.2–19.3 kWh/100km (NEDC); 22.5–20.6 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

Stated specifications apply only in Germany and are not applicable in other regions.

Marco Philippi is in a workshop in Ingolstadt.
Technology for the future: Marco Philippi in a workshop in Ingolstadt.

 

And do you feel that you can make a real difference?

Absolutely, because we’re not just toying with theories here. What we do has a genuine impact on our supply chain and our supplier companies. We’ve helped many of them improve their ratings by supporting their efforts to create better working conditions for employees and optimise energy consumption. This is testimony to how, by working together, we can make a difference. In 2020 alone, the Audi CO₂ program eliminated more than 335,000 metric tons of net carbon emissions¹ from the global supply chain that would have otherwise been released into the atmosphere.

 

Do you ever wonder if you’ve gone far enough and done enough?

Your question makes me think of my kids again. For them, there are no gray areas to sustainability. It’s a black and white issue. If we don’t resolve these problems for them, they will face an altered world. One day, I want to be able to say that we did everything we could. That’s why, in our work, the team takes even the smallest ideas seriously and sets about implementing them. We are working to leverage our supply chain as a powerful force for good. While that may sound ambitious, we have every intention of achieving it.

¹ Audi defines net carbon neutrality as a status where, despite having exploited other possible reduction measures in relation to CO2 emissions caused by our products or activities, remaining and/or currently unavoidable CO2 emissions in connection with the supply chain, manufacturing or recycling of our vehicles are, at least in terms of quantity, offset by voluntary compensation projects worldwide. CO2 emissions generated during the operational phase of a vehicle (i.e. as of the time the vehicle is handed over to the customer) are not taken into account.

¹ Audi defines net carbon neutrality as a status where, despite having exploited other possible reduction measures in relation to CO2 emissions caused by our products or activities, remaining and/or currently unavoidable CO2 emissions in connection with the supply chain, manufacturing or recycling of our vehicles are, at least in terms of quantity, offset by voluntary compensation projects worldwide. CO2 emissions generated during the operational phase of a vehicle (i.e. as of the time the vehicle is handed over to the customer) are not taken into account.

The supply chain is a key driver on Audi’s path to greater sustainability. You can find more information as well as facts and figures on the topic here.

Watch the “Let’s make sense” video here.

The Audi e-tron GT quattro

Bright prospects: the Audi e-tron GT quattro

The Audi e-tron GT quattro combines forward-looking technology with electrifying design.

Learn more now

Audi e-tron GT quattro: Power consumption, combined*: 19.6–18.8 kWh/100km (NEDC); 21.8–19.9 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

German model shown. Stated specifications apply only in Germany and are not applicable in other regions.

Audi e-tron GT quattro: Power consumption, combined*: 19.6–18.8 kWh/100km (NEDC); 21.8–19.9 kWh/100km (WLTP)CO₂ emissions, combined*: 0 g/km

German model shown. Stated specifications apply only in Germany and are not applicable in other regions.