Products and Value Chain

With its solutions, ZEISS constantly advances the world of optics and helps shape technological progress. With its passion for excellence, the company creates value for its customers and inspires the world to see in new ways.

ZEISS offers a wide variety of highly specialized products that are as diverse as its different customer groups and their particular requirements – from hospitals and medical practices to research laboratories and technology companies and extending to automotive manufacturers and consumers. For all of them, the name ZEISS is a promise of quality, innovation, safety, reliability and responsibility. And for many of our customers, ZEISS also stands for better health and improved quality of life.

Product Safety and Product Development

ZEISS products and services contribute to medical advancements in neuro/ENT surgery and support physicians on every continent in improving their patients’ quality of life. Eyeglass lenses from ZEISS help people around the world enjoy better vision, while intelligent measuring systems from ZEISS increase efficiency in different sectors, including the automotive and aerospace industries. For example, state-of-the-art coordinate measuring technology is used to inspect the fit accuracy of drive train components in vehicles to ensure low fuel consumption. For ZEISS, product responsibility means more than just innovative, effective and safe products. It also includes responsible value chain creation from raw materials to product sales.

Guidelines and Structures

At ZEISS, creating safe products is a matter of course. ZEISS requires that all applicable laws governing product safety, both when the products are in use and being disposed of, be implemented consistently. As part of a comprehensive risk assessment during product development and production, ZEISS ensures that, prior to a product launch, all necessary measures have been taken to guarantee that customers and third parties can use and dispose of the product safely. Instructions for use and trainings help users operate ZEISS devices safely and successfully. In addition, potential vulnerabilities are reviewed within the scope of continuous market surveillance. As a result, ZEISS is able to respond by implementing potential improvements and, if necessary, rapidly executing corrective measures.

The issue of product safety and its importance for the company’s success are enshrined in the ZEISS Group’s Code of Conduct. All applicable country-specific laws and guidelines for ZEISS’ primary markets lay the foundation for product development, design and sales – in accordance with the applicable standards. Individual specialists from ZEISS play an active role in their ongoing development by European and international committees and standardization bodies and thereby bring fresh ideas to product development at ZEISS.

Within the ZEISS Group, guidelines and monitoring ensure compliance with standards and rules. The responsibility for product safety lies with the Executive Board or the Managing Directors of the individual companies, respectively, as well as with Safety Officers responsible for the particular product. They must make the structures, resources and necessary skills available to properly implement all mandatory legal requirements. The following principles apply worldwide:

  • Product safety requirements must be observed during every stage of the product life cycle.
  • Customer feedback must be used as the basis for product improvements.
  • Ongoing market surveillance is utilized to ensure that products continue to meet the highest safety requirements.
  • The safety of certain products must be verified by independent organizations.

Processes
The Product and Solution Generation process is of fundamental importance. The purpose of this guideline is to both define the minimum requirements for a modern development process at the ZEISS Group and specify mandatory minimum content. A checklist outlines the mandatory minimum content. The goal of this systematic focus on the development process is to give customers the right products and solutions with respect to customer expectations, customer benefit, quality, time and costs, thereby achieving a significant competitive edge.

ZEISS only releases products after successfully addressing the aforementioned areas and the corresponding requirements. In addition, ZEISS continuously strives to reduce the environmental impact within the product life cycle. The mandatory checklists feature two related categories that must be observed during development: The products’ environmental performance and sustainability over the products’ entire lifetime. Based on the company’s environmental principles, this approach to product-integrated environmental protection constitutes an obligation to adhere to strict process management. This is how the company ensures that all ZEISS products meet the applicable environmental regulations and guidelines. In particular, ZEISS ensures that:

  • Raw materials are used that are harmless to human health and the environment.
  • The manufacture and use of products generate as few effluents and emissions and as little waste as possible.

Objectives and Results

ZEISS products must not endanger users’ safety or health. To guarantee this, the applicable requirements are implemented and, where needed, the necessary approvals are obtained to launch the products. The certification of relevant products by independent testing centers ensures a higher safety standard.

Updated minimum requirements governing the further integration of sustainability aspects in the product development process became binding for the development of all ZEISS products on 1 October 2018.

Many of the ZEISS strategic business units have switched from disposable to recyclable packaging for their products in recent years. Recyclable packaging is most frequently used for products from the Industrial Quality & Research and Semiconductor Manufacturing Technology segments delivered to customers within Europe.

Procurement and Supplier Management

Due to the significant value creation along the supply chain, the procurement process is critical to the long-term success of the ZEISS Group. Local purchasing organizations active around the globe source both production and non-production materials from local and international suppliers. The company’s constantly evolving supplier base now includes over 6,000 suppliers located in different countries around the world. ZEISS business units generated more than 50 percent of total purchasing volume with approximately 650 major suppliers that are located in the following regions: 73 percent in EMEA, 14 percent in APAC and 12 percent in the Americas.

Guidelines, Structures and Processes

The company works very closely with its global supplier network to reduce the negative impact across its business operations. For this, ZEISS takes a risk-based approach for the systematic management of suppliers as concerns sustainability aspects. As such, environmental and social aspects play an important role in the selection of and collaboration with suppliers. In complex supply chains, environmental pollution, inadequate occupational health and safety standards, and child or forced labor all represent potential risks that ZEISS wants to proactively address. To ensure its own requirements are fulfilled and the expectations of customers, employees and society at large are met, ZEISS plays an active role in ensuring that suppliers adhere to environmental and social standards.

ZEISS suppliers must adhere to the provisions listed in the internationally recognized Code of Conduct from the Responsible Business Alliance (RBA). These serve as minimum standards for human rights, health and safety, environmental protection and business ethics. The RBA Code of Conduct is based on the UN Guiding Principles on Business and Human Rights and
international human rights standards like those issued by the International Labour Organization (ILO). ZEISS expects all suppliers who have a direct business relationship with the company to meet the minimum standards in the Code of Conduct. The strategic suppliers outside of the ZEISS Group, who make up around 50 percent of the company’s external purchasing volume, must recognize the RBA or a similar code of conduct, adhere to it and inform their sub-suppliers and contractors of the standards. Demand-driven assessments and audits are conducted to monitor compliance with the Code of Conduct. On principle, ZEISS does not enter into any business relationship if there is evidence of human rights deficiencies.

In order to anchor the topic of human rights more strongly within the company, ZEISS has assembled a work group with representatives from the Supplier Sustainability Team, Corporate Human Resources and Sustainability Coordinators. This group develops strategies for implementing the German Federal Government’s National Action Plan for Business and Human Rights (NAP) and ensures that these comply with statutory requirements like the British Modern Slavery Act. The integration of sustainability aspects in the supply chain is monitored by the Supply Chain Expert Panel, which comprises employee representatives from supplier management at the different strategic business units. The Supplier Sustainability Team, which also operates on a Group level, bundles different activities for integrating sustainability aspects in supply chain management, drives their development and supports their implementation in all strategic business units.

Processes
Within the scope of a risk-based approach, issues relevant to sustainability are a part of the supplier management process.

  • New suppliers are selected on the basis of a self-assessment questionnaire that includes questions related to occupational safety, environmental protection, energy efficiency and the acceptance of the RBA Code of Conduct. In addition, observing the RBA requirements also constitutes a key part of contractual agreements.
  • If a supplier is responsible for a significant share of value created, ZEISS conducts an on-site supplier audit at the supplier’s place of business to perform a supplementary risk assessment. The goal is to get to know existing and future partners better as well as identify and eliminate weak points in the supply chain.
  • Major suppliers undergo an annual evaluation that includes occupational safety, environmental protection and energy management criteria. The results are then discussed with the suppliers in order to define enhancement measures. Aspects such as occupational safety, fire prevention and environmental management have been a part of cross-divisional supplier quality audits since 2012.
  • In accordance with established risk indices and the annual purchasing volume, the assessments of major suppliers determine if there are any potential sustainability risks. For those suppliers with an increased risk, a comprehensive media screening and a supplementary risk assessment are performed before conducting any further business activities. This makes it possible to define additional steps, such as the completion of a sustainability self-assessment or an on-site audit. In the event of insufficient compliance with ZEISS’ sustainability requirements, an action plan is agreed upon, with the company monitoring and overseeing its implementation.

Within the scope of its due diligence obligations, ZEISS has also established a suitable process for identifying and assessing risks in the supply chain for handling conflict minerals and draws on the globally recognized templates from the Responsible Minerals Initiative (formerly: the Conflict-Free Sourcing Initiative) when communicating with relevant suppliers.

Results
A standardized assessment was conducted in fiscal year 2017/18 to identify the sustainability risk of the 650 major suppliers. In preparation for potential on-site audits, those suppliers considered particularly high risk as a result of the initial evaluation will be asked to fill out a sustainability survey in the future: The Sustainability Supplier Self-Assessment Questionnaire. In order to systematically identify risks in the supply chain pertaining to modern slavery, the standardized STRT (Slavery & Trafficking Risk Template) questionnaire was also piloted for the first time.

Based on the risk assessment and classification, ZEISS identified six suppliers in the reporting year and had an interdisciplinary and international team conduct on-site sustainability audits. This involved a follow-up audit in Germany and five initial audits in Asia. Deviations, particularly in the areas of occupational safety and transparency concerning working conditions, were identified. A plan for corrective measures was instituted to rectify them.

In order to sensitize suppliers and key functions in supply chain management to sustainability issues and to train them on how to meet requirements, ZEISS developed an eLearning course on the RBA Code of Conduct. In October 2018, this was made available on the ZEISS Learning Platform, which suppliers can also access.

ZEISS did not become aware of any violations or complaints pertaining to human rights in the supply chain during the 2017/18 fiscal year. All stakeholders were asked to report any suspected cases.

Conflict Minerals

ZEISS supports the aims of Section 1502 of the American Dodd-Frank Act, which aims to stop the financing and preferential treatment of armed groups in the Democratic Republic of the Congo and its neighboring states through trade with so-called conflict minerals.
Conflict minerals include:

  • Columbite-tantalite (raw material for tantalum extraction)
  • Cassiterite
  • Gold
  • Wolframite (raw material for wolframite extraction)
  • Compounds of these minerals.

ZEISS has established a suitable process for identifying and monitoring the relevant suppliers.

ZEISS expects its suppliers to take action to ensure that the requirements of the Dodd-Frank Act regarding the use of conflict minerals are met and that the materials supplied to ZEISS contain no conflict minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or its neighboring states.  

Further information is available in the current Sustainability Report.

If you have any questions or comments on sustainability at ZEISS, please write to us at: respons ibility @zeiss .com