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 things 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 solutions 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 the company’s intelligent measuring systems 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 drivetrain components in vehicles to ensure low fuel consumption.

At ZEISS, product safety begins in the development stage, continues through the procurement and production processes and remains an important aspect when the product is being operated by the customer, or serviced. A wide range of legal stipulations on the development, production, approval and sale of these products ensures product safety. Defective products may cause serious harm to the user, but can also severely damage the company’s reputation. For ZEISS, product responsibility means more than just delivering innovative, effective and safe products. It also includes responsible value chain creation – from raw materials to product sales.

Guidelines and Structures

ZEISS requires all applicable laws governing product safety to be implemented consistently, during both product use and disposal. To this end, all ZEISS units use a quality management system based on the requirements of the international standard ISO 9001:2015. Systems and processes at multiple sites have been certified in accordance with it. To meet the specific requirements made of medical devices, various Medical Technology, Consumer Markets and Industrial Quality & Research sites have implemented a quality management system certified to ISO 13485. This is also verified through independent external certification.

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 the product safely. Operating instructions, training seminars, different types of support and opportunities for dialogue help users operate ZEISS devices safely. A set of guidelines applicable across all ZEISS units helps employees deal with customer issues and complaints in a structured way. In such cases, appropriate measures must be implemented and monitored. ZEISS is thus able to implement potential improvements and, if necessary, quickly execute 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 are involved in their ongoing development through 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. Responsibility for product safety lies with the Executive Board or the Managing Directors of the individual companies, respectively, as well as with the employees in charge of a particular product. They must make the structures, resources and necessary skills available to properly meet all legal requirements.
The key elements of ensuring product safety are:

  • Observing product safety requirements during each stage of the product life cycle
  • Using customer feedback as the basis for product improvements
  • Performing ongoing market surveillance for selected product groups to ensure products meet the highest safety requirements
  • Independent organizations inspecting selected products to ensure product safety 

Processes

The Product and Solution Generation process is of fundamental importance. The purpose of this guideline, which is binding for all business units, is to 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, reliability, 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 contain two related categories that must be taken into account

during development: the environmental performance of the products and the evaluation of different sustainability requirements over the products’ entire life cycle. 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 met and any necessary approvals are obtained to launch the products. Relevant products are certified by independent testing centers to ensure a high safety standard. Certified products can be viewed on publicly accessible databases like that of the CSA Group, an international certification body. In the reporting year, the quality management system was re-certified as per ISO 13485 at four sites in Germany and three sites abroad. Around 100 locations had thus been certified to ISO 9001 and 16 locations to ISO 13485 by the end of fiscal year 2018/19. 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.

Procurement and Supplier Management

Due to the significant amount of value created along the supply chain, the procurement process is critical to ZEISS’ long-term success. Local purchasing organizations 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 7,000 suppliers located in different countries around the world. ZEISS business units generated around 48 percent of total purchasing volume with 573 major suppliers who are being focused on in a risk-based approach and are located in the following regions: 70 percent in EMEA, 10 percent in APAC, and 20 percent in the Americas.

Guidelines and Structures

The company works very closely with its global supplier network to reduce the negative impact of its business operations. To do 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 increasingly 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.

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 on international human rights standards like those issued by the ILO. ZEISS expects all suppliers who have a direct business relationship with the company to meet the minimum standards in the Code of Conduct. Key strategic suppliers outside of the ZEISS Group, who make up around 48 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. Risk-based assessments are conducted through supplier audits 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 violations.

As a leading global technology enterprise, the ZEISS Group is conscious of its responsibility to uphold human rights. This issue is particularly important because of the global supply chain and increased regulation, e.g. the German Federal Government’s National Action Plan (NAP) for Business and Human Rights. ZEISS categorically rejects all forms of forced and child labor and actively works to ensure that environmental and social standards are met at its sites and in its supply chain.

Processes
Within the scope of a risk-based approach, issues relevant to sustainability are also 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 or similar guidelines. In addition, observing the RBA requirements also constitutes a key part of contractual agreements. In the future, information exchanges and agreements pertaining to services, quality and different sustainability aspects will be supported by the supplier portal launched in fiscal year 2018/19. 
  • If a supplier is responsible for a significant share of values created, and shows a specific risk profile, ZEISS conducts an onsite suppliert audit at the supplier’s place of business. 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 if needed. 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 the established risk indices and the annual purchasing volume, major strategic suppliers are assessed to determine if there are any potential sustainability risks depending on the context. In order to plan further activities, a list of priorities will be compiled in consultation with the business units and action plans discussed. This makes it possible to define additional steps, such as completing an on-site sustainability audit, or piloting new development measures. 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. Some “conflict materials” are disposed of in conflict areas under inhumane conditions. ZEISS does not directly purchase any metals like tantalum, tungsten, tin or gold, but does demand that its direct suppliers do not use any ores from conflict areas. ZEISS also collects information on the associated risks. As part of its annual reporting, in its communication with relevant suppliers the company relies on the globally recognized standards of the Responsible Minerals Initiative (formerly: the Conflict-Free Sourcing Initiative). ZEISS uses available means and information to verify data on these smelting works in order to identify possible risks and raise supplier awareness for this topic.

Objectives and Results
In fiscal year 2018/19 the sustainability risk of ZEISS’ 573 major suppliers was assessed using the established risk indices. Suppliers considered particularly high-risk as a result of an initial evaluation were asked to complete a Sustainability Supplier Self-Assessment Questionnaire in preparation for an on-site sustainability audit. In order to systematically identify risks in the supply chain, industry risks were determined, including those related to human rights. In the future, these will form part of the risk analysis.

In the reporting year, ZEISS had seven sustainability audits performed on suppliers’ premises by an interdisciplinary and international team. This involved initial audits in Asia, Europe and Central America. Deviations were identified, particularly in the areas of occupational health and safety and working hours, as well as transparency concerning working conditions, and informing those involved in upstream supply chain activities of the ZEISS sustainability requirements. In order to process the deviations, corrective measures needed to be agreed with the relevant suppliers and their implementation monitored.

To sensitize employees and suppliers to sustainability issues and train them on how to meet requirements, ZEISS began offering an e-learning course on the RBA Code of Conduct in October 2018. ZEISS will continue rolling it out both internally and externally. Moreover, a central supplier portal was launched to facilitate knowledge-sharing. It requires suppliers to accept the RBA or an equivalent code of conduct. Further suppliers around the world will be required to use the portal in the next fiscal year.

ZEISS did not become aware of any violations or complaints pertaining to human rights in the supply chain during the 2018/19 fiscal year.

 

Key Figures
85 percent of the 573 strategically relevant suppliers have replied or confirmed, via the supplier portal, that they will comply with the RBA Code of Conduct or an equivalent code of conduct. Further suppliers will be able to use the supplier portal over the course of the next fiscal year.

In fiscal year 2018/19, approximately 100 supplier audits were performed worldwide. These also covered aspects related to occupational health and safety and environmental management.

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