Governance

Strengthening Our Supply Chain

Supply Chain Governance

CMC works only with reliable partners who share our commitment to sustainability and ethical business practices, as well as quality and reliability. We continually evaluate our supplier practices to set goals and benchmark performance.

CMC’s vice president and chief supply chain officer oversees the procurement practices for vendors as well as our Supplier Relationship Management Program. Our Operations and Procurement teams meet regularly to discuss our supplier strategy from a risk reduction and continuity perspective.

In addition, CMC does not purchase, use or process any conflict minerals. In 2022, we developed a standalone conflict minerals policy outlining our position toward conflict minerals and making clear our expectations for our suppliers and our purchasing teams to that end.

In order to maintain our high internal standards, we require employees in our Purchasing and Procurement Department to enroll in our Supply Chain Academy courses within six months of joining CMC. Specific courses are tailored to employees depending on their roles and levels of responsibility within the company. Once employees successfully complete the assigned curriculum, they are certified either as a certified advanced procurement professional or a certified procurement professional. The course work is administered by our training partner, Skill Dynamics, a platform accredited by the International Federation of Purchasing and Supply Management.

Additional information on this procurement and supply-chain-related coursework is available at the Skill Dynamics’ Procurement Strategy Training & Certification webpage.

CMC is committed to monitoring and evolving our supply chain management strategy to ensure it accurately reflects our company values and best practices.

Engaging Our Supply Chain

CMC maintains strong policies and processes to support a dependable and socially and environmentally responsible supply chain. We believe that maintaining transparent, respectful business partnerships is fundamental to good business practice and we aim to acquire supplies and materials from reliable and responsible sources. CMC does not use iron ore or coking coal to produce our products; instead, every ton of steel produced at CMC facilities uses the EAF process, which utilizes 100% recycled scrap metal. Our EAF electrodes suppliers use petroleum coke from oil refining in their production process. We purchase our raw materials and supplies from a diverse range of suppliers, both domestic and international.

As we continue our efforts to maintain the resilience and quality of our supplier base, ESG is an increasingly important aspect of our supplier engagement. ESG provides a basis for establishing common values and expectations, including human rights, worker conditions, ethical behavior and environmental compliance and performance. In 2023, we will develop a supply chain program that extends our ESG commitments and sustainable practices to our suppliers.

Risk Monitoring

CMC’s large and global supplier base does present some inherent risks. Economic downturns in the U.S. and Central Europe, or decisions made by individual governments, can adversely impact our supply chain and demand for our products. Starting several years ago to reduce risk from supply chain disruptions, CMC adopted an approach to procurement that seeks to move the supply chain closer to our operations, to the extent possible. This effort was expedited due to the COVID-19 pandemic and frequently has led to our utilizing smaller companies with bases of operations within the communities where we work and draw our workforce.

By utilizing local suppliers, we improve the resilience of our supply chain, reduce risk exposure due to longer and multi-jurisdictional supply chains and minimize our environmental impact from such factors as transport-related GHG emissions. This approach also supports local economies and provides a more diversified supplier base. CMC works closely with these smaller suppliers with fewer administrative resources to ensure that they are able to satisfy our requirements to be a supplier.

Supplier Code of Conduct Compliance

Ultimately, our responsibility is to source quality products and services that are required for our business from reputable and reliable suppliers. As a minimum requirement, each CMC supplier must agree to adhere to our Supplier Code of Conduct.

Our supply chain and vendor base are large and widespread, comprising over 6,000 companies and service providers, not including our scrap metal providers, which are managed separately. Eighty percent of our net spend on suppliers in the U.S. is with approximately 350 large vendors. This smaller number of large vendors generally supplies large and specialized equipment that is difficult to source elsewhere.

We continue to tour critical supplier facilities prior to contracting to identify any issues or risks for resolution.

Download Supplier Code of Conduct

Through multiple touchpoints, internal collaboration and continuous risk review and assessment, we aim to build a resilient supply chain that minimizes disruptions while upholding our values.