Supply Chain Management

Third-party contractors and suppliers are vital to the success of our industry, and at Crestwood, they are considered essential partners. They play a crucial role in our responsible business growth and the advancement of our sustainability efforts and commitments. Supply chain management is a key component in our current three-year sustainability strategy.

Approach

Crestwood's Board of Directors and Sustainability Committee conduct an annual evaluation of the company's supply chain management performance, which includes assessing our efforts to improve supplier diversity. The Supply Chain Management department spearheads these initiatives, aiming to optimize the supply markets and deliver streamlined services throughout Crestwood's operations. On a continuous basis, Crestwood monitors our suppliers’ commitments to shared core business values such as human rights, environmental stewardship, social performance and responsible business ethics.

Our Journey and Progress

We continue to develop our supply chain management and procurement approach with a focus on identifying strategic partners early in our Request for Proposal process. As part of Crestwood’s supplier evaluation, we consider each supplier’s commitment to enhance diversity and inclusion in the workplace, reduce or mitigate environmental impacts and community involvement. We partner with a dynamic and diverse supply chain that operationalizes sustainability throughout our business, mitigates risks and meets Crestwood’s business objectives. 

Our key 2022 supply chain management and procurement achievements include:

Focus Areas	2022 Key Achievements
Supply Chain Continuity, Resiliency and Continuous Improvement	Conducted a supply chain gap analysis focused on long lead items, critical equipment and maintenance program needs and materials, taking into consideration emerging issues and risks including labor shortages and increased pricing Continued our efforts to mitigate supply chain risks through strategies like bulk ordering, standardizing equipment across basins to allow for inventory relocation and the development of new supplier relationships Identified barriers to further diversify sourcing materials, labor and equipment across the business  Implemented supply chain standards and procedures at newly acquired assets  Reduced our footprint by redeploying inventory from newly acquired assets
Supplier Diversity	Continued efforts to identify new strategic partnerships with diverse suppliers that share our core business values Continued to require at least one diverse supplier in growth capital requests for proposals over $100,000
Reporting and Transparency	Developed a supplier mapping process for key operational areas  Assessed technology to incorporate into supply chain management systems and operations  Continued to report real time supplier spend via a PowerBI dashboard providing clear and interactive daily supply chain insights

Supplier and Contractor Expectations

Our suppliers and contractors are expected to adhere to the requirements and expectations outlined in our Supplier Code of Conduct and our Code of Business Ethics and Conduct. We use ISNetworld to track and assign deadlines for suppliers and contractors to acknowledge the Codes prior to performing work for or on behalf of Crestwood. 

At the end of 2022, 100 percent of our material suppliers and 95 percent of our service contractors, including those providing supplies and services to our newly acquired Oasis Midstream and Sendero assets, had acknowledged our Codes through ISNetworld. Crestwood does not engage in business with contractors or suppliers that fail to complete this acknowledgement and commitment. Therefore, in 2022 the five percent of service contractors who did not acknowledge our Codes in ISNetworld were not eligible to work with or for Crestwood.

Our suppliers and contractors are expected to adhere to applicable child labor, wage, labor, safety, human rights and environmental laws. In addition to the Codes discussed above, we require suppliers and contractors to review and acknowledge additional policy documents that complement the areas discussed in the Codes, as outlined below.

Supplier Code of Conduct Area	Other Applicable Policy Documents
Health, Safety and Environment	Health, Safety and Environment Policy
Employment Practices and Human Rights	Anti-Human Trafficking Policy Truckers Against Trafficking Training Workplace Violence Policy
Responsible Business Ethics	Code of Business Conduct and Ethics Drug & Alcohol Policy
Social Performance, Supplier Diversity and Indigenous Peoples	Indigenous Relations Policy

Selecting Trusted Partners

We screen contractors and suppliers based on their performance, including their ESG performance, and we continuously monitor them to identify areas for improvement as we work together to advance our shared goals.

3 of our top 10 suppliers are diverse

Supplier Diversity

Our commitment to diversity, equity and inclusion extends to our supply chain and procurement strategy. We are proud to include and partner with diverse suppliers and we remain committed to identifying new opportunities to increase our supplier spend and further diversify our supplier relationships, including with women-, minority-, veteran- and Indigenous-owned businesses across the U.S. We also expect our business partners to use and develop diverse suppliers of their own while performing work with or on behalf of Crestwood. Please see our Diversity, Equity and Inclusion section to learn more.

2022 Supplier Diversity Spend

In 2022, our total supplier diversity spend was more than $43 million, an increase of nearly $24 million compared to 2021. We collect and report diverse supplier spend quarterly, and we report diversity spend to the Board of Directors annually. For a full data review, please see our Performance Data Table.

Working with Indigenous Suppliers

We are firmly committed to partnering with Indigenous suppliers and contractors. We collaborate with Indigenous-owned businesses through the Tribal Employment Rights Office (TERO) for all work conducted on the Fort Berthold Indian Reservation. TERO requires all companies conducting work on the reservation to partner with Tier 1 contractors. We not only adhere to this mandate but also give preference to qualified, self-performing Indigenous-owned businesses.

In 2022, Crestwood’s spend with Indigenous-owned suppliers and contractors was more than $14 million, representing 33 percent of Crestwood's total diversity spend.

Please see the Indigenous Relations page to learn more about Crestwood’s approach to cultural awareness and Indigenous relations.

Looking Ahead

We believe in partnering with suppliers and contractors who share our core values and adhere to our company standards and expectations. In 2023, we plan to:

• Continue to focus on increasing the resiliency of our supply chain by establishing plans for known and emerging risks like supply chain delays and disruptions
• Continue participating in EPA’s SmartWay program, which assists companies in advancing supply chain sustainability by measuring, benchmarking and improving freight transportation efficiency
• Continue to increase diverse supplier relationships by developing engagement plans for increasing interaction, awareness and understanding at the local level
• Strengthen our partnerships with nationally recognized diverse supplier networks