The Group’s supply strategy in fact attempts to satisfy project requirements as far as possible within the territory in which each project is located, depending on local availability of the goods and services required.

 

Local supply chain spending

In 2014 our links with local providers of goods and services remained robust, with an average of 58% of spending placed with locally-based suppliers. This peaked to over 95% in Europe and North America. Moreover, 2,400 new suppliers were contracted by our construction sites for the first time in 2014, and 87% of these were local.

In monetary terms, the total economic value distributed to the supply chain was €3.4 billion, consisted mainly of sub-contracts (43% of total), services (31%), raw materials, and goods (17%).  

87%
New suppliers contracted in 2014 from local markets

 

Procurement process

The supply chain is a fundamental factor in generating value, and a vital contribution to any project’s development and implementation. To ensure consistent quality levels and performance worldwide, the Group requires its partners to conform to specific standards and rules, including ethical, social and environmental principles, along with respect for human rights.

To effectively support production activities at our sites around the world, the integrated management of the supply chain is of particular relevance, mainly for what concerns the procurement of facilities, equipment, and materials. The procurement departments at headquarters and at local level ensure the correct management of the entire process, including site visits to suppliers’ factories, along with shipping and customs activities.  

Special attention is also paid to sub-contracts, as these can have a significant socio-environmental impact on our supply chain. For this reason, they are subject to the same rules that apply to our direct workforce and activities throughout the world.

All major and strategic suppliers are investigated and cross-checked both before and during the execution of contracts. After this, the in-house performance evaluation system leads to the suppliers being either confirmed or denied any further business with the Group.

 

Suppliers support and monitoring

As well as dealing with local enterprises, the Group provides a range of strategic support for suppliers and sub-contractors, to ensure satisfactory performance in questions of quality, health, safety, and the environment.

Sharing our knowledge and skills with local suppliers and sub-contractors allows us to develop strong partnerships and promote their growth and technical development.

For this reason we regularly schedule specific training activities, especially to our sub-contractors’ personnel. In 2014 we provided over 195,000 training hours on issues of quality, environment, health, and safety.

In addition, our site-based Quality and HSE departments carry out regular monitoring of sub-contractors to guarantee the same standards of protection and performance that are ensured to activities carried out directly by our employees. In 2014 around 3,000 formal meetings were held with subcontractors on these issues.

The Group also periodically checks the compliance of sub-contractors and service providers with regard to legal obligations related to wages, social security, and insurance for workers employed at our sites.

As with our direct workforce, sub-contractors are eligible to use our on-site grievance procedures to report their concerns and suggestions to the management.  

>195,000
Training hours provided to subcontratctors' employees