Suppliers and contractors

Supplier and contractor management is an important aspect for the Group, since the work performed thereby has a direct influence on the quality of the result of the projects carried out by the Group.

In ACS Group companies, the purchasing departments are responsible for managing the relationship with suppliers and contractors by means of specific systems for managing, classifying, approving and controlling the risk thereof.

As a characteristic feature that differentiates the Group from its competitors, it is important to highlight the distinct decentralization of purchasing and supplier management departments in this area. This provides Group companies with a competitive advantage as a result of the agility, flexibility and autonomy granted by this model.

In 2017, companies representing 98.7% of the ACS Group’s procurement expenses have a formal system for approving suppliers and subcontractors, in line with a series of clearly established criteria, which is subsequently used by the construction managers of the projects and provides them with information on the suitability or otherwise of a supplier to fulfil the intended task. The main concepts used for approving suppliers are as follows:

• Cost, payment and collection period, experience, professional prestige and technical capability.
• History of fulfilment of contractual clauses in their prior relationship with ACS.
• Additional non-financial criteria that are shown in the table below.

Level of implementation of the non-financial criteria in the suppliers approval (% of acs group purchases)
2015 2016 2017
Adherence with the ACS Group’s Code of Conduct 77.3% 96.1% 99.2%
Evaluation of adherence with international standards in relation to human rights and labor rights 60.8% 83.2% 90.1%
Evaluation of certification in quality aspects (ISO9001) 99.5% 99.1% 100.0%
Evaluation of certification in environmental aspects (ISO4001, EMAS or equivalent) 99.8% 98.3% 99.4%
Analysis of the labor standards and practices of suppliers and subcontractors 83.1% 97.5% 97.7%

The ACS group’s companies carry out an analysis to identify critical suppliers in their supply chains that in 2017 comprised a total number of suppliers of 123,040 and total procurement expenses of 22,644 million of euros. The Group considers a supplier to be critical when the percentage of procurement or subcontracting expenses are significantly greater than the average for the company’s other suppliers.

Therefore, companies that represent 94.9% of the Group’s procurement expenses have determined processes to identify critical suppliers. As a result of these processes, the main data from the analysis of critical suppliers is as follows:

• Companies representing 83.06% of suppliers have performed this analysis.
• Of these, 5.9% (6,612) are considered critical suppliers.
• These suppliers represent 37.5% of the total costs for Group companies with critical suppliers.
• Almost all these suppliers consider ACS to be a key customer to their business activity.

Likewise, given the importance of the supply chain analysis for risk management, ACS Group companies have begun to identify critical suppliers of their direct suppliers.

 


For more information, please click here