- Procurement volume reaches EUR 14.25 billion
- Procurement accounts for approximately 75 percent of Group sales
- Supplier management optimized further
- Shared procurement platform expanded
Procurement as a key success factor
In the year under review, HOCHTIEF spent 74.6 percent of
Group sales on the procurement of supplies and services,
amounting to a procurement volume of EUR 14.25 billion.
Our procurement strategy, which we pursue rigorously, is
key to the success of HOCHTIEF. It gives us a competitive
edge that goes far beyond mere price advantages. We
focus
on optimum procurement processes, professional
supplier management and systematic bundling of demand
by the lead buyers.*
This puts us in a position to react to changes and events
on the procurement market quickly and comprehensively.
This will be to our advantage in the current financial crisis:
For example, we optimized the prequalification of subcontractors
in good time and expanded our internal lead buyer
organization. We also sustainably reduced our indirect
costs with the KaufPilot project. Based on the model of
our US subsidiary Turner, we have introduced safeguards in
Europe against the consequences of the loss of subcontractors**.
Expansion of cross-divisional supplier management
HOCHTIEF places high demands on its suppliers and subcontractors.
The careful selection of our partners is crucial
to the success of our projects and the development of a
reliable, trustworthy supplier base. This benefits all parties
involved. Since 2005, we have been working hard on
continuously expanding and improving Group-wide supplier
management with the
ProVis project. With ProVis,
HOCHTIEF is seeking to increase transparency within the
Group and to improve the relationship with our suppliers.
Group-wide access to the supplier base creates security
of supply and minimizes procurement risks. The main
elements
of HOCHTIEF's supplier management in 2008
were as follows:
Prequalification via a supplier portal
Our Internet-based supplier portal, rolled out in 2007, is a
crucial interface to HOCHTIEF for suppliers and subcontractors.
Anyone wishing to offer their services to HOCHTIEF
can access the portal and register. Over one thousand subcontractors
and suppliers registered in the reporting year.
For HOCHTIEF, the portal is a central component of risk
management. Registered subcontractors and suppliers
are regularly required to enter information such as financial
indicators in the portal. This provides a basis for validated
prequalification, which is a binding requirement if they are
to be engaged.
HOCHTIEF observes a Code of Conduct. We also expect
our subcontractors and suppliers to comply with these
ethical, ecological and social standards. External partners must therefore
acknowledge and agree to be bound by a special Code of Conduct for
HOCHTIEF subcontractors and suppliers as a prerequisite for qualification.
Cross-divisional supplier assessment
In addition to prequalification, another central element of
our integrated supplier management system is supplier
assessment.
Since 2008, this has been based on standardized
criteria. We used the results of the assessments to
optimize the integration of suppliers' expertise and capabilities
into our range of services. As a component of ProVis,
the supplier assessments afford all buyers fast access to
information about partner companies with which we have
a good working relationship.
Cross-divisional contract management
In the reporting year, HOCHTIEF began to hold all master
agreements negotiated by the lead buyers centrally, as
with supplier assessments. In this way, we enable local
buyers throughout the Group to obtain the best possible
terms and give suppliers easier access to the relevant
contact persons. In the period under review, utilization of
master agreements intensified, resulting in a substantial
increase in sales-related refunds.
