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  1. FERROVIAL IN 2014
  2. INDUSTRIAL CAPITAL

INDUSTRIAL CAPITAL

Supply chain and Quality

Ferrovial's supply chain follows the Principles of the Global Compact and FTSE4Good supply chain standards.

supply chain

Suppliers by division
Suppliers by origin

Ferrovial includes supply chain management as a priority of its 2016 Plan. Of its 62,612 suppliers, 95% operate in construction and services.

Ferrovial seeks to establish long-term relations with its suppliers (with suppliers meaning vendors, lessors and subcontractors).

SUPPLY CHAIN DESCRIPTION

Most purchasing in the Construction division is for works underway at any given time, while a small proportion goes to the offices, departments and services supporting the same.

The supply chain is made up of the following supplier types:

  • Suppliers (manufacturers and distributors): suppliers of materials and machinery.
  • Subcontractors: implementing work units. These provide personnel and working equipment, and may or may not also provide materials.
  • Companies renting machinery and auxiliary equipment (including operator personnel, depending on the machinery/equipment in question).
  • Service providers other than work units (not considered subcontractors): companies providing engineering services, supervisory services, legal services, security services, transport, public services, etc.

The sector includes numerous suppliers that operate using a large number of subcontractors, depending on the type and size of the project and country where it is implemented. There is also a high percentage of local suppliers, as construction is closely associated with the location where each project is implemented, and sometimes requirements are tailored to each local market. Suppliers vary greatly by type, from large and technologically advanced multinationals with global reach, to small local suppliers (largely subcontractors) for less qualified work.

This division has undergone significant change due to operations getting underway in new countries (Australia, Oman and France), as well as growth in other markets where Ferrovial already had a presence.

It is also important to emphasize that international growth, via new large-scale projects, is often performed via joint ventures with local partners who contribute their local market expertise and provide quick access to suppliers from the outset. As a result of the above, Ferrovial’s vendor quality assessment and monitoring system has been extended to cover these new markets, although the quality systems used by partners also have to be taken into account, which often means a specific and tailored monitoring system for each JV.

A plan for integrating the processes that make up the procurement cycle has been designed in the Services division. This plan considers the complete supply chain process, from managing the need to payment and transferring the purchase/subcontracting to the end client, with the aim of meeting their needs and demands.

The need’s management is channeled through an automated system where, based on the product/family category and/or its amount, the orders are centralized in the Procurement Department or placed with suppliers with framework agreements negotiated previously. These agreements set out the best terms and conditions for both parties and regard the suppliers as long-term partners.

In the Services division, there have been no significant changes in the supply chain in 2014, except for a greater centralization of purchases and the establishment of common agreements for Spain. Substantial changes are planned in 2015 due to the technological project for integrating the procurement cycle.

GLOBAL PURCHASING POLICY

Applicable to all Ferrovial companies. This is based on certain mandatory principles that must be complied with before, during and after each purchase. Throughout the process, the principle of integrity will take precedence, founded on the Code of Business Ethics and Corporate Responsibility policies. Some businesses have specific purchasing policies in place that are supplemental to the corporate policy.

GLOBAL PURCHASING COMITEE

In the Construction and Services divisions, this establishes the general guidelines for everyday procurement operations, based on rigorous, ethical and efficient relationships. This complements the Code of Business Ethics and is applicable to all staff working in the Purchasing Departments of said divisions, who are provided with due training and are required to comply with the same.

BUYER'S CODE OF ETHICS

In the Construction and Services divisions, this establishes the general guidelines for everyday procurement operations, based on rigorous, ethical and efficient relationships. This complements the Code of Business Ethics and is applicable to all staff working in the Purchasing Departments of said divisions, who are provided with due training and are required to comply with the same.

CORPORATE RESPONSIBILITY CLAUSE

Ferrovial includes a Corporate Responsibility Clause in supplier contracts that demands the following commitments from suppliers: 

  • Compliance with the Principles of the Global Compact.
  • Compliance with all environmental and sector-based legislation applicable to any aspect of Ferrovial’s activities or services.
  • Compliance with all health and safety rules and occupational safety commitments at Ferrovial workplaces.
  • Evaluation of potential for collaboration with Ferrovial to carry out joint aid projects for disadvantaged groups. 

SUPPLIER PROFILE

In 2012, a system was introduced to classify high-risk suppliers in terms of corporate responsibility, based on product and country of origin, founded on the principles of the Global Compact and FTSE4Good standards. Most of Ferrovial’s purchases are in OECD countries, or in upper-middle or high income countries (according to the World Bank classification).

Ferrovial predominantly hires local companies in all markets where it operates; approximately 97% are local suppliers in each country.

In Construction, the purchasing policy is based on a general organizational procedure with basic standards and guidelines, and is subsequently developed for each country to regulate the entire purchasing process. As for Services, both in Spain and the United Kingdom, most suppliers are local, keeping in mind the company’s interests at all times. However, given that the company operates worldwide, in order to ensure competitive purchases globally, prices are checked internationally for key purchases, seeking to capitalize on the competitive advantages offered by other markets.

SELECTION AND CONTINUOUS EVALUATION OF SUPPLIERS

The Construction Division controls and monitors the quality of its suppliers via assessments conducted by the site managers upon completion of the supply contracts or works. These may also be conducted annually for long-term supply contracts or works, or immediately when incidents are identified. The factors evaluated are: compliance with deadlines, product quality, technical capability, price compliance, occupational health and safety compliance and environmental conduct

Suppliers20142013 2012 
Suppliers evaluated 6,724  6,038  8,402 
Suppliers rejected 346 540  773 
Suppliers with incidents 475  592  381 

An incident is deemed to have occurred when the average evaluation score fails to meet the requirements established in agreed parameters. A “rejected supplier” is a supplier that incurs three incidents within a single year, or one “very serious” incident.

In Services, currently undergoing a transitional period, provisional supplier selection and assessment procedures have been drawn up. Basically, these are structured into two stages:

  • Selection: suppliers must be registered in the Ferrovial Services communication portal. Each supplier must be demonstrably capable of providing the supplies or services in question.
  • Assessment: In the event of breach of order/contract, or when significant problems are generated by the supplier during the course of the same, the center supervisor will evaluate the quality provided and complete the Supplier/Subcontractor Evaluation Form. Should the Procurement and Fleet Department receive three assessment forms for the same supplier within one year, starting from the date on which the first is submitted, certification for said supplier shall be revoked, rendering it impossible to work with said supplier for three years. The Procurement and Fleet Department may ban any supplier from being hired on the grounds of protecting the company’s interests.

Finally, in the case of suppliers that hold framework agreements with the organization, as well as representative negotiations, the Purchasing Department evaluates aspects such as technical and financial solvency, other standard criteria and customer satisfaction when selecting the bidding suppliers.

SUSTAINABLE STANDARDS 2014

Controlling the origin of wood

Ferrovial requires its wood suppliers to provide information and guarantees on the origin of their materials. Since 2005, all orders and purchasing contracts include clauses setting out the contractual obligation that the material supplied must be of a guaranteed origin. Ferrovial uses wood as an auxiliary material and it does not constitute a critical element for its commercial operations, except in the case of housing construction (which is only a small part of its business). Recycled material Green purchasing Ferrovial pays attention to the environmental aspects of construction activity, particularly in terms of the use of recycled and recyclable materials. The Purchases Department has an IT knowledge management application called “icompras”, which enables information to be exchanged between national and international production centers. The Services Division has prepared its own green purchasing guide that includes specific products, equipment and manufacturers for its own needs.

Recycled material

Ferrovial continues with its commitment to promoting, as far as possible, the use of products manufactured using recycled materials, as well as products that can be recycled. With this aim in 2012, Ferrovial Agroman carried out a survey of its main suppliers, covering the activities in which these products are most likely to be included.

Green purchasing

Ferrovial pays attention to the environmental aspects of construction activity, particularly in terms of the use of recycled and recyclable materials. The Purchasing Department has an IT knowledge management application called “icompras”, which enables information to be exchanged between national and international production centers. The Services Division has prepared its own green purchasing guide that includes specific products, equipment and manufacturers for its own needs. 

Quality

MANAGEMENT SYSTEMS

All business areas include quality and environment systems in their contracts. Most of these systems are certified according to ISO 9001 and 14001 standards.

In 2014, the average percentage of activities run with quality and environmental certifications stood at 91% and 90% respectively.

With regard to contracts that are not included under certified systems, it is important to note that they all have quality and environment systems implemented.

 
 

OTHER CERTIFICATES

  • Standard ISAE 3410 “Assurance Engagements on GHG Statements”.
  • “Integrated Management System PAS 99” and “Specification PAS for composted materials and Quality Compost”.
  • UNE-EN 12899-1:2009; UNE 135332:2005; UNE 166002; UNE 179002; ISO 50001:2011; ISO 22000, ISO 39001, BS 1100, EMAS and Madrid Excelente.

COMPLAINTS

All businesses have internal procedures in place, establishing a methodology for detecting, identifying, recording and monitoring complaints filed by customers with regard to products or services. All such complaints are subject to analysis, while action for improvement is also established.

The Ferrovial Quality & Environment Department handles any complaints submitted by clients to Ferrovial that are not satisfactorily addressed by the business areas and that demand a solution. In 2014, two complaints were received involving housing incidents (Building), both of which have been resolved.

In 2014, Ferrovial companies as a whole received a total of 1,436 complaints from clients and users. Of this total, 98% were closed within the same year. 

CUSTOMER SATISFACTION

Ferrovial aims to continuously improve customer satisfaction levels. To this end, all Ferrovial divisions conduct customer satisfaction surveys. These are usually annual, every two years or every three years. Surveys were conducted during 2014 at Cintra, Amey and Ferrovial Agroman. The results are evaluated to identify and implement improvements.

Customer satisfaction 

Customer satisfaction
201420132012 
4.0 4.1 4.0 

CUSTOMER SERVICE

Channels are in place that allow clients and users to submit their opinions, queries and/or complaints. These are sometimes included in after-sale departments, customer service departments or call centers. In the construction and water treatment industries, clients can directly contact the individuals in charge of a specific contract. An email address is available for complaints, comments or queries (dca@ferrovial.com).

NORMATECA AND AMBIENTATECA

Ferrovial uses these applications and internal procedures to guarantee compliance with all current legislation, regulations and client agreements, thus delivering on one of its core principles. All business areas can offer user security guarantees throughout out the lifecycle of their products and services.

Normateca currently includes 20,906 standards. This year, 592 new standards were included. Ambienteca has a total of 1,901 provisions, of which 26 were incorporated over the last year.

All systems are audited internally by qualified teams that are fully independent of the audited area. 1,339 quality and environment audits were performed and 2,475 production centers were audited.