Supply chain management

Our supplier relationship management aims to build a two-way relationship that supports and encourages supplier business, helps us to deliver our client operations and expects the same standards of responsibility as we set for ourselves.

MyRegister supplier accreditation system

We set best-in-class standards for health, safety and working conditions wherever we work. We also set high standards of corporate governance, and our supplier partners are assessed against commercial, health and safety, quality and sustainability indicators. MyRegister, our supplier accreditation system, captures information on capability from all our suppliers, assessing against health, safety, quality and sustainability indicators. Based on their responses to the My Register questions, suppliers are graded from A to D with A being the highest. This assessment informs our purchasing decisions, ensuring that the most capable supplier is selected for a given project. We also use this information to actively engage with our supply chain, sharing knowledge and encouraging development of their capability as appropriate.

We have 6,783 accredited suppliers internationally, with the top 10% achieving an ‘A’ grade in 2014. Working with the Supply Chain Sustainability School we are actively encouraging our suppliers to undertake further training. This should in turn improve the quality of responses to the MyRegister question set and therefore enhance the overall sustainability capability of our supply chain.

We manage our preferred supplier list through categories of supplier, which strengthens our relationships, innovation and development of supplier sustainability credentials. By sharing information about future business demand, we can also help our suppliers to plan and grow in line with forecasted work.

We also regularly audit and measure supplier performance using our Supplier Performance Improvement tool. This enables us to manage category-specific sustainability risk assessments, helping us to understand and mitigate risks for that category. The average supplier sustainability score from the many thousands of reviews carried out in 2014 was 69%, down from 71% in 2013.

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Sustainable Procurement Steering Group

This is made up of senior representatives from across our business units, who work to develop and govern best-practice approaches to supply chain sustainability. A key objective is to assess suppliers against ethical sourcing standards, with the aim of achieving 100% compliance by 2020. The steering group also oversees our Ethical Sourcing Plan, Timber Procurement Policy, SME spend ratios and Sustainability School relationships.

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Prompt supplier payment

396 Carillion suppliers (150 SMEs) are now using our Early Payment Facility (EPF) and we paid nearly £977.6 million in 2014. The EPF allows suppliers to access early payment in advance of their agreed terms at no additional cost, which improves their cash flow. We plan to further expand this facility in 2015, with a target to pay £1 billion through this mechanism, equivalent to almost 50% of our UK supplier spend.

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UK Contractors Group

We are members of the UK Contractors Group. Membership commits around 30 companies to work with their supply chain to reduce waste and greenhouse gas emissions.

We support the Government’s construction industry strategy (Construction 2025) for greater resource efficiency and a 50% reduction in greenhouse gas emissions in the built environment by 2025. It supports a number of WRAP Built Environment Commitments to take actions through the supply chain that contribute to a lower-carbon, resource-efficient built environment.

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Training our supply chain managers

Our internal Supply Chain Academy has delivered its most successful training year to date with more than 3,000 hours completed by our supplier teams, the equivalent to four days per person. More than 30 courses are available, including Data Gathering and Market Analysis, Customer Service Skills, IOSH and NEBOSH qualifications and Women in Leadership.

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Carillion in Qatar

Carillion sets best-in-class standards for our people’s health, safety, human rights and working conditions wherever we work. We also set high standards of corporate governance, supported by policies and procedures that are applied rigorously across our business. These are not just standards we set for the benefit of those we employ directly, but also standards from which our supply chain’s people should benefit.

In regions such as the Middle East, where we have operated for over 40 years, we make strenuous efforts to ensure that our supply chain aligns with ISO standards, as well as local laws. We make it clear to all our subcontractors that they must comply with Carillion health and safety standards on our sites – the same as those applied in the UK. In addition, we require our subcontractors to comply with the requirements set within Qatar Labour Law in respect of payment of wages, living conditions and employment rights.

We work closely with our suppliers, and where we identify inappropriate practices or subcontractors/sub-suppliers not meeting our standards we will work with them to help them improve. If they are either not prepared or unable to do this, we will engage alternative suppliers who are able to do so.

In Qatar, Carillion is contracted to deliver phase 1B of the Downtown Doha project, a mixed-use development comprising retail, commercial, residential, leisure, cultural and community facilities. Our work on this scheme has won a key industry Sustainability Project of the Year Award. While this was principally in recognition of our achievements in minimising environmental impact, it also reflects Carillion’s leading role as a responsible contractor and employer in the region.

You can find out more about our standards and practices in Qatar in this section of our corporate website.

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£977.6m paid to 396 suppliers

6,783 accredited suppliers internationally against commercial, health and safety, quality and sustainability indicators

100% of supply chain teams completed the ethics module of the Chartered Institute of Procurement and Supply

Procurement Pledge Carillion signed the Government’s Procurement Pledge

Carillion plc, Company No. 3782379. Registered Office: Carillion House, 84 Salop Street, Wolverhampton WV3 0SR. Place of Registration: England and Wales

Copyright 2015 Carillion plc

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