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Prysmian Group – 2015 Sustainability Report
Supply Chain
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guarantee long-term suppliers; secondly, Prysmian purchases from all major global manufacturers, in order
to ensure the efficient coverage of requirements and optimise the metals logistics chain.
The Group has therefore chosen to develop long-term agreements, veritable industrial partnerships, with
integrated suppliers that guarantee sourcing for extended periods via reciprocal volume commitments. The
necessary flexibility needed to follow the natural cycles of demand is assured by short-term agreements
(usually annual, with considerable flexibility regarding volume). These include suppliers that are not
integrated, since this characteristic guarantees greater flexibility.
Even with regard to the purchasing of aluminium, the Group has decided to concentrate increasingly on
suppliers that are vertically integrated (with processes that manufacture aluminium rod directly from
aluminium oxide), in preference to those that are not integrated (manufacturers that smelt aluminium ingots
in order to produce rod). This strategy assures the security of supplies and also has cost and environmental
advantages, due to simplification of the logistics and elimination of the ingot re-smelting cycle.
THE GROUP'S SUSTAINABLE SUPPLY CHAIN
In terms of supplier management, Prysmian identifies its suppliers via a formal process founded on economic
and financial analysis. Specifically, the Group examines data and information about the risk of dependency
on the suppliers considered and, also, about their technical and technological capabilities and skills.
In order to monitor the sustainability of the supply chain, especially with regard to critical suppliers, the Group
analyses all associated risks and opportunities on a centralised and integrated basis, focusing most on the
critical risks.
In this regard, Prysmian carried out an internal analysis of key suppliers during 2014, assessing them
against a number of sustainability criteria. This analysis considered the Group's strategic suppliers: those
that are critical and those deemed significant in terms of the value of purchases. The selected suppliers
covered about 51% of the Group's purchases in 2014.
Continuing this approach, Prysmian implemented multiple initiatives in 2015, with a view to strengthening its
commitment on sustainability matters. In order to guarantee the quality of the materials purchased, the
Group is committed to using only those raw materials approved by the responsible technical functions
following laboratory tests and extended processing trials conducted both in-house and by qualified suppliers.
This process seeks to check the environmental and social aspects, as well as those of a qualitative nature.
The qualification process starts by sending a questionnaire that the supplier is required to complete in full,
addressing every aspect. This is followed by an audit of the materials classified as critical, or if further
information is needed because, for example, the replies to the questionnaire were not considered sufficiently
complete. Raw materials are considered critical if purchased from a single supplier or if the supply
percentages are particularly high, or if they are used in applications that are especially demanding in terms
of the performance required.
9 audits were carried out at European and American suppliers during 2015: there was only one case in
which these checks identified need for a plan to improve the process controls in place to guarantee constant
quality levels. The related supplies were rescheduled for delivery from alternative established suppliers.
Action taken in 2015 included adding a section on sustainability to the new supplier qualification
questionnaire, as part of the process of evaluating environmental and social criteria when selecting,