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Report BFA - Bankia 2014 / Responsible managementSuppliers

  • Supplier payments
    €936.3 M
  • Supplier satisfaction index
    75.5
  • Suppliers classified with CSR criteria
    751
  • New suppliers
    977
  • Nº SME suppliers
    883
  • Supplier payments made in less than 30 days
    97%
  • Contracts managed via e-contract
    98%

In 2014, Bankia became the first financial institution to implement a Procurement Management System according to the UNE-CWA 15896 standard on value-added procurement management.

The increased complexity of economic and international issues means that the supply chain can directly impact a company’s risk. This has been the context for developing a European standard by all of the European Procurement Associations, including AERCE (the Spanish Association of Purchasing, Procurement and Provisioning Professionals) of which Bankia is a member.

Bankia, the first financial institution to implement a value-added procurement management system.

Following the implementation of the UNE-CWA 15896 standard on value-added procurement management, Bankia’s main goal is to achieve excellence and to minimise risk when managing its purchases. Furthermore, the standard is based on European best business practices and establishes a standard quality commitment that adds value to the company and ensures that all environmental, ethical and sustainability aspects are also observed.

Classification of active suppliers by sector

*Security, office supplies, furniture, insurance, advertising, etc.

Number of SMEs that are active suppliers

Map of active SMEs

A total of 3,586 certified suppliers, of which 1,551 are active suppliers

  43.25% of suppliers are active suppliers

Active suppliers domiciled locally

  95.74% of locally domiciled active suppliers are national companies

% Billing from local suppliers

  99.14% of local billing is from national suppliers

Ethics and transparency with suppliers

The Code of Ethics and Conduct requires the company to act with complete transparency with suppliers, who shall know the situation of their certification process and any exclusions from it, at all times.

Furthermore, goods and services must be purchased or contracted based on wholly independent decisions, unaffected by any personal, family or financial associations that could call into question the decision-making criteria.

General procurement conditions may not include abusive clauses that contravene the principles of good faith and a fair balance between the rights and obligations of the bank and those of the supplier. Goods and services must be procured in a way that is appropriate for the requirement, their suitability and with a view to restricting costs.

A system of authorisations and delegated powers exists for awarding contracts to ensure transparency and diligence when selecting suppliers. These ensure that all purchases are reported and/or signed-off by multidisciplinary committees that are authorised to approve them according to the proposed contract type and amount.

Procurement policy

The Procurement Policy is a specific part of the bank’s Responsible Management Policy and is intended to establish a collaboration framework between Bankia and its suppliers in order to encourage solid and long-lasting commercial relationships, obtain mutual benefits and comply with the values defined by Bankia and its suppliers.

Bankia is committed to business diversification between different local, national and international suppliers to help generate wealth in a balanced way while offering equal opportunities. Bankia therefore strives to include new suppliers every year, which account for at least 10% of the total number of authorised suppliers. In 2014, 977 new suppliers were included in a total of 3,586 authorised suppliers, an increase of 27%.

Furthermore, to ensure that suppliers support the bank’s policies, priority is given to those suppliers that demonstrate a commitment to their employees, quality, the environment and human rights -among other issues- while blocking any procurement from suppliers that fail to comply with legal, tax, employment, environmental, health and safety or human rights requirements. Agreements include environmental clauses and an annex related to occupational health and safety if the service is being provided at the bank’s own facilities.

Bankia sponsored the II CPONET Convention an event for procurement managers in search of best practices, and to present its “Comprendedor” award

Certification, analysis and evaluation

The Supplier Portal was set up in October 2014 as a new online communication channel that enables suppliers to register themselves, to manage all of the information required for their certification and to stay up-to-date.

The supplier certification process is based on best social responsibility practices (30% weighted for CSR, HR and the environment) and breaches of these requirements result in exclusion. All supplier applicants must include the information requested by Bankia in the Supplier Portal to begin the certification process.

Suppliers can access their score, which is automatically calculated once the requirements have been fulfilled, and is fully transparent. Certification is an essential prerequisite to a commercial relationship with Bankia.

Suppliers are evaluated on a regular basis, reviewing their compliance as they improve as per the established requirements, classifying them into three categories (see figure).

At the same time, periodic meetings and evaluations are carried out to verify compliance with employment, tax, environmental and health and safety regulations.

Suppliers are analysed according to their financial, social and environmental risk and they must have an appropriate financial risk rating.

A total of 7.16% of suppliers have a high financial risk although none have been identified with either social or environmental risk.

Classification of approved suppliers

Payment commitment

Approvals, supplier communications, invoices and agreements are managed electronically to provide greater flexibility of payments and cost savings by eliminating paperwork.

Bankia understands the importance for suppliers of knowing their collection periods in advance, especially for small companies, since 89.5% of active suppliers in its main business region are SMEs. Bankia therefore strives to play its part in the process of re-activating the economy.

In 2014, use of the digital invoicing system rose to 69.22% of the total number of invoices managed, while Bankia reduced the average payment time for supplier invoices from 21.8 to 6.1 days from the date of issue (4.3 days in the case of e-invoices). Consequently, 97% of the bank’s payments (both with and without electronic invoices) are made in less than 30 days.

Electronic Invoices


2012

2013

2014

Streamlining and improving processes

The e-contract project (digitally signed contracts) became firmly established in 2014, encompassing the company’s active suppliers and managing 3,938 paperless documents, among other measures to improve the bank’s procurement process. During 2014, some 98% of the contracts that Bankia implemented with its suppliers were managed by this system.

Various service level agreements were also established during the year related to purchases and services to supply office and cleaning materials, reflecting the bank’s commitment to provide a quality service to branches while ensuring a customer-focused approach throughout the organisation. These agreements take the form of service charters, which identify the services that central units provide and the corresponding responsibilities and quality commitments, as well as defining and monitoring the indicators to ensure compliance with these commitments.

Furthermore, the management of service requests such as cash management, security operations, general services and procurement are periodically evaluated to detect any process improvements.

Supplier relationships

Different channels exist to enable suppliers to contact Bankia:

  • The Confidential Whistleblower Channel, available to suppliers but managed by an independent third party, was created in 2013 to detect potential breaches of the bank’s Code of Ethics and Conduct.
  • The Supplier Service Department, created in 2014, enables suppliers to make complaints, claims and suggestions related to invoice payments and the provision of contract related services, and disagreements related to supplier selection processes. All of the claims received by the Supplier Service Department are dealt with directly by the Chairman’s Office.
  • Satisfaction surveys, implemented in 2014, assess the perception of Bankia’s suppliers about aspects such as the courtesy shown to them, the Confidential Whistleblower Channel, negotiation processes, compliance with payment commitments, etc. as well as understanding the extent to which the bank’s values are transmitted. The survey was sent to more than 1,700 suppliers. The results showed that 75.5% of suppliers ranked their level of satisfaction equal to or greater than 7 out of 10.

As part of the bank’s materiality project, focus groups were performed with suppliers to learn about their opinions regarding their relations with the company.

To improve communication and facilitate contact and to effectively monitor the performance of the relationship, a supplier “sponsor” role was created and developed in 2013. A sponsor is assigned to key suppliers (strategic and preferential) and is responsible for resolving any doubts or problems that arise in any area of the supplier’s relationship with Bankia.

To improve our understanding of suppliers and their services, an assessment is carried out by users of the services once they have been provided enabling improvement actions to be incorporated. In 2014, the functioning of different general service requests, such as office supplies and cleaning materials, was evaluated.

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