Supplier management, which allows us to mitigate risks and maximize opportunities associated with our supply chain, is a strategic pillar at Celsia. Our focuses are the inclusion and strengthening of our relationships with suppliers throughout the life cycle, in order to foster long-term relationships that allow us to have more agile, reliable processes and promote joint growth.
- In 2019, we had contractual relationships with 2,833 suppliers.
- Local suppliers accounted for 91% of the total purchases we made in each country where we operate (Colombia, Panama, Costa Rica and Honduras).
We work with suitable suppliers; we carry out due diligence and we have good control of compliance with our policies, manuals and guidelines.
Our Priorities
Strengthen the Supplier Relationship Model to promote collaborative work, integrate them into the Celsia strategy and culture, enhance their performance and improve service levels in the value chain.
Continue with risk management of the supply chain, to anticipate the materialization of environmental, social and economic risks, through the definition of controls, the monitoring of their application and the measurement of their effectiveness.
Strengthen the simplification and digitization initiatives, to enhance the transformation of the supply chain and ensure a greater contribution to the business strategy.
Develop new skills and competencies, to address the challenges and opportunities that arise from new business models and global trends.
Below, we detail the processes we carry out to achieve responsible sourcing:
(102-9)
Local Sourcing
We contribute to the growth of local suppliers and encourage the development of the economy of each country where we are present. For this reason, of the total purchases made in Colombia, Panama, Costa Rica and Honduras during 2019, 91% were from local suppliers.
Proportion of Local Suppliers
Proportion of Spending on Local Suppliers
(204-1)
Risk Identification and Management in the Supply Chain
We have a Risk-Management Policy that allows us to establish the framework for action and manage any type of risks to which our organization is exposed.
In particular, the Supply- and Distribution-Chain Risk is included as one of the company’s strategic risks. For this reason, the Supply Team carries out a risk assessment each year in its processes with the general methodology defined by the Company.
It should be noted that 25% of the supplier evaluation criteria corresponds to social, environmental and corporate governance matters.
Risk Identification and Management
Critical suppliers are those that provide high volume of goods or services, critical components or that are non-substitutable.
suppliers classified as critical at the close of 2019.
critical suppliers evaluated during the year.
Total of the suppliers considered as having a high risk in sustainability. *
*The 33 suppliers were evaluated and their gaps were identified. We constructed correction plans with 19, of which 10 managed to advance in closing the gaps in the last 12 months.
Every year we analyze a greater number of suppliers through relationship visits and the Comprehensive Risk-Management Survey. These processes seek to delve further into the management and performance of our suppliers, so that – with our help – we can close the identified gaps, in order to strengthen their processes, improve their practices and give more solidity to our business.
In 2019, in particular, we evidenced greater management of our suppliers vis-à-vis their suppliers, greater openness to apply the recommendations and the commitment to get to know their allies more closely. Likewise, we saw how the assessment and management of the risks and impacts evidenced through the good practices that we want to promote and replicate began.
We achieved a positive result of 91% in the 2019 Supplier Satisfaction Survey.
We had our annual supplier event, attended by 300 national and international suppliers. At this event, we recognized seven suppliers in the Best Practice Categories:
- The supplier most committed to Occupational Health and Safety (OHS).
- The most innovative supplier.
- The supplier with good practices in sustainability.
- The best Small- and Medium-Sized Enterprise (SME).
- The supplier connected to the strategy.
- The supplier with the highest evolution.
- The Supplier of the Year.
We held the first annual event with suppliers in the Department of Tolima, Colombia, where we began to operate the energy service.
We implemented supplier segmentation, through which we began to identify their risks in seven dimensions:
- Supply chain.
- Supply.
- Financial.
- Labor – OHS.
- Business continuity.
- Socio-environmental.
- Policies and procedures.
We started the Supplier Development Program, in which we linked 14 suppliers in this first stage. With this program we hope to improve practices through a proactive, innovative relationship scheme.
We carried out trainings in the framework of the I Choose to Take Care of Myself (YEC, in Spanish) Program to Wave-2 suppliers and we started with those of Wave 1 in Central America.
We finished the design of a 100% self-managing warehouse (Amazon-Go type), for which we acquired a mobile warehouse (container type) for the installation of the necessary equipment and software.
We are making progress in transforming our warehouses into self-sustaining, environmentally friendly operations; we made the switch to LED luminaires and optimized the use of water.
As part of the Optimization Plan for the Logistics Chain of Storage and Distribution, we acquired the SAP Extended Warehouse Management (EWM) module, which will allow better inventory management in the organization.
New Challenges
- Short Term0 to 2 years
- Medium Term3 to 5 years
- Long Term6 years or more
Continue with the improvements in the warehouses on issues of self-sustainability, such as solar roofs, LED lighting, use of rainwater, among others.
Advance the digital-transformation strategy in the supply chain by automating processes associated with order requests and purchase orders.
Increase the evaluation base of suppliers associated with critical categories by 25%.
Implement the Supplier Development Program and consider other strategies to leverage relationships with this Stakeholder.
Incorporate new indicators in the processes to measure sustainable purchases.
Implement a comprehensive tool for supplier management throughout its life cycle.
Provide and ensure connectivity models with our suppliers.
Advance in the strengthening of the digital transformation towards disciplines of blockchain, artificial intelligence and machine learning.
Mature the Program of Management of Strategic Allies in the Supply Chain, in which suppliers become key business partners by assuming responsibility for the logistics operation.
Leverage new businesses through sustainable supply models.
Incorporate virtual processes in the management of the supply chain and flexible and mobile structures with less consumption of the working capital.
Develop and implement fully automated processes, refocusing work teams towards strategic processes.
Glossary
Suppliers with a High Sustainability Risk
Suppliers that may affect the development and achievement of the Company’s strategy objectives. These include ESE (Environmental, Social and Economic) threats, weaknesses and specific situations to which the Company is exposed. If we do not manage it, the lack of risk orientation in the supply chain could limit our ability to obtain sustainable, reliable long-term benefits for all our Stakeholders.
Wave 1 Supplier
A supplier of services associated with the business object (high-risk activities, within our facilities or assets, inherent to the business).
Wave 2 Supplier
A regular high-risk service supplier.