Types of supplies and suppliers

Ansaldo STS considers the supply chain management process a critical factor for the success of its business. Strategic procurement management requires a broad vision of the process along the entire value chain, from the definition of product specifications and service to delivery. Ansaldo STS has adopted an interdepartmental management approach which provides for the involvement and approval of all bodies concerned by the overall logistics.

 

Given that it designs, builds and operates transportation and signalling systems for railways and urban rail transport, Ansaldo STS’s supplies include:

  • Materials – purchase of circuit boards, mechanical and plastic parts, wayside equipment, cables, racks, cabins, industrial PCs, on-board equipment and electromechanical components.
  • Services – facility management and HSE, payroll services, professional and ICT services, logistics services and travel.
  • Business services – engineering and development services and RAMS activities (reliability, maintenance, availability and security).
  • Turnkey projects and subcontracts – the award of a turnkey contact relates to systems that interact with the rest of the technologies for the specific contract, such as installation systems, telecommunications systems, auxiliary braking systems, power supply and systems, supervision and control systems, depots for equipment, signalling systems, rails and civil works. 

Orders in 2017 by suppliers’ geographic location were as follows:

2017 ORDERS17 BY GEOGRAPHIC LOCATION OF SUPPLIER (EUR)

 Italy/EU18The Americas19Asia Pacific20OtherTOTAL
Materials 107,547,799 65,307,057 64,903,337  3,698,580 241,456,773
Services 313,220,596 17,910,019 15,733,693 2,667,574 349,531,882
Business services 76,669,180 13,060,421 4,314,506 1,224,956 95,269,064
Turnkey projects and subcontracts 231,364,305 139,354,464 147,916,155 29,980,501 548,615,425
TOTAL 728,801,880 235,631,961 232,867,691 37,571,611 1,234,873,143

17 Intragroup orders were excluded
18 Mainly Italy and France, followed by Spain, Sweden, Germany, UK, Belgium, Switzerland and Denmark
19 Mainly US, followed by Canada and Brazil
20 Mainly Australia and India, followed by Malaysia and China

The number of active suppliers in 2017 increased from 3,250 to 3,321, as shown by geographical area below:

  • 58% are European suppliers;
  • 21% are suppliers in North/South America;
  • 19% are suppliers in Asia Pacific;
  • 2% are suppliers based in other areas.

The economic benefit of working with Ansaldo STS can be measured by considering the intensity of its suppliers’ workforces. Accordingly, the following should be considered:

  • 36% of Ansaldo STS’s orders are for labour-intensive services (100%);
  • 44% of its orders are for turnkey projects and subcontracts which have an average labour intensity factor of 50%;
  • 20% refers to supplies of materials with a medium labour intensity factor of 20%.

Therefore, the labour intensity factor of Ansaldo STS’s orders is roughly 62%: approximately EUR 766 million is paid to suppliers to cover their labour costs.