Supplier qualification process
Red Eléctrica considers its suppliers, as well as the provision of equipment, materials, services, manpower and civil engineering works they provide, as a key factor in the successful fulfilment of its business activity.
If you are interested in becoming a supplier for Red Eléctrica, you must register on PRORED, a new space for Suppliers that Red Eléctrica has set up so that any company can see what supplies the company acquires and what the minimum requirements to meet are in each case. It also allows companies who are interested in becoming suppliers for Red Eléctrica to register and start the qualification process.
For the provision of services or supplies whose unique nature allows specific requirements to be defined, a ‘supplier profile’is prepared, which must be duly completed and fulfilled as a prior step to qualifying the supplier.
Red Eléctrica has a new Supplier portal (PRORED) that allows any company to find out about the products and services Red Eléctrica acquires and what the minimum requirements are that must be met in each case.
Transfer of requirements to the supply chain
Red Eléctrica, as part of its commitment to also transfer its qualification requirements to Tier 2 suppliers, requires that supplier subcontractors’ who provide services or supplies, classified as relevant and critical, meet and comply with the same requirements demanded from the Tier 1 suppliers awarded a contract and, who in turn, were the Tier 1 supplier previously qualified by Red Eléctrica.
Monitoring of suppliers
Once the supply process has begun, Red Eléctrica continuously monitors the performance of its suppliers and verifies compliance with all the requirements (business, financial, legal - and those regarding technical know-how and sustainability) which may have been established by the Group at the moment the supplier qualification is processed.
Although all the pertinent areas of the RE Group monitor the performance of the suppliers whose contracts are under their department’s responsibility; the Supply Area also conducts the following monitoring tasks:
- Constant monitoring of a supplier’s business and legal statuary requirements (i.e. being up to date with payments to the Spanish Tax Authority and Social Security, having a Civil Liability insurance in force, etc.), in addition to ensuring that suppliers are keeping up-to-date regarding the capabilities and resources established and required from suppliers during the qualification process.
- Monitoring the financial solvency of all qualified suppliers and applying corrective measures if and when they might in a weak financial situation. As part of its sustainability strategy, Red Eléctrica is committed to continue working with those suppliers that are in financial stress, but additionally it must manage the risk derived from working with suppliers that may potentially be in financial difficulties.
- Implementation of a security management model to the supply chain for procurement for the Red Eléctrica Group, resulting in a reduction of the risk inherent following the incorporation of security requirements among the minimum criteria for signing supply contracts for which this model will be progressively implemented.
- Identification of integrity findings.
- Evaluation of the supplier in criminal, privacy and cyber security issues(Scoring compliance). Evaluation of a supplier’s likelihood of compliance with a regulation on these issues.
The scoring associated with each of these three areas, as well as the overall result, enables us to assess the level of risk of a supplier (low, medium, high or very high) in each of them and globally, and to share a report with the supplier that contains the following information:
- An executive summary, with the normative risks identified.
- The metrics and assessment scales.
- Recommendations for Criminal Risk, Privacy and Cyber-security, depending on the evaluation of the risk of compliance.
Consult your compliance scoring here.
- Analysis of incidents related a supplier’s performance during the execution of the service, works or the provision of supply works awarded. Said analysis is conducted in collaboration with the different areas of the Company responsible for monitoring and overseeing the contracts.
- Identification of actions to improve and define action plans that can correct the issues and advance the supplier. En último término, la aplicación de una penalización económica o sanción en su estado de calificación (apercibimiento, bloqueo temporal o descalificación).
- Establish performance indicators and service level agreements (SLA) in the contracts.
Social responsibility monitoring
- Conducting of social audits in order to assess compliance with the Supplier Code of Conduct.
- Identification of actions to improve and establish action plans that enable the supplier to develop, measure their advances and verify the improvements implemented, ensuring their impact in this development.
- Implementation of a new supplier evaluation model for sustainability (ESG scoring) to replace the previous RSC scoring. This new model is organized around three core areas of sustainability, summed up in the acronym ESG (Environment, Social and Good Governance)
The new scoring consists of a questionnaire with 58 questions, some of which require the mandatory submission of accreditation documents or evidence if the answer is affirmative, which allows us to evaluate suppliers in terms of these three aspects of sustainability and compare them against the scores obtained by other supplier.
Click here if you want to see your ESG score.
Continuous improvement of the monitoring process
Red Eléctrica continues to work to improve communication and transparency with its suppliers in the monitoring and tendering processes. This allows, on the one hand, a more fluid dialogue to be established and ensures that Red Eléctrica’s expectations are known by the supplier, and on the other, it contributes to the professional development of suppliers, increasing the Company’s commitment to creating value for them.