Suppliers

Suppliers

How to become a supplier

Our suppliers are essential for the functioning of Red Eléctrica, for that reason they are all qualified and assessed to know the supplier company’s capacity to meet commitments.

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, technical and sustainability) established by the Group.

The main actions carried out during the monitoring process are the following, according to type:

Business
  • Constant review of business requirements, as well as of the capacities and resources required of suppliers during the qualification process.
  • Periodic monitoring of the supplier’s financial solvency. As part of its sustainability strategy, Red Eléctrica is committed to continue working with suppliers that may be in financial difficulties, but it must also manage the risk derived from working with a supplier in such a situation.
  • In order to be able to identify if a supplier is in financial difficulties, the Company relies on the ‘scoring’ calculated by Axesor, an expert company in credit risk management and the first Spanish Rating Agency. In addition, Red Eléctrica has jointly developed with Axesor its ad hoc financial solvency ratio, which allows suppliers whose financial difficulties may affect their ability to execute the work contracted by the Company to be assessed and identified. Moreover, as a measure of transparency, if a supplier is identified as being in this situation, the supplier is informed of its new status and about the measures that Red Eléctrica will undertake. This allows the Company to mitigate the risk of the incomplete execution of works, while being able to maintain the business relationship with the supplier, helping it to overcome a weak financial situation.
Technical
  • Analysis of incidents related to the performance of the supplier; an analysis conducted in collaboration with different areas of the Company during the execution of the works. Identification of improvement actions and monitoring of the implementation of the action plans that also allow the development of the supplier. Ultimately, if a supplier is not successful in implementing the action plan, the Company may apply a financial penalty or may change the supplier’s qualification status (warning, temporary blocking or disqualification).
Corporate responsibility
  • Conducting of social audits in order to assess compliance with the Supplier Code of Conduct and through which improvement actions can be identified and action plans agreed on with suppliers. The continuous monitoring of said plans has allowed Red Eléctrica to measure evolution and verify the improvement implemented, making sure that it has favourable impact on supplier development.

 

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 supplier development, increasing the commitment to creating value for them.

To this end, a series of actions are being carried out, such as: strengthening the figure of the Key Supplier Manager, which will enable a more fluid communication with suppliers that are key for Red Eléctrica, as well as the progressive application of service level agreements and of performance indicators in contracts.