Supplier Performance Management

We reduce risks, improve results and reward excellence.

The Supplier Performance Management (SPM) process is managed on WeBUY, Enel's procurement platform

The methodology of the process includes the periodic evaluation throughout the purchasing process (from the contract award and throughout the time of contract validity) by the contract managers, users and beneficiaries of the contract, in the management systems of Enel's businesses and in the Track & Rate (TnR) application.

Performance evaluation

Performance evaluation is divided into 6 individual categories of indicators, uniform, homogeneous and standard for all business lines and for all countries in which Enel is present:

Safety - takes into consideration the information about any breaches of the rules and contractual provisions related to H&S matters (e.g. non-use of personal protection equipment while working, failure to notify to Enel within 24 hours non-severe accident at work)
Enviroment - takes into consideration the information about any breaches of the rules and contractual provisions related to environment matters (e.g. air emission with no authorization or not in compliance with limits stated by local applicable regulation)
Quality - takes into consideration the information on the quality of the services and the goods provided by Suppliers during the contract execution (e.g. compliance to the technical specifications, product reliability)
Punctuality - takes into consideration the information about the compliance with the contracted/agreed deadlines (e.g. deliveries punctuality, design plan and program);
Human rights & correctness - takes into consideration, for example, the information about the respect of the human rights (e.g. measures that guarantee respect of the fundamental rights of workers, principles of equal, non-discriminatory) and the correctness in the relationship with Enel (e.g. respect of the procurement process rules)
Innovability & collaboration - takes into consideration the ability to create value added for the Enel Group by innovative tools or products (e.g. reduction of time/cost of realization/ intervention using robots or drones on site) and the attitude to be collaborative (e.g. to be proactive, to manage criticalities through sharing solutions)

A synthetic indicator called Supplier Performance Index (SPI) is calculated monthly as the weighted average of the 6 categories - which have a different weight based on the risk assessment associated to the merchandize group in the qualification phase.

Methodologies for the evaluation of the categories

For the evaluation of the categories, there are some common methodologies and some specific methodologies depending on each business. Here are some non-exhaustive examples:

Common methodologies

Safety


Type of merchandize group	Data
High and Medium risk	N° and type of H&S accidents N° Non conformities in audit; type of impact; N° of inspections N° TnR Events and type of impact
Low risk	N° TnR Events and type of impact

Environment


Type of merchandize group	Data
High and Medium risk	N° and type of Environmental accidents N° Non conformities in audit; type of impact; N° elements checked N° TnR Events and type of impact
Low risk	N° TnR Events and type of impact

Quality


Type of merchandize group	Data
Works	Design N°documents validated; N° documents issued for validation Execution N° Non conformities in audit; type of impact; N° elements checked N° TnR Events and type of impact
Professional services	Design N°documents validated; N° documents issued for validation Execution N° Non conformities in audit; type of impact; N° elements checked N° TnR Events and type of impact
Materials	N° TnR Events and type of impact Production N° Non conformities in audit; type of impact; N° elements checked Transport&Logistics N° lots delivered, N° total lots ordered Installation and commissioning N° Non conformities, type of impact, N° total items inspected N° documents validated/ N° documents issued for validation

Punctuality


Type of merchandize group	Data
Works	N° TnR Events and type of impact Amount of penalties Engineering N° of document issued; N° of document planned issued Execution N° of days of delay according to project Gantt
Professional services	N° TnR Events and type of impact Amount of penalties Engineering N° of document issued; N° of document planned issued Execution N° of days of delay according to project Gantt
Materials	N° TnR Events and type of impact N° of days of delay according to schedule

Human rights and correctness


Type of merchandize group	Data
All	N° Non conformities in audit; type of impact; N° elements checked N° TnR Events and type of impact

Innovation and Collaboration


Type of merchandize group	Data
All	N° TnR Events and type

Specific methodologies

Quality


Type of merchandize group	Data
Works	Global Power Generation – Engineering and Construction N° Non conformities in audit; type of impact; N° Non conformities closed Score in a survey performed by project team
Professional services	Global Power Generation – Engineering and Construction N° Non conformities in audit; type of impact; N° Non conformities closed Score in a survey performed by project team Global Digital Solutions Compliance to Service Level Agreement Market Compliance to Service Level Agreement Services Compliance to Service Level Agreement
Materials	Global Power Generation – Engineering and Construction N° Non conformities in audit; type of impact; N° Non conformities closed Score in a survey performed by project team Global Infrastructure and Networks Merit Order considering factory acceptance test, off line test, conformity to type test, audit

Punctuality


Type of merchandize group	Data
Works	-
Professional services	Global Digital Solutions Compliance to Service Level Agreement Market Compliance to Service Level Agreement Services Compliance to Service Level Agreement
Materials	-

Consequence Management

Depending on the score obtained in the categories and their historical evolutions, a consequence management process is applied to the supplier on merchandize group and/or contract, in order to solve criticalities, encourage improvement and reward excellence.

The monitoring of categories is carried out:

at contract level - short-term analysis, carried out every month by the Contract manager, which takes into account the performance in each of the 6 categories during the last 4 months in order to minimize the risk at the contract level. From this analysis, contractual management actions will be derived (contract termination, improvement plan, increase in the contractual volume if the contract provides for it ...)
at merchandize group level - long-term analysis, done every month by the Qualification Committee, which takes into account the performance in each of the 6 categories during the last 12 months - without effect of fluctuations - with the objective of optimizing the qualified supplier list (suspension, qualification renewal without fees, ...).

Since its activation, the Supplier Performance Management process has registered a progressive increase in coverage in terms of contracts and economic volume in the different businesses and countries of the Enel group. The Supplier Development Program also uses Supplier Performance Management data.