Suppliers play a significant role in Caverion’s supply chain, since most of the technical systems and solutions designed and installed by Caverion include components, materials or services purchased from suppliers.
With continuous consolidation of purchases to selected suppliers, we have further reduced the number of suppliers and improved our leverage of the supply base in 2021.
In 2021, the market was hit by rising material prices, as well as shortages and delays in the delivery of some supplies by region. This emphasised the role of active supply chain management and efficient internal cooperation even further. Despite the challenging market situation, we were successful in optimising the supply chain and managing the pricing.
Economies of scale are captured by utilising group-wide best practices and purchasing from the best suppliers across our geographic footprint following common procedures. We have several common suppliers serving the demand throughout our operating countries, but a major part of purchasing is done locally in our operating countries using selected suppliers. We value a close location of our suppliers and their ability to react rapidly to changing business needs. As a result, the majority of our suppliers are located in our operating countries. In 2021, the proximity of suppliers and strong cooperation with them proved again their value in managing the challenging market situation.
A separate Supplier Code of Conduct is used with our partners, suppliers, subcontractors and other business partners. In 2021, we continued the implementation of our Supplier Code of Conduct. At the end of 2021, 66 % of our purchase volume was covered by the Supplier Code of Conduct which means an improvement of 3 percentage points compared to the situation at the end of 2020. The increase is due to consistent work across our divisions.
According to the Supplier Code of Conduct, suppliers, subcontractors and other business partners shall: