Our supply chain More than 1,000 companies supply goods and services to Transurban across our Australian and US operations.
Our total reported statutory spend in FY14 was $605 million, of this $319 million related to our supply chain cost base. Of that amount:
half of the business was with our top 10 suppliers
half was for goods and services related to capital expenditure (and represents a quarter of our supply chain partners), and
the top 80 per cent involved 56 suppliers, which highlights our strategic approach towards procurement and investing in key partnerships.
When we manage multi-million dollar contracts and engage multiple service providers for our operations and projects, our own reputation as a business is always a top priority. For that reason, we are focused on ensuring our suppliers comply with best practice and adhere to our Supplier Code of Practice.
Social procurement Transurban is committed to supporting small businesses and people who may be at a disadvantage in seeking work.
In Australia, we partner with Ability Works Australia (AWA), an organisation that employs, trains and supports people with disabilities and provides meaningful employment for them. AWA manages our e-TAG returns and customer mail.
In the USA, we continue to support the Small, Women- and Minority-owned Business (SWaM) Procurement Initiative and Disadvantaged Business Enterprise (DBE) Program. In FY14, Transurban awarded US$3.9 million in contracts to SWaM entities working on the 495 Express Lanes and US$123 million to DBE and SWaM entities involved in the 95 Express Lanes – for a total of around US$127 million in contracts. The 95 Express Lanes remain on track to exceed the combined goal of 29 per cent for SWaM and DBE participation in the project.
This year Transurban’s USA office will also be participating in the Virginia Values Veterans (V3) program, which asked 10,000 businesses in the state to commit to hiring Virginia’s veterans.
In the USA we are also continuing to work with the Virginia Department of Minority Business Enterprise to obtain eligibility for small specialty businesses which do not currently meet the DBE/SWaM requirements.
Our new approach to procurement As our business grows, our supply chain does too – and that means we have an even greater need to manage our suppliers effectively.
We recently completed an 18-month project to revamp our procurement processes at Transurban, with the aim of achieving better commercial outcomes across our assets. Sourcing activities are now led by a dedicated team of managers across Australia and the USA, each with a portfolio covering specific categories. The team uses an online platform to manage all procurement activities with greater efficiency and transparency. The new system also allows us to manage our spending more strategically and collaborate more closely with our suppliers.
Greater operational control As part of our long term strategy, we are aiming to bring the operations and maintenance of all our assets in-house.
This comprehensive shift will allow us to manage our assets with more consistency, reduce our costs, and monitor and report our performance more effectively. More importantly, it will give us greater control over the quality and safety of our roads, and ensure we can respond quickly and effectively to any issues that arise.
We began this transition this year with Tollaust (a wholly owned subsidiary of Transurban), taking control of Hills M2 and Lane Cove Tunnel road operations from Transfield Services as of 1 April 2014. We also acquired Translink Operations, the contractors responsible for the operations and maintenance of CityLink. Their employees became part of the Transurban Group on 1 April 2014.