Purchasing materials and subcontractor services at optimal terms is one of the key factors for the financial success of our Group. At present, high levels of demand are a feature of many markets, which can lead to shortages of materials and personnel resources and thus to price increases. It is therefore particularly important to plan our purchasing processes carefully and well in advance. We generally secure the availability and prices of raw materials and major subcontractor input as early as the bidding phase by means of preliminary agreements.
The operational units know their regional markets and make use of decentralized purchasing channels. In order to ensure efficient purchasing processes, Group Procurement exercises a Group-wide controlling function, organizes regular training and further-training events, and promotes the formation of national and international networks among our buyers by means of targeted projects.
In our construction divisions, the use of subcontractor services and purchased materials is particularly high compared with other industries. Large volumes of purchased materials are also processed in the services business, especially in connection with industrial and power-plant services. The share of purchased subcontractor services and materials in the Group’s cost of sales amounted to 68% in the 2007 financial year. Due to the growth in output volume, the procurement volume increased to €5.2 billion. Subcontractor services accounted for 68% of this total, while purchased materials accounted for 32%.
Group-wide databases
Numerous instruments are available on the Group’s intranet for the optimization of procurement processes. Transparency is enhanced by a continually updated contract database containing all the relevant information on contracts concluded by companies of the Group, also involving joint ventures, consortiums, framework agreements, bonus agreements etc. And with our highperforming suppliers and subcontractors, we have established premium partnerships offering rapid online access.
In addition, we keep a close watch on the development of prices in our procurement markets. Our Group-wide monitoring of the world market for key resources such as steel and oil products provides an important basis for purchasing decisions.