Responsible procurement

We engage in business with reliable and carefully selected partners. The procurement process is guided by the Public Procurement Act (Erityisalojen hankintalaki 349/2007). The general requirements are supplemented by Caruna’s own demands, the implementation of which we follow on a regular basis.

Our supply chain

Our network improvement and repair work is carried out by contractors and their subcontractors. In addition, we have outsourced project supervision for our network construction projects during the actual construction phase. This will ensure sufficient capacity and expertise in the network construction and maintenance tasks.

Caruna is responsible for the general planning of the electricity network which is based on the network’s reliability, age and condition analyses. The contractors prepare the field and electrical planning in accordance with Caruna’s guidelines. Caruna inspects the plans, the contractors build the network, and the networks are deployed in cooperation with the contractors. Project managers supervise and inspect the work during the construction stage and also carry out warranty-period inspections. All deviations are documented and photographed by using a mobile inspection tool for clear reporting.

Our projects directly employ approximately 2,000 and indirectly approximately 4,000 people in Finland.

In 2015, Caruna had a total of 20 contractors, all of whom were Finnish. Other subcontractors or service providers totalled 10, of which nine were from Finland and one from Sweden. Once the subcontractor has been approved by Caruna they may use their own subcontractors to fulfil their contractual obligations. Subcontractors should however follow the same principles and requirements as the main contractors as well as commit themselves to our regulations as issued.

Via procurement, our operations exert considerable direct and indirect financial impact. Our projects directly employ approximately 2,000 and indirectly approximately 4,000 people in Finland. The impact is also regionally extensive, due to the geographical scope of the Caruna network.

Working hours reported by contractors, million hours

  • Network contractors’ working hours *

*Subcontractors’ working hours are largely estimated.

Procurement management

Professional and high-quality procurement is enabled by a concentrated organisation.

All entities and processes connected with procurement are concentrated to our company’s procurement organisation. Professional and high-quality procurement is enabled by a concentrated organisation that functions in a manner subordinate to a procurement manager.

The public bidding that we implement is steered by the Public Procurement Act, which imposes requirements on the public bidding process. In this process, special attention is given to equal and non-discriminatory treatment of the bidders as well as the total costs of individual procurement, also taking into consideration aspects of quality. Our public bidding process is in electronic format, and the suppliers see the public bidding in both the HILMA notification channel and in the tarjouspalvelu.fi supplier portal. The use of the electronic channel is free of charge to suppliers, and complementary user support is available during office hours.

Plan to Source to Pay

In selecting the procurement process and partners, risk management plays an especially critical role. Caruna’s operations come with significant risks, which likelihood must be minimised. An essential part of Caruna’s procurement operations is the management of supplier risk. By this means, there is an attempt to minimise the risks incurred by suppliers and safeguard Caruna’s business operations and their continuity under all conditions.

By management of supplier risk, we prepare against financial, quality-based and legal risks. Risk management is the responsibility of Caruna’s procurement organization on a concentrated basis. The purpose of the supplier risk management process is to identify the pivotal risks associated with procurement and specify the measures for risk management.

Caruna’s procurement process-based specification work was performed in 2015. For this reason, more exact figures connected with procurement will not be published until 2016.

Responsibility requirements

We set strict demands on suppliers in our contracts to which each of our partners must commit.

We set strict demands on suppliers in our contracts to which each of our partners must commit. The contracts are based on Caruna’s contractual practices, in which the monitoring of quality and risk management are taken into consideration. All partners must also commit themselves to observe Caruna’s Supplier Code of Conduct.

The responsibility requirements are part of the public bidding documents. The requirements concern, among other things, financial stability, working conditions and supplier responsibility as well as environmental aspects.

In Caruna’s network construction work, Finnish-language skill is required as part of occupational safety. The legislation imposes requirements with respect to the utilisation of foreign labour.

We exclude tenderers from the invitation to tender that have been convicted of crimes noted in the Public Procurement Act (Erityisalojen hankintalaki 349/2007).

Material procurement

For the most part, we need network construction – and renovation work-related materials such as underground cables, transformers and secondary substations. The most pivotal raw materials when it comes to network construction materials are aluminium, copper and steel. For the most part, the new electricity network is being built from new materials.

 

As of 2016, Caruna will be primarily responsible for material procurement.

Until the end of 2015, the contractors have mainly been responsible for material procurement as well as its recycling. Precise quantities of raw materials or their origin are unavailable. As of 2016, Caruna will be primarily responsible for material procurement, whereupon monitoring and reporting will also be further clarified. During the tender phase, precise requirements have already been set on material procurement in which, for example, environmental factors play a significant role.

> Kuusakoski Oy recycles the materials from old electricity networks

Monitoring and auditing of suppliers

Our goal is to mutually develop operational models and activities during the entire contractual period.

Caruna’s supplier management focuses on the comprehensive management of the Caruna supplier relationship. Our goal is to mutually develop operational models and activities during the entire contractual period. We regularly follow the operations of all our partners as well as their fulfilment of the contractual terms and conditions. Individuals connected with the supplier or project concerned participate in follow-up meetings.

For each project entity, Caruna has its own persons in charge. In addition to these, persons in charge have been appointed for various geographical areas who are responsible for the projects in the area concerned.

We are developing and deploying suppliers’ audit processes in 2016. Audits will cover all our most important suppliers.