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Supply chain management
09.

Supply chain management

A plan at a business level

A responsible, sustainable and effective supply, always under good practices, is the purpose of our Supply Plan at TGI.

Why is this important?

(103-1)

The importance of supply chain management allows us to effectively ensure the contracting of goods and services required by the areas through qualified suppliers that comply with environmental, Occupational Health and Safety, and good social practice standards. All this defined by our company and by our parent company GEB with the best market conditions and, above all, guaranteeing continuity in the provision of our services.

How do we manage it?

(103-2)

We execute the supply under a strategic model implemented since 2016. The selection and engagement with suppliers are governed by the Code of Ethics, the HSEQ Manual (health, industrial safety, environment and quality) and social aspects, the Recruitment Manual and the Management and auditing manual; these documents compile the conducts and behaviors required by TGI.

Furthermore, all contractors declare, when they sign our contracts, that they know and accept our corporate policies and the 10 Universal Principles of the United Nations Global Compact; these include the protection of Human Rights and the elimination of child labor and compulsory forced labor.

(102-9) The Supply Management contributes to the fulfillment of the objectives of TGI's Strategic Plan in order to maximize financial efficiency, in addition to promoting the competitiveness and quality of suppliers. All of this to guarantee a responsible, sustainable and effective supply, based on the cost of risk, impact and opportunity.

Likewise, we indirectly contribute to the strategic objective of developing infrastructure projects, ensuring the Maturity and Value Creation Model (MMCV). This is how we achieved an efficient operation and maintenance, reaffirming the integrity and reliability of our infrastructure through the acquisition of goods and services needed for said operation and for the growth of TGI.

Having qualified suppliers that comply with environmental, Occupational Health and Safety standards and good social practices is part of our excellent supply chain.

Our supply chain management is in line with both the strategic model and the Supply Policy, in compliance with the principles of planning, equality, morality, efficiency; in addition to economy, speed, impartiality and publicity.

We have the HSEQ and social manual for contractors, which establishes the requirements that contractors and subcontractors must meet in terms of Occupational Health and Safety, social, environmental and energy management and quality during the development of the activities, object of the respective contract.

As part of the assurance and follow-up, we carry out evaluations of the contractors, whose criteria, including HSE and social issues, are established in the performance evaluation instructions. The delegates, as auditors, must carry out the evaluation, while the Supply Management is responsible for managing the tool, consolidating the information, and deriving the actions defined in the instructions.

Compliance with the requirements established in the HSEQ and social manual and the legal requirements are ensured by the controller of each contract. We also have defined goals within the organization on Occupational Health and Safety, which are the responsibility of employees and contractors.

(103-2) In line with the company's Corporate Governance Model, we monitor the hiring committees, compliance with the Annual Purchasing and Contracting Plan (PACC) and the satisfaction of internal and external customers. In addition, we ensure the effective management of the supply chain through contracting committees, monitoring of compliance with the PACC, internal and external audits, and quarterly monitoring of the strategic risk matrix, with regard to fraud and corruption control.

(102-9) Within the Annual Procurement and Contracting Plan, we segment goods and services by categories in order to plan the best strategy to approach the market. Among the main categories are the following:

Supply category Percentage of value
Civil works 20%
Gas pipeline auditing 10%
Adaptations in gas pipelines 9%
Preventive maintenance for gas pipelines and compressor stations 9%
Advice and technical consultancy 8%
Hot tap maintenance 7%
Waukesha parts 5%
Projects management 4%
Preparation of reports 3%
Cathodic protection system maintenance 2%
Support and consulting in SAP 2%
Social management 2%

In turn, critical contractors, based on the expense and type of service performed, are classified as follows:

Typology of the contract % of spending Number of contractors
Work contracts 22% 16
Supply of goods in general 18% 27
Consulting (auditing) 18% 3
Other supplies 11% 22
Consulting (other) 10% 37
Other typologies 21% 109
Total 100% 214

What we achieved in 2020

(103-3)

We managed to consolidate the strategic supply model through the sap ariba technological tool, in line with our supply, ethics and compliance policies.

  • (Own) We generated savings of 7.8% of the values awarded for competitive processes with respect to the budget of the competitive processes managed in 2020; with this we surpassed the 4% goal.

  • We comply with the contracting times by 87%, understanding these as a weighted average of said times in competitive processes and direct offer requests > 200 SMMLV.

  • We were able to establish the Strategic Supply Model through the SAP Ariba technological tool, for a comprehensive and strict management in the supply chain in accordance with our Supply and Ethics and Compliance policies; this is how we contribute to the company's effort to reach zero in paper consumption.

  • We have 1,025 suppliers registered in SAP Ariba (shared registry between GEB and TGI).

  • We contribute to rapid and timely management to support the population most affected by the Covid pandemic in our areas of influence through the necessary contracts to deliver humanitarian aid kits in the shortest possible time.

  • We comply with all the requirements demanded by the Chartered Institute of Procurement & Supply, which allowed us to be certified in the Excellence in Supply program (certification granted in January 2021).

  • (Own) We carried out 255 contracts for COP 150,965 million with 214 suppliers, of which 208 (97.2%) are national contractors. (204-1) 96.9% of spending in our supply chain corresponds to local suppliers, that is, Colombian suppliers.

  • (Own) The number of suppliers increased in 2020 compared to 2019: it went from 48 to 61.

(Own) Proportion of local suppliers
2018 2019 2020
Total number of providers 415 285 214
Number of new local (national) providers 41 48 61
Percentage of new local suppliers* 10% 17% 29%
* National suppliers (Colombian) with a signed contract.

  • (308-1) (414-1) Of the total of new suppliers, 43 (70.5%) were evaluated under environmental, social, health and safety criteria.

Annex - Supply chain management

Hombre trabaja frente a dos pantallas de computador

We were able to establish the Strategic Supply Model through the SAP Ariba technological tool, for a comprehensive and strict management in the supply chain in accordance with our Supply and Ethics and Compliance policies; this is how we contribute to the company's effort to reach zero in paper consumption.

Challenges for 2021

In 2021, we will work with those suppliers at highest risk, to generate action plans and improve their performance in osh, environmental and social sustainability.

  • We will integrate SAP Ariba (supply management) with SAP S4 / HANNA (ERP) to guarantee greater efficiency and control through the articulation between all the phases of the model: planning, selection, execution, and termination of contracts.

  • Identify and develop savings initiatives that contribute to the objective of generating administrative and operational efficiencies in the company.