Process conformity and international activities
Procurement ensures operational excellence when carried out in line with processes. An audit of contracting activities as part of the Performance and Financing Agreement (Leistungs- und Finanzierungsvereinbarung; LuFV), commissioned by the German Federal Audit Office (Bundesrechnungshof) and conducted by an auditing firm specifically commissioned for the task, found that no directive or legal provisions governing the awarding of contracts or any other provisions were violated. Trusted cooperation with industry associations and initiatives also makes it possible for us to orient our supplier portfolio predominantly toward system providers with proven expertise in the rail transport sector. Strategically we are focusing on a high rate of consolidation and long-term framework agreements.
We focus our procurement activities in Germany, but we also rely on suppliers worldwide for competition reasons and to ensure reliability of supply. Our supplier development is focused on Asia. Our International Procurement Office Asia in Shanghai, founded in 2015, has identified about 700 suppliers for DB Group and supported their development and participation in tenders in accordance with the applicable processes. For instance, an Asian supplier qualified for the corporate attire product group, and we established a sustainable and transparent supply chain with them. The International Procurement Office is also responsible for identifying innovative products and technologies in the rapidly developing Asian market, for example in the areas of digitalization and electric vehicles.
In 2020, we also received our first freight cars and a mini locomotive manufactured in China. With new suppliers for vehicle replacement parts, we increased supply reliability during the Covid-19 pandemic and tested the quality of the purchased goods on-site with engineers at the plants. International procurement markets are generally considered in all product group strategies, and procurement opportunities are explored, taking into account various criteria: quality, logistics and costs. With regard to increased construction activity, we are increasingly looking at the suitability of European construction companies from Denmark, Italy, the Netherlands and Spain. The objective is to qualify the suppliers before there is a specific tender.