Supply Chain Management
Scale of Supply Chain
MCI contracted over €350 million of services with our supply chain partners in 2016, of which €260 million was direct spend and the rest was indirect spend on behalf of our clients. Our largest category of procurement is hotels which accounts for more than half of our total spend. Venues, Food, Audio Visual, Transport, Temporary Staffing, Print and DMC services make up the rest.
Managing our Supply Chain
At a strategic level the sustainability of our supply chain is managed by our Group Procurement Team and our Group Sustainability Director. Driving our commitment across the supply chain, each major office has a Local Procurement Coordinator.
Our environmental, social and ethical requirements are communicated to our supply chain through the MCI Supplier Code of Conduct. Compliance with this policy is a core component of our group and local preferred supplier agreements.
In 2010, only 25% of our strategic suppliers had signed the Code of Conduct, increasing to 57% of strategic suppliers in 2012, 73% of preferred suppliers in 2013 and 100% of preferred suppliers in 2015. In 2016, 22% of our entire supply chain has signed or is in compliance with this policy
All new group and local preferred suppliers must sign and comply with this Supplier Code of Conduct, and all contract renewals must include it also.
Challenging the system
Sustainability performance of our suppliers varies significantly around the world and consistency is one of our challenges. The second key challenge is that some providers charge extra for more sustainable products and services. One of the key tasks for our talents is to demonstrate to our partners that sustainability is important to MCI and to challenge them to provide sustainable services and products at parity costs.
Training our Talents and Partners
We delivered 20 webinars and 20 sustainability training classes to our talents in 2016 that addressed sustainable procurement, operational and sales practices. We conducted 29 workshops for our suppliers and industry peers, engaging 3,815 people, sharing our knowledge and searching for new ways to collaborate. Please see our Industry Collaboration section for more information.
Plans for 2017
In 2017, we will role out an improved risk management process and focus on improving performance of both group and local providers.
“We have been progressively making sustainability a core part of how we assess, select and manage suppliers to become partners at MCI. Our offices are improving their local procurement procedures and understanding the importance of sustainability in the supply chain. Our spend with local suppliers who have adopted our code of conduct has increased year on year by 8%. I am proud to say that it’s now a key requirement of doing business with MCI”.
Neil Redmond, Group Procurement Director
MCI Supply Chain: Key Spend Categories 2016
Managing our highest spend category – hotels
In 2010, 23 hotels had signed our Code of Conduct. This increased in 2013 to 73% of our preferred partner hotel chains, and in 2014 we increased compliance to 98% of our preferred hotels partners. From this total, 90% of hotels signed up to our Code of Conduct and a further 8% had their own Code of Conduct, which after review provided acceptable levels of sustainability performance.
In 2016 we focused on increasing the procurement compliance of local hotels that are outside of our large chain agreements. The MCI’s Code of Conduct is now an inherent part of the local contracting agreement with these partners.
Assessment of supplier compliance against our Code of Conduct is conducted on a random and specific basis. For high profile large events, our Sustainability Services team is frequently involved to assess and audit performance. For the majority of suppliers our local and group procurement team are provided with tools to allow them to assess performance and risk.
Key risks that have been identified in audits include the management and impact of water, food and beverage, their supply chain, health and safety and compliance. We have identified supplier assessment as an area where we need to improve and create more rigorous procurement processes.