2.6 PROCUREMENT WITHIN THE POŠTA SLOVENIJE GROUP

The successful implementation of public procurement procedures, which was especially effective in 2020, as there was a need to quickly react to an increased need for protective equipment, particularly for workers in transport, and to an increased need for work equipment given that there was an increased volume of operations in logistics (lease of vehicles and tents, lease of contracted transportation services, warehouse areas together with warehousing services, etc.), also contributes to the Pošta Slovenije Group’s successful performance. This demonstrated the efficiency of the procurement process across the entire Pošta Slovenije Group, which includes the proposers of contracts from all organisational units and procurement agents from all Group companies, which, despite carrying out the procedures for the selection of the most favourable tenderers in accordance with the Public Procurement Act, is a smooth and fluid process, as well as ensuring a market-oriented approach in both operational and strategic procurement. Together with experts from other organisational units and subsidiaries, the Procurement Department ensures the uninterrupted supply of the business process with ordered goods, services and construction works through the successful execution of public contract procedures and the resulting timely conclusion of agreements.

In the scope of strategic procurement, activities mostly associated with strategic projects POINT and OPT PIS were carried out: certain major procurement synergies were implemented in the scope of the POINT project, where through merged procurement quantities we achieved economies of scale, i.e. lower prices and higher discounts on purchase prices. In the OPT PIS project we took over the activities of key users and prepared all the operating instructions for the end-users of the SAP MM (Material Management Module), which is a key procurement module in the new ERP system that we plan to implement in 2021. Activities linked to major logistics contracts in the pre-tender phase, the public contract phase and conclusion of agreements with selected tenderers were all carried out in the scope of strategic procurement. We are preparing market analyses according to the technological requirements of technicians and thus laying the basis for the selection of new suppliers. The strategic procurement function is also involved in the drafting of measures and conditions in tender documentation for tenderers, products and services, and in negotiations to reduce tendered prices. It also monitors achieved savings. At the strategic level, we pursue the objective of bringing both technological and procedural innovations to the procurement process. We achieve this by analysing the market, encouraging professional dialogue and sending RFI questionnaires. Activities were carried out in 2020 primarily in procurement categories linked to logistics: the maintenance of cars and freight vehicles, the purchase of freight vehicles with 8-year maintenance agreements, the maintenance of company vehicles (medium-size delivery vehicles, light delivery vehicles and cars), the purchase of four-wheeled vehicles, the purchase of scooters, and a market analysis for CT devices.

Protective equipment that was required to protect employees from infection were provided immediately after the initial spreading outbreak of COVID-19 and also throughout 2020 for the Company’s smooth operations despite the difficulties faced by suppliers in supplying protective equipment by the agreed deadlines. The demand for protective equipment was enormous, primarily for protective face masks of which the European market was out of stock. So those ordering supplies depended on shipments from China from where cargo aircraft transported the ordered quantities of protective equipment. The deliveries during the first few months (March and April) were irregular and in smaller quantities. But in May we managed to secure a large amount of three-ply surgical masks. We spent EUR 1.5 million in total for protective equipment in 2020.

Operational procurement remains an important element of the overall procurement process, as it ensures the procurement of materials and services for continuous operations based on concluded procurement contracts. One permanent task of contract administrators is the prudent, carefully planned and economical placement of orders in accordance with contractual provisions and based on justified needs. In 2020 we conducted intensive testing of the SAP MM module, which is planned as a single information system for all Pošta Slovenije Group companies.

The primary objective of the procurement function in 2020 was cost-efficiency while achieving the same level of quality of the subjects of orders, which we achieved by converging with procurement conditions from previous years. This was a major challenge given the situation associated with COVID-19. In the majority of cases, we concluded agreements under conditions that were achieved in previous years, despite the trend of rising prices on procurement markets.

The strategic policy of the procurement function remains the timely and efficient procurement of goods and services for the smooth functioning of the Company. This is achieved through the continuous optimisation of the provision of services, both in terms of costs and volume, the optimisation of technological processes and rational procurement, the continuous improvement of processes used to shorten lead times throughout the supply chain, and the standardisation of procurement processes at all Pošta Slovenije Group companies.