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Procurement of services: sustainability is becoming increasingly important

Group-wide product management

Munich Airport does not have a conventional supply chain, but procures a wide range of products and services needed to operate and expand an international hub airport. The range of essential products is comparable to the requirements of a small town: The 132 product groups range from things like office supplies and road construction to vehicles and buildings. In 2019, the Munich Airport Group’s procurement volume amounted to around €753 million (net). All procurement by specialist departments and subsidiaries is handled by the central Group-wide product group management system. Only the merchandise, food & beverage, and medical equipment product groups are procured directly by subsidiaries.

Target
Creating transparency in existing supplier and service relationships

Legal provisions in respect of procurement

The Munich Airport Group, a sectoral contracting entity, operates in the field of «Ports and Airports». As such, it ensures its procurement policy is consistent with public procurement legislation. Where public contracts are involved, calls for tenders are issued on a Europe-wide basis in keeping with the binding regulations under procurement law. The Group normally puts contracts that are not subject to public procurement legislation to tender based on a formal, company-specific process. A party submitting a tender must confirm it complies with the statutory provisions in order to rule out anything that would prevent it taking part in public procurement or tendering procedures. They must also provide evidence that they comply with the standards relating to quality assurance and environmental management.

Responsibility in the supply chain

Munich Airport awards contracts on the basis of cost-effectiveness and places particular emphasis on the utilization of materials and products that are both durable and use low levels of natural resources. For investment goods, any subsequent costs for servicing and maintenance (life cycle costs) are also considered, where necessary. Munich Airport strives increasingly to design procurement processes as sustainably as possible in all corporate divisions. Sustainable procurement does not just commence with the actual purchase of goods and services.

Consumers in the specialist departments are also increasingly prescribing ecological, economic, and social standards in IT, in building maintenance, or in the construction of new buildings, in the vehicle pool, and in the purchase of promotional material. Thus, for example, the tender documents pertaining to uniforms contained a provision that the contractor must guarantee compliance with ethical obligations (no child labor, environmentally sustainable manufacture and processing of substances and materials, and healthy working conditions in the workplace at the manufacturers). When procuring promotional materials, the origin of the item, resource-friendly production, and recycling capability are important criteria. For vehicles and equipment for the FMG vehicle pool, care is taken to ensure that environmentally friendly vehicles, specifically those with low CO2 emissions, are procured.

Supplier structure and supplier management

Around 5,600 suppliers work for the Munich Airport Group. The supplier structure during 2019 was relatively consistent with the previous year. About 96 percent of the procurement volume of the airport went to companies headquartered in Germany. Of these, 67 percent are from Bavaria and 40 percent are from Munich and the airport region. Because Munich Airport is supplied primarily by business partners from the region, transportation distances are short and CO2 emissions are reduced. For example, the subsidiary Allresto purchases mainly seasonal produce worth around €20 million throughout the year – nearly all of which originates from Bavaria, and a good 50 percent of which comes from the area directly around the airport. Flughafen München GmbH assessed its framework agreement partners in 2019 according to the following criteria: the quality of the product or service, reliability of delivery, service and price trends, as well as the company’s certification according to quality and environmental standards. In the event of poor outcomes, the suppliers were given the opportunity to eliminate deficiencies in supplier audits.

40 percent Because of the high percentage of products and services it sources in the region, Munich Airport not only creates societal value, it also reduces damage to the environment.
3 airplanes on the runways of Munich Airport surrounded by a lot of green, in the background forest, fields and in the distance the Alps
With procurement also, the airport’s attention is on the region.

Verification and documentation of commitment to human rights

The Munich Airport Group’s business operations are primarily confined to Germany. Here, human rights are enshrined in law. In calls for tender for international services, it is ensured that national and international laws and agreements are applied. This is documented again when contracts are signed. As part of the national action plan (NAP) for business and human rights, an internal risk analysis was initiated at the end of 2018 in the form of one-on-one discussions. The intention is to establish a process within Flughafen München GmbH in 2020, following conclusion of this analysis and its related evaluation in 2019. Integration of human rights into Munich Airport’s general opportunities/risk analyses indicates the importance of the topic in the company.

Strict requirements for precluding child labor

When sourcing product groups where the likelihood of child labor is high, steps are taken in particular to ensure that none is involved. Manufacturers of products in areas known to be high risk in terms of using child labor are required to present independent certification that they do not. Clauses to this effect are integrated in the calls for tenders and awards documentation.

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