Ansaldo STS: leading the way in transportation and procurement

Ansaldo STS: leading the way in transportation and procurement

We speak with Vijay Chintam, Head of Procurement and Supply Chain (India) and Filippo Fanfani, Vice President of Procurement at Ansaldo STS, regarding t...

Working with global contractors worldwide, Ansaldo STS has become one of the leading multifunctional railway signalling and integrated transport companies in the world. Supporting individuals in moving from A to B, the company has amassed a USD $1.5 billion (or 1.3 Bn Eu) turnover, providing exceptional safety standards throughout its operations.

An international technology company specialising in the development and delivery of integrated solutions for passenger and freight rail networks and Mass Transit worldwide, Ansaldo STS designs, manufactures, installs and commissions solutions for the management and control of new and upgraded railway, transit and freight lines in approximately 28 countries.

“Ansaldo is a global organisation,” explains Filippo Fanfani, Vice President of Procurement. With two thirds of the company based outside of Italy, Ansaldo STS has undergone an internal shift in its procurement processes to cater towards this newfound global outlook, competing with larger competitors, such as Siemens in a number of projects. The objective to adopt best in class procurement practices in this sector has led the company to utilise the ERP system (SAP) for its procurement and supply chain functions; however, Fanfani explains that there has not been much investment in terms of other sourcing tools, as the company is “focused more on organisation and current processes, before thinking of the required tools”.

To this effect, Ansaldo STS has adopted a number of sourcing and cost optimisation strategies, involving not only procurement, but also the company’s engineering and construction functions, in order to deliver increased value to clients and stakeholders. “We decided that this should be part of our modus operandi within procurement,” Fanfani says. “We look forward to a new program ACE (Achieve Continuous Excellence) which we’ve just launched, where the leadership is situated in procurement.”

To support this further, the implementation of value engineering has also proved invaluable in delivering solutions to clients. “In most of our Indian projects, we have delivered over a million Euros in productive savings through our value engineering and supplier collaborative initiatives,” explains Vijay Chintam, Head of Procurement and Supply Chain in India.

“We have a cross-functional and cross-entity value engineering initiatives,” he adds. “This enables the company to undertake value engineering with both the supplier and the customer (wherever feasible), where both parties gain an increased perspective of the subject. The state of the employee led bottom up value engineering activities, and supplier induced value engineering activities, has shown positive results.”

Strong governance

To ensure the company deliver a clear and visible decision-making process at a global level, Ansaldo STS has also strategically worked on its global sourcing processes. With three key parameters, viz., Organisation, Processes and Tools, the procurement function has embarked on a journey.  “The journey”, as Fanfani puts it “would position Ansaldo among the league of advanced procurement organisations.” The journey had just begun by redefining its inter-functional processes.

“Internal processes, in turn encapsulate the constraints, availability and timing of the sourcing, where we can then receive internal sourcing approval,” adds Fanfani.

“Through these processes, we also define the procedures in order to identify key subjects which are very important for our global decision-making approach.” For instance, a high value deal includes multi-step process involving possibly all stakeholders owning up and aligning with the recommendation that procurement function had put forward. 

Supplier relationships

Ansaldo STS has a number of multiple, long-term and strategic suppliers, who have been supporting its operations at various regions the company is now situated. “We build relationships with global suppliers at a local level and encourage regional suppliers for global requirements. We also ensure that they all meet our global technical and quality standards” explains Chintam.

“Everybody in the procurement organisation is trained in the multidimensional selection process which suppliers undergo. This is essential in selecting suppliers who fit our business aspirations.” Any supplier who adds value to our operations, especially with regards to quality and safety of the products and solutions, shall be nurtured.

Future development

With a continual focus to provide innovative products, such as driverless and freight transportation systems besides remaining competitive, Ansaldo STS is further looking to improve its procurement services through integrated platform solution.

The company is currently exploring the possibility of implementing an IT platform, where entire sourcing and procurement processes could be managed. This is on top of all essential information, surrounding company contracting and collaboration with the large number of suppliers. Fanfani explains: “This opens up possibilities of operational enrichment, with essential information embedded in the systems. Another step would be to have increased links with the upstream and downstream processes, and with our other tools to consolidate further Supply Chain operations.”

Through redefining its global strategies, Fanfani highlights the particular importance of tapping into the Asia market. With two projects presently underway in Taiwan, Ansaldo STS is now tendering for a third project in the region. “From a procurement perspective, we decided to deploy a team in Taiwan,” says Fanfani. “It is an area of importance, and even more important with our suppliers alongside us,” in the development of advanced and reliable transportation systems.

On the other hand, India market has been promising with multiple projects under execution and host of tenders being rolled out on several technologies. The price pressure is immense in this market hence the focus on costs takes centre stage. Thanks to Ansaldo STS’s supplier community it have been able to remain competitive. It will continue to invest in developing greater supplier relationships to create more opportunities in the coming future.

Although Ansaldo STS remains a medium sized company, its cutting-edge technology and integration possibilities will enable its future growth in emerging markets and secure its global reach. As an organisation, Ansaldo STS has become an integrated company, to which Chintam concludes: “This is one of the few companies which is integrated across the value chain which provides a connecting platform between its customer and its supplier partners.”

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