Presentation of DB Procurement Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Strategy With DB2020 we want to achieve sustainable business success by bringing all three dimensions into harmony with each other Vision We are becoming the world's leading mobility and logistics company Sustainable business success and social acceptance Profitable market leader Top employer Eco-pioneer Sustainability Economic Social Environmental dimension Top1 Top10 Top1 Strategic Customer and quality Cultural change/ Resource conservation/ directions employee satisfaction emissions and noise Profitable growth reduction 2 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Zukunft Bahn Zukunft Bahn is our map for the future of rail transport in Germany Time horizon III Time horizon II Time horizon I Eliminate annoyances Quality that persuades Service that inspires Better traveller information Reliable travel chains and Rail service = first choice: Clean, functioning rolling information reliable, high-quality and stock Top-quality rolling stock, reasonably priced Clean stations stations, staff and service Stable live timetables Active intermodal travel planning 3 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Strategy DB2020+ If we are to drive progress and shape the future, we must place a greater focus on quality and carry out the necessary change processes – that is what DB2020+ stands for Our customers benefit from first-class, environmentally-friendly mobility and logistics solutions, driven by dedicated employees and digital expertise Culture of quality Kundenzufriedenheit Produktqualität Operational excellence Angemessene Verzinsung and customer focus Finanzielle Stabilität ProfitableProfitabler qualityQualitätsführer leader We drive Digital expertise Mitarbeiterzufriedenheit progress and Innovative solutions in our Arbeitgeberattraktivität shape the core and new businesses future. TopTop - High performance Arbeitgeber employer Shared responsibility and strong performance Reduktion CO2-Emissionen Lärmreduktion EcoUmwelt- - pioneerVorreiter 4 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 We ensure the supply. With quality. With innovation. With reliable suppliers! We guarantee that the business units worldwide are supplied with materials, capital goods and services – economically, on time and with the right quality. In doing so, we ensure DB's innovative capability and sustainable market success. 5 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 With its eight business1 units DB is active in all segments of the transport market Passenger Transport: Transportation and Logistics: Infrastructure: Domestic and European-wide Intelligent logistics services via land, Efficient and future-oriented rail mobility services air and the sea infrastructure in Germany DB Long Distance DB Cargo DB Netze Track Long-distance rail pass. transport2 European rail freight transport Rail network DB Regional DB Schenker DB Netze Stations Regional/urban pass. transport (GER) Global logistics services Traffic stations DB Arriva DB Netze Energy Regional/urban pass. transport (EU)3 Traction current 1 The former business unit DB Services has been dissoluted and its activities assigned to different divisions; 2 Within Germany as well as cross border traffic; 3 In UK with Arriva-affiliate ‘CrossCountry’ also long-distance passenger transport; 6 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Central Procurement is part of the Board Division Finance/Controlling Organisational anchoring of Procurement Group Management Board Chairman and Human Finance/ Economic, Legal Traffic and Infrastructure, CEO Resources Controlling and Regulatory Transport Services and (G) (H) (F) Affairs (C) (V) Technology (I) Dr. Rüdiger Grube Ulrich Weber Dr. Richard Lutz Ronald Pofalla Berthold Huber Dr. Volker Kefer1 Fx Fx Fx 1 Deputy Chairman 7 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 In 2015 Central Procurement had a total Spend of about € 9 billion Data partly rounded Overview Central Procurement 2015 Central Procurement Procurement Rolling Stock General requirements Principles and IT- Infrastructure Systems and Parts and services Total Number of 66 323 407 168 964 employees1 Spend 885 6.035 2.043 8.963 (EUR million) Number of 1.200 4.500 12.100 16.3002 suppliers 1 Full-time staff (excl. trainees), 31.12.2015 2 Overlap possible (total no. of FE suppliers) 8 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Procurement Principles and IT-Systems develops and secures the safeguards for Procurement within the Group . Coordination and . Procurement . Provision and . Support for provision of controlling development of a employees, internal processes, . Strategic purchasing stable, performant and requisitioners and guidelines and projects and methods user-friendly IT- suppliers via master data which to maximise results system for phone,email and are revision-safe and . Securing and Procurement within Procurement-Wiki compliant with verification of the the Group . Established procurement law. benchmark qualification concept capability with mit differentiated . Supplier specialist careers - DB management Institute of § Procurement (IoP) Together with the internal requisitioner and the suppliers - Procurement you can rely on! 9 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Rolling Stock and Parts Procurement offers a wide service portfolio . Project Management . Supplier Management . Verifications and Requirements Management . Procurement Quality, Vehicle Inspection and warranty management . Contract, Procurement and Tender Management . Worldwide sourcing . Claim Management . Material Supply Management and Obsolescence Management . … 10 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Infrastructure Procurement purchases goods and services in eight different technology fields 1. Track 2. Construction Engineering 3. Building, Construction, Passenger Train Facilities 5. Electrical engineering 4. Telecommunication/Train Formation Facilities 6. Control Command and Signalling Technology 7. Architectural and Engineering Services 8. Safety and Construction Services 11 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 General Requirements and Services Procurement ensures the supply of various products and services Travel Management Facility Management Operative Purchasing / Shared Service Center Consultancy Contract, Machines, Technical Facility Information Systems Communication and other Management and Materials and Telecommunication Services 12 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Central Procurement is developing from a conventional Group Purchasing department to international procurement organisation “World Class Procurement” Organization DB Procurement Network Sustainability International Procurement Teams Commodity Group Management GF Global Value Sourcing Central FS.E Procurement Life Cycle Cost analysis 2020 “World Class Supplier Management 2.0 and innovation Procurement” Digitalisation Emphasis on Supplier Development Customer management Procurement as business partner Further development of cross-divisional exchange 13 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 International DB Procurement is developing rapidly International DB Procurement Global Value Sourcing worldwide and in all commodities bundles demands globally to achieve the best conditions Procurement Network by sourcing from the (incl. Arriva, Schenker Logistics, Cargo) best suppliers world-wide with a significant benefit for all Business Units. Established IPO Asia CSR Initiative Railsponsible 14 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 DB main expectations on international suppliers: innovative, high quality products and services at competitive prices General expectations on international suppliers (Abstract) . Reliability and availability of materials and services . Competitive price levels including Life Cycle Costs of products . Engineering ability for development & optimization of products for innovation . Capability to manage the homologation process with DB and their authorities . Financial sustainability and convincing business model . Flexibility for business changes . Long term partnership approach . Compliance with the Code of Conduct 15 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Supplier Management comprises four interlinked phases Core activities in each phase Supplier Qualification Supplier Development . Verification of technical and . Supplier development in the commercial adequacy qualifying phase . Impulse for Supplier Supplier Supplier . Independent from contract development if not verified Qualification Development development of supplier New Suppliers Target: Participation in Established Suppliers competition Start: Contract placing Phasing out of suppliers Supplier Appraisal Supplier Adjustment Supplier Supplier . Supplier adjustment as a Adjustment Appraisal . Systematic assessment of consequence of deliverables malperformance in a contract . Impulse for Supplier or project adjustment if indicated 16 Deutsche Bahn AG | Uwe Günther | Chief Procurement Officer | December 2016 Different documentation needs to be provided depending on the requirement category