Procurement Process

Procurement & Supply Chain Management Policy

Procurement & Supply Chain Management Policy – Effective from 1st January, 2021.

K  M Group appreciates that diligent Supplier selection and ongoing performance management in business, is both  prudent and wise, and is essential in upholding quality standards across  the business.

K M Group acknowledges and recognises the principle areas of risk that  exist within its areas of commercial operation, and seeks to avoid,  reduce or mitigate such risks with careful stewardship of its  engagements. K M Group’s Procurement and Supply Chain Management  operates a strict regime of Ethical Sourcing and Due Diligence upon the  Supply Chain, and applies PAS 91 processes to the selection and  maintenance of all approved Vendors, Subcontractors and Suppliers. This  is monitored on an ongoing basis and subject to annual review.

The  purpose and scope of this Procurement Management Policy, governs the  way K M Plant works with the selected Suppliers – Vendors, business  partners and third parties, including Subcontractors. 

The Policy applies to all personnel who procure from Suppliers, in all areas of operation,  across Directs and Indirects.

The Policy objectives  take into account that K M Group seeks to deliver and provide excellent services at value costs, and acknowledges that our Suppliers are pivotal  in achieving this.  The management of our Procurement processes and Supply Chain, has a significant potential ‘Bottom-Line’ impact on our  business performance, profitability, our industry perception and reputation, and also in our success towards meeting our ethical sourcing and sustainability  objectives.  Using high quality vendors, business partners and third parties gives K M Plant commercial flexibility and agility, and is also  integral to the sustainable delivery of client commitments as the business scales.

The principal objectives of this Policy are to:

• Make  sure that Suppliers comply with Policy and Legal requirements (including areas such as Finance, Health and Safety, Human Rights,  Labour engagement standards and Employment Law, etc.);
• Identify the risks associated with using particular Suppliers and manage these risks to an acceptable level;
• Ensure that the roles and responsibilities of Vendors/Suppliers are clearly defined and adhered to; and
• Ensure  that the way K M Group supplies, delivers and develops their products  and services reflects the sustainability objectives of K M Group and  those of customers and Clients.

K M Group’s approach to Ethical and Responsible Procurement is based on the following Key Principles:-

• Upholding Ethical business practices and complying with all relevant Legislation;
• Being an informed, aware and intelligent Customer/Client.
• Understanding the risks and complexities of the services K M Group procures.
• Ability to respond to performance issues and address or resolve appropriately.
• Influencing the priorities of key Suppliers to align with K M Group’s and those of our Clients.
• Ensuring a sustainable service can be provided to K M Plant’s Customers and Clients.
• Ensuring Equal Opportunities, Diversity and Inclusion is embedded within the whole Supply Chain.

Requirements in respect of Supplier selection:

Appointment  of Suppliers must be based on their ability to perform as defined for  the mutually agreed terms, in addition to taking into consideration such  factors as social values, ethical sustainable practices and  environmental impacts. All terms must be agreed on an ‘arms’ length  principle’ basis, and comply with the prevailing Policies and  Legislation.

This is managed through K M Group’s PAS 91  quality and compliance assurance on-boarding procedure.  All Suppliers  are in turn encouraged to monitor the sustainable credentials of their  own suppliers, and assist those who require support in achieving and  optimising this.

Management of Contracts:

Supplier  Contract Performance Management must address the key issues. These  include defining our expectations, the Vendor’s understanding of their obligations, contract related performance, scope of work, and any  deliverables. In particular, confirmation is sought regarding the  comprehension of and adherence to, the following fundamental Policies:  Ethical Sourcing and business practices, Supply Chain sustainability,  Equal Opportunities, Diversity and Inclusion, Social Responsibility,  Data and Information responsible curation in GDPR/DPA compliance, responsible physical asset management, fully compliant Health and  Safety.  All Vendors must take appropriate measures to protect our  physical and intellectual property, proprietary information and data, in  the interests of transparency, include a right of verification and  Audit access.

Engagement Fairness:

Equal  opportunities for small and medium sized businesses, minority owned  businesses, social enterprises and the voluntary and community sector,  etc., will be provided;

Management of Subcontracting:

Ensure  that any right to Subcontract included in the contract, is bound by the  same terms and conditions, and is expressly agreed and approved by the  Contract Manager, prior to inception or commencement.  Before  Subcontractors are appointed, a Risk Assessment must be carried out, and  any required mitigation measures put in place;

Governance:

A defined Governance structure in put into place to manage key strategic and core suppliers; and

Monitoring of Suppliers:

Suppliers are monitored to ensure that the Supply Chain risk is managed within the terms of our Risk Management Policy.

Responsibilities:

The  Managing Director is ultimately responsible for the engagement into the  Procurement and Supply Chain Management function, of a suitably  qualified, competent and experienced Procurement and Supply Chain  Management professional, and undertake over-arching Governance via  reviewing, monitoring, endorsing and facilitating the achievement of  this Policy’s aims.

The Procurement and Supply Chain Department  is therefore responsible for the administering this Policy on behalf of  the Managing Director, and for developing and rolling-out the supporting  methodologies, mechanisms and strategies to drive continual performance  improvement and responsible curation on the Supply Chain and  Procurement function.

All personnel involved in the Procurement function are responsible for:

• Driving, adopting and sharing best practice purchasing and supply standards and initiatives;
• Developing  mutually beneficial collaborative trading relationships with suppliers  which increase the accountability (including environmental performance)  of the Supply Chain; and
• Monitoring the evaluation and  assessment of Supplier’s supply practices (including ethical,  sustainable measures, etc.), taking appropriate commercial action as  necessary.

The Procurement and Supply Chain Management Team are responsible for:

• Ensuring that this Policy, supporting procedures and corrective actions are implemented and complied with; and
• Leading  by example in protecting the K M Plant brand and championing beneficial  knowledge sharing across the business divisions;
• Implementing and enforcing the supporting processes and procedures;
• Undertaking  effective Supplier performance and Supply Chain sustainability  evaluation and applying corrective actions where necessary;
• Ensuring  that all personnel are aware of their responsibilities under the  respective Policies and legislation, etc. and receive appropriate  guidance, support and training to fully comply; and
• Addressing any inappropriate behaviour or Policy breaches.

Personnel are responsible for:

• Carrying out their work in line with this Policy and any associated procedures, and legislation;
• Challenging any behaviour that falls short of the expectations of this and any other Policy; and
• Identifying any breaches of this and any other Policy and reporting them to their Line Manager.

Vendors and Suppliers are responsible for:

• Acting in accordance with this Policy and any associated procedures, following legislation and official guidance.
• What will successful implementation of this Policy achieve?
• Governance and adherence to our Policy, procedures and controls is evident; and
• Any commercial activity and contract management audits confirm compliance with the policy.

In further support of the Policy, the following measures are applied in due diligence:-

Financial  Intelligence is garnered and referenced in respect of potential  suppliers and Clients, to minimise risk exposure to the implications of  poor payment behaviours, and to verify supplier stability and related  sustainability of supply.

The following checks are undertaken initially and ongoing:-

• Accreditation validation for veracity, maintenance and current status.
• Financial Stability and Credit Worthiness assessments via Credit Assist (also Dun & Bradstreet).
• Where necessary Anti-Fraud, Money Laundering, Modern Slavery, checks will be undertaken.  
• Director Checks via Companies House Webcheck system.
• OSINT Internet Searches for potential areas of concern or risk exposure.
• Consultation with Trade Credit Insurance Brokers for Industry Intelligence via The Channel Partnership, K M Group’s advisors on Credit provision matters.
• Review of PAS 91 Subcontract supplier applications against acceptable criteria.
• Technical and Legal review of proposed Contract(s) and any subsequent alterations from Clients.
• Reference where applicable to external professional Advisers or Trade Bodies.
• Active monitoring of the economic markets and sector of Supplier operations.
• Initial and ongoing reviews of the Suppliers terms of business for currency and appropriateness.
• Review of the Supplier’s ESG, CSR, self-governance and any Social Responsibility factors.

Practical Application

Care  is taken to apply optimum appropriate resourcing to the Procurement  function, with the most suitably qualified and experienced personnel  applied to the management of each aspect. Care is taken to ensure all  respective personnel involved in the procurement function, are suitably  qualified, experienced, trained and supported, to ensure they can manage  their aspect of the Procurement function effectively and efficiently.

To mitigate risk and promote safe and efficient working, the following is applied:-

• All  personnel (whether part-time, full-time or temporary), are equipped  with the necessary skills and resources for the effective performance of  their role(s).
• All personnel also receive appropriate training to  ensure they are correctly trained, skilled and qualified for the work  they undertake, and a Gap Analysis is undertaken annually.
• Risk  Assessments and Audits are undertaken across the business and through  the Supply Chain to ensure compliance with this and any other applicable  Policy.
• Supplier/Vendor performance is measured against agreed terms and any identified shortfall is challenged.
• Ongoing liaison with Suppliers and Vendors is undertaken to address any sub-optimal performance issues.
• Regular Toolbox Talks and Team Briefings are provided to ensure all internal  personnel are fully aware of their responsibilities towards full  compliance with applicable legislation and company policies, etc.
• A  culture of awareness and knowledge-sharing is encouraged for all  personnel to provide mutual support in respect of ensuring all Polices  are complied with across all operations of the business.
• Policies are reviewed and where applicable revised on at least an annual basis for compliance, currency and suitability.
• Policies are in place for the management of Risk, and active monitoring is undertaken in support and enforcement.

Our Commitment Managing and Mitigating Risk

K  M Group endeavours to provide a safe and  efficient working environment, within which professionalism, appropriate  diligence, care and best practice are present in all aspects of  operational activity.  All personnel are actively encouraged to  proactively seek to avoid, reduce or mitigate Risk wherever possible, within all the functions of the business, and to support their  colleagues in this common objective accordingly.

Khan Lynch
Group Managing Director.