Piaggio is a leader in engine technology and produces engines at its plans both for internal production and to meet the demand of other manufacturers.

Piaggio Group produces vehicles that are sold under its brand on the various markets around the world. The only exception regards vehicles purchased by the Chinese subsidiary Zongshen Piaggio Foshan (about 17,100 units in 2018, equivalent to 2.8% of vehicles sold).
Piaggio is a leader in engine technology and produces engines at its plans both for internal production and to meet the demand of other manufacturers.
All the other components that constitute a vehicle are purchased externally and assembled in-company.

Italian Plants27

In 2018, Italian plants purchased merchandise and spare parts for an overall value of 389 million euros (excluding complete vehicles) from around 710 suppliers.
The first ten suppliers made up 20% of the total purchases.

Geographic localisation of the suppliers of italian plants27

Geographical segment201820172016

27 For the calculation of the percentages, the value of incoming goods for orders - open orders was taken into consideration.

In 2018 payments were made to suppliers for about 627 million euros.

Indian plants

In 2018, plants in India purchased raw materials, merchandise and spare parts for an overall value of 305 million euros from around 590 suppliers.
The first ten suppliers made up 35% of the total purchases.

Geographical segment201820172016

In 2018 payments were made to suppliers for about 352 million euros.

Vietnamese plants

In 2018, plants in Vietnam purchased merchandise and spare parts for an overall value of 141 million euros from around 220 suppliers.
The first ten suppliers made up 37% of the total purchases.

Geographical Localisation Of The Suppliers Of Vietnamese Plants

Geographical segment




Cina + Taiwan21.3%19.8%22.0%

In 2018 payments were made to suppliers for about 139 million euros.

Group relations with suppliers are based on loyalty, impartiality and respect of equal opportunities of all parties concerned.

The Piaggio Group is convinced that responsibility is a commitment which goes beyond the boundaries of the Company and must positively involve everyone in the Company-supplier chain; this is why suppliers worldwide that wish to do business with Piaggio have to sign the general conditions of supply of the Piaggio Group which include the “Code of Ethics and Guidelines for doing business”; audits are regularly conducted on the Group’s direct material suppliers to ensure their effective compliance.

In line with the Group’s guidelines, every year the Purchasing Unit seeks to improve the procurement process by promoting the technical skills of buyers and focusing on the management of the various goods categories.

Over the last few years, Piaggio Group Management has started a process of common development with its suppliers by setting up a specific department called “Vendor Assessment” as well as assigning the “Finance” Function to define and monitor activities of possible risks areas involving financial and corporate issues, to protect and guarantee the complete independence between corporate areas involved in the procurement processes, as well as to place priority on meeting the needs of all stakeholders.

Corporate Finance Area

The responsibility for activities relating to the monitoring of the financial and corporate reliability of Strategic Suppliers rests with the Corporate Finance Area.

In 2018, Group Supplier analysis and monitoring continued, as did the mapping of controlling partners/shareholders of strategic partners. Furthermore, on the subject of compliance, checks and controls on any politically exposed persons and/or subjects included on anti-terrorist lists (or in any case on lists regarding possible offences that could harm the company’s reputation) among Suppliers continued, in order to mitigate “reputational risk”.

All possible financial variations and other variations to the company that could affect perceived risk are presented to a Suppliers’ Committee (comprising the Purchasing Manager, Managers of Production Development (2W, 3-4W), the Manager of Administration and Credit Management, as well as the Finance Manager and the Chief Financial Officer) during periodic meetings in order to identify remedial actions and those dedicated to improving performance, whenever critical issues are identified.

The Financial Assessment of Aprilia Racing Strategic Suppliers continued in 2018, along with an analysis of the financial and corporate reliability of the main Sponsor Companies of the Aprilia Racing Team, including the monitoring of possible risks to reputation.

Vendor Assessment

The purpose of the Vendor Assessment department within the Piaggio Group is to forge a long-lasting, mutually satisfying relationship with a network of highly qualified partners. In addition to managing the Supplier Qualification Process, the function has the task of doing an evaluation of the purchasing performance through Vendor Rating Campaigns.

Supplier relations are defined by specific company processes comprising two fundamental stages: new supplier qualification and supplier monitoring.

New supplier qualification is an inter-functional process based on specific standards that lead to a potential supplier being included in the Supplier List, for its chosen goods’ category; after an initial documentary pre-qualification stage, a multidisciplinary, supplier qualification team is involved, with specific positions giving a technical, economic/financial and corporate rating on goods’ categories.

Suppliers are monitored through at least two annual assessment sessions, referred to as the “Vendor Rating Campaign”, during which investigate the materials supplied for the period in question are examined, on the basis of the quality of the business relationship, the technical-scientific cooperation, compliance with delivery schedules and the quality of the product supplied. This provides a reference framework for procurement strategies and actions concerning suppliers.

The process involves:

  • Assignment of a Vendor Rating Index, which measures the performance of the vendor using a weighted average of the assessments made by corporate functions (for direct materials, the relevant functions are R&D, Quality, Manufacturing and Spare Parts);
  • Assignment of a Criticality Rating that takes into account both the reliability of the supplier in economic and financial terms and the Quality function’s assessment, to decide whether a supplier is “critical” for the purposes of granting them new supply agreements.

At present, Criticality Ratings have been assigned to most Group suppliers of European production sites only. In terms of “spending”, the indicator for 2018 covered 98% of purchases of direct materials and 50% of services and works provided. The evaluation process was also carried out in Vietnam and India.

Suppliers Portal

To ensure the effective and efficient management of supplier relationships, the Supplier Portal, based on the SRM-SAP system, is available in Italy, India and Vietnam.

The “SRM – Suppliers Portal” system is a computer tool to exchange information and documents on purchasing materials, components, equipment and services in real time between all company functions and suppliers, so as to guarantee the proper and transparent management of all purchasing process stages: purchase requests to purchase orders, price lists and supply programmes, incoming goods, invoices and information on payments.

In particular, the Portal ensures the achievement of the following objectives:

  • Greater collaboration with suppliers, through self-service, connectivity, document and information sharing tools;
  • Greater efficiency of purchasing processes, through the implementation of automated tools, and greater compliance with purchasing procedures;
  • Minimisation of manual activities;
  • Quality and accuracy of information;
  • Reducing business processes and communication times;
  • Low use of paper (including through the use of the digital signature);
  • Reducing billing anomalies;
  • Visibility of the entire authorisation process, from purchase orders to orders.
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