Leonardo's supply chain is growing. Value of production at 24 billion euro

28 October 2022

For some time, Leonardo has had a clear need to work together with the supply chain, made up in Italy of over 4 thousand companies with 87% of SMEs, with a medium-long term partnership perspective. From the launch of the LEAP program to the new Code of Conduct for Suppliers, suppliers are considered an integral part of Leonardo's business ecosystem. The newspaper Il Sole 24 Ore dedicates an extensive article to the topic.

The contribution of the Leonardo Group to the Italian economy has grown considerably compared to 2018, both in terms of production and employment. In four years, Leonardo's turnover increased by about 14% on average, going from 21.4 billion euros in 2018 to 24.4 billion in 2021, with an increase in total employees, understood as direct, indirect and induced, of 18 thousand units. The resources employed grew by 20% compared to an increase from 110,000 employed in 2018 to 128,000 in 2021. Leonardo also relies on its supply chain to grow and, for this very reason, supports them in consolidating, in turn, both under the economic-financial and industrial profiles both in the field of sustainability. “We have worked to create an ecosystem with our suppliers”, explains Giacinto Carullo, Leonardo's Chief Procurement & Supply Chain Officer, “and we do it because the quality of the supply chain is a distinctive element of success on the market”.

The path followed to achieve these results began in 2018 when the LEAP (Leonardo Empowering Advanced Partnership) program was created, with a perimeter extended to the entire Leonardo Group, which selected Leonardo's 4 thousand suppliers, of which the 87% represented by SMEs in Italy to identify 1,400 suppliers subject to assessment of industrial performance. In 2021, the objectives of operational performance and cost competitiveness are accompanied by those of sustainability, in the belief that a sustainable business must generate value for the customer, for society and for the environment. "Thus, was born LEAP - Partnership for Sustainability, so we defined the second step of the program, which marked the raising of ambitions towards the supply chain", explains Carullo, "for innovation, digital transformation, cyber security and transition green, using the levers of sustainability to ensure the medium-long term competitiveness of our integrated industrial ecosystem".



The evolution of the program follows the evaluation of over 500 key suppliers on the ESG sustainability axis, to identify strengths and areas for improvement in the supply chain. "On the basis of the results we have published the Manifesto for the Sustainability of the Supply Chain", recalls Carullo, "which addresses the three main themes - digital transformation, Cyber Security, People & Planet - declined in 18 concrete projects, with progressive and measurable milestones, to support and accelerate the transformation of Leonardo's supply chain ". And in drafting the new Code of Conduct for Suppliers, suppliers are treated as an integral part of Leonardo's business ecosystem and as a crucial element for the implementation of our strategy. It becomes a fundamental asset to ensure that suppliers share values, principles and standards, from a partnership perspective to Leonardo's commitment. "We ask our suppliers to implement the best Business Ethics standards", Carullo clarifies, "and to adopt conditions, working hours and economic and regulatory compensation such as to guarantee workers decent living conditions and to foster diversity and inclusion. in the workplace ".

Today there are over 120 suppliers within the LEAP program for which improvement and development projects have already been activated, including targeted management and specialist technical training programs, long-term commercial partnership agreements, agreements for financial support, support for technology transfer, digital transformation and cyber security. In addition, almost 70 key suppliers of Leonardo, for a turnover of 1.3 billion euros and a total of 7,500 employees, who have participated in the Elite-Leonardo Lounge program developed with Elite di Borsa Italiana, thus following a path of development aimed at entrepreneurs and top managers of supplier companies to accelerate their growth, facilitating access to capital, the network and key skills. Leonardo's commitment to support competitiveness, sustainability, and qualitative and dimensional growth of the country's AD&S sector supply chain has also resulted, in the last 36 months, in over 40 extraordinary transactions among the players in the supply chain: 70% of the transactions have featured companies participating in the Elite-Leonardo Lounge, with two suppliers - ALA and Civitanavi Systems - who have also been listed on the stock exchange in the last 12 months.