Hitachi Rail STS considers the supply chain management process a critical factor for the success of its business. Strategic procurement management requires a broad vision of the process along the entire value chain, from the definition of product specifications and service to delivery. Hitachi Rail STS has adopted an interdepartmental management approach which provides for the involvement and approval of all bodies concerned by the overall logistics.

Given that it designs, builds and operates transportation and signalling systems for railways and urban rail transport, Hitachi Rail STS’s supplies include:

  • Materials – purchase of circuit boards, mechanical and plastic parts, wayside equipment, cables, racks, cabins, industrial PCs, on-board equipment and electromechanical components.
  • Services – facility management and HSE, payroll services, professional and ICT services, logistics services and travel.
  • Business services – engineering and development services and RAMS activities (reliability, maintenance, availability and security).
  • Turnkey projects and subcontracts – the award of a turnkey contact relates to systems that interact with the rest of the technologies for the specific contract, such as installation systems, telecommunications systems, auxiliary braking systems, power supply and systems, supervision and control systems, depots for equipment, signalling systems, rails and civil works.

Orders in 2017 by suppliers’ geographic location were as follows:


The number of active suppliers in 2017 increased from 3,250 to 3,321, as shown by geographical area below:

  • 58% are European suppliers;
  • 21% are suppliers in North/South America;
  • 19% are suppliers in Asia Pacific;
  • 2% are suppliers based in other areas.

The economic benefit of working with Hitachi Rail STS can be measured by considering the intensity of its suppliers’ workforces. Accordingly, the following should be considered:

  • 36% of Ansaldo STS’s orders are for labour-intensive services (100%);
  • 44% of its orders are for turnkey projects and subcontracts which have an average labour intensity factor of 50%;
  • 20% refers to supplies of materials with a medium labour intensity factor of 20%.

Therefore, the labour intensity factor of Ansaldo STS’s orders is roughly 62%: approximately EUR 766 million is paid to suppliers to cover their labour costs.