Vodafone is a global business. Each year we spend billions of dollars with a global portfolio of tens of thousands of suppliers. This scale gives us the power and responsibility to specify social and environmental expectations for our suppliers to meet. It also allows us to influence other companies in our sector to work together to build consistent standards for ethical supply chain management.
Vodafone does not manufacture anything itself. We source all of our equipment for our networks and the handsets we sell from third-party manufacturers. These suppliers are mainly large, well known multi-nationals, who themselves source components and assembled products from other suppliers. Vodafone's supply chain operates as a global function, ensuring greater efficiency in its spend and consistent standards across all countries.
Our Code of Ethical Purchasing (CEP - PDF 78KB download) sets out Vodafone's expectations of suppliers. CEP requirements are integrated into our supplier qualification process, to ensure that all new suppliers are aware of our expectations at the first point of contact. Vodafone's strategy is to engage directly with our first-tier suppliers and assess their compliance with the CEP. We emphasise the need for our global strategic suppliers to engage with their own suppliers in a similar way.
All New Zealand suppliers are subject to a qualification and approval process. This includes acceptance of the CEP and management of CR (Corporate Responsibility) issues in their own supply chain. Should a local risk assessment show any cause for concern, the supplier is required to go through the global qualification process, which involves completing a detailed self assessment before they can progress to the next stage of qualification. In line with our global process, should a supplier be identified as medium or high-risk they will be referred for an audit. In some cases a site assessment may also be necessary. The supplier will only qualify as a Vodafone supplier after all of these requirements have been met.
Vodafone's accounting systems mean that no purchase orders can be raised, or any payments made, to suppliers who have not completed the qualification and approval process. Purchases made using company credit cards do not require supplier approval, but are typically for lowvalue and low-risk services such as accommodation and meals.
As standard practice we regularly monitor the performance of strategic suppliers. As one of the six pillars of Vodafone's supplier performance management, part of this monitoring includes assessment of CR performance and risk management, which accounts for 10% of the overall evaluation score. The scorecard evaluates:
In New Zealand we assessed 17 local suppliers last year. These were Nokia Siemens Networks, HP, Alcatel Lucent, Unisys, Huawei, EMC, Carlson Wagonlit, Downer, Teradata, Starent, Cisco, ITCS, Siae, Dell, IBM, TCT and ZTE.
