BT 2014 Annual Report Download - page 32

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The Strategic Report
Delivering our strategy
Delivering our strategy
Suppliers
Our suppliers from across the world play a vital role in helping us to
provide our products and services and deliver our strategy. We spent
around £9.8bn with our suppliers this year (201213 £9.7bn).
The top 100 represent around 61% of our annual spend.
The mix of our suppliers continues to evolve as we move into new
markets, such as televised sport.
Our approach to procurement
We want to get the most from our suppliers  especially from their
diversity, skills and innovation.
As part of our cost transformation programmes we have concentrated on
leveraging our relationships with our largest suppliers to get even better
value. For example, we have used forecast volumes of future orders to
negotiate better prices or terms with our main suppliers.
We have focused for two years on extracting value from the tail-end
of our supply base by increasing competition between them. This
has delivered £40m of savings over this period. In addition, we have
deactivated around 16,000 suppliers from our procurement systems.
A revamped strategy to focus on categories of products and services
across our lines of business will underpin further cost savings.
We have around 370 people in 30 countries working with suppliers to
deliver our procurement strategy.
Supplier selection
It is important to us that we know who we are doing business with and
who is acting on our behalf. So we choose suppliers using an established
set of principles that makes sure both we and the supplier act ethically
and responsibly.
We check that the goods and services we buy are made, delivered and
disposed of in a socially and environmentally responsible way.
We measure factors such as energy use, environmental impact and
labour standards.
<ou can Ƭnd out more at
www.selling2bt.bt.com
Supply chain human rights
We want our suppliers employees to experience workplace conditions
that meet the standards we have developed. We send our suppliers
an ethical standards questionnaire. We follow up with any suppliers
identied as high or medium risk, and this year we met 97% of our
target to achieve 100% follow-up within three months. We also visit
supplier sites to make sure they meet our standards. This year we visited
54 sites (201213 49 sites) around the world.
Number of on-site supplier assessments
Year ended 31 March
2012
2014
2013
54
54
49
To comply with the Dodd-Frank Act and our SEC obligations, we asked
our suppliers whether their products contain certain minerals which may
have been sourced from conict areas such as the Democratic Republic
of the Congo. We will le with the SEC the required report describing our
due diligence and reecting the responses we received.
Payment of suppliers
This year the average number of days between invoice date and supplier
payment was 62 days (201213 60 days).
In the UK, we have re-tendered the supplier nancing scheme that
oers contracted suppliers the chance to be paid early. This reduces
nancing costs to a new lower rate for all participating suppliers,
irrespective of their sie. We think this will be particularly attractive for
SMEs (who make up around 60% of our supply base) and it supports UK
Government initiatives to encourage small business growth.
We follow the Better Payment Practice Code.
<ou can Ƭnd out more about the Better Payment Practice Code
at www.payontime.co.uk