Vodafone 2010 Annual Report Download - page 23

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Vodafone Group Plc Annual Report 2010 21
Business
Supply chain management
Handsets, network equipment, marketing and IT services account for
the majority of our purchases, with the bulk of these from global
suppliers. Our supply chain management (‘SCM’) team is responsible
for managing our relationships with all suppliers (excluding handsets)
and for providing cost benefits through utilisation of scale and scope.
Since the launch of our supplier performance programme, the
performance of these global suppliers has improved year-on-year. The
best performing suppliers are recognised annually during our supplier
conference. Our SCM team was recently voted as one of the top 20
most admired companies for “buy negotiation” by a study run by the
International Association for Contract & Commercial Management.
SCM is a major contributor to our cost reduction programme and
operates across all local markets, achieving savings that are measured
using a unified methodology and are reported regularly to the
Executive Committee. SCM has been operating its strategic
procurement function from the Vodafone Procurement Company
(‘VPC’) in Luxembourg for over two years, driving increased
standardisation and cost savings through the use of global price books
and contracts, e-auctions and low cost network vendors. Worldwide
independent benchmarking studies have shown our SCM team has
achieved significant cost advantages and indicate that we are
achieving best in class pricing for IT storage and servers. We also
operate through the China Sourcing Centre which has achieved
significant trading volumes further improving the Group’s cost base.
Our suppliers are expected to comply with the Group’s Code of Ethical
Purchasing as well as stringent health and safety plans. Further detail
on this can be found in “Corporate responsibility” on page 45.
It is our policy to agree terms of transactions, including payment
terms, with suppliers and it is our normal practice that payment is
made accordingly.
We are working hard to reduce our
own carbon impact through
increasing energy efficiency and use
of renewable energy as well as
behaving responsibly by seeking to
manage environmental issues in our
supply chain.
Solar panels powering our base
stations in India
Proportion of new radio
sites shared
75%