BT 2011 Annual Report Download - page 46
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43BT GROUP PLC ANNUAL REPORT & FORM 20-F 2011
BUSINESS REVIEW OUR RISKS
BUSINESS REVIEW
Supply chain
We are dependent upon our supply chain for the delivery of
goods and services on time, to cost and specification. A number
of factors, including the continuing economic uncertainty have
contributed to a heightening of the risk of this reliance. Failure
of any of our critical suppliers to meet agreed deliverables could
adversely impact our customer service, product launch, business
critical systems updates, revenues or cost efficiency.
BT is committed to ensuring that all dealings with suppliers,
from selection and consultation, to contracting and payment are
conducted in accordance with our trading and ethical policies.
Our supply chain is truly global and we aim to harness the
capability, diversity and innovation of our supply market to add
value to our business and customers. Many suppliers are being
impacted by the economic downturn and the challenges of
globalisation. This is introducing further risk in our supply chain
which includes, but is not limited to: increase in supplier
insolvency; lack of supplier resilience following a disaster;
corporate social responsibility risks in our extended supply
chain; and security risks relating to data protection.
Impact
Our suppliers could be adversely affected by economic
conditions which in turn could impact their ability to meet their
obligations to us or, in the extreme, cause them to fail. If we are
unable to contract with an alternative supplier our customer
commitments could also be compromised leading to contractual
breach, loss of revenue, penalties or increased costs.
A failure in our supply chain to meet legal obligations or ethical
expectations could adversely impact our reputation or possibly
lead to censure, legal action and financial loss.
Risk mitigation
We continue to mitigate this risk through a number of measures
including: globally coordinated vendor management
programmes; rigorous bid controls; supplier risk assessments
including focus on our most critical suppliers; our Procurement
Academy Programme, an internal training initiative; anti-
corruption and bribery awareness training; and CR and
Compliance Health Checks. We work with our suppliers to ensure
that the goods and services that we buy are made, delivered and
disposed of in a socially and environmentally responsible
manner.
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