TomTom 2012 Annual Report Download - page 14

TomTom Annual Report and Accounts 2012
12
Supply chain
—
TomTom outsources the manufacturing of all its PND and in-dash
navigation systems, as well of its accessories and sportwatches.
It also outsources its logistics and reverse logistics. Customer
care and content production are partly outsourced. Our top 20
tier 1 suppliers operate in 13 countries. Up to 4,000 workers are
involved in producing TomTom products.
As a company, we are committed to continuous improvement
in our supply chain management practices. We believe that it
is important that we meet relevant industry standards for the
electronics manufacturing supply chain. In 2012, we completed a
review of international standards for the ethical management of
supply chains. We concluded that membership of the Electronics
Industry Citizenship Coalition (EICC) would be effective in enabling
us to meet our strategic objectives. At the end of the year, our
membership of EICC was approved.
TomTom’s membership of the EICC demonstrates that we are
committed to fully supporting the mission, vision, goals, bylaws
and membership requirements of that organisation, as well as its
Code of Conduct. Membership of the EICC gives us access to up-
to-date research and methodologies with regard to international
benchmarks on sustainability practices in the electronics industry.
It will help us to progressively align our management of our
supply chain with the most relevant standards for our industry.
It will enable us to track our policies, targets and performance in
relation to those standards and to calibrate them as they evolve.
And fi nally, it will also allow us to participate with industry peers in
key developments with regard to supply chain practices. Wherever
possible, TomTom will seek to adopt the EICC approach and tools
in practical ways and in the spirit of the industry’s common goals.
We note that the past four years have seen a dramatic growth in
the adoption of new environmentally related product legislation.
Compliance is crucial for our brand and business and we ensure
that we always take suffi cient steps to achieve compliance. In
2012 we invested in a legislative tracking and management tool
that comprehensively supports our internal processes for ensuring
compliance with relevant environmental product legislation.
Community giving
—
In 2012, we piloted a programme focused on donating our
products to charitable organisations that rely on vehicles to
reach the communities they serve. All of the PNDs and/or map
updates that were donated in 2012 were provided to charitable
organisations that operate in areas that are related to our own
business focus in some way: disaster emergency relief, the
charitable care community, road safety and disadvantaged youth.
Management Board Report | continued
As a result of our donations, TomTom products have enabled
recipient charities to achieve their missions.
TomTom PNDs are being used to enhance the response times of
voluntary ambulance or community based nursing care services
in a range of locations around the world including the UK,
the United States and Switzerland. Using our navigation tools
enables these organisations to administer critical care quickly and
effi ciently. Though we initiated these donations relatively recently,
they are already demonstrating the value and benefi t that TomTom
products can have in assisting charitable organisations to save
and enhance the lives. At the same time, our navigation tools
also help them to be more effi cient, saving fuel and money.
In 2011 we said that we were at the start of the next phase of our
journey in CSR. This year we have established a solid foundation
on which to build our CSR programmes. We will continue to drive
the development and continuous improvement of these activities
in line with our overall strategy.
For more details on our CSR programme please refer to
http://corporate.tomtom.com/ethics.cfm.
Business Risks
Our group can be adversely affected by a variety of business risks
and economic developments. A structured risk management
process helps management to better understand how risks might
impact the company and to take risks in a controlled manner.
We update our business risk profi le every year in order to manage
our most important risks.
We do not quantify these risks or specify a list of the top fi ve
risks as we believe that the careful management of all these
risks is important and that singling out particular risks could be
misleading to investors. The sequence of risks below in no way
refl ects an order of importance, vulnerability or materiality.
Approach to risk management
—
Our Executive Committee determines the risk management
priorities for the group. Lead ownership for each risk is taken on
by an Executive Committee member, which helps to achieve clear
accountability for the mitigating actions. The Business Assurance
department facilitates the annual assessment of business risks,
which ensures
an appropriate level of objectivity in our assessment
of risks. The business risk profi le is taken into account when
establishing our annual business plans and budgets.