TomTom 2015 Annual Report Download - page 42

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MANAGEMENT BOARD REPORT
TOMTOM / ANNUAL REPORT AND ACCOUNTS 2015 / 41
SUPPLY CHAIN
As a global business we are committed to continuously
improving our supply management practices. TomTom uses its
full membership of the Electronic Industry Citizenship Coalition
(EICC), to achieve these objectives.
We have adopted and implemented the EICC Code of Conduct in
our business processes and operations. This code sets out the
electronics supply chain standards and practices for business
conduct that we expect from our employees and our suppliers.
A management system has been established to ensure
compliance with applicable laws, regulations, customer
requirements and the EICC Code of Conduct. This framework
also enables us to identify and mitigate operational risks and
facilitates continual improvement in our supply management
practices.
We expect our suppliers to comply with the EICC Code of
Conduct and to share our commitment to corporate social
responsibility and continuous improvement in social and
environmental performance. Not only in the development and
manufacturing of products but also in the way they conduct their
businesses.
The EICC Code of Conduct is embedded in our vendor selection
process and is signed by all our major tier one suppliers. We
continue to believe that a risk management approach enables us
to spend our resources efficiently by identifying areas of high
risk. The risk profile, self-assessments and audits are all based on
EICC industry developed tools and practices, which we continue
to believe are the most appropriate and relevant to our business
and our supply chain.
Using EICC tools is not only efficient for TomTom but it also
sends a consistent message to our suppliers, and minimises the
duplication of their effort between different customer
requirements.
In 2015, we completed facility risk assessments for 100% of our
tier one major suppliers using EICC developed tools. This
includes electronics assembly suppliers for the PND, in-dash
navigation systems and sports products. These suppliers
accounted for almost 88% of TomTom’s total supply chain spend.
It also included 50% of our logistics suppliers, accounting for a
further 6.5% of total supply chain spend. We found that the
majority of the supplier facility risk assessments had a low-risk
profile and there were no high-risk findings. As a result, we did
not conduct any independent supplier audits in 2015.
BUSINESS OUTLOOK
In 2016, we shall maintain our efforts to improve
internal processes for the management of our product
compliance programme.