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vodafone
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Vodafone Supply Chain’s Journey
Philip Wang
Asia Supplier Quality Manager, Vodafone
May 2012
2
Did you know? There are 7bn people world-wide…
…and there are 6bn mobile
subscriptions
6.0bn have access to running water
5.4bn have access to electricity
4.2bn have access to sanitation
2.1bn have internet access
1.2bn have a fixed-line telephone
1.1bn have a PC
0.76bn have broadband access
May 22, 2012
Vodafone Scale of world-wide business
3
398 million proportionate customers (Q3 2011/12)
Operating companies in 22 countries
45 partner markets
Group revenue: £45.9 billion (FY10/11) £32.5bn (Q3 11/12)
1 in 8 mobiles globally is connected to Vodafone
May 22, 2012
Strategic
Sourcing Centre The VPC
4 May 22, 2012
Network & IT
Equipment Devices
Network
Operations Services
Applica-
tions
Content
Providers
Commercial Complexity
Size of supplier ecosystem
Homogeneity of products
V1.3
~€12bn Spend Under management
33 nationalities In strategic sourcing
centre
3 Level One Categories Networks, IT and Services
(handsets in separate team)
24 procurement
organisations across the markets
~€1bn Spend Directly
Sourced in China Considerably more indirectly
through China manufacturing bases
1
Vodafone SCM operates across the entire telecoms value chain
Procures everything from individual products to complex managed services agreements
OneSCM: One Company, Local Roots
Accountability for all strategic category activities related to
suppliers, savings and trading operations as well as Partner
Markets and 3rd party business.
~170 people
Local accountability for stakeholder management and commercial savings realisation
in Local Markets
~ 650 people
Accountability for overall operational effectiveness of
supply chain across categories, VPC and operations
~20 people
Vodafone Procurement Company (VPC)
SCM Operations Teams Enablers Team
5
One Team build on three pillars
May 22, 2012 V1.3
China Sourcing Center
6
• Opened in March, 2007
• Reinforce Vodafone’s commitment to emerging
markets, and China in particular
• Support the strategy of the Chinese government
to assist local companies to develop a global
footprint
May 22, 2012
OneSCM Strategic Priorities – the picture
Customer
Obsession
Supplier
Relationship
Management
People
Global Scale Operational
Excellence Sustainability
Vision: To be recognised as the best SCM team in the world
“…We work in strong collaboration with our stakeholders, partners
and suppliers to ensure…”
“…the best service”
“We are a professional team always
delivering on our commitments and constantly adding
value...”
7 May 22, 2012 V1.3
Insert Confidentiality level | 22 May 2012 8
• China Sourcing centre
• Direct engagement with Chinese suppliers in China
• Building up Africa supplier base
• Driving tools usage
• Reducing duplication in the SCM organisation
• Single ERP system as basis for our tools roadmap
• Supplier portal and B2B hub
• Mobilisation of reporting and dashboards
• Driving sustainability into out tier 2/3 supply chain
• Focus on health and safety
• Focus on brand protection
• Driving strong NGO engagement
• Linking supplier performance with customer perception through Net Promotor
Score (NPS)
The Productivity
Imperative
The Global Grid
The Price of the
Planet
The Great Global
Rebalancing
We have identified 5 global trends for 2020
Collaboration with suppliers and partners becomes increasingly important
for value creation
The External
Rules
C2 – Vodafone Restricted| 22 May 2012 9
Sustainability supply chain approach
Code of
Ethical
Purchasing
Minimum Standards
• sets minimum ethical, labour
and environmental standards for
suppliers
• Included in qualification,
scorecards, quotations and
contracts with suppliers
Risk
Based
Approach
Based on location, size and
category
• evaluating new suppliers using
qualification
• responding to incidents robustly
• China Sourcing Centre
assessing higher risk suppliers
through site assessments
Measurement
Performance Scorecard
• Measure and work with our
strategic suppliers, evaluating
their sustainability performance
every six months using the
supplier performance scorecard
Cascade
Drive standards down the
supply chain • Through industry collaboration
and by ensuring our suppliers
take responsibility for working
with their suppliers
Engagement
Stakeholder engagement
• With NGO’s to improve our
capability to detect and prevent
concerns or incidents
• Embedding internally across all
functions through training and
involvement
Drive Health
& Safety
Drive health & Safety controls
• Following up on adherence and
change attitudes and behaviours
• included in all quotations and
new contracts for high-risk
activities.
• Working with key suppliers to
raise performance through audits
and training
C2 – Vodafone Restricted| 22 May 2012 10
Code of Ethical Purchasing
The Foundation of our Approach
Underage work
Environment
Individual conduct
payment
working Hours
Disciplinary
practices
Discrimination
Freedom of association
Health & safety
Forced labour
• No person under min
Legal age
• Optimise use
of resources
• Zero-tolerance
anti-bribery. No-
gifts
• Fair and
reasonable pay
for employees
• Does not exceed
maximum by law
• Employee treated
with respect
• No form of
discrimination
tolerated
• Employee entitled
to join
representative body
• Safe and
healthy
environment
• Free to leave with
reasonable notice
Speak
up
10 May 22, 2012 V1.3
C2 – Vodafone Restricted| 22 May 2012 11
Supply Chain Sustainability Goals
C2 – Vodafone Restricted| 22 May 2012 12
Supplier audits
• FY10/11 – 26 audits performed across supply chain and
terminals suppliers
• Collaboration and sharing audits between our peers
– One of the leading members in “Joint Audit Co-operation” with
Belgacom, Swisscom, KPN, France Telecom, Deutsch Telekom,
Telecom Italia on the 27th Oct 2011
• Audits based on the Code of Ethical Purchasing areas and
aligned with JAC approach
• 2 people support local audits of Asia suppliers in our China
Sourcing Centre (Beijing)
• Created new Anti-bribery supplier assessments to validate
requirements for the UK bribery act 2010.
Supplier Management | 22 May 2012 13
Supplier management
Segmentation
Performance
Evaluation
Performance
Optimisation
Qualification
Sustainability
Health & Safety
Relationship
Management
Sustainability
Product Development
Portfolio
Commercial
Delivery
Quality
Relationship
Innovation
Health & Safety
Finance
C2 – Vodafone Restricted| 22 May 2012 14