Technology and resources
Supply chain management
Handsets, network equipment, marketing and IT services account for the majority of Vodafone’s purchases, with the bulk of these purchases being from global suppliers. The Group’s supply chain management (‘SCM’) team is responsible for managing the Group’s relationships with all suppliers, excluding those of handsets, providing cost benefits to the Group through utilisation of scale and scope.
SCM is a major contributor to the Vodafone cost reduction programme, achieved through a unified approach using global price books and framework agreements, a standardised approach to e-auctions, the introduction of low cost network vendors and achieving best in class pricing for IT storage and servers. Vodafone’s SCM continues to transform itself and is operating across all Vodafone’s operating companies, delivering savings that are measured using a unified savings methodology, which are reported regularly to the Executive Committee. Vodafone’s SCM was centralised in Luxembourg during the 2008 financial year and is delivering further synergies for the Group through the execution of global material strategies based on local market expertise. Worldwide independent benchmarking studies have shown Vodafone SCM as achieving significant cost advantages. Vodafone also has a China Sourcing Centre, which has achieved significant trading volumes, further improving the Group’s cost base.
SCM won the “Team of the Year” award and was short listed for the “Corporate Responsibility and Environment” award in the 2008 European Supply Chain Excellence Awards.
Suppliers to Vodafone are expected to comply with the Group’s Code of Ethical Purchasing. Further detail on this can be found in “Corporate responsibility”.
It is the Group’s policy to agree terms of transactions, including payment terms, with suppliers and it is the Group’s normal practice that payment is made accordingly.
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