Safaricom 2018 Sustainable Business Report

69 INTRODUCTION OUR BUSINESS OUR MATERIAL TOPICS STAKEHOLDER ENGAGEMENT 2018 SUSTAINABLE BUSINESS REPORT Encouraging sustainable practices among our suppliers We continue to undertake performance evaluations of all of our suppliers on a quarterly or bi-annual basis. Suppliers are measured against a variety of indicators — including cost, quality, delivery, responsiveness, flexibility, value-add, health and safety — and a performance score is calculated. Suppliers whose performance is below the required threshold (<60%) are assisted with customised performance improvement plans (PIP) and mentored towards achieving acceptable levels of service. In cases of lack of improvements after a PIP has been implemented, the contract is recommended for termination and no invitations are sent for participation in future business opportunities. FY18 FY17 FY16 FY15 Suppliers evaluated 750 1,099 947 400 Average score 78% 82% 78% 77% The number of suppliers evaluated this year was greatly reduced as the majority of contracts were expiring in the last quarter and, thus, evaluations were not required, only the issuing of notices of expiry. We missed our target of an average score of 80 per cent by two per cent, which we attribute to the on- boarding of new suppliers, who often require a transitional period to adjust to our performance thresholds and requirements. We continue to insist that all suppliers sign up to the Code of Ethics for Business in Kenya as well. The Code is based on the principles of the United Nations Global Compact (UNGC). We maintained the same level as FY17 this year, with of 98 per cent of suppliers with running contracts having signed up to the Code. Suppliers are not invited to take up new business opportunities until they sign up to the Code. Total Spend (Local vs Foreign Suppliers) FY18 FY17 FY16 FY15 200 1200 1000 800 600 400 YEAR TOTAL NO. OF SUPPLIERS FY18 FY17 FY16 FY15 0 100 80 60 40 20 YEAR TOTAL SPEND (KES billion) Foreign Local S D G 1 7