Safaricom - 2021 Sustainable Business Report

84 SAFARICOM SUSTAINABLE BUSINESS REPORT 2021 / STANDING TOGETHER: GOING BEYOND / OUR MATERIAL TOPICS //// OUR STAKEHOLDERS / KPI SUMMARY with compliance checks, establish what areas we need to address in order to promote our suppliers’ wellbeing. Accordingly, we held sessions focusing on the implementation of sustainability; building resilience; tax compliance and risk management. TOTAL SUPPLIERS AND SPEND FY18 FY19 FY20 FY21 Number of suppliers 1164 1138 1095 839 Total spend (KSh billion) 85.6 84.8 86.7 92.8 While our strategic intent is to increase the share of procurement spend going to local suppliers, the number of local suppliers reduced by 27.8% compared to the previous year and total spend declined by 12.2%. This was largely due to lockdown, impacted by the COVID-19 situation which led to the cancellation of events and the majority of staff working from home. Local spend is heavily dependent on the provision of essential services to staff such as transport, travel, gym and crèches; as well as local suppliers needed for operations, including promotional merchandise and point-of-sale material, as well as hospitality consumables. The reduction of these services was reflected in the number of suppliers receiving business from Safaricom which went down by 23.4% to 839. EVALUATING SUPPLIER PERFORMANCE We insist that all suppliers sign up to our Supplier Code of Conduct and the Code of Ethics for Business in Kenya (the Code for Business). The Code for Business is based on the principles of the United Nations Global Compact (UNGC). Suppliers are not invited to take up new business opportunities until they sign up to the Code. We continue to undertake performance evaluations of all 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 which then results in a performance score. Pleasingly, this score improved from 82.61% to 86% YoY. We were also pleased to achieve our target of 100% supplier evaluation coverage for all contracts due for assessment. SUPPLIER PERFORMANCE INDICATORS FY18 FY19 FY20 FY21 Supplier performance evaluations – average score 78% 80% 83% 86% Performance evaluations – number of evaluations completed 750 605 1025 1 493 MEASURING SUPPLIER SATISFACTION The result from our supplier satisfaction survey was a score of 73%, the same as the previous financial year, while the supplier satisfaction rate improved from 91% the previous year to 94% which is considered a high level of satisfaction. The survey indicates that we have earned a high level of trust – evidenced by the high likelihood that suppliers would recommend Safaricom to other potential business partners. SPEND INFORMATION BY SUPPLIER CATEGORY (KSH MILLION) FY18 FY19 FY20 FY21 LOCAL SUPPLIERS FOREIGN SUPPLIERS WOMEN, YOUTH, PWD FY18 FY19 FY20 FY21 Spend with local suppliers 60 586 56 519 64 470 56 654 Spend with foreign suppliers 25 049 28 311 22 226 36 173 Spend with women, youth, PWD 1 697 2 155 1 798 1 733 Total spend 85 635 84 829 86 696 92 827