Our supply chain

We recognise that by procuring products and services in a responsible manner, we not only contribute to the reduction of global and local social, environmental and ethical impacts, but also help manage direct and indirect risks to our business. By integrating CR issues into our procurement process we can proactively deal with supply chain risks, as well as creating opportunities for cost savings, innovation and enhanced relations with suppliers.

TARGETS
2007 Undertake a Responsible Supply Chain Management (RSCM) survey of the UK businesses' top 50 suppliers Achieved
Establish a RSCM champion for each UK division Acceptable progress
Develop a local sourcing briefing note for the UK catering department Achieved

We recognise that by being responsible in the management of our supply chain and in the choice of those businesses that we work with, we can reduce impacts such as those caused by the inefficient use of natural resources and the contravention of internationally accepted labour standards. In addition, we can reduce costs, manage risks and enhance our reputation.

In 2006, we introduced our Responsible Supply Chain Management (RSCM) policy which guides our supply chain management approach. Both buyer and supplier have responsibilities and expectations. As buyers we can demand high ethical standards and as suppliers they can expect fair treatment from us. Our RSCM policy underlines our commitment to upholding professional and responsible supplier relationships, our intention to adhere to the payment of suppliers according to their terms and conditions, and our responsibility to keep suppliers informed of our expectations. It also sets down and embeds our commitment to assess the social, environmental and ethical performance of our supply chain.

High performance in supplier payment

We recognise that a critical issue for our suppliers, particularly the small to medium enterprises, is prompt payment in line with their terms and conditions. During 2007, we continued to assess whether we pay our suppliers promptly. The average time taken to pay suppliers of products and services across the entire Provident Financial group in 2007 was 24 days. This continues to compare well with UK averages in this area.

Embedding CR into the supply chain

Throughout 2007, the procurement team within the Consumer Credit Division initiated work to assess the CR performance of their top 100 suppliers. These suppliers were sent a copy of our RSCM self-assessment questionnaire to complete. The questionnaire had two purposes: first, to raise supplier awareness of Provident's RSCM commitments, and second, to elicit social and environmental information on the products and services we procure. This initial piece of CR work with our supply chain will enable us to understand the social, environmental and ethical issues that are material to the products and services we procure, and, where appropriate, take steps to ensure that our impacts are minimised. We will report on the findings from our analysis in our 2008 CR Report.

We have continued to embed social, ethical and environmental considerations within the documents used in the prequalification stages of supplier selection which enables us to assess prospective suppliers' CR commitments and performance at an early stage. An additional briefing note for our catering suppliers was produced which increased awareness of issues such as local sourcing and Fairtrade products. As a result, we have extended the range of Fairtrade products on offer in our coffee bar at our Bradford head office.