Suppliers

Bell Canada has an obligation to our stakeholders to obtain the maximum value for each dollar spent. In upholding this commitment we seek quality products and services through mutually beneficial and ethical relationships with suppliers who act responsibly, respect the environment and demonstrate integrity in the marketplace.

The procurement of goods and services is controlled through a centralized Procurement group to ensure we obtain the best value through customized purchasing arrangements and economies of scale. In 2005, Bell Canada spent $5.1 billion on goods and services and had 5,595 active suppliers, located as follows:

• 2,599 in Ontario
• 1,373 in Québec
• 1,185 in the rest of Canada
• 438 located in other countries

RESPONSIBLE PROCUREMENT

As a general rule, a qualified supplier must have a sound business reputation in the marketplace and a proven record of good quality and service to support Bell's requirements. Other key attributes include:

• meeting established standards and quality certification criteria
• ability to transact business electronically
• capacity to hold and manage inventory offsite
• willingness to engage in continuous improvement
• demonstration of commitment to sustainable development (new in 2005)

When more than one proposal meets all of Bell's criteria and when all other things are equal, suppliers who contribute to the Canadian economy and society at large through research and development and/or manufacturing will be given preference. In general, Bell tries to ensure that its total annual spend with a given supplier does not exceed 50% of the supplier's total annual sales. Exceptions are reviewed on a case-by-case basis.

In 2005, we expanded our Procurement Policy to include commitment to sustainable development as a supplier selection criterion. The inclusion means that we will continuously strive to deal with suppliers who are leaders in their industries, are willing to work towards continuous improvement, introduce innovative products, services or processes, demonstrate a strong commitment to sustainable development and adopt health & safety, labour and ethical principles that ensure the well-being of their employees.

In addition, we strongly encourage our suppliers to apply similar sustainable development principles with their own suppliers of products and services.

SUPPLIER SELECTION

Quality audits and risk evaluations

Supplier Quality Management (SQM) audits and risk evaluations are also performed as part of the selection process. Suppliers are measured on product and service performance for the following key indicators:

• Registration of quality and environmental standards (ISO 9001:2000, TL 9000, and ISO 14000)
• Quality reports or problem notification
• Environmental programs in place
• Quality survey results.

Corporate Responsibility Questionnaires

Bell's Procurement group has identified green-friendly suppliers for many years through the regular use of its environmental questionnaire. All new suppliers are asked to complete the questionnaire prior to contract negotiations and survey results are put into a database.

In 2005, environmental questionnaires were returned by all 30 new suppliers to Bell. We ensured that environmental considerations were part of all contract negotiations. Survey results for 220 suppliers or their divisions are now included in our database and we strive to have questionnaire information updated every three years. Three on-site audits to validate questionnaire responses and one environmental risk evaluation were also conducted in 2005. We also provide training to suppliers and to our supply chain managers on Bell's environmental practices.

We have recently expanded our environmental assessment of suppliers to encompass broader corporate responsibility issues, and are working with other companies from the telecom sector to develop an industry-wide approach. In 2005, in conjunction with the Global e-Sustainability Initiative (GeSI) and the Electronic Industry Code of Conduct Implementation Group, Bell helped develop a supplier self-assessment questionnaire to evaluate a supplier's management systems and practices relating to human rights, labour conditions, health and safety and the environment. We conducted a trial of the questionnaire with three of our main suppliers, and obtained valuable feedback. The groups are currently developing a web interface for the questionnaire, an online tool to assess CR risks, and a common auditing methodology for the telecom industry.

We are also developing a simplified corporate responsibility questionnaire and assessment methodology to be used with suppliers who are outside the telecom industry. This questionnaire will be trialed in 2006 with ten major suppliers.

Ongoing monitoring

Once a contract is awarded, ongoing supplier performance is monitored under the Bell Canada Supplier Performance Management Program. Suppliers are awarded a score for key measurement indicators including on-time delivery and shipment completion.

ADDRESSING SUPPLY CHAIN ISSUES

Environmental and social issues that have the potential to arise from supply chain operations, such as the use of child labor or the mining of Coltan* for the electronic, medical and telecommunications sectors are shared industry concerns. Through our membership in GeSI, Bell supports research into these issues and the development of long-term solutions.

Bell is contributing to GeSI's Supply Chain Working Group, helping Information and Communications Technology (ICT) sector companies to raise the level of environmental and social responsibility within their supply chains. GeSI is now working in partnership with the Electronic Industry Code of Conduct Implementation Group (EICC IG) to develop a consistent set of tools and processes to measure, monitor and improve corporate responsibility in the global ICT supply chain.

*Read the full report about Coltan on the GeSI website.