Our supply chain consists of three categories of procurement: product which refers to the materials that go into our products, services which we offer to customers such as network planning, installation and maintenance and construction, and finally indirect supply which consists of goods and services we buy to run our business such as IT, logistics, financial, legal and marketing services. The majority of our manufacturing suppliers are based in Asia, whereas our Services suppliers are located around the world. 80% of our total supplier spend is distributed across approximately 480 suppliers.
In 2016, we made tremendous strides in bringing together the complex procurement systems of two large companies into an integrated system. We also took the opportunity to leverage the best practices and elements of both systems to create the best responsible sourcing management system.
Working with suppliers
Before any work begins with a supplier, we expect them to meet the high ethical, social, and environmental standards set out in our Supplier Requirements. These requirements are an integral part of all our supplier contracts. We expect suppliers to have the appropriate management systems, resources, and a code of conduct that shows a high commitment to respecting human rights, good labor practices and conditions as well as clear ethical business conduct. We also expect our Tier 1 suppliers to apply the same standards to their own suppliers.
We strictly implement Nokia purchasing procedures in our relationships with existing suppliers as well as when taking potential new suppliers on board. We are transparent in our relationships with our suppliers, and gifts and entertainment are neither given or received beyond those of nominal value such as lunch in a canteen.
We qualify suppliers according to Nokia standards and practices, expect them to comply with all applicable laws and regulations, and show they share the values stated in our Code of Conduct.