Supplier Assessment and Improvement Plans
IBM continued to deploy its supply chain assessment activity with focus on growth market countries in which we have grown our purchasing during the year.
Two additional countries, Singapore and South Korea, were added to the roster of in-scope activity. A large proportion of resources was allocated to 380 initial audits completed in 2010 along with 23 re-audits of suppliers in the target countries. These assessments total more than 900 from 2004 through 2010, and measure supplier compliance to both the Electronic Industry Citizenship Coalition (EICC) and IBM Codes of Conduct. In 2010, IBM was the largest user of the EICC’s Validated Audit Process (VAP), directing all hardware supplier initial assessments through this sector-developed approach. For suppliers and buyers, the EICC VAP provides a common audit for sharing results and eliminating duplicate costly assessments.
Supplier Initial Audit Results—Global Cumulative (2004–2010)
Argentina, Brazil, China, Czech Rep, Hungary, India, Korea, Malaysia, Mexico, Philippines,
Poland, Romania, Singapore, Slovakia, Taiwan, Thailand and Vietnam
IBM’s supplier assessment protocol requires that all audited suppliers create and submit a Supplier Improvement Plan (SIP) for all noncompliance—with priority given to major noncompliance. The SIP forms a conduit linking initial audit findings to supplier-generated improvements geared toward resolution of root causes with verification taking place through a re-audit following the completion of all improvement actions. IBM’s Supply Chain Social Responsibility (SCSR) team independently reviews and advises on the submitted SIPs and their likely impact toward code compliance. In 2010, a total of 316 SIPs (covering hardware and services suppliers) were reviewed and accepted from suppliers (audited during the previous 12 months) all within 90 days of the initial audit.
The effectiveness of IBM’s audit-SIP-re-audit approach was further illustrated in the past year. Re-audits of services suppliers located in China, India, Mexico, the Philippines and Thailand yielded results of 85 percent with no priority/major code noncompliance after completion of the SIP. This is a testament to the commitment of our suppliers to make the necessary improvements to reach code compliance and therefore generating benefits accruing to the employees of these firms. The remaining 15 percent that still had major noncompliance were required to submit a supplemental SIP or face potential resourcing of their IBM business to other suppliers. We will be monitoring the progress of those suppliers against the supplemental SIPs. We also consider removing business from those suppliers if they do not make progress. These actions underscore the importance to IBM of a socially and environmentally compliant supply chain.
assessments measuring supplier compliance from 2004 through 2010.
Featured IBM Initiatives
A Century of Shared Value
As IBM celebrates 100 years of building a responsible enterprise, we look back at several moments that have defined our values and served as cornerstones in our pursuit of progress.Launch Feature
Smarter Cities Challenge
The Smarter Cities Challenge is a competitive grant program awarding $50 million worth of services and expertise over the next three years to help 100 cities around the globe address a wide range of challenges.Launch Feature
Celebration of Service
IBMers worldwide are improving the communities in which they work, learn and live by pledging time and expertise. IBM honors their commitments with a program of new and expanded grants, and the opportunity to join a global effort.Launch Feature