Yes. HP measures supplier performance in order to understand issues at the supplier level and identify trends across our supplier base. We track supplier issues and trends through our assurance program, which includes both comprehensive audits using HP’s Supplier Code of Conduct and focused assessments in specific high-risk areas such as the use of foreign migrant workers. We also collect specific metrics around working hours, day of rest, student workers, and other labor indicators with key suppliers in our KPI (Key Performance Indicator) program.
Our supplier audit process is an essential component of our risk assessment framework and a key mechanism for improvement with our suppliers. Supplier audits measure conformance with all provisions of the HP Supplier Code of Conduct in the areas of labor, health and safety, environmental, ethics, and management systems.
Every year, we evaluate a list of suppliers that make up 95% of HP’s production supplier spend. We then look at geography, type of manufacturing, and external information sources such as news and NGO reports to determine which suppliers require an on-site audit. The audit format follows the Validated Audit Process (VAP), a collaborative approach that reduces the burden on our suppliers by avoiding multiple audits. The VAP meets the need for a high-quality, consistent, and cost-effective standard industry assessment of labor, health and safety, environmental, and ethics practices based on the Responsible Business Alliance (RBA) Code of Conduct and relevant laws and regulations.
In 2019, we worked with our final assembly suppliers to confirm they are auditing companies in their own supply chains that represent approximately 80% of their spend, based on the RBA Code of Conduct.
In addition to the audit process, we engage with suppliers through:
The supplier self-assessment questionnaire (SAQ). This includes detailed questions around social and environmental management and practices. As well as assisting HP to evaluate risk, identify areas for improvement, and determine a firm’s inclusion in our audit program, self-assessment helps suppliers become more familiar with HP’s expectations of conformance to our supplier code of conduct and is a core part of our onboarding processes. During 2019, 235 production suppliers and 44 nonproduction suppliers completed SAQs.
Coaching, specialized training, data collection, and ongoing dialogue. Using these mechanisms, we aim to help suppliers develop robust management systems to address root causes of key risks and challenges; for more detail see capability building.
Key performance indicator (KPI) monitoring program. We collect data from high-risk suppliers weekly on key issues such as working hours, day of rest, and student workers, and collaborate to drive ongoing improvement.
In 2019, we completed 187 audits of production, nonproduction, and product transportation suppliers, and 60 other assessments of production suppliers. During the year, 91% of production supplier audits were third-party certified RBA VAP audits.
From 2017 to 2019, the percentage of production supplier initial audits and full re-audits that scored above 160 increased from 38% to 45%. The average score during that period rose from 135 to 141. Twelve of those audits were of final assembly supplier sites. Of these, 67% scored over 160, 17% scored between 100–160, and 17% scored under 100.1 The other 53 audits were of commodity supplier sites. In 2019, 40% of commodity suppliers scored over 160, 43% scored between 100–160, and 17% under 100.
We periodically increase our expectations of suppliers, so suppliers must continually improve to maintain a consistent audit score. For example, in 2018 we adopted version 6.0 of the RBA Code of Conduct, which includes requirements related to worker voice and training, pregnant and nursing women, process chemicals, and water management.
The RBA considers scores above 160 to be in near full conformance with the RBA code. In the newly developed RBA Factory LEAD Certification Program, suppliers with scores from 160 to 180 are eligible for a Silver certification, and scores above 180 for a Gold certification.
RBA Online is an online sustainability data management system designed to help RBA members and their suppliers manage and share sustainability data, including from audits and self-assessment questionnaires that assess risk at the corporate, facility and supplier level.
Please see the Code of Conduct and RBA Validated Audit Program (VAP) Operations Manual.
In addition to comprehensive audits, we conduct targeted assessments to supplement our comprehensive audits, focusing on specific risk areas including:
- Vulnerable workers, such as student, dispatch, and foreign migrant workers
- Health and safety, including fire safety and emergency preparedness
- Supplier sustainability management system maturity
- Supplier environmental performance
For more information about progress achieved in our supply chain please see our Sustainable Impact Report and website at: http://www8.hp.com/us/en/hp-information/global-citizenship/index.html