Supplier Principles: Supply Chain Management System

At the center of Dell's global supplier management program is our supply chain management system that includes a number of core components:

Certification and Standards

ISO 14001 certification.  We require our suppliers to be compliant with ISO 14001, the most widely-recognized standard for environmental management systems, by Jan. 31, 2004 or submit a schedule for achieving certification and obtain Dell approval. OHSAS 18001 certification.  We require our suppliers to be compliant with OHSAS 18001, a prominent European standard for workplace health and safety management systems, by Jan. 31, 2004 or submit a schedule for achieving certification and obtain Dell approval.

Training and Communication

Training.  Dell provides training on its supplier expectations during its annual supplier conference as well as updates in quarterly business reviews. In addition, Dell provides training in a variety of relevant areas, such as environmental practices, to suppliers. Supplier social responsibility and environmental responsibility agreements. As part of every new supplier contracting process, Dell requires suppliers to sign an agreement acknowledging they are aware of and will abide by Dell requirements and principles.

Reviews and Compliance

Business reviews.  In order to embed socially responsible behavior into business activities, Dell includes a review of requirements and principles in quarterly business reviews that are held with key suppliers. Self audits. Dell asks key suppliers to conduct a self-audit to review with Dell management on an annual basis, using a standard scorecard format. These audits are required to be signed by a member of senior management of the supplier. Dell executive oversight and review. Dell's supply-chain management system is overseen by chief procurement officers and senior vice presidents of Dell Inc. Issues of concern related to supply chain practices are raised in regular operations reviews with these executives and, if appropriate, also raised in Dell's business conduct committee and to the chief executive officer. Board of directors oversight. Issues of concern related to supply-chain practices will, as appropriate, be raised with the Dell Board of Directors and/or its various committees. Engagement with third parties and non-governmental organizations (NGOs). Dell will engage with third parties and NGOs as it deems necessary in order to ensure the effective implementation and oversight of its supplier principles.

Correction and Enforcement

Correction.  In recognition the complexity of the world in which we do business, when suppliers fail to meet these principles, Dell and the supplier will create an action plan to ensure future compliance. Performance against the plan to adhere to Dell's standards shall not take more than one year. Enforcement. Dell reserves the right to terminate at any time, even before corrective plans are developed and implemented, agreements with suppliers that fail to comply with our Supplier Commitment Policy or our Supply Chain Management Requirements.