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Supply Chain

Today’s supply chains are a complex web of interconnected companies and in the technology industry especially, we often share suppliers with competitors. We work with our suppliers and with others in our industry through groups like the Electronic Industry Citizenship Coalition to set high standards and create a socially and environmentally responsible ecosystem.

In the space below we articulate our commitments, identify actions we take and provide data on our progress.
Dell is committed to responsible business practices and to high standards of ethical behavior. This extends to the way we manage our global supply chain.

We operate in a world with many different cultures, countries and levels of economic development. Even in this diverse world, we believe there are some standards that are universal — including respect for workers, communities and the environment — and meeting these standards is a condition of doing business with Dell.

Global Supplier Citizenship Principles

Dell requires suppliers to comply with all applicable laws and regulations where business is conducted. Our suppliers are also expected to embrace high standards of ethical behavior and treat their employees fairly with dignity and respect, consistent with local laws and the Electronic Industry Citizenship Coalition (EICC) Code of Conduct.

Dell is a founding member of the EICC, comprised of the world’s leading electronics companies working to improve efficiency and social, ethical, and environmental responsibility in the global electronics supply chain. The EICC Code of Conduct sets out expectations for all industry members and their suppliers. While the EICC Code of Conduct provides a shared, global framework for suppliers, it is not superseded. The strongest of the two apply. If EICC code is stronger than local law, then the former applies. The EICC code contains provisions to address performance in the following areas:

eicc table

Expectations of Production and Selected Service Suppliers

In addition to compliance with the policies, standards and requirements outlined above and further referenced in the Relevant Policies and Standards section below, Dell has further requirements for ourselves and our suppliers in the areas listed below:
Conflict-Free Minerals
Dell’s policy is to source metals that are conflict free. We expect our suppliers to have policies and due diligence in place to reasonably assure that products and components supplied to Dell are conflict free. Further, suppliers must meet conflict minerals reporting requirements by collecting and reporting smelter data following the Conflict-Free Smelter Initiative protocol. Learn more about Dell’s commitment to conflict-free minerals here.
Sustainability Reporting and Transparency
Dell is committed to supply chain transparency. We expect our suppliers to publish a Global Reporting Initiative (GRI)-based sustainability report on their corporate websites and update the report annually. In addition, Dell expects suppliers to report annually via the CDP Supply Chain Climate and Water programs, as well as to maintain a 5-year responsible water risk mitigation plan on its corporate website and update the report annually.
Supplier Diversity and Non-Discrimination
An ethical, diverse supply chain is a vital part of our business. We partner with companies that share our vision of promoting a diverse workforce and seek suppliers from various backgrounds to best serve our global customer base. Learn more about this aspect of our standards here.
Supplier Engagement, Capability Building and Assessment Program
To help ensure that global standards and Dell policy commitments are implemented and reinforced, Dell requires that suppliers participate in capability building programs designed to enable them to exceed applicable international standards and remedy areas of concern that may be revealed in our social and environmental audits.
Continuous Improvement
We invest our company’s resources and time to drive improvements throughout our supply base, and we encourage suppliers to view social and environmental responsibility as a journey of continuous improvement. With a focus on self-assessment, internal ownership and self-accountability, Dell Suppliers can make changes that will bring long-lasting, sustainable impact not only to their own facilities and operations, but also to those of their own providers. Suppliers are required to undergo third-party validated EICC audits biannually and close audit findings with a corrective action plan.
Quarterly Business Reviews
To embed socially responsible behavior into business activities, key suppliers must undergo reviews of their social and environmental progress in quarterly business reviews. The reviews include audit performance data, assessment of policy compliance and specific implementation plans for suppliers’ own programs for compliance and environmental stewardship.
Relevant Policies, Standards and Goals

The EICC Code of Conduct governs expectations for suppliers across our industry and we supplement this policy with our own expectations. These are informed and supported by the following international standards, Dell policies and goals.
International Standards   Policies 

Goals

Dell supports the United Nation's Sustainable Development Goals (SDGs), and was actively involved in promoting Goal 8, whose objective is to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

Dell has also committed to demonstrating 100% transparency of key issues within our supply chain by 2020 while working with suppliers to mitigate risks in those areas.

This includes a goal to have all of Dell’s Tier 1 production suppliers publish a GRI report annually by 2020. This goal is a part of Dell’s 2020 Legacy of Good Plan and helps direct supplier approach and standards.

supply thumbnail 1Goal 8 supply chain eiccEICC Code of Conductsupply chain worker policy

Dell Vulnerable Worker Policy

     
human rights and labor policyHuman Rights and Labor Policyconflict minerals policyConflict Minerals Policy
From direct engagement to industry-wide partnerships, Dell takes an active role in guiding our suppliers to a better, more ethical supply chain.

Supplier Assessments and Facility Audits

Dell requires that our production and select services providers undergo regular social and environmental audits and close findings following the timeline laid out by the EICC. All Dell audits follow the EICC Audit Protocol and are conducted by certified third party audit firms. Suppliers that fail to take appropriate actions to correct social and environmental audit findings may lose their business with Dell. We take all violations of policies and principles very seriously. Suppliers with severe issues are reviewed by the SER Executive Review Board, which is made up of senior Dell leaders.

Dell works with suppliers to conduct ongoing risk assessments on various topics. We have developed an environmental health and safety (EHS) assessment system to help identify risks that could lead to production suspensions, factory shut-downs or environmental damage or harm to workers.
assembly line
We also require 100 of our key production suppliers to develop water risk mitigation plans – helping us (and them) understand what risks they face from global and local water-related threats and how they plan to reduce these risks. By 2020, we will have water mitigation plans from all of our production suppliers and select service suppliers.

Building Supplier Capabilities

Accountability is a two-way street. Dell has an obligation to help our suppliers grow their capabilities and meet the social and environmental expectations we have. Dell hosts multiple supplier workshops each year that address issues of sustainability affecting our suppliers and we offer those in our supply chain the opportunity to learn and share best practices. Recent Social and Environmental Responsibility (SER) workshops included topics such as the greenhouse gas accounting and reporting via CDP's Supply Chain program, management of working hours and corporate responsibility performance evaluation tools. We also partnered with ELEVATE, a supply chain SER consulting firm, to launch a metric management project for 20 of our suppliers whose audits identified priority issues. The project was designed to provide deeper insights into underlying social performance issues by analyzing the correlation between metrics like overtime, turnover rates, rework rates, wages and productivity.
microchip
Collaborating within the industry

We recognize there are systemic issues in the collective electronics supply chain – like excessive working hours, insufficient transparency and violations of freely chosen employment standards – that stubbornly remain a challenge.

While Dell continually works to eradicate these and other issues, we cannot do it alone.

Working together to improve working conditions

As part of our efforts, we partner with others in our industry to find solutions to issues common to our disparate supply chains. For example, we are part of the EICC’s Vulnerable Worker working group and use the EICC’s student worker toolkit to educate suppliers on protecting student workers. The toolkit ensures all EICC members’ suppliers receive the same directions.

We are also a part of the Dutch Sustainable Trade Initiative (IDH), a program designed to improve working conditions at the supplier level by finding innovative ways to address concerns that affect both management and workers. The program affects more than 500,000 workers worldwide. Eleven Dell suppliers participate in IDH, and we continued to drive them to establish worker committees that can build effective dialogue mechanisms in the workplace. Suppliers set up continuous improvement teams, consisting of worker representatives and management, which help solve issues related to working conditions, productivity and labor.

REAP / Student Worker program

Student vocational programs and internships are important to our talent development pipeline. Unfortunately, our industry has seen that not all vocational training is the same and Chinese student workers can get inappropriately placed. In a study we completed with EICC, Apple and Stanford University’s Rural Education Action Program in 2014, we found that:
  • The quality of schools varies greatly
  • It is very difficult for anyone (firms, students or even the government) to know which schools are of high or low quality
Together, we created a pilot credentialing program in Henan Province (with the buy-in and participation of the provincial government and EICC members). This test was designed to assess the vocational schools, promote the credentialing system as a tool for firms looking to hire, and measure the results of others in our industry using the credentialing system.

This initial program delivered impressive results:
  • Vocational skills improved by 55 percent
  • Math skills improved by 34 percent
  • Drop-out rates shrank by 15 percent
Currently, there are 20 million students in vocational education in China today. If the project were extended to all vocational schools, reducing the dropout rate by 15% would result in approximately 3 million more graduates per year.

Dell and Apple are continuing to support this important initiative as key funders and partners of the EICC and its ongoing success is a testament to our collaborative approach.

Working to cultivate a conflict-free supply chain

There is an ongoing humanitarian crisis in the Democratic Republic of the Congo where the mining, processing and trade of “conflict minerals” – tin, tantalum, tungsten and gold – continues to finance violence. Additionally, mining of other minerals and in other parts of the world has been criticized for lack of regulations and monitoring, environmental damage, and human rights violations.
conflict minerals
Human rights issues in the mining sector are a real concern for Dell and the rest of the electronics industry. We have been a leader in pressing the issue and publicly supporting traceability and responsible sourcing for some time. Dell is committed to working toward a conflict-free supply chain and has been involved with this issue since before the passage of the Dodd-Frank Consumer Protection Act in the U.S. and other related regulations. Our most effective means of influencing responsible mineral sourcing is by engaging with our industry peers, our supply chain and other industries that use the same minerals.

Because this issue affects our whole industry, we work with the EICC, our peers and our suppliers to develop solutions. We helped establish the EICC’s Conflict-Free Sourcing Initiative and contributed to tools like the Conflict-Free Smelter Program. We regularly conduct training with our commodity managers and maintain this list of smelters involved in our production cycle.

Since 2010, Dell also has been part of the Public-Private Alliance for Responsible Minerals Trade (PPA), a multi-sector and multi-stakeholder initiative to support supply chain solutions to conflict minerals challenges in the Democratic Republic of Congo (DRC) and the Great Lakes Region (GLR) of Central Africa. The PPA helps fund and coordinate support of organizations working within the region to develop verifiable conflict-free supply chains, develop industry best practices, encourage responsible sourcing, and promote transparency.

Dell also joined the Tin Working Group (TWG), which was convened by the Sustainable Trade Initiative (IDH) and brings together members of the EICC, Friends of the Earth and the International Tin Industry Association to address the ongoing mining issues in Indonesia. TWG works with local stakeholders in the country’s biggest mining area, the Bangka-Belitung Islands, to better understand their goals and challenges and improve their business sustainability.

Mitigating water and climate risk with CDP

Risks such as drought, flooding, disasters or a lack of clean water can disrupt suppliers’ abilities to deliver goods and services and to care for their employees. We work with Dell suppliers to mitigate these risks with the ultimate goal of requiring all production and select service suppliers to have a mitigation plan in place by 2020.

Before they can plan for the future, companies must understand their current water consumption trends, the level of water stress in regions in which they operate, and issues that could compromise their access to clean, potable water. In FY15, we invited 86 suppliers to report their water usage to the CDP’s water disclosure program as a first step toward characterizing our supply chain water footprint. In FY16, we launched our water risk mitigation plan and are asking all our production suppliers and select service suppliers to have a five-year responsible water risk mitigation plan in place by 2020. To date, we have plans from our top 50 suppliers based on CDP disclosure data. These suppliers will come from parts of the industry with high water consumption, such as printed circuit board makers and display manufacturers. Even beyond water mitigation, we are increasingly looking at climate-related emissions among our suppliers and encourage their participation in CDP’s Action Exchange – a platform for helping suppliers uncover energy efficiency opportunities within their operations. Of Dell’s 27 participating suppliers, 12 separate facilities have used the tools to identify 753 energy efficiency opportunities and $39.7 million in potential savings.

Dell is continually monitoring opportunities to take action that would drive improvements into our supply chain. We eagerly engage with others who share this goal and will update this section as new initiatives and programs are undertaken.
Measuring the effectiveness of our actions is a critical step in the ongoing effort to better our supply chain. From improving compliance and driving accountability to identifying emerging social or environmental risks, data drives our understandings and helps us improve.

Following you will find a quarterly update on our progress, followed by several metrics we provide in our ongoing efforts to increase transparency. While we provide an overview of our progress on an annual basis in the Legacy of Good Annual Update, we strive to provide more timely updates here for various metrics of interest to our stakeholders.

Weekly Working Hours Trends

We recognize the industry-wide challenge of abiding by a maximum 60-hour workweek. The first half of this year, 92% of our suppliers’ workweeks met this standard. We know this is an ongoing process and are continuously monitoring and working on improvement. The view below provides an overview of our working hours monitoring program and represents data from the past quarter.
 Weekly Supply Chain Monitoring 
 # of workers covered185,500
 # of facilities covered116 
 % of workers compliant with 60 hour workweek92% 
 % workers with at least one day of rest per week94% 
Data snapshot: 13 weeks rolling FY17 Q2
Audit Data

One of the ways we push for accountability is by ensuring that production suppliers representing 95% of our spend undergo EICC-validated third-party audits. In our two-year audit cycle, we will cover all Tier 1 production suppliers and additional sub-tiers and small-spend suppliers we perceive to be at high risk around key issues.

eicc audits

The chart below summarizes aggregate findings from initial audits conducted in FY16 (Feb. 2015 - Jan. 2016).
audit table
The chart above shows how many facilities were identified during audits to have at least one of these issues. It also shows, by category, how many of the facilities were within compliance for the given issue in the EICC audit protocol. The chart below shows the breakdown of findings by tier level in the past year. Roughly half of our findings come from Dell’s Tier 1 production and select service suppliers and the other half come from their suppliers (Dell’s sub-tiers).
eicc audit
Environmental responsibility

As part of our commitment to environmental responsibility and transparency, we ask our suppliers to report their GHG emissions to CDP. In 2014, 81 key production suppliers, representing more than 90 percent of Dell's production spend, reported their emissions, and through the process of developing GHG emissions reduction plans, identified USD $41 million in potential savings. We encouraged another 27 suppliers to participate in an energy exchange program that helped them identify an additional USD $54.6 million in potential savings.
In addition to GHG emissions, we are asking all our production suppliers and select service suppliers to have a five-year responsible water risk mitigation plan in place by 2020. To date, we have plans from 50 suppliers. We have also invited suppliers to begin using the CDP’s Water Disclosure Program as a first step toward measuring our supply chain water footprint.cdp emissions

Additional reporting

supplier map
Above is a map showing the geographic distribution of our manufacturing and select service partners. Below is a list of those suppliers, with key locations identified and links to their sustainability reports, if available.
SupplierLocationSupplierLocation
AMDDongguan (China)Lihua Shin ShinShanghai (China)
AmphenolXiamen (China)LishenTianjin (China)
AUOSuzhou, Shanghai (China); Longtan, Taichung (Taiwan)LiteonHsinchu (Taiwan)
BoardtekTaiwanLiteOn / SilitekDongguan (China)
BOE B3Hefei (China)LuxshareDongguan, Jiangxi (China)
BTIGuangzhou (China)MicronMuar (Malaysia); Singapore; Xi'an (China)
BuruizeXiamen (China)MingJiDongguan (China)
C2GKunshan, Shenzhen (China)MitacShunde (China)
CatcherSuqian (China)MolexDongguan (China)
CEC PandaNanjing (China)MSIShenzhen (China)
CelesticaSuzhou (China)MultekZhuhai (China)
ChangYunKunshan (China)PanasonicSuzhou, Wuxi (China)
ChiconyDongguan (China)PegatronSuzhou (China); Taiwan
CompalJundiai (Brazil); Chengdu, Kunshan (China); TaiwanPlastoformShenzhen (China)
CoretronicKunshan (China)PLDSBeihai (China)
CostlightZhuhai (China)Power StarFujian (China)
CPMJurong (China)PrimaxChongqing (China)
DazhiSuzhou (China)QisdaSuzhou (China); Taiwan
ECSShenzhen (China)QMShanghai (China)
ErgotronDongguan (China)QuantaShanghai (China)
FagerdalaChengdu, Xiamen (China)RiTeng(Casetek)Shanghai (China)
FinisarWuxi (China); MalaysiaRRDChengdu (China)
FlextronicsSorocaba (Brazil); Penang (Malaysia); Zhuhai (China)SamsungSuzhou (China)
FounderChongqing, Zhuhai (China)SandiskShanghai (China); Penang (Malaysia)
FoxconnJundiai (Brazil); Kunshan, Yantai, Chongquing, Tianjin, Wuhan (China); Juarez (Mexico)SDISuining, Tianjin (China); Seremban (Malaysia)
FSCXiamen (China)SharpWuxi (China)
GBMShenzhen (China)SimploChongqing, Changshu (China)
GCEChangshu, Suzhou (China); TaiwanSinHerKunshan, Chongqing (China)
GN NetcomShenzhen (China)SK HynixWuxi (China)
GuangkuotiandiChengdu (China)Speed WirelessHuizhou (China)
HannstarJiangyin, Nanjing (China); Tainan (Taiwan)SZSSuzhou (China), Taiwan
HengHaoKunshan (China)TaiyiKunshan (China)
HexingXiamen (China)TasunChongqing, Suzhou (China)
HiggstecYilan (China)TE(Tyco)Shunde (China)
HitachiPrachinburi (Thailand)TorgusaXiamen (China)
HLDSBangi (Malaysia)ToshibaShanghai (China); Philippines
HynaXiamen (China)TPKXiamen (China)
IBMChina, MexicoTPTWuxi (China)
Icon TransPenang (Malaysia)TPVFujian, Fuqing (China)
InnoluxFoshan, Ningbo (China); Tainan (Taiwan)TripodWuxi (China)
IntelVietnamTSSTSephil (Philippines)
Interplex(Amtek)Huizhou, Shanghai, Shenzhen (China)VeritivLodz (Poland); Chengdu, Suzhou (China)
InventecShanghai (China)VGTHuizhou (China)
IretexXiamen (China)VIA OptronicsSuzhou (China)
JarllyDongguan, Fuqing (China)ViasystemsGuangzhou (china)
JingdaKunshan (China)WeiliTaizhou (China)
Job SquarePulau Pinang (Malaysia)Western DigitalBrazil
KensingtonChina, TaiwanWistronChengdu, Zhongshan (China); Juarez (Mexico)
KerryBeijing (China)WorldmarkChongging (China)
KingslideTaiwanWuzhuDongguan (China)
KingstonShanghai (China)XIPShenzhen (China)
KorrunDongguan (China)YCTWujiang (China)
LaibaoChongqing (China)YFYKunshan (China)
LeohoSuzhou (China)YounglightingGuangzhou, Shanghai (China)
LexmarkDongguan (China); MexicoYuandengTaiwan
LGC / LG ChemChongqing, Nanjing (China)ZhuchangShanghai (China)
LGD / LG DisplayDongguan, Guanzhou, Nanjing (China); Gumi (South Korea)ZiyanShanghai (China)
LianhongSuzhou (China)ZyluxShenzhen (China)
LianyiZhongshan (China)