Managing our supply chain
|In all that we do, integrity, responsible business practices and a high standard of ethical behavior are paramount. We expect the same of our supply chain partners, too. Respecting workers, their communities and the environment are a fundamental expectation and meeting these standards is a condition of doing business with Dell. And having an effective management system is the key to identifying risks, reinforcing values, and driving change.|
|Industry Collaboration to address common challenges|
Many of our suppliers build components for multiple companies in the electronics industry. It is therefore particularly important that companies work together and consistently in how we monitor supplier performance, address systemic challenges, and continuously raise the bar. In 2004, Dell and other leading electronics companies joined forces and founded the Responsible Business Alliance (RBA), a nonprofit organization with a common goal to use shared standards and tools to advance social, ethical, and environmental responsibility in the global electronics supply chain.
As members of RBA, we commit to and are held accountable to responsible business standards set forth in the RBA Code of Conduct, which addresses performance in the areas of labor, health and safety, environment, ethics, and management systems. We follow this in our corporate activities, facilities, and our supply chain, and have adopted this as part of Dell’s Code of Conduct and Supplier Principles.
In addition to complying with all applicable laws and recognized international standards, we ask our suppliers to abide by the RBA Code of Conduct and our Supplier Principles as a condition of doing business with Dell. The RBA Code of Conduct screens for compliance to local laws, and enforces whichever standard is stricter. We monitor and seek to improve suppliers’ compliance with these expectations through our risk assessment, audit process, corrective action plan management, and capability building programs.
Every year, the Dell Supply Chain Sustainability team evaluates supplier risk and develops the annual audit plan for our supplier facilities. During our risk assessment process, we evaluate all direct material suppliers based on geographic location, business relationship, manufacturing processes, past SER performance, and public reports. This assessment is conducted at the facility level. If a supplier has several facilities providing product to Dell, each is evaluated independently and assigned its own SER risk level.
New suppliers undergo risk assessment during the onboarding process. Based on their assigned risk level, suppliers must conduct an audit based on the RBA Code of Conduct. As a condition of doing business with Dell, these suppliers undergo the same audit and corrective action plan processes as existing Dell suppliers to maintain Dell’s commitment to social and environmental responsibility within the supply chain.
|Reinforcing Values: Audits and Corrective Action Plans|
Dell requires all of our high-risk production suppliers and select services providers to undergo regular social and environmental audits on a 2-year cycle and to close findings following the Corrective Action Plan process according to the timeline laid out by the RBA. All Dell audits follow the RBA’s VAP Audit Protocol and are conducted by RBA-certified third-party audit firms. The RBA VAP screens for compliance to the RBA Code of Conduct and local laws, and enforces whichever standard is stricter.
Audit findings are going to happen – the key is making sure they don’t happen again.
Suppliers are required to create a corrective action plan and root cause analysis to address findings identified during an audit or survey. We work with our suppliers to help them identify causes, review plans, and evaluate evidence demonstrating completion of corrective actions. Once corrective actions are completed, official closure audits and remote closures are used to confirm that findings have been successfully closed.
While our audits cover suppliers in multiple tiers of our supply chain, we have also begun to assist our first-tier suppliers in monitoring the parts of their own supply chain that Dell does not already audit. Building capabilities for sub-tier SER management is a priority that we believe will strengthen the electronics industry as a whole.
|Driving Change: Capability-Building, Accountability, and Transparency|
Driving meaningful change requires collaboration and sharing of best practices with our suppliers and throughout our industry. We also offer a variety of online and in-person trainings, helping suppliers understand expectations in their onboarding process and improving their adherence to our standards for social and environmental responsibility.
For example, we provide access to the RBA’s e-learning Academy (and those who participate are then able to lead their own team study groups and train more people) and offer mobile training for EHS issues. We also host supplier orientations, webinars, networking sessions, and instructor-led trainings for both HR and EHS practitioners for our suppliers.
Through it all, we use our audit findings insights and best practices from across the industry to improve the trainings.
Dell’s Supply Chain Sustainability team works closely with procurement teams to monitor supplier social and environmental performance. We incorporate discussions about social and environmental progress in suppliers’ quarterly business reviews, which include audit performance data, assessment of policy compliance, and specific implementation plans for improving social and environmental stewardship. Suppliers that fail to take appropriate actions to correct social and environmental audit findings may lose their business with Dell.
We believe that pushing toward greater levels of transparency in our supply chain makes us a stronger company. To this end, we have set a goal to demonstrate 100 percent transparency in key issues in our supply chain by 2020. This serves as a guiding principle for our actions and work throughout our supply chain.
One of the most important ways to be transparent is to report with regularity while using global standards that make data understandable and comparable. In addition to our semi-annual SCS Progress Report, annual Responsible Minerals Sourcing Report and Legacy of Good report, we ask our suppliers to publish their own Global Reporting Initiative (GRI)-based sustainability report on their corporate websites and update the report annually. Links to our suppliers’ GRI reports can be found in our public supplier list. We also expect suppliers to report annually via the CDP Supply Chain Climate and Water programs.
In 2016, we introduced a new level of transparency by hosting representatives from enterprise customers on a tour of supplier manufacturing facilities in China – an industry first. The tour allowed customers to interact with workers and experience their working and living conditions. This helped customers enhance their understanding of our suppliers’ operations and industry challenges, as well as to better understand Dell’s work with our suppliers to advance social and environmental responsibility. We have continued to offer these tours to a limited number of customers, but recognized that appetite for information was bigger than our capacity to lead these tours. In early 2018, we released a set of virtual reality videos filmed during an actual tour – providing greater access for a much larger set of stakeholders. As this program continues to evolve, we see the use of technology as an important key in providing even greater transparency down the line.
|Download Dell’s whitepaper on Supply Chain Assurance here. This document describes at a high level how Dell prevents and detects counterfeit and tainted product within our supply chain.|
The Responsible Business Alliance’s (RBA) Code of Conduct governs expectations for suppliers across our industry and we supplement this with Dell’s own Code of Conduct and additional policies and expectations. These include: