Some specific social and environmental responsibility (SER) issues require frequent monitoring. Since 2009, we have asked certain supplier sites in China with major nonconformances related to working hours to report monthly key performance indicators (KPIs) that track the average number of hours worked, and amount of overtime.
In 2010, we integrated these KPIs into suppliers' corrective action plans. Of our high-risk profile suppliers with working hours major nonconformances, more than 40% (by spend) report monthly KPIs to us. This exceeds our goal of 25% by the end of 2010. These facilities represent more than 100,000 workers. We aim to have 75% (by spend) of suppliers with major nonconformances in working hours reporting related KPIs to us by the end of 2012.
Monitoring KPIs allows for delivery of real-time information about supplier performance between audit visits, providing further insight into suppliers' degree of performance, creating a bench line for monitoring future performance and improvement, and indicating where capability-building programs are needed. These benefits allow HP to further support suppliers' development. Our work is focused on:
- Eliminating the most excessive overtime
- Reducing average overtime
- Ensuring every employee has at least one day off per week
The KPIs have revealed variations in performance among suppliers and between the facilities of individual suppliers. Some suppliers with a major nonconformance improve performance consistently once corrective action plans have been implemented, while others struggle to avoid further excessive working hours, and some improve performance for several months before regressing when business conditions change. (This does not necessarily correlate to increased demand from HP.) In particular, we have seen positive results when a facility's management has acknowledged the benefits of reporting and monitoring these KPIs. Ongoing dialogue with facility management has helped us learn and disseminate best practices to all suppliers. The KPIs enable HP to focus on suppliers and factories that need the most help long before we conduct follow-up audits.