Since we began auditing in 2005, rates of major nonconformances1 have decreased across all of HP's Electronic Industry Code of Conduct (EICC) sections. The prevalence of specific issues varies substantially from region to region. (See our detailed results.)
The graph below shows the growth of HP's supply chain social and environmental responsibility (SER) program. As our program matures, fewer suppliers enter it, and the proportion of initial audits is lower. We conduct a higher proportion of follow-up audits to help us resolve issues with our higher-risk profile suppliers. This reflects our focus on supporting long-term SER performance improvements.
|Audits conducted (cumulative)|
The chart below shows that as suppliers advance through HP's SER program, their performance improves. We believe this continual improvement is due to our validation system, with its focus on collaborative audits and corrective actions, and our efforts to build our suppliers' capabilities.
|Distribution of audit findings, 2005–2010|
The chart below lends support to the effectiveness of our validation and improvement process. The process involves auditing supplier sites, requiring corrective actions, and re-auditing to verify that nonconformances have been addressed. Across all provisions, between 70–75% of major nonconformances identified in initial audits have been subsequently addressed. The chart also demonstrates that nonconformances have been easier to address for some sections of the code than others.
|Major nonconformances reduced by section of HP's EICC, 2005–2010*|
- * Based on follow-up audits compared with initial audits at same sites; does not include new items identified.
The chart below shows the distribution of major nonconformances at audited facilities across the provisions of HP's EICC. Labor and health and safety account for the majority of major nonconformances.
|Distribution by section of HP's EICC of major nonconformances in most recent audits of suppliers worldwide, 2009–2010|
For details about other issues identified in audits and HP's response by region, see the Detailed audit findings section.
Nonproduction supplier self-assessment results
Fifty-six of our global strategic nonproduction suppliers have now performed self-assessments. (See Supplier management system for more information.) We considered supplier risk profiles, supplier's strategic importance to HP, and the supplier industry before we introduced nonproduction suppliers to our supplier management system. We found minor deficiencies—largely concerning SER management systems that do not fully cover HP's EICC—in 25% of these self-assessments. However, more than 50% of self-assessments in China, India, and Latin America had more serious deficiencies, including no SER management commitment or policy. We believe the higher number of serious deficiencies reflects lower levels of EICC awareness among country-level nonproduction suppliers compared with production suppliers. (See Supplier management system for more information.)