Supplier Relations

Performance and Reviews

Xerox’s Global Purchasing organization routinely tracks and reports on current and potential suppliers for adherence to our requirements, and we hold quarterly on-site reviews with our top 38 suppliers. This provides a forum to discuss our business relationships and to define and refine the metrics for Xerox and the supplier performance evaluations.

Xerox requires all production suppliers to complete an assessment of their quality management system prior to being added to the Approved Vendors List (AVL), which now includes about 1,500 active suppliers. Our vendors use the Xerox Multinational Supplier Assessment, which is equivalent to the ISO 9000, but was implemented ten years earlier.

Before our primary suppliers are permitted to do business with us, we make on-site visits. Once they are added to our AVL, we conduct on-site audits every one to three years, depending on the scope of our relationship with them. About 80% of our spending for the manufacturing of Xerox technology (i.e., for components, wiring, plastics, etc.) comes from 50 global suppliers. These suppliers are assessed regularly to measure compliance with Xerox standards and applicable local laws. Xerox audited more than 90% of them in 2006.

As with any relationship-based engagement, face-to-face communication is critical to building trust, respect and credibility. With more and more of Xerox’s suppliers now located in Asia, we felt the need to develop a stronger Xerox purchasing presence in this region, enabling more direct interaction between Xerox buyers and suppliers. In the last year, Xerox has transferred the vast majority of its production purchasing operation to the Asia-Pacific area and we now have Xerox Global Purchasing representatives in Hong Kong, China, Malaysia, Singapore, Korea, Japan and India. These purchasing professionals conduct quarterly, if not more frequent, on-site reviews to assess the quality, cost and delivery of the vendor’s products and ensure the business is run with the highest ethical standards. In addition, we have opened access for the supplier community to work more directly with Xerox. Through the Web site www.xerox.com/suppliers, vendors and potential vendors can learn about the latest procurement initiative and find information on supplier diversity, procurement policies, supplier quality assurance and supplier ethics.

Consistent with our comprehensive environmental initiatives, Xerox has specific guidelines for our paper suppliers. These paper-sourcing practices are outlined here.

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