Supplier Relations

Overview
Xerox’s Global Purchasing (GP) organization is headquartered in Rochester, New York, and manages the sourcing, contracting, purchasing and supplier oversight activities for technology, indirect and services suppliers across Xerox and its affiliates including ACS, A Xerox Company. As with any relationship-based engagement, face-to-face communication is critical to building trust, respect and credibility. The GP staff is located across the world to facilitate a more direct interaction between the Xerox buyers and the suppliers within each region. This includes a strong purchasing presence in Asia with representatives in Hong Kong, China, Malaysia, Singapore, Korea, Japan and India.

The purchasing professionals assess the quality, cost and delivery of the supplier’s products and ensure the business is run with the highest ethical standards. Through the website, www.xerox.com/suppliers, vendors and potential vendors can learn about the latest procurement initiatives and find information on supplier diversity, procurement policies, supplier quality assurance and supplier ethics.

Chartered Institute of Purchasing and Supply Certification

In early 2009, Xerox became the first organization to attempt and successfully achieve global certification from the Chartered Institute of Purchasing and Supply (CIPS) in the area of procurement excellence through processes and procedures. This certification is an established benchmark of excellence in organizational procurement and signifies that an organization maintains excellent procurement standards. The program is endorsed by the Institute of Quality Assurance. An organization that meets certification standards for excellence in procurement policies and procedures also meets the purchasing requirements of international quality standard ISO 9001:2000.

Supplier Code of Conduct/Ethics
Xerox remains committed to the Electronic Industry Citizenship Coalition (EICC), a group established to improve social, economic and environmental outcomes in the electronics industry, since joining in 2006. Xerox has validated its compliance with the EICC guidelines and has adopted the EICC’s Code of Conduct for corporate social responsibility as its code of conduct for suppliers (“Supplier Code of Conduct”). The Supplier Code of Conduct includes labor standards based on recognized principles on international labor and human rights.

Xerox has implemented a compliance program with its direct/technology suppliers to monitor their compliance with the Supplier Code of Conduct. The following are highlights of this compliance program:

  • As part of this program, Xerox requires such suppliers to comply with the Supplier Code of Conduct. The terms and conditions in Xerox purchase agreement and purchase order forms incorporate this requirement, as well as the requirement for suppliers to comply with all applicable laws and regulations. Xerox reinforces the Supplier Code of Conduct in an annual communication to its suppliers.

    • – Xerox conducts initial risk assessments of its suppliers based on objective criteria. For key suppliers and certain suppliers identified in Xerox’s initial risk assessment, Xerox requires the completion of supplier
    questionnaires. In addition to allowing Xerox to validate its initial risk assessment, this step also serves to
    raise suppliers’ awareness about the importance of social responsibility topics, clarify Xerox’s
    expectations, target areas for review and serves as written documentation of suppliers’ assessment of
    their performance.

    – To monitor suppliers’ compliance with the Supplier Code of Conduct, Xerox conducts certain announced
    compliance reviews/audits of its key suppliers depending upon the results of their supplier questionnaire.
    In addition, Xerox conducts announced compliance reviews/audits of a group of suppliers identified in
    Xerox’s initial risk assessment regardless of their supplier questionnaire results. Annual compliance
    reviews/audits are on-site visits by either trained Xerox or qualified third-party personnel and follow a
    consistent review/audit process.

    – By the end of 2010, Xerox conducted more than 150 first-time and follow-up Supplier Code of Conduct
    compliance reviews/audits. Areas of nonconformance are evaluated as priority, major, minor or
    observation, and are addressed through a corrective action process. We monitor our compliance program
    regularly through internal management reviews.

  • Supplier Management: In addition to compliance-related visits, on-site visits of suppliers are routinely conducted as part of Xerox’s ongoing supplier management by Xerox procurement professionals and quality assurance engineers.
Supply Chain Security

Xerox is committed to implementing security controls within its supply chain to enable the uninterrupted flow of products from the point of manufacture to the customer. Xerox is a certified participant of the U.S. Customs and Border Protection Customs-Trade Partnership Against Terrorism (C-TPAT) and the E.U. Authorized Economic Operator (AEO) program in the Netherlands and Ireland. Both programs require Xerox to have specific security criteria present throughout its supply chain. C-TPAT, AEO and other specific Xerox criteria are contained in the Xerox Supplier Security Requirements for external Xerox suppliers and in the Xerox Security Policies and Standards for internal Xerox locations. Xerox has an ongoing assessment program to monitor compliance with the security criteria throughout its supply chain. Xerox is a member of the High Tech Supply Chain Security Coalition (HTSC2) and the Transported Asset Protection Association (TAPA).

See Xerox’s response to the California Transparency in Supply Chains Act.

Performance and Reviews

The purchasing staff routinely tracks and reports on current and potential suppliers for adherence to our requirements. Business reviews are held regularly with our key 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 technology suppliers to complete an assessment of their quality management system prior to being added to the Approved Vendors List (AVL), which includes about 1,000 active suppliers. Xerox continues to use an internally developed Supplier Survey & Assessment process, as it has for nearly 20 years, that covers relevant sections from ISO9001:2008 and critical topics from current supply chain management practice. The Xerox Supplier Quality Management processes align with the global nature of our supply chain and current quality management best practices.

Before potential primary technology suppliers are permitted to do business with us, we make on-site visits. Once a supplier is added to the AVL, we conduct on-site reviews periodically based on supplier performance and the scope of our business relationship. About 90% of our spend for the manufacturing of Xerox products comes from 50 global suppliers. These suppliers are managed closely with periodic business and quality reviews to ensure they continue to meet our high standards.

Consistent with our comprehensive environmental sustainability initiatives, Xerox has specific guidelines for our paper suppliers and for the use of chemicals in our equipment and supplies. These practices are outlined in the Preserving the Planet section of this report.

Supplier Diversity

As a global leader in business process and document management, Xerox recognizes that having a diverse supplier pool is a major competitive advantage and a powerful business tool. Xerox’s supplier diversity mission is to proactively identify, build relationships with, and purchase goods and services from certified small businesses as well as enterprises owned by minorities, women, veterans, gays and lesbians, and disabled persons. It is the policy of Xerox that diverse suppliers will have an equal opportunity to be included in our strategic sourcing and procurement process. Companies that seek to do business with Xerox must demonstrate the ability to add value, and provide high-quality goods and services that are competitively priced, reliable, and aligned with our superior level of service. During 2010, Xerox purchased goods and services from minority-owned ($209M), woman-owned ($282M) and veteran-owned ($56M) businesses. In addition, we completed the integration of the ACS supplier diversity program into the overall Xerox program to fully leverage the sourcing opportunities across a broader base.

More information about our supplier diversity is available at www.xerox.com/supplierdiversity.