Performance and Reviews
Xerox’s Global Purchasing organization routinely tracks and reports on current and potential suppliers for adherence to our requirements. On-site 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 production suppliers to complete an assessment of their quality management system prior to being added to the Approved Vendors List (AVL), which includes about 1,500 active suppliers. Our vendors use the Xerox Multinational Supplier Assessment, which is equivalent to the ISO 9000, but was implemented 10 years earlier.
Before potential 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 reviews every one to three years, depending on the scope of our relationship with them. About 90% of our spending for the manufacturing of Xerox products comes from 50 global suppliers. These suppliers are assessed regularly to measure compliance with Xerox standards. As of 2008, more than 90% of these suppliers have been assessed for compliance to Xerox standards.
As with any relationship-based engagement, face-to-face communication is critical to building trust, respect and credibility. We continue to have a strong purchasing presence in Asia to facilitate more direct interaction between Xerox buyers and the Asian production suppliers. Xerox Global Purchasing has representatives in Hong Kong, China, Malaysia, Singapore, Korea, Japan and India. These purchasing professionals conduct 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. Through the Web site, 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.
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 A Greener World section of this report.
During early 2009, Xerox became the first organization to attempt and successfully achieve professional
global certification from the Chartered Institute of Purchasing and Supply (CIPS). This certification is an established benchmark of excellence in organizational procurement and competence and ensures 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 purchasing policies and procedures also meets purchasing requirements of international quality standard ISO 9001:2000.
As a coalition member since October 2006, Xerox has continued its rollout of the Electronic Industry Citizenship Coalition’s (EICC’s) Code of Conduct, a standards-based approach for monitoring suppliers’ compliance across several areas of social responsibility, including labor, health, safety and environmental activity. Xerox has validated its compliance with EICC guidelines and is working to ensure compliance by our key vendors that contribute to the manufacturing of Xerox products and systems. We continue to actively participate in EICC quarterly conferences, where members share industry best practices for managing and monitoring the supply chain.
We have also developed a process that measures suppliers’ compliance and incorporates EICC activities into our internal management reviews. To date we have completed EICC compliance reviews for 30% of our key suppliers and will have an additional 10% assessed by year-end 2009. Any identified gaps are addressed through a rigorous corrective action process, which is monitored regularly. In addition to EICC compliance reviews, Xerox requires all our vendors to commit to complying with the principles of the EICC standards. All new supplier contracts include social responsibility language that reinforces this commitment.
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 U.S. Customs and Border Protection certified under the Customs-Trade Partnership Against Terrorism (C-TPAT) program that audits specific security measures protecting our supply chain and in the application review process to become Authorized Economic operator (AEO) certified. We have cascaded the security requirements of the program to our suppliers and require certification indicating they are in compliance.
Ethical Business Environment
To report concerns that suppliers feel may jeopardize otherwise constructive business relationships, we provide them with an ethics hotline and P.O. Box address, and we promptly investigate all concerns. More information on the EICC Code of Conduct can be found online at www.eicc.info/EICC CODE.htm.
Xerox was recognized as number one for supplier diversity by DiversityInc magazine the last three years. We have established partnerships with minority- and women-owned business enterprises (MWBE), veterans/service-disabled veterans, HUBZones and Protected Workshop Suppliers. We are also establishing supplier relationships with gay and lesbian business enterprises. Since 1985, Xerox has purchased more than $7 billion in goods and services from certified and qualified diverse suppliers owned by minorities, women and veterans/service-disabled veterans. In 2008, Xerox purchased approximately $400 million in goods and services from certified and qualified diverse suppliers. Total spending with certified and qualified diverse suppliers represents 32% of Xerox’s annual qualified purchases.
More information about our supplier diversity is available at www.xerox.com/supplierdiversity.