Philips 2009 Annual Report Download - page 49

3 Our planet, our partners, our people 3.4 - 3.4
Philips Annual Report 2009 49
Driving sustainability in the
supply chain
We believe achieving a sustainable
supply base is about taking care of
workers’ lives and the environment.
As a member company of the Electronic Industry Citizenship Coalition (EICC)
our goal is to improve conditions in the electronics supply chain. To do just that,
we conducted a record total of 858 supplier audits to identify and resolve issues
in 2009.
Our approach
The Philips Supplier Sustainability Involvement Program is built on five pillars:
setting out our requirements; building understanding and agreement;
monitoring identified risk suppliers through audits using the EICC checklist
(90% of initial audits are now conducted by specialized external auditing bodies);
working with suppliers to resolve issues quickly; and engaging stakeholders.
To focus our efforts, we developed an approach based on a risk profile related
to spend, country of production, business risk and type of supplier relationship.
Where risk is identified we conduct awareness training with suppliers to
prepare for third-party audits.
Corrective action plans are agreed upon within 30 days of an audit.
Sustainability officers follow up monthly and can escalate the issue to the
responsible purchasing manager as necessary to ensure zero-tolerance issues
are resolved within three months. In this way the vast majority of zero-
tolerances from 2009 have been resolved.
Continual conformance audits show that a multi-year approach to training and
auditing is essential to ingrain sustainability in the supply chain.
New initiatives
Mirroring our supplier approach, we audited 12 internal sites in risk countries
using the EICC checklist.
We selected 10 pilot products whose components are being analyzed to assess
CO2 emissions throughout the supply chain. Our goal is to identify large sources
of emissions and implement abatement measures with our suppliers.