Philips 2014 Annual Report Download - page 203

Sustainability statements 14.2.8
Annual Report 2014 203
Philips Group
IDH Electronics Program
2014 Goals Progress
Increase number of participating suppliers to 20 21 Philips suppliers are now participating
All participating suppliers identify their top 3 improvement actions and
develop their work plans Completed for all 21 suppliers
70% of all identied top 3 improvement actions implemented by end 2014 90% implemented by year-end 2014
2015 Goals
3 out of 4 top improvement actions identied for each IDH supplier
implemented by end 2015
Example: IDH case study
N is a Philips supplier participating in the IDH
Electronics program since 2013. During their
Entry Point Assessment, it quickly became clear
that N’s workers and management prioritized
two topics: low worker satisfaction and high
worker turnover rates. With the help of IDH, the
management and workers jointly developed an
action plan around three main themes:
• Worker-management dialogue - A worker
representative team was elected to help bring
messages from the factory oor to top
management, including improvement
recommendations and worker concerns
• Worker well-being - Workers designed and
implemented a canteen improvement program
• Working environment - Implementing the 5S
methodology to organize the work space for
eciency and eectiveness, including professional
working skills training
During the implementation of above actions in
2014, worker satisfaction increased and N’s
management team became increasingly
enthusiastic to continue the program in 2015 as
worker turnover rates started to decrease and
production eciency improved.
More information on the Supplier Sustainability
Involvement Program, the Philips Supplier
Sustainability Declaration and audit approach can be
found at www.philips.com/suppliers
Addressing issues deeper in the supply chain
Conict free minerals
Responsible sourcing of minerals is an important part
of our supplier sustainability commitment and we
implement measures in our chain to ensure that our
products are not directly or indirectly funding atrocities
in the DRC. Philips works towards the following goals:
• Stop trade in conict minerals that benet armed
groups in the DRC or an adjoining country
• Enable legitimate minerals from the region to enter
global supply chains, thereby supporting the
Congolese economy and the local communities that
depend on these exports.
What are conict minerals?
Tin, tantalum, tungsten, and gold are used in
many dierent products such as cars, planes,
chemicals, jewelry, packaging, and electronics
equipment. They come from mines around the
world, including mines in the DRC which are
estimated to provide 18% of global tantalum
production and 2-4% of tin, tungsten, and gold.
In the Eastern parts of the DRC a decade-long
civil war is continuing. Illegal armed groups
control mines and transit routes and use mining
prots to fund their violent operations.
The Conict Free Tin Initiative
Although the DRC has a rich supply of minerals, its
economy has collapsed due to decades of ongoing
conict. In an eort to prevent minerals from nancing
war, many companies worldwide have shied away from
purchasing minerals from the DRC, creating a de facto
embargo in a region where mining is often the only
source of income for local communities. We decided to
take the more dicult road, supporting the veriably
conict-free sourcing from the DRC.
To promote cooperation and economic growth in the
DRC region outside the control of the rebels, we
launched the Conict-Free Tin Initiative in 2012 in
collaboration with the Dutch Government and other
industry partners. This initiative introduced a tightly
controlled conict-free supply chain of tin from a mine
in the DRC all the way down to an end-product. The
initiative expanded to other mines in the DRC this year
and received additional funding from the Dutch
Ministry to continue for the next few years. In 2014 we
took the decision to include this tin in the regular supply
of solder, meaning it is now contained in many dierent
Philips products sold globally.
Conict-free minerals policy and Supply chain due
diligence
Philips has committed not to purchase raw materials,
subassemblies, or supplies which we know contain
conict minerals.