An internal training programme at Philips Electronics has equipped more
than 500 managers to carry out basic ethical supplier audits during the
past 12 months.
The training sessions typically last two days and cover all aspects of
a supplier audit, including worker interviews, detailed facility tours
and factory managers’ attitudes to leadership, quality and
sustainability.
The programme is run in all Philips’ operations and involves managers
of various business functions. At a recent training event in
Chandigarh, India, for example, representatives from the company’s
purchasing, human resources, quality and internal audit departments
carried out five audits of the Mohali factory’s suppliers.
The programme is one of the internal measures recently adopted by
Philips to raise awareness of supplier-related social and environmental
issues and is part of the ‘core curriculum’ of staff learning.
Sustainability has also now been introduced into an existing module on
supply chain management.
Last year about 1600 employees took the course. Outside the workforce,
Philips runs sustainability workshops for suppliers and about 350 have
so far taken part. The workshops emphasize Philips’ requirement that
suppliers observe basic environmental and workplace standards.
The electronics giant requires its largest 1000 suppliers to undertake
self-assessments on their social and environmental policies and
performance, and to be audited in cases where compliance with Philips’
business principles remains in doubt.
Last year Philips made 207 site visits to new and existing suppliers,
mostly in Asia. Every audit includes interviews with employees, payroll
reviews, confirmation of health and safety measures, and checks for
proscribed chemicals. Suppliers are then given a timetable for
improvements, with contract termination regarded as a last resort.
Philips spends €20.7billion ($25bn, £14.3bn) annually with 25,500
suppliers, 35 per cent of whom are in western Europe. It aims to
increase its presence in Asia Pacific in the year ahead.
