IT giant Hewlett-Packard has issued a set of guidelines for multinational companies seeking to strengthen social and environmental practices among their smaller suppliers.
The advice follows the completion of an 18-month project HP undertook with 20 suppliers in the Czech Republic, Hungary and Poland.
The aim of the project, which was sponsored by the European Commission, was to encourage HP’s contract manufacturers in the region to cascade good practice down into the second tier of SME suppliers and ensure that it becomes part of their everyday operations rather than just an exercise in legal compliance.
In the guidelines, HP urges other large companies not only to conduct social and environmental audits and to follow up on areas of non-conformance, but also to engage in continuous dialogue with suppliers, provide resources to help them solve problems, encourage better communication between their management and employees, and engage in industry-wide initiatives designed to reduce the burden placed on suppliers.
Speaking to CPO Agenda, Bonnie Nixon-Gardiner (pictured), HP’s global programme manager for supply chain social and environmental responsibility, said long working hours, discrimination against migrant workers, and lax health and safety were just some of the issues that needed to be tackled.
Simply asking suppliers for copies of ISO and other certification documents wasn’t good enough, she said.
HP found that while most of its central and eastern European suppliers complied with local laws, their management systems and processes were often lacking or inadequate.
“You have to get out there and manage your supply chain, engage with your suppliers and be willing to share tools, people and expertise to help them grow,” she said.
Nixon-Gardiner added that this more collaborative approach to CSR issues needed to be “embedded in your sourcing organisation” and go “beyond the first tier of suppliers”.
Procurement had to “step up and be accountable”, she said. “CPOs need to be truly committed to this.”
During its project, which was run in conjunction with the Danish Commerce and Companies Agency (DCCA), HP conducted on-site assessments, training workshops and experience-sharing sessions with five tier-1 suppliers and 15 tier-2 suppliers of packaging materials and recycling services.
Nixon-Gardiner admitted it wasn’t easy to convince resource-strapped SMEs that a more proactive, business-orientated approach to CSR was beneficial. But she said at least two of the suppliers in its European project had improved the efficiency of their factories and won more business as a result of the measures they had implemented.
She has run similar projects among HP suppliers in China, India and Mexico over the past four years and next week is launching its latest one in Thailand.
HP has about 600 suppliers worldwide operating more than 1,000 sites and employing over 300,000 staff. Its annual purchasing bill is around $53 billion.
A full copy of the report, Small Suppliers in Global Supply Chains, which includes the guidelines, is available here.
