Green Sourcing Procurement
Raising the bar worldwide
Effective management of our supply chain on Code of Conduct issues is a top priority. Our suppliers worldwide are required to meet the Ericsson Supplier Code of Conduct (S-CoC), based on the UN Global Compact principles. All our Regions and Business Units have trained auditors and procedures in place to assess critical suppliers and to conduct S-CoC audits and on-site assessments. A critical part of the sustainable sourcing process is following up the results to ensure continuous improvement.
Ericsson purchases customized and standardized components, services etc. from several global providers as well as from numerous local and regional suppliers. Certain types of components, such as power modules and cables, are produced in-house. The production of electronic modules and sub-assemblies is mostly outsourced to manufacturing services companies, of which the vast majority is in developing markets. Node production is largely done in-house and on-demand.
We continuously work towards increased awareness of CoC issues in the supply chain, particularly in developing markets. By actively helping our suppliers improve their performance with the use of audits, on-site assessments, web training and seminars, we reduce our risk while contributing to higher standards in the supply chain.
Ericsson operates a systematic and documented risk matrix to identify higher-risk suppliers. This matrix was updated in 2010. Among the prioritized (or risk) commodities are:
- die-casting and network roll-out
- tower manufacturing and galvanization
- mechanical parts
- power supply
- printed circuit board manufacturing
- warehousing and logistics.
Room for improvement
Based on audit and assessment results, we have found steady improvements in the supply chain in a number of areas, such as proper use of personal protective equipment, and suppliers’ communication of S-CoC to their own suppliers . However, vary widely, but are generally positive. performance varies between suppliers, and improvement areas are identified in virtually all audits. Critical areas vary between markets and lines of business. More frequent findings include insufficient training and information, shortcomings in communications of workers' rights, environmental management and, in some markets, use of excessive overtime. Findings are actively followed up using corrective action plans and follow-up audits.
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