HP shares best practice for suppliers

Supply Management, Jan 31, 2008 by Snell, Paul

[CSR]

Companies wishing to share HP's supply chain success can now access guidelines drawn up by the IT giant. The guide, devised with the Danish Commerce and Companies Agency covers areas including social and environmental responsibility.

It has attracted interest from firms in the pharmaceutical, automotive and cosmetics industries. The publication follows an 18-month project carried out by HP with 20 of its own suppliers in Eastern Europe, five first-tier and 15 second-tier.

Karl Daumueller, programme manager for global procurement at HP, said the company "has one of the largest and most complex supply chains in the technology sector. This project is about equipping our direct suppliers with the tools to meet the highest environmental and social standards, enabling them to project these standards on to their suppliers."

It is a continuation of a project that started in 1998, when HP began to outsource more work to suppliers and recognised the importance of standards issues. The project involves working with suppliers, raising awareness of HP's own supply chain code of conduct, and providing workshops and support to help with issues including health and safety, energy efficiency and staff issues, such as discrimination.

Bonnie Nixon-Gardiner, global programme manager for supply chain social and environmental responsibility at the firm, told SM: "We found the real challenges and risks lie in the small suppliers that don't have the resources, or have grown quickly. When they first came to me the big question was 'Why?'"

But suppliers overcame their initial hesitancy when they realised better working practices can bring benefits such as more profit and higher productivity.

Gardiner said one of the hardest parts of the project has been developing HP's own supplier relationship managers alongside the suppliers.

"It still remains the greatest challenge. These people didn't have all the expertise when they heard about [the project]. Cost, quality and delivery - that's how they are really measured. We recognised the need to make the procurement team understand why we are doing this."

She said HP created a 10-step process for buyers, and there is now some "phenomenal" work involving supplier relationship managers helping suppliers to improve.

The firm intends to extend the guidelines to its suppliers in Thailand and Southeast Asia this month. "They are very easily adapted to any company," said Gardiner.

The guidelines are available online at http://tinyurl.com/38ourn.

Paul Snell

paul.snell@supplymanagement.com