That should be an obvious statement.
It should. But not everyone recognizes how fundamental people are to a technology company. In fact, at Dell, our stated purpose is to create technologies that drive human progress. This purpose has been consistent for many years, and it’s centered around people, all people. Not only the customers we seek to serve, but also our employees, suppliers and individuals who work in our supply chain. Through our reach, technology and global workforce, we’re dedicated to creating a positive and lasting impact on humankind and the planet. It’s not just something we say – it’s something we do. And I’m proud of what Dell has accomplished in its supply chain, including in the two years since I joined the company.
Our FY19 annual Corporate Social Responsibility report shows Dell Technologies will complete or exceed more than 75% of our 2020 Legacy of Good goals ahead of schedule. And we’re not done. Recently we announced our 2030 social impact plan, Progress Made Real. This new plan is the foundation for how we’ll begin tackling the greatest challenges facing businesses and the world over the next decade. Our commitment to driving human progress, our transparency about how we’ll do it, and our passion for making it real, are reasons I chose to build a career at Dell.
Respect and transparency – prove it …
For Dell’s Supply Chain, it’s important we live and drive our purpose into our supply base. We’re proud of the work we’re doing to support our supplier communities and promote respect and equal rights for all. So proud, in fact, we publish an annual supply chain report highlighting our work to ensure a responsible supply chain. This includes programs focused on understanding and mitigating risk and efforts to continuously improve our supply chain’s performance. We work in a way that promotes collective intelligence and encourages collaborative efforts. We work together with peers, industry groups and non-governmental organizations (NGOs) to find better ways to identify and mitigate new and existing risks. Our philosophy is to listen, learn, train and partner with workers and suppliers to bring forth the best ideas.
Got it. But what can a single company do?
We can help drive the industry; by their nature, technology supply chains – even amongst competitors – are highly intertwined. What happens in the Dell supply chain can have ripple effects throughout the industry. We’re a founding and full member of the Responsible Business Alliance (RBA), a nonprofit coalition of leading companies dedicated to improving social, environmental and ethical conditions in their global supply chains. Through the RBA, we continually evolve collective standards for the whole sector to work towards and use audits to verify the lived experience of our workers. The RBA ensures the worker voice and feedback are at the heart of the audit process.
Dell upholds and implements the RBA Code of Conduct for our own operations. We expect our suppliers to abide by the Code with the same approach adopted with their own suppliers. The RBA Code establishes standards for safe and responsible working conditions alongside environmentally sustainable operations in which workers are treated with respect and dignity. Dell’s own manufacturing facilities, as well as those of our key suppliers, are audited for conformance to the RBA requirements in ethics, labor, environment, health and safety, and management systems.
Dell expects our suppliers to uphold the rights of workers in our supply chain by following both the RBA Code of Conduct and our Vulnerable Worker Policy, which applies to all workers including temporary, migrant, student contract and direct employees. These are designed to protect workers and ban behaviors that represent a risk of human trafficking or child labor at any stage of our supply chain. In addition to these policies, we train factory managers on how to identify human trafficking and forced labor risk signals.
Though the RBA audit is robust and comprehensive, any single audit includes risk of missing individual issues. It’s important we supplement the RBA’s audit with other engagement vehicles, ensuring anyone within our supply chain has multiple opportunities to share information, and not only in an interview with auditors.
How do you do that?
We provide additional engagement vehicles, so workers feel safe and able to provide honest feedback. Workers can access our grievance mechanisms at any time. In China, our contracted auditors even provide communication cards that include Dell’s helpline information for use by workers interviewed during audits of factories in our first and sub-tiers. We understand some workers may not be comfortable discussing certain issues at the factory. Alternatively, they might remember relevant facts after an interview, or are unsure their truthful cooperation with auditors will be viewed favorably by management. In any situation, they can use this helpline to reach us directly.
Fundamentally, we promote a non-retaliation environment, where anyone can feel secure in providing feedback. This is reinforced through the combination of communication cards distributed by auditors to workers at the given facility, alongside the helpline which can be accessed from either inside or outside the factory. We also reinforce this non-retaliation principle directly with supplier management. These vehicles help create an engagement path, whether or not that engagement occurs at the facility.
We stress the importance of the workers’ voice and make it easy to reach us so we can act when there is an issue to be addressed. For instance, through one of our engagement vehicles, we recently discovered incidences of a supplier falsifying data on working hours completed. By contrasting information provided by a worker to the data collected in an audit report, we were able to investigate a serious non-compliance. As a result, we implemented a corrective action plan that included additional internal controls with enhanced management oversight and operational planning processes. Offering off-site feedback channels to workers allows us to gain more information on working conditions and engage workers to address their concerns.
What else is on the horizon?
We want to use our direct experience with a robust, responsible program to drive success and capability deeper in our supply chain. Currently, we’re piloting a model with two of our larger supplier partners to assess and increase the efficiency of their own supplier audit organizations. We’ll leverage process improvement best practices developed from this engagement to share with other suppliers. Our model includes training and consultation, as well as shadow audits and management system reviews. Examples listed below:
- Develop baseline of competencies/skills through surveys to target efforts and bridge gaps
- Reinforce skills for Social Environmental Responsibility (SER) focus areas (capability-building training in both 2018 and 2019; reaching auditors who perform multiple functions and have not yet received specific SER training)
- Provide auditor training and interview techniques for worker engagement and soft skills development to help less experienced auditors develop competences for raising more complicated topics, such as recruitment fees
- Establish appropriate risk assessment processes and ensure the cascade into other stages of the supply chain to enable targeting of high-risk areas
- Train-the-trainer for sub-tier suppliers and create a training structure and tracking mechanism
- Implement a governance system, including executive sponsorship, and robust tracking of key performance indicators
That’s a lot…anything else?
Quarterly business reviews (QBR) with suppliers are critical to our supplier management program. These reviews include scorecards, reward performance and drive continuous improvement. Key executives attend QBRs and help determine future business awards, supplier resources, and policy, as well as progress, towards aligned goals. Examples of sustainability performance in the scorecard include:
- RBA audit score – points for higher scores and timely completion of corrective action plans
- Conflict Minerals – score for timely and complete submission of the Conflict Minerals Reporting Template and driving out high-risk smelters
- Forced Labor – monitor and flag inappropriate recruiting behaviors, including charging workers for health fees, resulting in reduction of points, high-level escalations, and potentially negative business award decisions when risks of forced labor are discovered and not remediated
This is great work – how do you keep it going?
In addition to QBRs, we rely on peer support and recognition. In 2018, we awarded a supplier for “Commitment on Continuous Improvement in Working Hours in 2017” in front of a room of their supplier peers. The session shared lessons from our worker training and included a panel on “How to improve worker well-being.” New supplier orientations are hosted every quarter and include training on the full RBA code, our vulnerable worker policy, webinars, and best practice networking events. We’re committed to promptly investigating concerns raised through audits, media/NGO reports, or through discussions with our procurement and supplier quality teams; and acting to address as appropriate.
Workers have their specific reach within a site, making them an important partner for long term success. We’re working with our suppliers to communicate directly with workers in our supply chain. For instance, we help drive long-term and sustainable change by delivering training to workers through their mobile phones. All workers at these suppliers’ factories – whether direct, temporary, students, migrants, contract or any other type of line worker – are eligible and encouraged to participate in this training.
In 2018, over 50,000 workers completed training courses on our expectations and policies related to forced labor, health, and safety. In a follow-up survey, 93% of workers understood our policy to prohibit the charging and payment of recruitment fees, a notable increase from the prior result of 87%. We also saw an increase in the number of workers understanding all and any overtime must be voluntary, from 88% to 93% in 2018.
We’ve extended this tailored training practice to other opportunities. For instance, in 2018 we expanded our on-site service provider training into additional countries. This training focuses on worker interview techniques and clarifies management system requirements. As an example, we partnered with an NGO and peer set to bring management consulting on forced labor risks to key suppliers in Taiwan.
We shared research on labor and recruitment costs from the RBA’s Responsible Labor Initiative with suppliers. This allowed for cost quote analysis of labor brokers to identify risk of costs borne by the workers. Taiwanese labor laws and some cultural norms allow recruiting fees that are against Dell’s and RBA’s code of conduct. Dell’s continued vigilance reinforces to the suppliers’ management Dell’s expectations and the importance of their adherence to the RBA code. We expect the same of their suppliers and do not permit forced labor in any tier of our supply chain.
What’s the takeaway here?
Transparency and collaboration enhance our ability to deliver a responsible and effective supply chain, which we view as critical to our company’s success. We need everyone working together to protect our planet, to create a more diverse and inclusive world, and to put technology to work where it can do the most good. Our industry’s programs must continue to evolve and adapt as risks emerge and shift. We’ll continue talking to workers, suppliers, NGOs and peers to understand and address these risks. Why? Because at Dell Technologies, people are our priority.
I have thoughts!
If you have ideas or suggestions, you can contact us at [email protected].