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Sustainable sourcing

Sustainable sourcing

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.

Risk-based approach

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

  • enclosures

  • 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.

Focus on training

Our online S-CoC training is expected to help our suppliers not only improve their own performance but also to better communicate the message to their own suppliers. The training spells out our standards in:

  • Employee conditions (including forced and child labor)

  • Health and safety

  • Supply chain compliance

  • Environmental management

  • Elimination of discrimination

  • Anti-corruption.

Thousands of our suppliers’ employees worldwide have taken the training already, and we expect thousands more to do so over the coming years. The training is available online and is open for anyone to use.

Highlights

  • 1998 – Code of Conduct and environmental requirements are among supplier evaluation criteria.

  • 2002 – Ericsson Code of Conduct established.

  • 2004 – The first auditors trained and first benchmark audits conducted for high risk areas.

  • 2005 – Initiated risk-based supplier improvement projects and scorecard system to rank compliance.

  • 2006 – Risk-based projects exceeded targets, delivering marked improvements in compliance among selected suppliers.

  • 2007 – Risk assessment model for local sourcing units piloted in China, India and Brazil. Prioritized commodities added to the Supplier Code of Conduct (S-CoC) Program.

  • 2008 – Internal, web-based S-CoC observer training launched. Roll-out of risk assessment model. Global roll out of S-CoC Program initiated. Most tower manufacturers worldwide audited and/or assessed.

  • 2009 – Global roll-out of Supplier Code of Conduct Program completed. On-line extensive Code of Conduct training for suppliers launched in five languages – English, Chinese, Russian, Spanish and Portuguese

  • 2010 - Performed 550 S-CoC audits and 218 on-site assessments. Updated risk matrix to identify higher-risk suppliers. Held eight training sessions worldwide for Ericsson auditors, and number of certified S-CoC auditors globally increased from 130 to 150 since 2009. On-line training for suppliers available in 13 languages.

2010 Audits and Assessments SCR Graph12

Supplier environmental requirements

  • English

  • Chinese

  • French

  • Portugese

  • Spanish

  • Swedish

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