Lenovo 2012 Annual Report Download - page 85

2011/12 Annual Report Lenovo Group Limited 83
Global Supply Chain
Lenovo is focused on driving sustainable activities through
its internal operations as well as the operations of its global
suppliers. The Company has driven numerous process
improvements initiatives that have had an immediate,
positive impact on the environment. Examples include local
manufacturing strategies to shorten ship requirements and
the award winning use of thermoplastics and other recycled
packaging materials. All of these initiatives help reduce the
environmental impact from Lenovo products. Suppliers
are required to implement and maintain documented
quality and environmental management systems that meet
ISO9001/14001 requirements.
As a member of the Electronics Industries Citizenship
Coalition (EICC), Lenovo is helping to lead a global,
standards-based approach to monitoring suppliers across
a broad range of sustainability and social responsibility
issues. Lenovo’s policies and processes are consistent with
the requirements of the EICC for ensuring that working
conditions in the electronics industry supply chain are safe,
that workers are treated with respect and dignity and that
manufacturing processes are environmentally responsible.
By working together, Lenovo and other member companies
are creating a comprehensive strategy for a standards-
based approach for monitoring suppliers’ performance
across several areas of social responsibility.
As an EICC member, Lenovo requires most of its supplier
activity to adhere to the program including agreement to
conduct compliance audits using third-party EICC auditors.
The company’s direct suppliers are required to fully comply
with EICC standards in the areas of labor, environment,
ethics, health & safety and management systems. During
this past fiscal year, Lenovo has continued to work with
its direct suppliers to expand EICC compliance to tier two
suppliers. In FY 2010/11, four manufacturing facilities in
China conducted the second round third party independent
EICC compliance audit. The audit results were strong,
validating Lenovo’s high standards for its own supply chain
operations.
In FY 2011/12, Lenovo supply chain operations continued
to show improvement in supplier engagement and
commitment to the EICC code. 100% of the identified
suppliers are committed to the EICC and have signed
formal agreements. Greater than 98% of Lenovo’s
top production spend suppliers have completed self
assessments to understand where improvements are
needed and/or conducted EICC audits to validate
compliance and we start to use EICC-ON system for all
tier one suppliers’ self assessment management in 2012.
More than 91% of the suppliers conducted the EICC audit
and no zero-tolerance findings. In addition to conducting
supplier education and training on EICC code/compliance,
Lenovo partnered with the EICC on supplier training events
relating to topics such as supply chain capability building,
material extraction, working hrs., EICC eLearning modules,
carbon reporting, water pollution and energy efficiency.
Lenovo also continues to optimize its global logistics
program to drive additional product volumes to shipping
methods that are more environmentally friendly, such as
ocean vessels and rail. In FY 2009/10, Lenovo shifted
11 percent of its notebook shipments from high carbon
air transport to lower carbon ocean shipping. Lenovo
continues its work with logistics partners to ship products
responsibly, maintaining its membership with the EPA’s
SmartWay Transport program. Finally, Lenovo completed a
risk assessment of its China-based carriers for EICC non-
compliance. Risks were judged to be minimal.
Social Investments
Lenovo’s Next Generation Hope Fund is helping redefine
how Lenovo and its employees support the global
communities where we live and do business. Lenovo
enables doers to do more through social investment
programs targeting education, entrepreneurship, disaster
relief and regional community outreach. Lenovo provides
assistance through cash contributions, equipment
donations, and employee volunteer hours. As a company,
Lenovo annually commits up to 1% of pre-tax income to
global social investment programs. To ensure success, the
company evaluates the effectiveness of each investment
against predefined goals upon program completion.
Lenovo aims to advance, enhance and extend education
at all levels. The company supports education related
programs and initiatives through the company’s industry