GE’s Supply Chain monitoring and evaluation program is multifaceted and risk-based. Virtually all suppliers must agree to comply with GE’s Supplier Expectations as part of our contracting process. We expect our suppliers to obey laws that require them to treat workers fairly, provide a safe and healthy work environment, protect environmental quality, and comply with prohibitions against forced, prison or indentured labor and against subjecting workers to any form of compulsion, coercion or human trafficking.
Suppliers are prioritized for detailed, on-site assessments depending upon the country in which they are located, their past performance and whether they are producing parts or components that will be incorporated into GE products. Almost all our on-site assessments are conducted in developing countries as part of our overall supplier-management strategy.
GE’s on-site supplier assessments cover environmental, health, safety, labor, human rights and security issues. For these assessments, we utilize a global questionnaire. The assessments take place prior to placing initial orders with new suppliers, and periodically thereafter, on a one- to three-year time frame, depending on our experience with the supplier.
Globally, GE personnel who interact with supplier facilities are expected to take GE’s awareness training, which covers GE’s supplier expectations, human rights issues and on-site due diligence requirements. Any sourcing personnel who visit supplier locations are required to take a hazard-recognition class, to have their “eyes always open” and to report any potentially problematic activity to our team of assessment professionals.
GE records all assessment findings from on-site inspections in an automated assessment tracking tool and monitors each one until the assessment finding is closed after a supplier provides evidence that the defect has been corrected. Typically, findings must be closed within 60 days.1 Purchase orders are suspended if findings remain open beyond this time frame, unless GE agrees that a closure requires more time, interim progress has been demonstrated and/or the delay has been approved by the compliance team. Labor-related findings, such as the presence of child labor or forced labor, ordinarily result in immediate cessation of business relationships.
In 2016, GE assessed ~2,660 new or existing suppliers. These assessments generated more than 20,870 findings. About 65% of our total assessments in 2016 were re-assessments. In the program, 37% of the assessments and 41% of the overall findings are from suppliers in China. View more on regional assessments here.
The on-site supplier assessments are conducted primarily by sourcing personnel or internal auditors specifically trained to find issues in our Company’s industries. More than 900 GE team members are executing the on-site audits. To a limited extent, third-party firms specifically trained in GE standards also conduct inspections. Since 2005, more than 1,875 GE team members have been trained in detailed audit skills. We supplement their efforts through cross-checks with regional databases such as that of the Institute of Public and Environmental Affairs’ (IPE) China pollution maps, plus periodic spot checks and anonymous desk-side reviews of GE audit records by inspectors from other business units or from our OneEHS team.
GE puts a great deal of emphasis on confirming closure of findings, which we track in a Gensuite® software system. Closure requirements for findings are linked either to compliance with local laws or, for some issues, to higher GE expectations. Typically, findings must be closed within 60 days. Purchase orders are required to be suspended if findings remain open after this time frame, unless GE agrees that a closure requires more time and/or interim progress has been demonstrated.
As of February 20, 2017, 95% of the 2016 findings from approved suppliers were closed. GE will track remaining findings to closure. While the Company’s experience has been that most suppliers seek to meet GE’s expectations, we do terminate a small number of suppliers for poor performance within our Ethical Supply Chain program.
Since 2005, more than 26,500 supplier assessments spanning 100 countries have addressed more than 209,770 findings, helping to ensure that GE and its suppliers are safer, cleaner and more compliant.
1 For example, as of February 20, 2017, 95% of the 2016 findings from approved suppliers were closed.