Optimizing the global supply chain to positively impact industries and communities
Flex continuously monitors and drives compliance of our social and environmental requirements throughout our supply chain. We require our suppliers to have a management system in place to ensure continuity and effectiveness of social and environmental activities and mitigate potential risks. Our aim is to leverage the magnitude of our supply chain to make a positive impact in our industry.
We established a social and environmental risk indicator for
preferred suppliers and have been performing risk assessments for each supplier since 2016
The percent of suppliers identified as high risk has dropped to
less than 3.17%
Over the last two years, 34 supplier auditors from manufacturing sites have been trained and certified, resulting in a 13% increase in qualified auditors
In 2016, we completed assessments of 440 suppliers, an 11.7% increase over 2015
Social and environmental requirements
Flex social and environmental training aligns with Responsible Business Alliance requirements and addresses labor practice issues including freely chosen employment, humane treatment, working hours, forced labor, wages and benefits, human rights issues, such as child labor, conflict minerals, ethical conduct, freedom of association, health and safety, environmental and other issues.
Local procurement practices
Flex has a direct and indirect economic impact in the countries where we do business. One measure of our impact is the proportion of spending on local suppliers. In 2016, twenty-four percent of our total spent on direct materials went to local suppliers at our top 10 locations. The spending percentage on local suppliers varies due to the nature of the projects and related OEM customers.
We’re a founding member and active participant in the Responsible Minerals Initiative(RMI) formerly the Conflict Free Sourcing Initiative (CFSI). . The RMI promotes the goal of understanding and mitigating social and environmental impacts of extraction and processing of raw materials in supply chains. As an active member of the RMI, we leverage direct and indirect partnerships and uses international standards, e.g. Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, United Nations (UN) Guiding Principles on Business and Human Rights as our guides.
We’re committed to responsibly sourcing minerals and follow the RMI’s Conflict Minerals data reporting format. We’re an active participant in the RMI and have adopted the tools published by the organization, including the Conflict Minerals Reporting Template and the Responsible Minerals Assurance Process (RMAP), formerly the Conflict Free Smelter Program.
Flex collects Conflict Minerals Reporting Templates from both customer-controlled and Flex-controlled suppliers. The collection of customer supplier data is solely for complying with due diligence and reporting obligations. We also collect and provide aggregated declarations, specific to the customer’s supply base. Flex has been involved in collecting Conflict Mineral data from our supply chain since August 2011.
On May 22nd 2017 Flex filed its fourth SD Form and Conflict Mineral Report with the U.S. Securities and Exchange Commission (SEC).
Supply chain innovation
Working hours improvement program
Since 2013, Flex has requested suppliers’ reports on their monthly working hours. Over 41,253 individual working hour records were continually tracked in the past year. Suppliers who fail to meet RBA requirements or improve conditions are flagged as high risk, and upon review, actions such as termination of the business relationship may be implemented.
On-site social and environmental responsibility training for suppliers program
On-site social and environmental supplier training is one way in which we communicate our requirements. In 2016, we provided on-site supplier training at our Flex Suzhou campus, where we explained Flex social and environmental expectations for suppliers, as well as the Flex Supply Chain social and environmental management program and updated Responsible Business Alliance requirements.
Labor agent assessment program
To ensure ethical compliance across the supply chain, we assess material suppliers and labor agent suppliers. We’ve performed social and environmental on-site audits for our major labor agent suppliers in China since 2015. Based on the audit results, the agents are either approved or rejected. Flex only does business with approved labor agents. We plan to expand our assessment program to Malaysia in the future.
Real-time insight across the global supply chain
Flex Pulse is a software-based mobile collaboration tool that provides unprecedented levels of inventory visibility and real-time global intelligence for managing supply chains. This system aggregates data intelligence from multiple sources around the world, including streaming and social media, and supply chain management applications, improving supply chain efficiencies through increased visibility and velocity.