Supplier Relations

In 2006, we began working with the Electronic Industry Citizenship Coalition (EICC), whose Code of Conduct sets industry standards on social, environmental and ethical issues in the electronics industry supply chain. In 2008, we became an official member of the EICC. We have adopted the EICC Code of Conduct as our Supplier Code of Conduct, and Xerox serves on the EICC Senior Executive Advisory Council.

We continually reinforce the importance of the Supplier Code of Conduct to our supplier base. We incorporate standards from the Supplier Code of Conduct in purchase agreements. We run a risk assessment and require suppliers to participate in the Xerox Compliance Program. Finally, we send an annual communication to our entire supplier base.

The Xerox Compliance Program upholds our Supplier Code of Conduct and our Supply Chain Transparency Statement. The following are components of the Compliance Program:

• All suppliers are subject to an initial risk assessment, which is based on objective criteria.
• Suppliers flagged in the risk assessment — in addition to suppliers deemed critical to our supply chain — are required to complete detailed questionnaires. In addition to highlighting areas of potential concern, these questionnaires clarify our expectations and reinforce the importance of these topics.
• Based on the assessments and questionnaires, we annually select suppliers for compliance review or audit.
• Trained Xerox personnel conduct audits on-site. Audits and compliance reviews both follow the EICC Audit format, which addresses labor practices, freedom of association, child labor and forced labor, human rights, environmental concerns and more.
• During the audit, we classify areas of nonconformance as “priority,” “major,” “minor” or “for review.” We provide each supplier with a written performance assessment.

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Revenue risk criteria include:

• The amount of revenue at risk
• The total dollar amount spent
• The length of time before the machine or parts in the field impact recovery time
• The total spend across Xerox product families

Business risk criteria include:

• Whether a supplier is a single source
• Length of time to resume normal business practice after an adverse event
• Percent of business revenue Xerox represents
• The stability of the industry
• Propensity for natural disasters or political turmoil
• Supplier’s performance in a financial assessment

In 2016, Xerox conducted 54 audits and 21 compliance reviews, which represented more than 75 percent of Xerox Direct/Technology Spend. Since the year 2010, we have audited more than 100 suppliers or 300 compliance reviews and audits, with 60 percent of suppliers showing improvement on labor, ethics, health & safety and environment control elements of their operations.

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• Xerox has an extensive Conflict Minerals Policy.
• We publish our Due Diligence activities in our yearly Conflict Minerals Report.
• Our internal processes incorporate the Organisation for Economic Co-operation and Development (OECD) framework for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
• We are an active member of EICC and the Conflict-Free Sourcing Initiative (CFSI).
• We use the CFSI reporting template to survey our supply base about conflict-free mineral usage.
• We support the Conflict Free Smelter Program (CFSP), which independently audits smelters and refiners to determine if they have a system in place to assure sourcing of conflict-free minerals.
• Our supplier contract template includes a specific reference to conflict-free minerals to ensure responsible sourcing in our supply chain.
• We filed Form SD with the SEC on May 15, 2017.

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• We have rigorous processes to identify and eliminate counterfeit supplies and components from our supply chain. Read our Anti-Counterfeiting Statement. Xerox genuine supplies also are microchip (CRUM) protected for use with Xerox products.
• Whenever possible, we source from a base of trusted and established suppliers (and their authorized distributors) who have been through our comprehensive vetting system.
• We also always seek warranties guaranteeing authenticity and quality; among other benefits, this practice mitigates obsolescence.
• If suppliers wish to substitute an item different than originally agreed upon, they must obtain approval from our Global Procurement and Engineering groups.
• We’ve built security controls into our supply chain to help ensure the uninterrupted flow of products from the point of manufacture to the customer.
• We are a certified participant of the U.S. Customs and Border Protection Customs-Trade Partnership Against Terrorism (C-TPAT) and the E.U. Authorized Economic Operator (AEO) program in the Netherlands and Ireland. As part of these memberships, we’ve adopted specific criteria for both our Supplier Security Requirements and internal security policies and standards.
• We have an ongoing assessment program to monitor compliance by high-risk suppliers as well as internal locations. We belong to the Transported Asset Protection Association (TAPA).

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In 2009, Xerox became the first organization to achieve global certification from the Chartered Institute of Procurement and Supply (CIPS) in the area of procurement excellence through processes and procedures, now known as CIPS Silver. In 2012, Xerox achieved CIPS Gold Certification at a global level, which recognizes our leadership in ethical, sustainable and strategic procurement and verifies our effectiveness in managing our global supplier base.

In 2015, Xerox achieved the highest certification awarded at a global level, CIPS Platinum Certification. The Platinum Certification signifies world-class levels in all aspects of ethical, sustainable and strategic procurement when measured against CIPS’ globally respected standards structured around leadership and organization, strategy, people, processes and systems, and performance measurement and management.

In 2017, CIPS completed a periodic re-assessment of Xerox’s strategic procurement program against the standards set forth in the Platinum Certification and concurred that Xerox continues to display world- class procurement practices required to maintain this advanced CIPS certification.

The certification process helped Xerox Global Procurement to identify and validate internal best practices, identify areas for improvement, and provided an unbiased measure of our organization’s performance against benchmark industry criteria.

In addition, it was a development opportunity for our people. Team members, as well as the other resources they engaged, were energized by the experience. This project put the spotlight on the excellent work done by our procurement team.

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During 2016, Xerox (Services and Technology) and our subsidiaries purchased goods and services from the following:

During 2016, Xerox (Technology) and our subsidiaries purchased goods and services from the following:

Several independent groups have recognized Xerox as having outstanding supplier diversity. Learn more about the awards we have received.

Supplier Diversity and Inclusion are important not only to our company, but also to our customers, suppliers, shareholders and the global society that we serve. We take part in several efforts with the goal of increasing diversity and inclusion in different business areas:

• We are an active member of the New York/New Jersey National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council. We participate in various national and regional conferences, matchmaker events and forums, which promote business with small and diverse businesses.
• The NMSDC’s Corporate Plus Member Accreditation recognizes and raises awareness for deserving minority-led companies. In 2014, we nominated and sponsored a key partner/supplier for this program.
• The Inclusion Initiative is committed to identifying and increasing opportunities for minority- and women-owned (MWBE) law firms. Since joining the Initiative in 2011, we have continuously exceeded and increased our annual goals for spend with MWBE firms.

More information is available at www.xerox.com/supplierdiversity.

Current and potential vendors can learn more about supplier diversity, supplier quality assurance and supplier ethics at www.xerox.com/suppliers.

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