Page 1

SUMMARY REPORT Q3/2013


Supplier Uptake Progress On-Boarding Progress in 2013 (by Sept. 30) 10

2

5

2012 Q4

4 5

5

4

0

2

2012 Q3

2

2012 Q1-2

0

4 1 1

2 1 1

9

2

2013Q3

3

1 2

2

2013Q2 2013Q1

Nokia

4

Apple

1

1

HP

6

Dell

8

Philips

On-Boarding Progress in 2012

Overview of Supplier On-boarding Status by Brands Program

Dell

HP

Philips Apple

Nokia

TOTAL

49

11

10

14

11

3

Contract signed (Move to implementation)

37

9

6

13

8

1

Pending

3

0

3

0

0

0

EPA in implementation

7

0

1

1

3

2

EPA in preparation (newly onboard)

3

2

1

0

0

0

2


Geographic Location by Brands Program Dell

HP

Philips Apple

Nokia

TOTAL

49

11

10

14

11

3

Guangdong Area

39

10

9

8

9

3

Shanghai Area

9

1

1

5

2

0

Other

1

0

0

1

0

0

Total Factories on board (by Sept. 30)

Geographic location, total factories (by Sept.30)

Total=49

Total=49

11

3

10

11

1

10 14 Dell

HP

38 South

Philips

Apple

Shanghai Area

Other

Nokia

3


Program KPI’s Trend Analysis Data Tracked Back To January 2012 June 2012 January 2013 March 2013 June 2013 September 2013

Worker Turnover (%)

Number of Suppliers 11 1 1 4 16 10

Program trend is flat, but the underlying worker turnover, excluding seasonal peaks at CNY and summer workers, is declining.

35% 30% 25% 20% 15% 10% 5% 0% Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec, Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 Program Average

Rework Rate (%)

Program Leader

Linear (Program Average)

Program trend is reducing, with some peaks related to specific factories, possibly related to production shifts and worker turnover.

3% 3% 2% 2% 1% 1% 0% Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec, Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 Program Average

Program Leader

Linear (Program Average)

4


Average Monthly Net Wages (RMB)

Program trend is increasing as minimum wages increases are applied. The seasonal low at CNY is due to lower hours and workers leaving.

4,300 3,800 3,300 2,800 2,300 1,800 1,300 Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec, Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 Program Average

Average Weekly Working Hour (Hours)

Program Leader

Linear (Program Average)

Program working hours are showing a marginally increasing trend, with seasonal lows at CNY. Average working hours are up approximately 5% YoY. This needs to be reviewed further.

60 50 40 30 20 10 0 Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, Oct, Nov, Dec, Jan, Feb, Mar, Apr, May, Jun, Jul, Aug, Sep, 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 Program Average

Program Leader

Linear (Program Average)

5


Comment on Progress Over the last three months, the program has continued to make progress with 37 suppliers implementing Work Plans and 10 suppliers conducting/preparing EPA. There are currently 49 suppliers in total in the program. On Boarding Phase Two Supplier Kickoff Events were held this year, one in Shenzhen (March) and one in Shanghai (May). A total of 26 suppliers joined the Program in Q2 and Q3 after the Kick-off event, including 9 from the Shanghai area and 15 from South China. Among them, 10 suppliers are in the process of conducting EPA. Work Plan Implementation Phase After the EPA, suppliers move into execution of their Work Plan, which is customized for each factory. Worker-Management Dialogue training is the first activity to roll out at this stage. In the first quarter of 2013, Work Plans for suppliers from the first uptake were reviewed and revised to incorporate the Dialogue structure and link the implementation modules to the improvement areas. Dialogue Core Curriculum resumed in Q3 after the revision of the training content by the Coaching Organization. The enhancement of the Continuous Improvement Team (CIT) establishment and short-term action plan development, will be facilitated by service providers. By Oct. 31, the suppliers received a total of 31 CC1, 18 CC2 and 6 CC3. We cannot understate the impact of the brand’s support and encouragement, which also helps to engage suppliers in worker-management dialogue, especially at the early stages. Additional non-dialogue modules have been lined up for implementation during Q3. The 2nd round of Frontline-supervisor ToT rolled out in July, and it has been scheduled in November for the suppliers in Shanghai area. This module is being well received by the factories and generally well supported. The Canteen Improvement Project and EHS Intensive Training were rolled out to suppliers in July. As was previously noted in the supervisor ToT sessions, suppliers who had been pro-active in training preparation and participation have shown better progress, getting more impact. This should also be noted and pro-actively supported by the brands. To reduce the ‘per supplier’ participation cost, group training was organized again in Q3. However, due to the number of suppliers requesting the same topic, it was limited in the current pool of suppliers, and progress was slowed down. This situation will be improved as more suppliers come onboard and we increase capacity. Key Learning Points: 1) To reach the target of 75 suppliers by December 2013, the Fast Track has been proposed and confirmed by SC. This will be launched in Q4 and start at the beginning of 2014. 2) Factory management commitment and active participation from workers is key to a dynamic dialogue and overall impact. The project team is encouraged to explore different ways to

6


ensure better commitment from factory management, as well as ways to build up the workers’ confidence, capacity and capability to participate in dialogue with management. 3) Group training, with advantages in reduced costs, and bringing in more participants for wider discussion and interaction, will be continued to be offered in the future. With more suppliers onboard this process is expected to run quicker. Meanwhile, more individual modules will be offered to suppliers to suit their Work Plan implementation schedule at a different pace.

7


APPENDIX Progress Status No.

1 2 3

4 5 6 7 8 9 10 11 12 13

14 15 16 17 18 19

By Brand

Status

EPA

Implementation Starting Point

Work Plan

On Track

Completed

Jan-13

On Track

NOT SUBMITTED

TUV, TIMELINE

On Track

Completed

Jan-13

On Track

April and May sent

TIME LINE

On Track

Completed

Jan-13

On Track

NOT SUBMITTED

CLSN, TIMELINE

On Track

Completed

Jan-13

On Track

Submitted by July 2013

TIMELINE

On Track

Completed

Jan-13

On Track

Submitted by July 2013

LESN, TIMELINE

On Track

Completed

Mar-13

On Track

Submitted by Sep 2013

TIMELINE

New starter

Completed

Oct-13

On Track

-

TIMELINE

Completed

-

-

-

TBD

D8

On boarding

In progress

-

-

-

TBD

D9

On boarding

Scheduling

-

-

-

TBD

D10

On boarding

Scheduling

-

-

-

TBD

D11

On boarding On Track

Completed

Jan-13

On Track

Submitted by July 2013

TUV

On Track

Completed

Jan-13

On Track

Submitted by July 2013

Timeline

Suspended

Completed

-

-

-

TUV

Resumed

Completed

Sep-13

On tract

-

CLSN

On Track

Completed

Jun-12

On track

-

TUV

Suspended

Completed

-

-

-

ERI

Pending

Completed

-

-

-

ERI

New starter

Completed

Oct-13

-

-

TUV

D1 D2 D3

D4 D5 D6

KPI Collection

Involving WMD SPs

D7

H1 H2

H3 H4 H5 H6 H7 H8

8


20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

38 39 40 41

H9

On boarding

H10

On boarding

In progress

-

-

-

TBD TBD

Re-joined

Completed

Aug-13

On Track

-

TAOS

On Track

Completed

Jan-13

On Track

Submitted by August 2013

Timeline

On Track

Completed

Mar-13

On Track

Submitted by August 2013

TUV

On Track

Completed

Mar-13

On Track

Submitted by July 2013

TUV

On Track

Completed

Mar-13

On Track

Submitted by July 2013

LESN

New starter

Completed

Nov-13

-

-

TBD

New starter

Completed

Oct-13

On Track

-

Timeline

New starter

Completed

Oct-13

On Track

-

TAOS

New starter

Completed

Sep-13

On Track

-

TUV

New starter

Completed

Oct-13

On Track

Scheduled in Nov

TUV

New starter

Completed

Oct-12

On Track

Scheduled in Nov

SUSA

New starter

Completed

Oct-13

On Track

Scheduled in Nov

TUV

New starter

Completed

Oct-13

On Track

Scheduled in Nov

SUSA

New starter

Completed

Pending

-

-

TBD

On Track

Completed

Mar-13

On Track

Submitted by August 2013

LESN

On Track

Completed

Mar-13

On Track

Submitted by August 2013

LESN

On Track

Completed

Mar-13

On Track

Submitted by August 2013

CLSN

On Track

Completed

Mar-13

On Track

LESN

New starter

Completed

Aug-13

On Track

Submitted by September 2013 Submitted by August 2013

New starter

Completed

Oct-13

On Track

-

Timeline

P3 P5 P6 P7 P8 P14 P15 P16 P9 P10 P11 P12 P13 P17 A1 A2

A3 A4 A5

TAOS

A6

9


42 43 44 45 46 47 48 49

New starter

Completed

Oct-13

On Track

-

Timeline

New starter

Completed

-

-

To finalize the contract

TBD

New starter

Completed

Oct-13

On Track

-

Taos

Completed

A10

On boarding

-

-

-

TBD

A11

On boarding

Completed

-

-

-

TBD

Completed

Completed

Approve

-

TBD

N1

Phase I completed

Completed

Completed

Approve

-

TBD

N2

Phase I in progress

Completed

Completed

Approve

-

TBD

N3

Phase I in progress

A7 A8 A9

10


H5 A4 P6 P7 P8

Philips

P5

D6

D5

D4

Dell

D3

D2

D1

A7

A6

A5

Apple

A3

A2

A1

H8

H4

HP

H2

H1

Program Status Overview: Work Plan Completion VS Work Plan Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline WP Completion WP Timeline 0%

10%

W-M Dialogue

20% Non-Dialogue

30% Check & Act

40%

50%

60%

WP Timeline

11


KEY PERFORMANCE INDICATORS – Comparative Analysis *Compared to last quarter data in bracket In 3rd Quarter (July 2013 to Sept. 2013)

Program Average

Leader

-

-

-

-

# of work-related injuries

1.38

0.00

# of days lost due to work-related injuries

4.77

0.00

Average weekly working hours in the calendar month

51.15

41.02

Average # of rest days

4.95

7.15

649866

N/A

% of workers working more than 60h in the week

20%

0%

Average monthly net wage (RMB)

2789

3254

Average monthly gross wage (RMB)

2998

3586

Ratio of OT Premium to Gross Wages

41%

N/A

1st quartile of monthly net wage (RMB)

1978

2747

2nd quartile of monthly net wage (RMB)

2561

3141

1st quartile of monthly gross wage (RMB)

2144

2984

2nd quartile of monthly gross wage (RMB)

2764

3450

2.12

1.68

11.95

0.03

Rework Rate (%)

2%

0%

Turnover (%)

19%

11%

Worker-Management Dialogue Worker-Management Dialogue Benchmarks in EPA Worker Satisfaction Worker Satisfaction Indicator from EPA Working Condition

Total monthly working hours in the calendar month

Environmental Condition Kilowatts used per product unit Business Impact Unit Produced Per Hour (UPPH)

12


13

IDH: ELECTRONICS - Summary Report Q3 2013  

Guangdong area Shanghai area KPI's trend analysis Worker Turnover Rework Rate