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Engaging business partners in sustainability

Responsible procurement

The Fuji Xerox Australia approach to sustainable supply chain management is informed by the principles of the UN Global Compact, to which our parent is a signatory.

Our goal is to share our sustainability standards with our suppliers and work with them to improve environmental, social and governance outcomes.

Our overall spend can be broken into the following categories:

  • payments to permanent employees and government
  • inter-company purchase of equipment, parts and materials for service
  • purchase of paper and document supplies from international and local suppliers
  • international and inter-state equipment transport and delivery
  • service engineer motor vehicle fleet
  • facilities costs associated with the maintenance and operation of our business sites
  • other purchases, including office supplies, telecommunications, consulting, marketing, recruitment and training costs
  • staff travel.

While we rely on the Xerox and Fuji Xerox Groups to assure integrity of our product supply chain, we are responsible for developing, applying and monitoring sustainability standards with our paper suppliers (see 'providing a responsible solution').

Regarding other procurement activity Fuji Xerox Australia has embarked on a journey to be a better customer to its suppliers and as a result is developing and introducing the necessary people, processes and technologies. One key to improving supplier relationship management is the supplier database that will assist in performance and risk management of suppliers.

Another key initiative is to provide technology platforms to streamline the creation of purchase orders and to allow efficient tracking of and invoice matching. Ultimately, working smarter and more collaboratively with suppliers will assist in reducing waste and extracting costs from the whole supply chain.

Looking at sustainable supply chain management more specifically, our approach is to use a 'gateway' sustainability code for all suppliers and develop specific environmental, social and governance requirements for 'high risk' suppliers.

To help us monitor and report on supplier performance more clearly, we are consolidating supplier data into a new database. This incorporates a limited risk assessment framework for suppliers.

We plan to build on this in 10/11 by developing a more rigorous process for sustainability risk assessment and assessment of compliance with our code. The following chart depicts our procurement activity by these categories and indicates with an asterisk where we have begun to apply environmental standards.

Procurement performance

09/10 has been an interesting year in regards to managing suppliers and maintaining business priorities. Supplier vulnerability increased due to the global financial crisis, which highlighted the need for security of supply to be managed through the procurement function. We did not lose any suppliers due to the crisis and worked with suppliers who asked for improved payment terms so providing financial relief.

There were opportunities for Fuji Xerox Australia to go to market for a range of products and services and in many instances the incumbents were successful. In a small number of supply chain operations' tenders, sustainability commitment and credentials led us to move away from particular incumbents.

Another significant development in 09/10 has been the piloting of 'purchasing cards' that will allow a streamlining of payments and reduction in supplier administration a benefit to both parties. We also took on board feedback that our suppliers could be better engaged by us on the sustainability journey and launched our first Supplier Sustainability Bulletin. In 10/11 we plan to build on these initial efforts.

The year ahead will be one of consolidating the changes and growing the sustainable supplier relationship management capability across the organisation by educating both suppliers and employees and by embedding policy and processes. Many of the tools and platforms are now in place to help us improve sustainability outcomes with the supplier community.

Regional ethical procurement in the manufacturing supply chain

The Fuji Xerox Group and Xerox Corporation strive for best practice in ethical procurement through their manufacturing supply chain. The ethical procurement program is intended to evaluate our suppliers' performance on environmental and social criteria and help them improve through a partnership approach.

Our parent company has been carefully honing its policies and practices in ethical procurement of the last three years, guided by our commitments through the UN Global Compact and the industry-wide Electronic Industry Code of Conduct (EICC) standards.

In 07/08, Fuji Xerox launched management guidelines and distributed a checklist for our major manufacturing suppliers.

Fuji Xerox promotes ethical procurement with suppliers through an annual ethical procurement questionnaire. Based on the findings, meetings are held with suppliers to formulate improvement plans and support supplier improvement initiatives.

The questionnaire is a checklist composed of 263 items in three categories: 73 environment items, 148 human rights and labour items and 42 business ethics items.

These cover:

  • prevention of forced and child labour
  • prevention of unfair discrimination and privacy infringement
  • prevention of violence, sexual abuse, sexual harassment and excessive punishment
  • provision of appropriate wages and leave
  • guarantee of the right to collective bargaining*
  • safety from workplace injuries and maintenance of health
  • promotion of human resource development and third party certification.

Results of supplier participation and compliance from the first three years of the questionnaire are outlined in our parent's sustainability report.

* We acknowledge that freedom to associate in the interest of labour relations and collective bargaining is not possible in the Chinese political context.

Dealer sustainability

In addition to our direct sales force, Fuji Xerox Australia has 28 dealers and 23 master agencies across Australia. Together they deliver over 60 percent of office colour units and 46 percent of our total equipment sales revenue.

Our agents work closely with branch management in metropolitan Sydney, Melbourne, Adelaide, Perth and Canberra. Our dealers are more independent of the organisation, as they purchase equipment from us and resell it to their customers.

We see our dealers as a significant extension of our presence in non-metropolitan areas, especially regional Australia. It is important that we share Fuji Xerox standards with this group. The standards cover ethical and legal principles for how we conduct business, customer service standards as well as environmental responsibility.

The dealer sustainability program was developed in 08/09 and is designed to provide a framework for our dealers to continuously improve environmental performance, especially the responsible disposal of end-of-life equipment, parts and cartridges and to promote their achievements with their customers. We have provided support to our dealer network by sharing environmental management tools with them and making them aware of the resources available to them through Fuji Xerox, local councils and recycling providers.

In 09/10 the program rigour was increased, including new requirements to develop an environmental policy, demonstrate engagement of employees in sustainability initiatives and integrate sustainability updates into management meetings. We also increased the incentives for those who do participate.

Three new award categories were introduced in addition to 'Best Overall Dealership'. These were 'Best Sustainability Project', 'Most Improved' and an individual 'Sustainability Champion' award. Out of our 28 dealers, 24 participated in 09/10. While the level of interest in the program was high, only 12 dealerships completed all requirements. In last year's report we noted that four dealerships failed to submit and were removed from the program. We did allow these dealerships re-entry to the program this year, although all four failed again to submit reports.

Leadership in dealer sustainability

The Fuji Xerox Business Centre Tasmania was the Best Overall Dealership this year, with their Human Resources Manager, Bob Wylie, taking out the Sustainability Champion award. The team in Tasmania made a number of key improvements in 09/10 including:

  • recycling over 100 cubic metres of business waste that previously were sent to landfill
  • disposal of 115 devices at end-of-life through recycling partnerships set up locally
  • establishment of an incentivised cartridge recycling program across their three business centres and copy centre, which has been achieving return rates over 70 percent in all locations
  • development of an environmental policy and setting of environmental targets moving forward.

The Viatek Pty. Ltd. group of dealerships took out the Most Improved' award, with all dealerships in the group completing the program. They were particularly recognised for creating environmental policies that demonstrated a commitment to the program.

Fuji Xerox Business Centre Townsville was awarded 'Best Sustainability Project' for their involvement in the Cromarty Wetlands Project. The dealership worked with other local businesses to invest in purchasing the Cromarty Wetlands for preservation.

New developments in dealer sustainability program

Our analysis of the program results in 09/10 indicates that a small number of sustainability leaders is emerging from our dealership community. These organisations are exceeding the requirements of the program in some areas and we are keen to support and recognise their efforts.

It is also clear that many dealers struggle to complete some fundamentals of the program and require further direction and support from us. For those reasons we will review the program structure in 10/11 and introduce a tiered structure, making end-of-life product recycling mandatory in line with proposed federal e-waste regulation.

We will also increase levels of support to dealers, ensure they understand the most simple success factors and encourage them to share learnings.

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