Supplier sustainability risk assessment
To enhance the effectiveness of our Supplier Sustainability Program, NXP performs sustainability risk assessments of its suppliers. A risk assessments is always made for Suppliers with an annual spend of over $ 200,000. Suppliers with an annual spend below $ 200,000 may be included in the risk assessment.
For a risk assessment tools like the EICC Risk Assessment Tool are used. Given the risk levels, Suppliers can be required to fill out a Supplier Self-Assessment Questionnaire and/or Suppliers can be incorporated in the audit program, with the audits to be executed either by NXP or an external EICC-certified auditing body.
Risk profile
The Supplier‘s risk profile is determined by criteria relating to
- NXP spend with supplier,
- Country of production (site specific),
- Risk criteria specific to the NXP organization,
- Material-specific risk criteria, or
- Risk criteria specific to the (manufacturing) process
These criteria, which determine the Supplier‘s risk profile, are based on Supplier-specific data such as
- business parameters, e.g. the number of people the Supplier employs, the Supplier‘s annual sales revenue, their products and services, the countries in which the Supplier operates and/or manufactures, the availability of public reports relating to the Supplier‘s business conduct, etc.
- external sources,
- NXP sources (Lead Buyers‘ assessments),
- outcome of the EICC Supplier Self-Assessment Questionnaire,
- EICC audit report (where available)
The criteria determining the Supplier‘s risk profile are regularly reviewed.
Audit threshold
For auditing purposes, NXP has determined a threshold based on an annual spend of $ 200,000 in a number of specific risk countries. Any Supplier in these countries with a NXP spend higher than the amount indicated will automatically be incorporated in the audit program. Audit prioritization will be based on the Supplier‘s individual risk profile. Those Suppliers with a high-risk profile outside of this threshold or Suppliers who express a desire to be audited in order to have external confirmation of their sustainability status may be incorporated in the audit program.
Risk countries
A number of countries are identified as risk countries. This list is regularly reviewed and currently includes the following countries. Brazil ,China, Hong Kong, India, Indonesia, Mexico, Pakistan, the Philippines, Thailand, Taiwan and Vietnam.
Prospective Suppliers
With respect to prospective Suppliers, new sites or new management, NXP may perform supplier sustainability risk assessments for projected spends of over $ 100,000 as part of the supplier selection process. This assessment may include an audit of the Supplier sustainability performance depending on the Supplier risk profile.