Supplier Program Description

Compliance with our supplier program is mandatory under GE’s Integrity program and is a precondition to receiving an order from GE.

Supply Chain Due Diligence

GE generally obtains contractual commitments from goods suppliers to comply with GE’s supplier expectations, including audit and termination rights. GE conducts on-site inspections of many suppliers, mostly in the developing world, prior to placing orders and periodically thereafter. Third-party firms conduct some inspections.

In 2008–11, assessments were conducted in 67 countries. In addition to focusing on corrective action for issues identified during on-site assessments, GE follows an “eyes always open” process to investigate issues identified from other sources, such as press reports and ombudsperson complaints, and requires corrective action where appropriate. GE verifies the execution of the program with “spot checks,” conducted by teams from the corporate audit staff, other businesses and/or Corporate Environmental Programs, of a sample of suppliers that were previously assessed by the business teams.

GE Teams

GE’s supplier review program relies on active participation by many functions within the Company. Each business global sourcing leader has primary responsibility for execution of supplier reviews and enforcement of the program, including tracking and reporting metrics. GE’s EHS, Legal and Human Resource teams provide training, interpretation of local regulatory requirements, and assistance with developing and reviewing corrective action plans.

Since 2008, more than 3,500 personnel globally have taken GE’s awareness training and more than 570 have received detailed training on how to conduct audits. Awareness training for the sourcing community involves an online training course covering GE’s expectations for suppliers in the areas of environment, health and safety, and employment practices; human rights; our on-site due diligence requirements; and functional roles and responsibilities. Auditor training provides detailed instruction on GE’s on-site assessment questionnaire; how to inspect facilities, review documents and conduct interviews to identify substandard EHS conditions, human rights issues and noncompliance with minimum wage, minimum age and maximum hour requirements; and how to encourage suppliers to implement corrective actions. GE continues to improve the Company’s auditor training and audit closure tracking to emphasize obtaining sufficient, objective evidence of finding closure. In addition, the GE corporate EHS team reviews all findings open more than 180 days.

Over the years, we have found we need to ensure a more rigorous audit approach in some countries such as India and China, and Latin America, given the size of the Company’s supplier base and the types of issues identified. We initiated an even more detailed auditor-training program for these countries, including additional instruction on local law requirements and field training, followed by a supervised audit with an experienced GE auditor. This has resulted in less variation in identifying issues and defect closure/resolution than in the past. Given the success of this effort, we now require all auditors globally to take the more detailed audit training.