idh electronics q1 2014 summary report final

SUMMARY REPORT

Q1/2014

2

Index of Contents:

Supplier uptake update

Comments on program progress (Q1 ’14)

Progress status overview on supplier uptake

Work-plan completion vs work-plan agreed timelines by supplier

Program trend analysis KPI’s

Worker satisfaction index

Worker management dialogue maturity index

3

Supplier Uptake Progress

Overview of Supplier On-boarding Status by Brands

Program Dell HP Philips Apple Nokia

TOTAL 48 + 7 11 7 15 + 7 12 3

Contract signed

(Move to

implementation)

48 + 7 11 7 15 + 7 12 3

Pending 0 0 0 0 0 0

EPA in

implementation 0 0 0 0 0 0

EPA in preparation

(newly onboard) 0 0 0 0 0 0

Number of Fast Track Program suppliers is in blue lettering

Geographic Location by Brands

Program Dell HP Philips Apple Nokia

TOTAL 48 + 7 11 7 15 + 7 12 3

Guangdong Area 37 + 4 11 6 8 + 4 9 3

Shanghai Area 10 + 3 0 1 6 + 3 3 0

Other 1 0 0 1 0 0

Number of Fast Track Program suppliers is in blue lettering

4

Total Factories on board (by Mar. 31) Geographic location, total factories (by Mar. 31)

Comment on Progress

Over the last three months, the program has continued to progress, with 47 suppliers implementing Work Plans and 8 suppliers conducting/preparing Entry Point Assessments. However, due to the Chinese New Year seasonal holidays at the end of January, some training activities had to be rescheduled after holiday, when the workers returned in February. There now are currently 55 suppliers in total in the program, including the new ‘Fast Track’ factories. IDH launched the ‘Fast Track’ program which will be conducted as a condensed program in 12 months (vs 18 months), and this has extended the availability window for factories to join the program into Q2’14. Among the current 55 suppliers, there are 7 suppliers enrolled in the ‘Fast Track’ program. Impact Review Meeting During Q1 IDH focused on following up from the ‘IMPACT’ event, held at the supplier meeting in Shenzhen in Dec ’13. The IDH team prepared and distributed a summary of the best practices and impact report, showing where we have currently been able to identify the emerging signs of impact at the factories as a result of the IDH program and curriculum. The impact analysis is focused on measuring performance improvement in areas related to improving worker satisfaction, worker / management dialogue maturity and overall productivity (related to the ROI model produced in 2013). The report also focuses on analysis & correlation of data collected from the factories, showing comparative benchmarking and identifying outliers amongst the IDH member factories. The initial impact report was shared with the IDH steering group and reflection group during Q1. Key Focus Points: 1) The program will close for new factories to join (including the Fast Track) during Q2’14. We are

now engaged in the final push for new entrants to the Fast Track program. 2) Several of the brands in the IDH program expressed an interest in developing the impact

assessment report and building on the data analysis to understand the potential for further improvements.

11

7

22

123

Total=55

Dell HP Philips Apple Nokia

41

131

Total=55

South Shanghai Area Other

5

Progress Status – Summary of the status of the active suppliers in the program and the WMD

service providers they are working with.

No. By Brand

Status EPA Implementation Starting Point

Work Plan KPI Collection

Involving WMD SPs

1 D1 On Track Completed Jan. 2013 On Track Submitted by

Mar. 2014 TUV, TIMELINE


Dec. 2013 TIME LINE

3 D3 On Track Completed Jan. 2013 On Track NOT

SUBMITTED CLSN, TIMELINE


Jan. 2014 TIMELINE


SUBMITTED LESN, TIMELINE

6 D6 On Track Completed Mar. 2013 On Track Submitted by

Dec. 2013 TIMELINE

7 D7 On Track Completed Oct. 2013 On Track NOT

SUBMITTED TIMELINE

8 D9 Move to new location

Re-doing EPA

May 2014 To be revised

- TBD


SUBMITTED Taos


SUBMITTED Taos

11 D12 On Track Completed Jan 2014 On Track NOT

SUBMITTED TUV

12 H1 On Track Completed Jan. 2013 On Track Submitted by

Mar. 2014 TUV

13 H2 On Track Completed Jan. 2013 On Track Submitted by

Mar. 2014 Timeline

14 H4 On Track Completed Sep. 2013 On tract Submitted by

Mar. 2014 Timeline

15 H5 On Track Completed Jun. 2012 On track NOT

SUBMITTED TUV

16 H8 On Track Completed Oct. 2013 On track Submitted by

Mar. 2014 TUV

17 H9 On Track Completed Jan. 2014 On track NOT

SUBMITTED

Taos

18 H10 On Track Completed Jan 2014 On track NOT

SUBMITTED

TBD

19 P3 Re-joined Completed Aug. 2013 On Track Submitted by

Mar. 2014 TAOS

6

20 P5 On Track Completed Jan. 2013 On Track Submitted by

Mar. 2014 Timeline

21 P6 On Track Completed Mar. 2013 On Track Submitted by

Feb. 2014 TUV

22 P7 On Track Completed Mar. 2013 On Track Not

Submitted TUV


Feb. 2014 LESN

24 P9 On Track Completed Sep. 2013 On Track Submitted by

Feb. 2014 TUV

25 P10 On Track Completed Oct. 2013 On Track Submitted by

Mar. 2014

TUV


Feb. 2014

SUSA

27 P12 On Track Completed Oct. 2013 On Track Not

submitted

TUV

28 P13 On Track Completed Oct-. 2013 On Track Submitted by

Mar. 2014

E&T

29 P14 On Track Completed Nov. 2013 On Track Not

Submitted BLC


Mar. 2014 BLC

31 P16 On Track Completed Oct. 2013 On Track Not

Submitted TAOS

32 P17 Withdrawn Completed Pending - - E&T


Mar. 2014 E&T

34 A1 On Track Completed Mar. 2013 On Track Submitted by

Mar. 2014 LESN


Mar. 2014 LESN


Mar. 2014 CLSN


Mar. 2014 LESN

38 A5 On Track Completed Aug. 2013 On Track Submitted by

Mar. 2014 TAOS

39 A6 On Track Completed Oct. 2013 On Track Submitted by

Mar. 2014 Timeline

40 A7 On Track

Completed Oct. 2013 On Track Not submitted

Timeline

41 A9 On track Completed Oct. 2013 On Track Submitted by

Mar. 2014 Taos

7

42 A10 On Track Completed Jan. 2014 On Track Submitted by

Mar. 2014

E&T

43 A11 On Track Completed Jan. 2014 On Track Submitted by

Feb. 2014

BLC

44 A12 On Track Completed Jan. 2014 On Track Not

submitted

Timeline


Mar. 2014

BLC

46 N1 On Track Completed Completed On Track Not

submitted TBD

47 N2 On Track Completed Completed On Track Submitted by

Mar. 2014 Taos

48 N3 On Track Completed Completed On Track Not

submitted Timeline

8

Program Status Overview: Work Plan Completion VS Work Plan Timeline

Summary showing the progress of each supplier on their WMD and Non-Dialogue WP (work plan) vs

the agreed project timeline from the EPA (Entry Point Assessment).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

WP Timeline

P3

P5

P6

P7

P8

P9

P1

0P

11

P1

2P

13

P1

4P

15

P1

6P

17

H1

H2

H3

H4

H5

H8

H9

H1

0D

1D

2D

3D

4D

5D

6D

7D

9D

10

D11

D12

A1

A2

A3

A4

A5

A6

A7

A9

A10

N1

HP

Del

lA

pp

leN

ok

ia

W-M Dialogue Non-Dialogue WP Timeline

9

Trend Analysis - KPI’s measuring worker and productivity data to indirectly link social

factors with business performance.

Worker Turnover (%) Program trend overall is relatively flat, however the average turnover peak in Q1’14 (CNY) reduced compared to Q1’13. Underlying (seasonally adjusted) turnover is decreasing slightly overall, if we adjust out the peaks in CNY.

05

101520253035

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Worker Turnover

Program Average Program Leader Linear (Program Average)

Rework Rate (%) Program trend is reducing overall. However, there is a spike in Q1’14, possibly related to increased worker turnover in Jan (CNY).

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Rework Rate (%)


10

Average Monthly Net Wages (RMB)

Program trend is increasing slowly which mostly reflects the adjustments of legal minimum wage. Q1’14 wages are lower due to the seasonal reduction in working hours, as in previous years, but on average wages flat vs 2H’13.

Average Weekly Working Hour (Hours)

Program working hours are showing a marginally increasing trend. Q1’14 reflects the seasonal reduction for the CNY holiday, but the adjusted Q1 working hours are flat compared to 2H’13.

1,300

1,800

2,300

2,800

3,300

3,800

4,300

4,800

5,300

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Average Monthly Net Wages


0

10

20

30

40

50

60

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Average Weekly Working Hours

Seasonal Adjusted Average Program Average

Program Leader Linear (Program Average)

11

Program average and leader KPI data points

KEY PERFORMANCE INDICATORS – Comparative Analysis

*Compared to last quarter data in bracket Program

Factory Name Average Leader

Worker-Management Dialogue

WMD Benchmarks (Non-rep comm systems) in EPA 6.08 9.20

WMD Benchmarks (Rep systems) in EPA 4.29 6.50

Worker Satisfaction

Worker Satisfaction Indicator from EPA 6.44 8.44

Working Condition

# of work-related injuries 0.59 0.00

# of days lost due to work-related injuries 16.72 0.00

Average weekly working hours in the calendar month 48.60 29.70

Average # of rest days 6.83 17.00

Total monthly working hours in the calendar month 307,535.60 N/A

% of workers working more than 60h in the week 17.45 0.00

Average monthly net wage (RMB) 2,579.54 3,784.00

Average monthly gross wage (RMB) 2,786.25 4,102.00

Ratio of OT Premium to Gross Wages 1,631.42 N/A

1st quartile of monthly net wage (RMB) 2,233.74 4,495.50

2nd quartile of monthly net wage (RMB) 2,626.93 3,938.00

1st quartile of monthly gross wage (RMB) 2,398.51 4,455.00

2nd quartile of monthly gross wage (RMB) 2,822.71 4,450.00

Environmental Condition

Kilowatts used per product unit 303.21 0.00

Business Impact

Unit Produced Per Hour (UPPH) 28533.36 506448.48

Rework Rate (%) 2.92 0.00

Turnover (%) 16.89 5.57

12

Worker Satisfaction Index Comparison by Supplier:

Measured at Entry Point Assessment & repeated at Exit Point Assessment (no suppliers completed exit

point as yet). Directly measuring program impact on worker satisfaction before & after.

Factory Name

Overall Scale (1-10)

Working Relationships

(0-100)

Wage Fairness and Transparency

(0-100)

Working Hours

(0-100)

Facilities (0-100)

Health and Safety

(0-100)

Career/Personal Development

(0-100)

Below Average

6.44 68.59 63.07 41.01 57.76 65.49 63.35 Above

Average

1 A1 6.34 64.53 63.67 59.93 56.09 56.22 57.55

2 A2 5.67 63.18 63.92 23.40 46.57 59.08 55.00

3 A3 6.33 68.08 67.81 37.09 58.94 60.23 64.09

4 A4 6.30 67.59 60.22 24.95 65.44 69.91 65.27

5 A5 6.87 66.22 67.52 64.75 61.85 67.76 63.16

6 A6 6.46 65.07 58.09 53.19 51.23 66.93 64.24

7 A7 6.72 68.65 63.94 46.79 55.53 70.14 73.02

8 A8 6.88 65.16 64.75 44.92 59.79 70.75 65.50

9 A9 6.70 62.74 60.70 54.30 46.64 67.19 58.02

10 A10 6.27 65.91 57.50 60.08 51.85 64.18 52.05

11 A11 5.31 63.01 52.56 15.47 31.41 64.07 59.73

12 A12 6.12 67.38 66.58 27.74 60.36 57.91 61.76

13 A13 6.03 68.92 59.97 18.41 59.75 61.81 66.24

14 D2 7.55 77.88 77.76 58.23 69.59 82.46 72.09

15 D3 5.71 62.87 54.49 31.70 51.42 57.82 55.00

16 D4 6.70 69.84 70.50 45.38 61.80 71.74 59.78

17 D5 5.40 64.40 54.23 29.25 49.32 45.56 52.46

18 D6 6.70 68.47 73.58 46.17 59.81 70.08 62.33

19 D7 5.68 64.67 54.55 36.55 44.07 50.78 59.04

20 D8 5.53 63.01 51.36 27.24 41.54 61.92 58.28

21 D10 5.95 66.70 59.74 33.33 45.87 63.46 59.31

22 D11 5.83 67.00 64.12 20.41 48.46 57.35 64.07

23 D12 5.71 65.76 56.34 18.29 56.02 60.68 56.66

24 H1 5.55 65.37 54.09 31.48 49.82 45.31 57.72

25 H2 6.22 66.65 60.48 28.14 60.33 74.90 57.80

26 H3 6.53 65.69 72.33 48.45 66.57 60.71 53.91

27 H4 6.21 62.70 57.77 59.64 56.87 59.87 52.70

28 H5 5.68 63.08 57.64 33.67 56.27 61.18 45.23

29 H6 6.70 66.59 70.02 41.89 62.65 73.20 64.38

30 H8 7.73 79.48 72.83 64.80 71.12 81.50 80.41

31 H9 5.44 62.73 64.17 13.78 43.65 58.04 53.11

32 H10 5.37 69.36 51.46 25.73 39.59 43.85 62.85

13

33 N1 6.83 67.39 59.71 60.31 65.09 65.19 62.99

34 N2 6.02 63.84 57.56 51.99 36.45 63.11 58.58

35 N3 7.36 75.86 70.79 50.43 71.64 82.54 76.43

36 P3 8.00 78.62 77.24 77.25 72.29 85.56 70.55

37 P4 8.27 83.73 83.05 67.11 80.70 90.84 77.97

38 P5 6.04 66.39 65.29 10.26 64.51 67.88 61.66

39 P6 6.20 67.32 65.92 28.97 61.34 64.49 58.33

40 P7 7.04 70.20 71.44 59.06 60.51 77.69 63.41

41 P8 5.26 65.26 48.72 17.89 46.52 41.99 63.03

42 P9 7.33 78.41 71.11 38.33 85.65 66.11 79.17

43 P10 6.06 69.91 40.65 30.08 50.97 62.97 66.55

44 P11 7.01 67.91 53.38 31.08 64.38 49.62 65.56

45 P12 6.74 70.67 67.11 37.74 62.04 79.21 67.74

46 P13 6.23 67.80 47.05 36.86 41.49 48.44 61.14

47 P14 6.23 65.60 61.50 39.47 45.74 63.68 64.33

48 P15 7.48 77.96 77.20 57.74 67.57 74.78 77.62

49 P16 8.44 85.78 83.47 68.13 92.41 90.41 86.74

50 P17 6.55 73.89 68.63 35.74 62.27 71.03 66.51

51 P18 7.38 73.00 62.22 67.87 74.07 77.78 69.63

Worker Management Dialogue Maturity Index Comparison by Supplier:

Measured at Entry Point Assessment & repeated at Exit Point Assessment (no suppliers completed exit

point as yet). Directly measuring program impact on WMD before & after.

Supplier/Factory Name

Non-rep comm

systems overall (1~10)

Rep systems

System & roles (0~20)

Representation & participation (0~20)

Resources (0~20)

Overall (1~10)

Above Average 6.08 16% 32% 16% 4.29

Below Average

1 A1 4.80 15% 50% 15% 5.25

2 A2 5.60 25% 30% 25% 6.00

3 A3 5.60 15% 45% 15% 4.75

4 A4 6.00 10% 15% 10% 3.00

5 A5 6.40 15% 15% 15% 4.25

6 A6 5.20 15% 35% 15% 4.00

7 A7 6.40 15% 35% 15% 4.50

8 A8 6.80 15% 40% 15% 4.75

9 A9 5.60 10% 20% 10% 2.75

10 A10 6.80 15% 35% 15% 4.00

14

11 A11 4.00 25% 55% 25% 5.75

12 A12 6.80 20% 50% 20% 6.50

13 A13 6.00 10% 25% 10% 3.75

14 D6 6.40 15% 60% 15% 5.25

15 D7 4.40 20% 45% 20% 6.25

16 D8 4.00 15% 30% 15% 3.50

17 D9 4.40 20% 20% 20% 3.25

18 D10 5.20 15% 30% 15% 4.50

19 D11 5.60 15% 40% 15% 4.50

20 D12 4.40 15% 40% 15% 4.75

21 H6 6.40 20% 45% 20% 6.00

22 H7 5.20 15% 40% 15% 4.75

23 H8 8.80 15% 30% 15% 3.75

24 H9 5.20 10% 20% 10% 2.50

25 H10 4.80 15% 15% 15% 2.75

26 N1 7.20 20% 50% 20% 5.75

27 N2 4.80 15% 40% 15% 4.25

28 N3 8.40 25% 40% 25% 5.50

29 P3 8.40 15% 20% 15% 3.25

30 P5 6.40 10% 20% 10% 2.75

31 P6 6.00 10% 15% 10% 3.25

32 P7 6.40 10% 20% 10% 3.00

33 P8 4.80 10% 20% 10% 3.00

34 P9 8.00 20% 50% 20% 5.50

35 P10 5.60 15% 30% 15% 4.25

36 P11 5.60 20% 15% 20% 3.50

37 P12 6.40 25% 35% 25% 6.00

38 P13 4.80 15% 50% 15% 5.00

39 P14 5.20 10% 25% 10% 3.75

40 P15 8.40 15% 20% 15% 3.75

41 P16 9.20 20% 30% 20% 4.75

42 P17 7.60 10% 20% 10% 2.75

43 P18 7.60 20% 15% 20% 3.50

idh electronics q1 2014 summary report final

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