Texas Instruments

2012 Corporate Citizenship Report


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2012 performance

Sustainability | Minority/women-owned business enterprises | Results | Looking ahead

The last few years have brought unexpected challenges to TI, and 2012 was no different. We continued to operate in a weak economic environment, and while we experienced no major natural disasters, we successfully managed other events that affected portions of our supply chain. Thanks to our robust management and response systems, and suppliers located throughout the world, we successfully delivered products and materials without significant interruption.

Complying with new laws and standards required us to make significant monetary investments in 2012: hiring additional employees, making process changes, and paying membership dues and subscriber fees. In addition to regulations, we are working to better understand and address additional customer expectations, which could further affect current internal manufacturing processes and controls.

The commitment and efficiencies of our supply chain helped us achieve these successes. After reviewing CETRAQ scorecards and identifying our highest-performing suppliers, we recognized 12 vendors with TI Supplier Excellence Awards. We applaud and thank them for sharing and upholding our high standards.

As a supplier ourselves, we were honored to receive the Siemens Innovation Award at the 2012 Siemens Supplier Forum in Feldafing, Germany.

Our Worldwide Procurement team addressed issues and established additional supply-chain management programs during the year such as:

  • Integrating former National Semiconductor sites into our supply chain and completing our migration to SAP enterprise software.
  • Improving synergies between the sites and commodity procurement teams.
  • Hosting TI Supplier Days in China, the U.S., Malaysia and the Philippines to reinforce company standards and explain to current and prospective vendors how to do business with us.

Sustainability

In 2012, TI:

  • Updated its supplier environmental and social responsibility policy and expanded its assessments to not only include the company's expectations for humane treatment, human rights and ethics, but also more stringent environmental and social responsibility controls and performance.
  • Became a member of the Electronics Industry Citizenship Coalition (EICC) and began implementing its requirements. This included updating our business practices statement to align with EICC requirements.
  • Expanded supply-chain assessments to include suppliers' programs and performance related to human rights, the humane treatment of labor, and ethical business practices.
  • Hired additional employees to manage, among other activities, the examination of suppliers' social responsibility performance.
  • Continued responding to customer inquiries about the sustainability performance of not only first-tier suppliers, but also their subcontractors.
  • Holistically evaluated supply-chain risks - political, operational and sustainability issues, as well as natural disasters - to help the company better understand and improve how we manage such risks from a business-continuity perspective.
  • Aligned former National Semiconductor's supply chain (management and reporting) systems with TI's after the late 2011 acquisition. This reduced duplication and improved efficiencies.
  • Hosted workshops for suppliers that included presentations on the company's ethics and values, as well as our responsibilities as a new member of the EICC.
  • Trained procurement specialists to monitor and report compliance with laws and regulations for both TI and its suppliers.

Minority-/women-owned business enterprises

Our key diversity supplier achievements for the year included:
  • Celebrating seven minority-/women-owned business enterprises (MWBEs) that graduated from our inaugural 12-month Supplier Development Initiative. The initiative pairs business owners with company procurement and business-unit mentors.
  • Honoring employees as 2012 Supplier Diversity Champions based on their support of and commitment to our minority/women business development initiative globally.
  • Being recognized by the Dallas/Fort Worth Minority Supplier Development Council for our employees' efforts to support minority-owned business enterprises.

Results

  • We conducted four on-site inspections of vendors in China and Thailand. While no major findings were identified, we discovered minor findings that were subsequently resolved.
  • Of our total U.S. procurement dollars, we spent $207.9 million with certified minority- and women-owned suppliers. We also enabled our prime suppliers to spend $17.4 million in direct sub-tier purchases from firms operated by minorities and women. Combined, this exceeded our 5 percent goal. (Currently, TI does not track global spending with MWBE suppliers. To learn more about our progress in the economic inclusion of MWBEs, read our Economic Inclusion annual reports).

Looking ahead

Throughout its 80+ year journey as a high-tech company, TI has enjoyed a great reputation as being ethical and socially and environmentally responsible. In 2013, we will adopt and use the Electronic Industry Citizenship Coalition (EICC) code of conduct as a tool to align and adopt best practices and processes within our industry. We will encourage our first-tier suppliers to do the same. For more information, see our public announcement and letter of support.

Other activities we plan to complete include:

Sustainability

  • Updating our business practice statement to align with EICC protocols.
  • Evaluating how to best integrate social responsibility and environmental considerations into supplier bids and proposals.
  • Initiating evaluations of our suppliers using the EICC's self-assessment questionnaire and validated audit process tools.
  • Deploying print-management software that requires employees to specify which document to print; this reduces the amount of documents printed in error. We will roll out the software globally as current print-management agreements expire over the next two to five years. We anticipate this will reduce paper waste by more than 20 percent over the next five years.

Compliance

  • Training employees and suppliers on changes related to the adoption of the EICC code of conduct.
  • Training our procurement employees on how to manage our suppliers to the requirements of the California Transparency in Supply Chains Act.
  • Tracking the use of tin, tantalum, tungsten and gold in our supply chain in preparation for compliance with the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act conflict minerals provision.

Minority- and women-owned business enterprises

  • Spending at least 5.5 percent of U.S. procurement dollars with minority- and women-owned suppliers.
  • Inviting seven new minority- and women-owned business enterprises to participate in TI's Supplier Development Initiative.