Every Link Matters
Teams maintain a trusted, sustainable supply chain
The integrity of one small component can play a huge role in managing our supply chain responsibly. Just ask Ted Shpak, who leads our global efforts to keep counterfeit parts out of Raytheon products.
"It comes down to quality and reliability," says Shpak, director of Supplier Quality Management. "Our customers depend on us to deliver system solutions, hardware or products that work the first time, every time."
Detecting and eliminating counterfeits is only one part of our broad efforts to maintain an efficient, trusted and sustainable supply chain. Our teams work just as hard to comply with industry and government regulations, find alternatives to materials of concern, source raw materials responsibly and prevent human trafficking. We collaborate with thousands of suppliers worldwide to implement environmentally sustainable practices, conduct business with integrity and promote greater diversity in the ranks of our supply chain partners.
As counterfeiting methods evolve, Shpak and his team stay a step ahead by creating more sophisticated methods and testing to prevent counterfeit parts from entering the supply chain. As recently as 2010, Raytheon experienced five to 10 cases of counterfeit parts a year. From 2013 through 2015, we had none — thanks to a concerted effort that extends from design to procurement.
When a part becomes obsolete, the only option may be to procure it from an independent broker. This raises the risk of the part being from a source other than the original manufacturer — and potentially being counterfeit. By better managing our designs and component part obsolescence, we've grown less dependent on independent brokers. Since 2011, our spending on parts procured from independent brokers has dropped by 90 percent.
A global view
Our global substances program focuses on product compliance and global regulatory challenges around substances and materials in the Raytheon supply chain. "We take a holistic approach," says program manager Sally Gestautas. "As opposed to every program or business trying to figure out the requirements on their own, we create an enterprisewide view."
Gestautas and her team collaborate across the company and the industry to address current and emerging substance-related requirements that affect the product life cycle. Our sustainable design goals, substance management compliance requirements, and responsible materials sourcing standards form the basis for our programs and supply chain teams to assess risks and improve processes. Information management tools such as our product material content system help us collect and track vital compliance data.
Our efforts are paying off in areas such as reducing and eliminating materials of concern. For example, we have replaced hexavalent chromium with safer alternatives on more than 1,000 newly designed assemblies over the past few years.
Compliance, not conflict
We help ensure our suppliers are sourcing materials ethically and responsibly. This includes taking steps to avoid sourcing tin, tantalum, tungsten and gold (3TG minerals) originating in conflict regions such as the Democratic Republic of Congo.
Our latest filing with the Securities and Exchange Commission reaffirmed Raytheon's commitment to the Dodd-Frank Act's Section 1502, the conflict minerals rule. We also work closely with our global supply chain partners to ensure compliance.
Our direct contractual relationships with first-tier suppliers require that they hold their own suppliers and subcontractors in compliance as well.
A halt to human trafficking
With dozens of subcontractors working at sites around the world, we spread awareness among employees and suppliers of potential human rights issues that may arise in some locations. Our employee code of conduct condemns and prohibits human trafficking or exploitation.
We have developed an awareness campaign for employees and a comprehensive training effort for people in roles that have greater exposure to the risks of human trafficking or forced labor. Along with teaching employees about these critical issues, the campaign helps them communicate our policies to suppliers, representatives, consultants, recruiters and housing providers. We provide employees with access to a toll-free ethics line that handles questions and concerns about compliance with applicable laws.
Chain of values
We operate with integrity and seek to grow sustainably through our interactions with suppliers, customers and communities. The result is a supply chain built on a foundation of collaboration and trust.
Last Updated: 05/26/2016