Our Suppliers

Abbott’s suppliers are integral to our success and to everything we do. In 2008, Abbott purchased an estimated $13.5 billion in goods and services from more than 20,000 suppliers worldwide, with more than $10.5 billion of these purchases supporting our work in the United States.

Supplier Management

We hold suppliers to high standards of ethics and performance and have management systems to review and audit them. We approach quality auditing from both a local and a global perspective: When we find a problem with one supplier, we not only work to fix it, we look all over the world to see if that problem exists elsewhere. Government compliance standards vary widely around the world, and our audits ensure that we and all of our suppliers meet them.

Abbott’s Supplier Guidelines address our expectations for ethical behavior, business integrity and fair competition, human rights, privacy, labor rights, worker protection, animal welfare, environmental stewardship, and health and safety practices. We communicate these guidelines to all our suppliers and translate them into multiple languages.

Engaging with Suppliers

In 2008, Abbott further strengthened supplier engagement on social responsibility issues by asking 205 of our most important suppliers to review their policies and procedures for compliance with the social responsibility expectations set forth in Abbott’s Supplier Guidelines. This was followed up by a self-evaluation form.

This new initiative supports a broader program of audits for a number of our suppliers’ social responsibility practices – from environment, health and safety to child-labor practices.

Selecting New Suppliers

We have established an even more intensive screening process for suppliers in emerging markets, where risk levels may be higher. It includes site visits, questionnaires and audits. We also conducted 23 social responsibility audits with potential new suppliers throughout the world in 2008.

Green Purchasing

During 2008, we began using only paper certified by the Forest Stewardship Council (FSC) in our U.S. office copiers and worked to eliminate paper catalogs for office supplies. We also offer green products as alternatives within the office supply category. We estimate that these initiatives have helped us to avoid 100,000 pounds of CO₂ emissions.

During the year, our pharmaceutical division converted more than 1,000 tons of promotional paper supply to FSC or Sustainable Forestry Initiative-certified sources. In addition, the division is working with its printing suppliers to reduce paper use by 30 percent, saving nearly 30,000 trees and reducing seven million pounds of CO₂ emissions over five years.

We are now developing a green procurement policy to formalize our approach. This policy will provide guidance on incorporating sustainable sourcing principles into the purchasing process.

Training

In 2008, Abbott Corporate Purchasing trained more than 19,000 employees in various aspects of supply chain management, including the use of diverse suppliers, the Abbott Code of Conduct and Abbott Supplier Guidelines.

Supplier Diversity

In the United States, we actively work to identify opportunities for small, and women-, veteran- and minority-owned businesses, as well as businesses located in HUBZones (Historically Underutilized Business Zones). We work with government agencies, minority business groups and advocacy organizations to identify suppliers and communicate sourcing opportunities. We also provide guidance to these suppliers through informal mentoring, advocacy and outreach efforts.

We are active members of supplier diversity and benchmarking groups, including the National Minority Supplier Development Council, the Chicago Minority Business Development Council, Inc., ISM Pharmaceutical Forum, and the Conference Board's Council on Supplier Diversity. We participate in small business matchmaking fairs and conferences across the United States, including Puerto Rico. To nurture fair and ethical relationships, we require our suppliers to comply with the Abbott Supplier Guidelines and applicable portions of our Code of Business Conduct.

We educate employees about the advantages of a diverse supplier base. In 2007, supplier diversity became a part of the required training curriculum of our ethics and compliance program for more than 17,000 Abbott employees in the United States. We hosted a supplier diversity fair near our company headquarters and, based on its positive impact, we hosted a similar event in 2008. We will also collaborate with our employee networks on raising awareness about supplier diversity.

Abbott Recognized for Commitment to Supplier Diversity

In 2008, Abbott received the Supplier Diversity of the Year Award from Premier Inc., a group purchasing organization. We also collaborate with our employee networks on raising awareness about supplier diversity.

Last year, Abbott also received the National Minority Business Council (NMBC) Corporate Supplier Diversity Award in recognition of our support of minority- and women-owned businesses and our commitment to establishing best practices in purchasing. The NMBC highlighted our Supplier Management System – a U.S. supplier database that allows our suppliers to update their information directly, and enables potential suppliers to enter their new information for review by our Purchasing department. Once entered, employees can search the database to identify new suppliers for goods and services. The NMBC is an advocacy group assisting small, minority- and women-owned businesses with procurement, education and training, advocacy, financing and business development.

Abbott's Supplier Diversity Program was also honored by Premier, the nation's largest health care alliance, for its recognition of supplier diversity as an essential strategy for managing product costs and creating fair market conditions for all.

Supplier Diversity Performance (dollars in millions)