Supply Chain Management Structure

ASUS Supply Chain

As a global leader in information communication technology industry, ASUS has cooperated with more than 700 suppliers, including product assembly plants and component suppliers, mainly located in China. Please see the figure for regional distribution.

 

 

 

We define the critical suppliers by purchase amount, supply limitation, and key technology. Critical suppliers are vital partners for ASUS in providing assurance of smooth launching regarding the mass production of products. We commit our resources to assist suppliers in sustainable management for the assurance of sustainable production.

Supply Chain Management Framework

According to The Electronics Industry Procurement Analysis Report, more than 60% of enterprise spending is on the supply chain. Procurement management is an aspect of showing corporate social responsibility and is a critical mechanism for driving the supply chain forward to achieve the goal of sustainability. The Supply Chain Risk Management Practices published by US National Institute of Standards and Technology (NIST 800-161) identify sustainability as a vital aspect of risk management.

Sustainability is a key factor of consideration in supply chain management. We implement ISO 20400 sustainable procurement program, considering of cooperation strategy, procurement model, and geographical relationships to identify the risks of human rights, labor practice, environment, and fair operation practices inherent to the life cycle of mining, components manufacturing, assembly, and disposal, and as such implementation of our strategy for the sustainability of the environment, society, and governance to drive the sustainable transformation of the supply chain.

ASUS sustainable procurement has been certified by the third party SGS, to prove that ASUS has implemented sustainability in its procurement policy and practice, and has been issued the world’s first ISO 20400 certification with high rating, becoming a benchmark case of sustainable procurement. We will increase the proportion of sustainable procurement in the supply chain and increase the evaluation proportion of sustainability performance in the Quarterly Business Review (QBR) to build up a sustainable supply chain with the influence of ASUS’ purchasing power.

The Supply Chain Management Process

The management consists of three phases: new supplier approval, continuous risk management, and performance evaluation. The targeted suppliers cover tier 1 product assembly, tier 2 component manufacturing, and tier 3 mining of raw material.

Phase 1 New Supplier Approval: The entrance barrier for becoming ASUS’ qualified suppliers are: possessing ISO 9001 and ISO 14001 certifications, singing the compliance declaration, and passing the audits on Quality, Hazardous Substance Free (HSF), and Corporate Social Responsibility (CSR).
   
Phase 2 Continuous Risk Management: We manage suppliers with continuous business relations by risk level. Suppliers classified as high risk will be subject to onsite audits by ASUS and the third party. Suppliers classified as moderate to low risks will be audited by document review. All suppliers must complete the annual survey on responsible minerals, greenhouse gas, water footprint, and waste. The potential risks of the suppliers in labor, health and safety, environment, and ethics are managed through audits to avoid posing an impact on governance, the environment, and society, which in turn affects the operation of the supply chain.
   
Phase 3 Performance Evaluation: Besides the quality, cost, technology, delivery, and service, we also includes sustainable indicators such as ethics, environmental protection, labor rights and health and safety for the QBR as an important basis to allocate orders and determine whether to continue the partnerships; suppliers with good performance will be given more resources. ASUS uses its influence to drive the supply chain for continuous improvement.