Supply Chain Management Framework

In addition to implementing sustainable procurement policies and practices, ASUS also formulated the ASUS Supplier Code of Conduct based on the Responsible Business Alliance (RBA) Code of Conduct, and add the PAS7000 and SA8000 standards. We also strengthen the protection of young workers and female employees. Suppliers are required not only to comply with ASUS Supplier Code of Conduct but also to take the same management apporach of their upstream suppliers. All new suppliers must sign the ASUS Code of Conduct Compliance Declaration to be eligible for cooperation, ensuring that they understand ASUS' sustainability requirements and truly follow their commitments.

We continue to communicate with external stakeholders on supply chain management issues, and actively participate in international initiatives. We became a Full Member of the RBA in 2018, demonstrating our commitment to supply chain management and producer responsibility.

Risk Evaluation and Classification Management

The latest Responsible Business Alliance Annual Report indicates that labor, the environment, and partnerships are the main risks to sustainable operations in the electronics industry. We have established risk identification procedures based on factors, including RBA self-assessment, hazardous substance management system and manufacturing process management, brand management, brand reputation, labor protection, continuous improvement, management systems, and labor intensity. Each year, we perform the risk identification on more than 300 suppliers and OEMs with quarterly procurement amounting to NT$2.5 million or more, and conduct on-site audits and supervision projects to help the supply chain take appropriate measures.

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 and Sustainability.
   
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 in the Quarterly Business Review (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 improvements.

[Case] Human Rights Management

Respecting for human rights is the core value of ASUS, as demonstrated in our Corporate Code of Conduct policy, which applies to our global operations, including our supply chain. All ASUS employees are treated with respect and fairness, and suppliers are required to comply with all relevant legal, social and environmental standards. We comprehensively review the employment conditions of our suppliers and set high standards for labor rights by publishing the ASUS Human Rights Statement:

  1. Formulate The ASUS Supplier Code of Conduct as the high-risk assessment criteria to elevate labor employment and does not allow any form of forced labor.
  2. Transparent disclosure of annual supply chain management performance, including conducting due diligence, risk assessment, audit management and supplier negotiations.
  3. Require all suppliers to sign the ASUS Supplier Code of Conduct Declaration, committing to comply with the RBA Code of Conduct with first-tier suppliers and industry regulations where they operate.
  4. RBA-qualified auditors conduct audits on high-risk suppliers, reviews human rights management and labor hiring and randomly interviews workers to review working conditions. After the interview, ASUS provides direct contact information to avoid retaliation.
  5. Hold regular supervision projects with qualified auditors from third party entities providing best practices to assist suppliers in continuous improvement.
  6. The audit results are included in the quarterly business evaluation as the basis to allocate orders and determine whether to continue the partnerships.