Supply Chain Management Structure

Supply Chain Management Framework

ASUS not only actively participates in international initiatives and joins RBA, it also adopts RBA code of conduct as the basis for ASUS' supply chain management. At the same time, in order to further strengthen the protection of female and young labors, we also refer to other international standards, including PAS7000 protection for young labors and SA8000 for female labors, to formulated the "ASUS Supplier Code of Conduct", which requires suppliers to comply with stricter standards and work with ASUS closely to fulfill their corporate social responsibilities.

The supply chain management process consists of three phases: new supplier approval, continuous risk management, and performance evaluation.

The scope covers all suppliers including of:

  • Tier 1: final product assembly
  • Tier 2: compoments
  • Tier 3: raw materials

Phase 1 New Supplier Approval: ASUS requests those who would like to become ASUS suppliers to comply with quality, hazardous substance free, and CSR requirements. Suppliers need to complete 4 audits - Quality System Assessment (QSA), Quality Process Assessment (QPA), GreenASUS HSF Assessment (GA), and Corporate Social Responsibility (CSR) - and then sign the "Code of Conduct Compliance Declaration," to become qualified.
Phase 2 Continuous Risk Management: Suppliers who complete the first phase and obtain the qualification for trades shall cooperate with surveys, including conflict minerals, carbon footprint, and water footprint. Based on the survey results, we will assess the potential risks of the supply chain, such as pollution prevention measures; labor safety; and rights and interests to avoid negative impacts on governance, environment, and society, which may affect the operations of the value chain.

In addition, we conduct specific requirements for tier 3 suppliers as:
• Hazardous substance management:
Establish stricter hazardous substance control standards than laws and regulations. Through a rigorous recognition process and chemical test reports to demonstrate all purchased raw materials are compliance with our standards. On-site audits of key raw material suppliers are also conducted annually to ensure compliance.
• Conflict mineral management:
Establish stricter conflict-free minerals policy. According to the OCED due diligence process, the smelter information is collected and disclosed annually . At the same time, ASUS actively participates in international organizations such as RMI (Responsible Minerals Initiative) and TWG (Indonesia Tin Working Group), conducts on-site audits of smelters through projects to ensure responsible procurement.
Phase 3 Performance Evaluation: We include suppliers’ performance in the second phase in the Quarterly Business Review (QBR) as an important basis upon which procurement departments can allocate orders and renew cooperation; suppliers with good performance will also be given more resources. ASUSTeK’s brand influence helps drive the supply chain to sustainable transformation to create sustainable shared value.

In phase 3 process, we evaluate suppliers’ performances in 6 aspects including “Cost”, ”Quality”, ”Technology”, ”Delivery”, ”Service”, and ”Sustainability” as Quarterly Business Review (QBR). The QBR result is an important basis upon which procurement departments can allocate orders and select suppliers; suppliers with good performance will also be given more resources.

In term of Sustainability, we consider several key factors as:
• Legal compliance and labor management (RBA Code of Conduct) evaluated by on-site audit
• GreenASUS Hazardous Substances Free (HSF) management
• Environmental footprints in GHG, Water, Waste management
• Conflict minerals management

Sustainable Supply Chain Management

As a global leader in information products, ASUS cooperated with 365 suppliers in 2018 and has cooperated with more than 700 suppliers, including product assembly plants and part suppliers, in the past 3 years worldwide, with 90% located in China. Please see the figure below for regional distribution. A variety of projects are implemented at different stages of the life cycle to create a win-win situation and a reciprocal relationship with supply chain partners.

Milestone and Achievements:

ASUS has continued to communicate and cooperate with external stakeholders on supply chain management issues; proactively participated in international initiatives and become an RBA full member; and achieved outstanding results in sustainable supply chain management. In 2018, ASUS was invited to become an RBA full member, reflecting its dedication to supply chain management. ASUS has promised to assume greater responsibility as a producer in the future to lead the supply chain’s continued march toward sustainable transformation.