Supplier Management Strategies

ASUS expects the cooperation with the supply chain to be based on long-term interests to create the win-win partnership. Therefore, we now do not focus on only traditional supply chain management models such as quality, cost, and trading procedures to choose our partners. In addition, we look for the possibility of establishing a supply chain with sustainable competitive advantage to create a new business model for sustainable development through identifying and managing risks of supply chain in governance, the environment and society.

Risk Identification and Management

According to the analysis by the latest international sustainable situation report and by Responsible Business Alliance (RBA, labor, environment, and governance are the major risks for the sustainable operation of the electronics industry. As a result, ASUS identified the most relevant risk issues with ASUS through the stakeholder engagement, the consideration of international laws, NGO organizations, and requirements of sustainability from customers, including: conflict mineral and labor protection in labor area, and the use of hazardous substance, greenhouse gas emissions, and water footprint in environment area.

At the same time, supplier risk identification procedures are established based on factors such as industry characteristics, procurement model, and geographical relationships. Through the evaluation on RBA compliance, brand reputation, brand management, continuous improvement, hazardous substances, and labor hiring, we classified our suppliers with continuous partnership by different level. Those identified as high-risk suppliers will be arrange for second and third-party audits to reduce related risks through continuous improvement tracking.

Supply Chain Management Process

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:

  • Phase 1 New Supplier Approval: ASUS requests those who would like to become ASUS suppliers to comply with quality, hazardous substance free, and corporate social responsibility requirements. Suppliers will need to complete the following fours 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 suppliers.
  • Phase 2 Continuous Risk Management: Suppliers who have completed Phase 1 and are qualified as business partners must cooperate with investigations on conflict minerals, carbon footprints, and water footprints in order to reduce any risk on sources of supply.
  • Phase 3 Performance Evaluation: ASUS assesses the performance of suppliers in accordance with ASUS continuous risk management and includes the result into the Quarterly Business Review (QBR), which will provide an important basis for sales to allocate the order and determine future partnership.

Through the above phases, ASUS expects to reduce the possible risks to sustainability in the supply chain, and at the same time to screen suppliers with sustainable competitiveness by including the audit results into the business review.