Tatung groups its suppliers into four categories; each category has its own introducing procedures and management standards. The introduction of the new supplier in Category I requires on site assessment by evaluation team. The assessment content mainly includes design, technical capabilities, quality management, manufacturing capabilities and management capacity. The introduction of the new supplier in Category II requires only document review. For construction category, the introduction of the new supplier requires on site assessment. Starting from Feb, 2018, CSR related contents were incorporated into on site assessment for all business units. In addition, Tatung also evaluates the management of hazardous substances (RoHS and REACH), conducting safety measures for hazardous job, and implementation of environmental management system as an extra evaluation for introduction of a new supplier. The detailed management measures are shown on Table 2 and Figure 2. The supplier with assessment result above B grade can then be introduced. All suppliers are requested to sign procurement contract and commitment letter.
For suppliers (construction category not included) who already cooperate with Tatung are implemented monthly assessment in aspect of quality, delivery, price, and service (Figure 3). Any non-conformity will be requested to correct. An annually re-evaluation is periodically implemented for main components suppliers, listed component suppliers, and outsourcing suppliers. The annually-re-evaluation is focusing on suppliers' operation policy, CSR policy, quality management, R&D capability, manufacturing management, servicing ability. Tatung wishes the suppliers who collaborate with us can grow together. As for the safety of the service-providing suppliers (construction, waste disposal, repairing) who operate in the factories and subsidiaries, Tatung stipulated "Tatung Health and Safety Management Method for Contract Suppliers" to make sure all this type of suppliers can follow it to reduce the risk from accidents.

▼ Table 2 Category of suppliers and introducing/management measures

Category Classification criteria Introducing procedure Introducing procedure
Category I
  • Important materials (parts, components, half-ready products, and products).
  • ODM/OEM
  • Outsourcing (including full case, manufacture only, product only).
  • Significant to product quality that need intensive management and tutoring.
  • On-site assessment
  • Sign procurement contract
  • Sign commitment letter
  • Monthly assessment1
  • Annually reevaluation2
Category II
  • Suppliers, who provide raw materials, ready to sale products, imported components, with less quality risks.
  • Suppliers who are world famous company with top capability in product and QA/QC.
  • Document review
  • Sign procurement contract
  • Sign commitment letter
Monthly assessment
Construction Suppliers who build factory, apartment, office building, system installation, or repair project.
  • On-site assessment or document review for existed cases
  • Sign procurement contract
  • Sign commitment letter
Evaluation after the case is completed
Others
  • Suppliers who provide office appliances, hard wares, software, waste disposal, verification, etc.
  • Suppliers who provide instruments or equipment.
  • Technical maintenance service.
  • Sign procurement contract
  • Sign commitment letter
Monthly assessment

Note 1: Increase or decrease procurement amount based on the result of monthly assessment.

Note 2: Maintain business or search for second source based on the result of re-evaluation.


▼ Figure 2 Supplier introduction and management procedure




▼ Figure 3 Result of supplier monthly assessment in 2019




Note: Grade A and B are qualified suppliers; Grade C/D is failed from monthly assessment and requested to be improved within a time limit.




▼ Figure 4 Result of supplier annually reevaluation in 2019




Note 1: Grade A and B are qualified suppliers; Grade C is fail from Yearly re-evaluation. If BU managers instruct to do reexamination, the failed suppliers have to improve within a time limit and to be re-evaluated again.


Note 2: Grade C disqualified suppliers was 1.41% in 2019. The main reason is that the supplier lacks relevant performance in 2019, and disqualified from our supplier list.