供應商管理 | 裕隆汽車ESG

Supplier Management

Suppliers are essential to our sustainable development, so by capitalizing our corporate influence, Yulon Motor builds close relations with suppliers in order to have positive impacts on economy, environment and society. In recent years, we have assisted suppliers in obtaining the ISO 14001 certifications in order to encourage them to implement an environmental management plan; meanwhile, with regard to the protection of labors’ human rights, we also include the criterion that whether a supplier meets the requirements of the Labor Standards Act in the supplier selection. All conditions and terms in the agreements with partners in the supply chain are handled and filtered in accordance with national laws related to human rights, or terms and conditions regarding human rights are supplemented.

Regulations for supplier sustainability:

In addition to the signing of the“ Supplier’s Undertaking of Corporate Social Responsibility,” Yulon Motor also added the requirements set forth in the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies in the agreements with suppliers to ensure that suppliers deliver quality products and meet Yulon Motor’s regulations in connection with sustainability.

Information on suppliers who signed the agreement with the added requirements set forth in the
Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies in 2022
Stakeholder	Item	Cumulative total	Percentage
Suppliers	Equipment/expenses	168	74%
Suppliers	Parts/mold procurement management	118	90.8%

Supplier Quality Evaluation

We have carried out evaluations to check a supplier’s performance in incoming materials, delivery, part production management and the operation of its quality management system. Since 2022, the quality improvement supervision project have been proposed to 10 suppliers in total, and in 2022, we guided 3 suppliers in improving their products to the A-grade with a 100% quality improvement project completion rate. We continue to guide suppliers through quality standard enhancement by facilitating events for Quality Assurance Requirements of suppliers’ independent processes and assist key suppliers in conducting QAR self-supervision evaluation. A total of 11 suppliers completed the evaluations in 2022 and established their QAR MAP technology library, thereby enhancing quality of parts and averting reoccurrence of issues; we also guided suppliers through the introduction of the part management system for Supplier Quality Management (SQM) where a total of 31 suppliers improved their rating to B+ with a 100% evaluation rate.

Supplier evaluation process

To make sure the improvement plan proposed by Yulon’s team is helpful for the supplier in generating actual benefits from improvement
To go deep with the suppliers to check their approaches to each control
To find the root of issues and propose mutually beneficial improvement plan

Note: Achievement rate equals to the number of suppliers who were actually evaluated divided by the number of suppliers who shall be evaluated.

We designate a responsible unit for the guidance and supervision of suppliers’ improvements. Multiple effective communication and improvement activities designed for suppliers have been carried out via various channels such as the directors’/supervisors’ meetings and the general meetings of the Yulon Motor Association and corporate seminars covering exchange activities, education and training and visit and learning activities to realize the ideals of“ complementary environmental protection and economic development for co-existence and co-prosperity” and create overall social benefit in the protection of environment. We routinely track the results of improvement plans of suppliers with a low rating score and guide them through the enhancement of performance.

Evaluation of supplier sustainability

We evaluate items in the topics of labor, ethics and environment in detail in the annual evaluation of suppliers and thus facilitate a good understanding of suppliers’ overall sustainability risk and performance.

Type	Criteria included in the 2022 Supplier Green Procurement DA Table
E	Restricted substances under REACH Environmental protection Product design (standardization, recyclability, low pollution, energy saving, package recyclability) Production process (water saving, energy saving, carbon reduction) Localized/Green procurement Use of renewable energy Greenhouse gas/carbon footprint inventory Provision of eco-labelled products (local and international labels)
S	Human rights and equality No child labor Compliance with the Labor Standards Act Gender equality at work Sustainability topics (social care activities, freedom to form a union, customer protection, ecological conservation, community engagement, support of innovative enterprises)
G	Personal Data Protection Act Ethical management Plant management systems (IATF 16494, OHSAS 18001); ISO (9001, 14001, 45001, 14064-1, 14046, etc.) Supplier risk assessment and management

Yulon Motor has promoted the ongoing supplier sustainability management project as follows:

Item	Description	Content of execution
Compliance with environmental protection regulations	Based on governmental laws, we require suppliers to comply with relevant laws and regulations with regard to air pollution, water pollution and waste management.	In the event of any violation, the supplier shall propose an improvement plan
Promotion of green suppliers	We will continue giving guidance and assistance in the facilitation of relevant operations based on the internationally recognized ISO 14001 certification in the hope that all suppliers can meet the requirements of environmental regulations and constantly improve.	Activities to guide and promote to suppliers about energy saving and carbon reduction
Improvement of safety and health	The key suppliers are classified for management pursuant to the international OHSAS 18001 certification standard or depending on if the safety and health work rules have been submitted to the competent authority for reference.	We enhance the awareness of occupational safety among the suppliers and improve their on-site safety management capability by sharing experience in the practices of occupational safety and relevant cases. Requiring contracting manufacturers to put safety and health management into practice through evaluations, guidance, auditing and tracking.
Implementation of labor rights	Based on governmental laws, we manage key suppliers by category and continue implementing and requiring all suppliers to comply with governmental laws.	The suppliers are reminded to improve the awareness of labor rights and protect the rights of the employees by sharing the cases of violation in labor inspection. The Company provides educational training by issuing the “information on labor regulations” to remind suppliers to pay attention to the new information on labor regulations and the key points of their implementation, with the goal of acting in compliance with the laws and regulations and protecting the labor rights. This way, the suppliers can refer to the difficulties that other companies in the industry have encountered and determine the best solutions.
Management of conflict minerals	We participate in the global green procurement policy and request key suppliers to sign the“ Supplier’s Undertaking of Corporate Social Responsibility” to avoid purchase of 3TG (tin, tantalum, tungsten, gold) metal materials from the conflict zone.	Investigations on Yulon Motor’s key suppliers are conducted to make sure none of the metal materials are sourced from the conflict zone. Suppliers shall sign the“ Supplier’s Undertaking of Corporate Social Responsibility” as a guarantee that they refuse to purchase metal materials from the conflict zone in the present and the future.

Environmental, health and safety management of contracting manufacturers

Yulon Motor takes contracting manufacturers’ environmental, safety and health management seriously, so we arrange safety inspections at contracting manufacturers’ sites every year to conduct the on-site examination on three aspects: firefighting safety, environmental protection and safety and health, and keep the improvement plans on file for follow-up. Assisted 8 contract manufacturers in the improvement of 23 environmental, health and safety issues in 2022. On top of the safety inspections, we also exchange information on matters concerning environment, safety and health in the hope of jointly sculpting a corporate culture of occupational safety.

Sustainable Supply Chain