Supplier Selection and Qualification Procedures
Supplier selection is accomplished in accordance with Qisda’s future product trends and purchasing strategies that assist our company to choose the right supplier based on its capacity, technical innovation ability, quality, services, and its management system. When evaluating a new supplier, an assessment team is created and comprised of members from procurement, quality assurance, R&D, and component sample approval teams. The team creates a survey that inquires about all potential suppliers’ capabilities, and finally evaluates the results from the survey. Only if a supplier passed Qisda’s strict qualification procedure, it can become a qualified vendor and proceed with its new product verification.
The supplier selection employs a survey with a wide range of screening criteria, including the supplier’s company and product information, major customers, financial performance, procurement contracts of responsibilities and obligations with Qisda, and non-use of hazardous substances documents.In addition, Qisda cooperated with the Work Instruction of Supplier Survey in 2015 revisioned while upgrading its online system, added three indicators about environment, human ethics and labor right to supplier survey items; until the end of 2015, the investigation rate of new suppliers reached 100%. The aforementioned requirements are also included in procurement contracts with suppliers.
Qualified suppliers that passed the supplier selection procedure must continue to be assessed on a regular basis. The QISDC evaluation module examines a supplier from five aspects: Quality, Innovation/Technology, Speed/Response Delivery, and Cost Leadership. The outcome of these evaluations will be considered in procurement strategies by sourcers, who consult with relevant departments to establish a Strategic Suppliers List of Key Components and update it every half-year. For suppliers who do not make the list, they will stay as qualified vendors. Qisda gives higher priority to its strategic suppliers in business selections or high volume of procurement opportunities.
Supplier Risk Management
For qualified suppliers, Qisda also cautiously perform risk assessments periodically or at nonscheduled times to investigate the financial status of suppliers and pay close attention to suppliers with high financial risk to avoid disputes such as discontinuity of product delivery due to bankruptcy.
In addition, Qisda continuously performs risk assessments on its suppliers to take precautionary movements in managing risks of extreme events. The catastrophic events include the price of oil plunged, anti-China riots in Vietnam, labor shortage in China, and the gas explosion in Kaohsiung. In facing those extreme events, suppliers located in the affected areas underwent thorough investigations for contingency plans, or were advised to take appropriate adaptation measures. By taking a proactive role in risk management, Qisda is able to maintain a stable supply chain during crisis and therefore, to prevent damages in its business operation in order to protect the benefits and rights of its stakeholders.