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Huawei - Responsible Supply Chain Management

Added on 22-03-2013

Company

Huawei

Year

2012

Business challenge

Huawei is committed to responsible sourcing for the following reasons:

  • Huawei is a responsible corporate citizen and it expects its partners to be so.
  • Brand scheme: the brand image of suppliers influences the brand image of Huawei, which in turn influences the brand image of Huawei’s customers
  • A non-responsible supply chain can be a risk for our business and our customers’ business

Challenges:

Huwaei in order to ensure that its suppliers comply with its expectations /requirements/standards as well as international regulations

Description

Objective:

  • to implement an efficient and responsible CSR supply chain management process
  • to encourage suppliers to adopt responsible and proactive CSR behavior
  • to collaborate with appropriate NGOs, customers, suppliers, government representatives and other pertinent stakeholders aligned with our business strategy.

Implementation process:

At the governance level:

  • creation of a Supplier CSR Committee to regularly review the strategies, principles, standards, processes and performance of CSR management
  • creation of a Supplier CSR Management Department to formulate and optimize management process and standards and coordinate global supplier CSR management
  • creation of a Supplier CSR Risk Ranking methodology
  • creation of a Supplier CSR Working Group that organizes supplier risk assessment, audits and follow-up

Certification and training:

  • Huawei procurement staff is trained on CSR (including internal audit standards and SA 8000-Social Accountability, OHSAS 18001 and ISO 14001 standards).
  • New suppliers must pass a CSR certification process before being added to Huawei’s supplier list. This includes site visits, site checks, employee interviews and third party information. The focus lies on risk and improvement opportunities. If deficiencies are found suppliers are required to take corrective and preventative measures in a timely manner. If a candidate fails to meet the requirements, they will not be accepted as a qualified supplier.
  • Supplier Capacity Building: training sessions and workshops for suppliers to address challenges through the CRCPE tool (Check, Root Cause, Correct, Prevent, and Evaluate.

Huawei’s CSR risk ranking tool facilitates assessing supplier risks and identifies the risk level of each supplier. Suppliers are managed based on their risk level (e.g. high risk suppliers are regularly audited). Supplier audit results are also used in the management process. There are incentives for suppliers with between CSR performance such as increasing their procurement quota.

A red card system also exists. Safety inspections are carried out on site to minimize health and safety risks, amongst others. If risk are identified and corrective measures are not taken a red card will be issued to stop site work immediately.

Impact

Strengths

  • CSR Supply Chain Management is supported and driven by top level executive management, with dedicated teams
  • it is fully integrated into the business process
  • it is a win-win collaboration between Huawei, its suppliers, its customers and society at large

Challenges/Lessons learned:

Business impact

  •  to build a solid responsible relationship with the suppliers
  •  to expect high-quality service (experience and knowledge sharing)

Social impact

  •  to improve the work conditions of local suppliers employees
  •  to improve the environment for people living  close to factories
  •  to improve work conditions for Huawei employees

Environmental impact

  •  to promote a green supply chain and to minimize our impact on the environment

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