WNC Global Supply Chain Management Policy

Policy 
Through continuous optimization of supplier management strategies and operational efficiency, WNC works with suppliers to manage sustainable supply chains. We aim to achieve balanced development among profitability, environmental protection and social responsibility, in order to create better value for all stakeholders.

Mission

By supporting the Company’s business development and enhancing the Company’s market competitiveness, WNC will continue to effectively manage and jointly improve the quality, price, delivery, service, and environmental and social responsibility performance of suppliers, and develop the most suitable supplier portfolio and purchasing policies to be able to work with suppliers in a responsible supply chain.

WNC regards supplier management as a key action in fulfilling its social responsibilities. WNC offers sustainable procurement courses for employees in the Global Supply Chain Management Division. Through the sharing of trends in sustainable procurement and case studies, WNC aims to implement sustainable procurement concepts in its materials procurement and in the screening and management of suppliers. Multiple online courses were held in 2022, with 73 employees completing training for a completion rate of 89%. WNC also offers online training courses to suppliers on sustainability concepts, its own Supplier Code of Conduct, and anti-corruption issues through the Digital Supply Chain Portal (DSCP).

Local Procurement

Local procurement can support the development of local economies, generate more employment opportunities and income, and reduce costs and carbon emissions of transportation. Therefore, WNC establishes a dedicated procurement team for each country/region, responsible for the selection and management of local suppliers. According to the amount of raw materials, components and production consumables purchased by WNC, suppliers in Taiwan are the main suppliers, accounting for 48% in 2022, followed by Chinese suppliers, accounting for about 38%. Other suppliers are located in Asia, Europe and the United States. 49% of WNC headquarters’ procurement is with local suppliers in Taiwan while 37% of procurement for WNC’s China sites is with local suppliers in China. Currently, most raw materials used in manufacturing in WNC’s Vietnam sites come from suppliers in Taiwan and China. Items purchased with local suppliers in Vietnam are mainly production consumables, which only account for 10% of all procurement. As demand for manufacturing in Vietnam is increasing significantly, WNC will continue to evaluate and plan for the establishment of local supply chains.

Supplier Investigation and Audits

WNC has formulated a Supplier Code of Conduct, which requires all suppliers to sign a Supplier Commitment to Sustainability Declaration and Supplier Integrity Commitment Letter, declaring that they have fulfilled their social responsibilities, and are committed to prohibiting the use of child labor, forced labor, and implementing occupational safety and health management, anti-bribery and anti-corruption measures, fair trade, supporting freedom of association for workers and labor-management agreement rights. Suppliers are asked to complete a Supplier ESG Questionnaire so WNC can understand suppliers’ implementation of labor, health and safety, environmental, ethics, and management systems. As of the end of 2022, 957 suppliers have signed the Supplier Commitment to Sustainability Declaration, 510 suppliers have responded to the Supplier ESG Questionnaire, and 225 suppliers have completed on-site RBA audits for suppliers, accounting for 88%, 47%, and 20% of suppliers with purchase transaction records in 2022, respectively.

Percentage of WNC's Suppliers who Signed the Sustainability Declaration and Completed the ESG Questionnaire in the Past 4 Years
RBA audit processes for WNC suppliers
WNC divides different types of major suppliers into A (high risk: printed circuit board, spray painting, injection molded plastics, electroless plating, and stamped product suppliers), B (medium risk: antennas, packaging materials, wiring, converters, connectors, and passive component suppliers) and C (low risk: Other electronics part suppliers) according to the risk level of labor, ethics, health and safety, environmental and management system. Every year, suppliers that require RBA audits are selected and included in the audit plan for the current year according to “top 10 suppliers providing the most materials in the previous year and that have not been audited in the past year”, “suppliers that must meet customer RBA requirements”, and “priority issues in the previous year’s audit”. Except for Category C, which is ranked as low risk and for which only desk reviews are conducted (with some exceptions for suppliers designated by customers), supplier RBA audits are conducted on the other two categories in the following four steps: signing of ESG related documents, actual audits, continuous improvement and results reporting, as well as from the five aspects stipulated by the RBA: labor, health and safety, environment, ethics and management systems. In 2022, RBA audits were originally scheduled for 50 tier-1 suppliers but 52 audits were completed, including 21 category A suppliers, 20 category B suppliers and 11 category C suppliers. The non-compliant items in the audit results are mostly labor-oriented and occupational safety-oriented. The supplier’s non-compliant items and corresponding improvement plans are tracked by the Supplier Quality Management Center. The suppliers work with the Global Supply Chain Management Division to follow the Supplier Evaluation Management Guidelines to supervise suppliers’ implementation of RBA specifications and continuous improvement. In 2022, no supplier relationships were terminated because the supplier’s RBA audit results or improvements did not meet the standards. In 2023, a total of 50 suppliers are scheduled to undergo a WNC RBA audit.

Responsible Minerals

WNC does not directly purchase raw metal materials, and has declared “Responsible Minerals Policy Statement”. WNC supports the Responsible Minerals Initiative (RMI) that was jointly initiated by the RBA and the Global e-Sustainability Initiative (GeSI), adopts the responsible minerals reporting template stipulated to conduct minerals investigations for suppliers every year since 2010, and identifies supplier risk levels based on the investigation results in accordance with WNC responsible minerals management procedure.

Responsible Minerals Policy

  • Do not purchase minerals directly from origin
  • Ban the use of conflict minerals that contribute to significant human rights violations such as armed conflict and forced labor in conflict-affected and high-risk areas (CAHRAs)
  • Require suppliers to obtain minerals from responsible sources and communicate this policy to their own upstream suppliers