By integrating industrial knowledge and technology, Pou Chen has linked the upstream, midstream and downstream businesses in the footwear industry and formed a complete supply chain. With the goal of providing customers with rapid responsive services, the Company continues improving manufacturing processes, enhancing production flexibility, and building a responsive material supply system that is sensitive to the market, so as to develop its long-term value.

Based on the vision of “resource integration and value increase”, Pou Chen has set short-, mid-, and long-term goals and expects to realize its corporate social responsibility and the sustainable development goal by developing more new materials, new processes, new technologies, and new applications, as well as developing product creativity and its added value. The short-term goal is to continue optimizing the vertically integrated supply chain management system by integrating the Group’s resources and to provide comprehensive solutions to meet customers’ needs. The mid- and long-term goal, apart from continuously enhancing the quality and the competitiveness of cost, is to expand suppliers’ R&D and sustainable development capabilities to innovate applications, upgrade manufacturing processes, and refine materials with suppliers.

Supplier Management Policy and Measures

New Suppliers

In addition to the materials appointed by customers or suppliers of specific materials, Pou Chen screens 100% of new suppliers based on environmental standards. New suppliers are required to complete a self-assessment form including items, such as the Group's code of conduct, environmental management, fire safety, occupational safety and health. In addition, new suppliers are sampled for factory inspection visits on a regular basis every year. After the completion of the self-assessment form and factory inspection visits, a decision will be made if applicants can be included as Pou Chen's suppliers.

Supplier Quality Management

  • Pou Chen has formulated the audit system for supplier quality management contains 11 quality management items.
  • In accordance with the ISO 9001:2015 quality management system, the selection and evaluation criteria are established for suppliers, and their business status, quality management system, supply capacity, service and delivery capabilities are further understood with a check list.
  • To effectively manage suppliers and ensure that the quality of procurement can meet the Company’s and customers’ requirements, the audited suppliers are required to respond to the deficiency improvement measures in accordance with the PDCA (Plan, Do, Check, Action) principle, so as to strengthen suppliers’ quality management.
  • In 2018, a total of 39 suppliers were audited of their Restricted Substances List (RSL) management practices.

Supplier Sustainability Management

  • Pou Chen has formulated 3 types with 12 items of auditing components based on the ISO 14001:2015 environmental management system, including environmental management, fire safety, and occupational safety and health.
  • The Company rewards suppliers with outstanding performance, including green design, green production, green innovation, green marketing, green procurement, green recycling, and green product.
  • The main environmental risks of supplier operation mainly come from wastewater discharge permit and effective treatment of wastewater, air pollutant discharge permit and control measures, and proper disposal of hazardous waste. In 2018, a total of 91 suppliers were audited for sustainability development. Suppliers who cannot meet the Company’s sustainable development management indicators will be first required to improve before a deadline. The Company also provides counseling to the suppliers to implement environmental projects for improvements. With suggestions, if the suppliers are still unable to meet the Company’s requirements after improvements, they will be replaced to reduce the supply risks to enable the Company’s supply chain management to be able to meet the basic environmental protection requirements of ISO 14001:2015 and international sustainable development trends.
  • Pou Chen conducts targeted management based on the importance and traded proportion of raw materials. For suppliers who fail their audits, the procurement quota will be adjusted through the supplier management system, so as to establish a high-quality supply chain management system.

Supplier Development

Pou Chen regards suppliers as partners. In September 2018, it held a Vendor Fair in Bình Chánh, Vietnam, and a total of 61 suppliers participated. By doing so, the Company provided a platform for suppliers and its R&D personnel to have a face-to-face interaction, during which they might share needs and development trends at products and materials. With collaborative innovation with suppliers and attention to environmental protection and health and safety issues, Pou Chen would build a sustainable development supply chain system to realize the vision of “resource integration and value increase” and ensure the implementation of corporate social responsibility.