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

Except for customer-specified or specific item suppliers, Pou Chen selects new suppliers based on ISO 9001 quality standards, adopts management indicators that comply with local environmental protection regulations and control measures, and the proportion of new suppliers selected according to the above standards reaches 100%. New suppliers must fill out self-assessment forms. The survey items include quality management, environmental management, fire safety, safety and health, and the Group's code of conduct. In addition, the Company regularly conducts on-site field visits for new suppliers every year. After completing the two procedures of self-assessment and sampling on-site visits, it is then decided whether to be included as a supplier of Pou Chen.

Supplier Quality Management

  • Pou Chen has formulated the audit system for supplier quality management contains 11 quality management items.
  • According to the ISO 9001: 2015 quality management system, establish the selection and evaluation criteria to require suppliers, and use the questionnaire to understand their business status, quality management system, supply capacity, service and delivery capacity. In order to effectively manage the suppliers and ensure that the purchased quality can meet the requirements of the Copmany and brand customers, the audited suppliers are required to respond to the deficiency improvement measures in accordance with the PDCA (Plan, Do, Check, Act) principle, so as to strengthen the quality management operations of the suppliers to reduce their quality failure cost and ensure that the incoming quality control of each factory meets the requirements of brand customers, and the suppliers must meet 100% of the Restricted Substances List (RSL) of each cooperative brand. RS project audit (audit supplier RS management specification or system, RS commitment and guarantee, and product RS test result list and report).
  • In 2019, a quality management audit is implemented on a total of 10 factories of domestic and overseas material and equipment suppliers, and a total of 3 factories did not qualify.

Supplier Sustainability Management

  • Pou Chen's audit system for supplier sustainable development contains 3 types of auditing items.
  • Based on the ISO 14001: 2015 environmental management system, the Company has implemented supplier sustainable development management and formulated auditing items, including environmental management, fire safety and safety and health. In addition, suppliers with good performance are encouraged to promote the circular economy, including but not limited to green design, green manufacturing, green procurement, green marketing, green products, and green recycling.
  • Since the suppliers have different scales, management capabilities and cooperation levels, for who cannot meet the main environmental risks of the Company's sustainable development management indicators will be first required to improve in a limited time to ensure that suppliers have effective environmental pollution prevention measures.
  • If the supplier still cannot meet the requirements of the Company after the proposed improvement, supplier replacement will be carried out to reduce the supply risk, so that the Company's supply chain management can meet the basic requirements of ISO 14001: 2015 environmental protection management and the international sustainable development trend.
  • In 2019, a total of 64 domestic and overseas suppliers were assessed for sustainable development, and 6 did not qualify. The main environmental risks of supplier operation are wastewater discharge permit and effective treatment, air pollutant discharge permit and prevention measures, and proper disposal of hazardous industrial waste.
  • Suppliers who fail the audits will be listed as non-cooperative suppliers. The Company conducts targeted management based on the importance and traded proportion of raw materials. For suppliers who still fail the audits, the procurement quota will be adjusted through the supplier management mechanism, so as to establish a high-quality supply chain management system.
  • In 2019, the Group's Code of Conduct was regularly announced to the cooperative suppliers, and the cooperative suppliers were invited to jointly observe and comply with local laws and regulations. The conducts were implemented over a total of 364 cooperative suppliers domestic and abroad.

Supplier Development

Pou Chen regards suppliers as partners. In September 2019, it held a Vendor Fair in Bình Chánh, Vietnam, and a total of 68 domestic and overseas suppliers participated. By doing so, the Company provided a platform for suppliers and its R&D personnel to have a face-to-face interaction, sharing information and development trends on innovative materials and automated production equipment. In addition, the Company set up a web platform during the fair to assist suppliers promote new materials, new technologies and future trends. Meanwhile, suppliers took the initiative to introduce newly developed eco-friendly materials and newly designed mechanical equipment and devices. It is hoped that through the collaborative innovation of the suppliers and the attention to environmental protection, safety, and energy conservation issues, the Company will build a sustainable supply chain system to fulfill the vision of "resources integration and value enhancement" and ensure the implementation of corporate social responsibility.