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Supplier Management
Supplier Management and Partnership Principles
Harvatek is committed to establishing "stable and reliable long-term partnerships" with our suppliers.
Through a robust supplier management system, we ensure that product quality, delivery schedules, and service performance consistently meet operational requirements, fostering efficiency and transparency in our collaborations.
This section is designed to help suppliers understand Harvatek’s core management principles and cooperation requirements, establishing a clear and consistent foundation for long-term mutual growth.
I. Purpose and Scope
Supplier Management Scope and Evaluation Objectives
Harvatek has established a comprehensive management and evaluation mechanism for all vendors or contractors supplying the following items:
- Key Raw Materials
- Equipment / Assets
- Parts / Spare Parts
- Consumables
- Other Procurement
The primary objective of supplier management and evaluation is to ensure that partnership outcomes meet long-term operational requirements:
- Stable Quality
- Reliable Delivery
- Satisfactory Service
II. Supplier Classification and Definition
Supplier Categories and Definition Details
Suppliers are classified as follows based on supply category and strategic importance:
New Supplier Definition
Any vendor supplying relevant items to the company for the first time is considered a new supplier.
Criteria for New Suppliers
- ISO 9001 Certified (Required for Class A)
- ISO 14001 Certified
- IATF 16949 Certified (For key suppliers)
- Monopoly or Oligopoly Status
- Parent Company or Original Factory
- Customer-Designated Supplier
Supplier Category Descriptions
- Class A: Suppliers of major raw materials listed in the BOM (Bill of Materials).
- Class B: Suppliers of consumables that have part numbers but are not in the BOM.
- Class C: Suppliers of spare parts without part numbers, fixed assets, controlled assets, and general procurement.
III. New Supplier Onboarding Process
Onboarding Procedures for New Suppliers
New suppliers must provide basic information and complete the following procedures as required by the company:
- Supplier Basic Profile
- Supplier Social Responsibility Commitment Statement
- Integrity, Anti-Corruption, and Confidentiality Agreement
- Conflict Minerals-Free Commitment (Based on category)
- Emergency Contact and Communication Notification Form
- Authorization Letter (Required for distributors/agents)
- • On-site Audit: Domestic or international, as required.
- • Document Review: Comprehensive desk audit.
Evaluation Tools:
- Harvatek Supplier Self-Assessment
- Harvatek Subcontractor HSF Audit Report
- Supply Chain Code of Conduct Audit Checklist
| Grade | Score | Definition |
|---|---|---|
| A | 91–100 | Qualified Supplier |
| B | 81–90 | Qualified Supplier |
| C | 71–80 | Observation Status |
| D | ≤ 70 | Unqualified Supplier |
- • Qualified suppliers will be added to the Approved Vendor List (AVL).
- • Grade C: Required to improve within a deadline and undergo re-evaluation.
- • Grade D: Generally disqualified from onboarding for two years (except customer-designated cases).
IV. Continuous Improvement and Annual Evaluation
Supplier Evaluation Tools and Procedures
1. Required Documents (Evaluation Tools)
| Document Name | Purpose |
|---|---|
| Annual Supplier Scorecard | Monthly Quality / Delivery / Service scoring |
| Supplier Audit Plan | Annual planning of audit targets |
| Audit Assessment Form | Determining product / process audit requirements |
| Supplier Process Audit Report (VDA 6.3) | In-depth process auditing |
| Subcontractor HSF Audit Report | Hazardous Substance Free management audit |
2. Evaluation Methods (Monthly, Semi-Annual & Annual Audits)
(A) Monthly Scoring (Class A Suppliers)
| Category | Max Score | Deduction Factors |
|---|---|---|
| Quality (Q) | 40 | Rejections, process anomalies, complaints, HSF non-compliance |
| Delivery (D) | 30 | Delayed replies, delivery delays (Bonus for early rush orders) |
| Service (S) | 30 | Overdue responses, poor cooperation attitude |
*Any single category scoring below 20 → Classified as Grade C immediately.
(B) Semi-Annual Comprehensive Rating
| Grade | Score | Description |
|---|---|---|
| A | 90–100 | Excellent |
| B | 75–89 | Qualified |
| C | 60–74 | Observation |
| D | ≤ 59 | Unqualified |
(C) Annual Audit Plan (Targets meeting any criteria)
Harvatek audits at least 10 suppliers annually based on risk and volume.
| Audit Type | Inclusion Criteria |
|---|---|
| Process Audit | Top 3 suppliers, Semi-annual Grade B or below, Management designated |
| Product Audit | Recurrent anomalies, customer complaints attributed to supplier |
3. Evaluation Results and Follow-up Actions
(A) Grading Actions
| Grade | Action Plan |
|---|---|
| A | Priority procurement |
| B | Audited at least once annually |
| C | Corrective Action Plan (CAP) + On-site audit |
| D | Disqualified; 2-year cooling-off period for re-onboarding |
(B) Qualification Revocation
- Poor corporate reputation/integrity.
- Consecutive Grade C for 3 months without improvement.
- Serious impacts on production due to delivery/quality.
- Failure to execute Audit CAR (Corrective Action Report).
(C) Strategic Procurement
- Top 3 suppliers in each category.
- Annual Rating maintained at Grade A.
V. Improvement, Suspension, and Exit Mechanisms
Supplier Disposition and Rectification Standards
Follow-up actions are managed in accordance with corporate procedures:
1. Grade C Suppliers
- Must submit a formal improvement plan within the specified deadline.
- Subject to on-site audits to verify rectification progress if necessary.
2. Grade D Suppliers
- Revocation of qualified supplier status (disqualification).
- Ineligible for re-evaluation for a period of two years (except for customer-designated suppliers).
3. Chronic Non-performance or Poor Reputation
Qualified status may be revoked through formal procedures for suppliers with persistent quality issues or damaged corporate integrity.
4. Inactive Supplier "Freeze" Policy
- • Class A/B: No transactions for 2 years → Account Freeze
- • Class C: No transactions for 1 year → Account Freeze
VI. Special Circumstances and Exception Handling
Special Concession Registration
In special cases such as customer-supplied materials, customer-designated components, or urgent material requirements, the R&D department may approve a temporary onboarding without a full evaluation after verifying the samples.
Priority Adoption of Special Materials
To respond to specific customer requests or critical schedule constraints, materials may be utilized following inspection assisted by temporary specifications and regulations.
VII. Change Management and Notification
Major raw material suppliers must provide notification in the event of the following:
- • Internal organizational changes or manufacturing process variations
- • Product End-of-Life (EOL) or discontinuation
- • Changes in manufacturing location or raw materials
VIII. Environmental Policy Advocacy
- • The Company’s environmental policies and supplier initiatives are published on our official website. Suppliers are expected to actively promote and implement these standards within their own organizations.
IX. Miscellaneous Provisions
- • The Company does not currently procure embedded software for its products. Relevant clauses regarding such software will only apply should such procurement occur in the future.
- • Suppliers are required to cascade Harvatek’s requirements and standards down through their own supply chains.