Huawei: The Principles of Quality and Sustainability

One of the Huawei's important procurement strategy and process is sustainability. It is also the basic requirement for them to pick their supplier qualification and selection. For suppliers that work with Huawei, they must be able to comply with applicable laws, regulations, and Huawei's Supplier Sustainability Agreement. In order to continuously drive supplier for improvements, Huawei uses procurement quotas as ways to improve their suppliers. They also apply viable measures to monitor and control risks to build a more healthy supply chain ecosystem.

In 2016, Huawei extensively implements the Quality First strategy. Because of sustainability is a key element of their Broad Quality Principle, Huawei is given more weight in materials and supplier qualification, performance appraisals, and procurement decision-making. Huawei strengthens cooperation in sustainability with customers, suppliers, and industry organizations. Furthermore, they adopted the "Top Four Initiatives" on a larger scale, which aims to achieve retain staff in key positions, develop employee expertise, IT-based management, and promote production automation.

Huawei continuously enforced their redline requirements for sustainable development and they adopted procurement quotas as a tool to increase the sustainability of suppliers. All of these efforts allowed them to minimize their supply risks, increase the customer satisfaction, and increase the competitiveness of supply chain.In 2016, Huawei had improved their collaboration with the customer to expand joint audits and increase supply chain transparency. Huawei and three customers conduct on-site audits on ten suppliers, and they share the results with their customers. Besides, Huawei and two customers conduct a survey to the staff of ten suppliers and use mobile technology to improve the communication between the employer and worker in the supply chain.

In April 2016, Huawei and Deutsche Telekom organized a joint seminar that discusses "Creating Value for Business through CSR and Sustainable Development". Other than that, Huawei also integrates sustainability into supplier lifecycle and improved the collaboration with the suppliers. Huawei had examined 57 potential suppliers based on their performance of sustainability, and 12 of them had failed and missed their opportunity to work with Huawei. They also audited the sustainability risk of 951 suppliers, there are two suppliers have poor performance and Huawei had limited their business.Furthermore, Huawei also improves the collaboration with governments and non-government organizations and reinforcing a market-driven green supply chain mechanism. Huawei used the enterprise environmental data of the Institute of Public and Environmental Affairs (IPE) to examine their suppliers.

In 2016, Huawei had run a routine query to 500 key suppliers regarding the environmental data and discovered there are 15 violations of environmental protection rules. They immediately examined ten suppliers and giving them a limited timeframe to make improvements in order to meet their requirements. Huawei also participates in multiple seminars on the green supply chain and introduced their Three-Pillar green supply model. They also take part in developing China's green supply chain management guidelines and defining the green supply chain management and evaluation requirements of China's Ministry of Industry and Information Technology (MIIT).

Moreover, Huawei improved the collaboration with industry players to develop standards and drive joint actions. Huawei was an expert member in a project dedicated to establishing CSR management systems and standards for China's ICT industry. They played a leading role in developing the IPC-1401 Supply Chain Social Responsibility Management System Guidance. They advocated that social responsibility should be integrated, as a customer requirement, into product lifecycles and the value chain. They also drove collaboration across industries and along the supply chain, helping industry players fulfill their social responsibility and become more competitive.