Sustainable supply chain

Supplier management measures include new supplier assessments and regular re-evaluations of existing suppliers to ensure they provide a stable supply of raw materials that minimize environmental impact during production. Furthermore, to ensure suppliers fulfill their obligations regarding integrity, social responsibility, and environmental protection, each procurement contract includes an integrity commitment clause, explicitly stating that any supplier causing adverse impacts on the local environment and society will result in immediate termination of the partnership. Furthermore, the top 20 domestic manufacturers by transaction volume are required to sign a supplier integrity commitment letter. This demonstrates our commitment to the environmental and social responsibilities of suppliers and encourages them to act more responsibly in their operations.

Existing suppliers undergo a written quality management reassessment every quarter, scoring their product quality and delivery time. The results determine continued cooperation. In 2024, a total of 260 suppliers completed quality management reassessments, of which 19 received a C grade. The primary reasons for this were logistics issues that prevented them from accurately tracking delivery deadlines and urgent deadlines for suppliers, resulting in suppliers failing to deliver on time. KUEN LING will continue to coordinate with suppliers to help them meet the reassessment requirements. If KUEN LING departments learn of a supplier experiencing a significant environmental violation, they will conduct an environmental management reassessment, proactively proposing an on-site environmental management assessment. Serious violations will result in immediate disqualification. The environmental management assessment and evaluation form will be consistent with the standards for new suppliers.

In order to deepen the local production and supply of raw materials, domestically produced compressors have been used in recent years to replace the original imported compressors to shorten product delivery time, reduce transportation costs, and thus reduce carbon emissions during transportation and promote the development of the domestic economy. However, there is a slight downward trend in 2024, mainly due to the trend of net zero carbon emissions, energy conservation and carbon reduction, and the increase in demand for magnetic levitation compressors to improve air conditioning efficiency and achieve greater energy efficiency. Since the domestic technology of magnetic levitation compressors has just started, the relevant equipment is currently mainly manufactured in the United States, thus reducing the proportion of local procurement. The amount of local procurement is shown in the following table.

Note: "Local suppliers" are defined as suppliers that manufacture or ship products locally in Taiwan.

Back