Lanner requires suppliers to sign the AEO Security Declaration, Declaration of Nonuse of Conflict Minerals, the Supplier and Employee Code of Conduct, and the "Supplier Declaration on Non-use of Restricted Substance" promising that all of the products, parts and components it supplies including product accessories, packaging materials and other attachments delivered with the product are in compliance with the EU RoHS and WEEE directives. They must also comply with the content limits set out in Lanner's "Restricted Substance Content and Testing SOP" and provide compliance documentation. Violations of related regulations may lead to the cancellation or termination of the contract. Supplier partners are therefore encouraged to work with us to improve CSR.
Our supplier requirements are not limited to performance and quality. Suppliers that seek to work with us must first sign a strict supplier code of conduct, declaration of non-use on conflict minerals, and supply chain security policy so that they aware of our requirements on social environmental responsibility. The above documents are reviewed by our auditors. If any non-compliance is found then we assist the supplier with taking corrective action.
At the same time, we also stay in regular contact with suppliers, conduct annual audits and ad hoc questionnaire surveys to ensure that standards are being maintained. Noncompliant suppliers are required to make improvements and meet the standard within the given deadline. If they fail to take corrective action then we will look for other suppliers that can satisfy our expectations on ethical and environmental standards.
In terms of internal controls, we follow the general principles of supplier management (Quality, Cost, and Delivery, or QCDS), comply with related domestic/overseas initiatives and regulations, and implemented an internal supplier management procedure. We have set up a Lanner internal material management system to enforce source management for raw materials in the supply chain.
Enforcing the 3R principle for environmental protection
Lanner not only implements the 3R principle (Reduce, Reuse, Recycle) in our own activities but also actively encourage our supplier partners to adopt the same as well. We do this through messages at supplier conferences and during supplier audits. We expect and ensure all suppliers are working with us to make improvements to the environment. The goal is to build a green supply chain that reduces and prevents the risk of pollution throughout all design, production and support activities. Lanner's push to establish a sustainable green supply chain is reflected in our organizational framework.
Supplier categories and local procurement
Suppliers are divided into categories such as manufacturers, material distributors, contractors and others such as consultants, molding, and services. Localized procurement is also practiced at Lanner. The materials and stock purchased by each business location are sourced from local suppliers if possible as long as their products meet our usability and quality requirements. In addition to ensuring the timeliness of our material supply and reducing transportation risks/costs, local procurement also greatly reduces environmental pollution during the transportation process. A geographic distribution of our suppliers means there are 404 suppliers in Taiwan, 7 suppliers in China and Hong Kong, and 34 in other regions.
Implementation of the ISO 28000 supply chain security management system
The supply chain security management system at Lanner is based on the ISO 2800 standard and is used to identify the severity of risks throughout supply chain operations. The information from the management system is also used for risk assessment. The supporting management tools such as document control, key performance indicators, internal audits and training are used to carry out the necessary controls.
Non-use of Conflict Minerals
Lanner requires suppliers to not purchase or use conflict minerals. Every supplier must promise to source their minerals in a responsible manner so that minerals such as tin, tantalum, tungsten and gold used in our products do not fund armed conflicts. This policy is now a core requirement of supplier procurement management and product design. If conflict minerals are used by a supplier then disclosure of the refinery is compulsory. The CMRT 4.1 survey template was used by Lanner in 2017 and the response rate from the 126 suppliers surveyed was 100%.
Supplier audit and assessment
The number of supply chain partners assessed by Lanner grows every year. We conduct two main types of audits:
Each site was rated as poor, average or excellent using the most rigorous standard in the industry. We work closely with suppliers that given a poor rating to improve their ability as quickly as possible. If a supplier is unwilling or unable to meet our standards then it will be removed from the supply chain.
- Quality Process Audit (QPA): Requirements include documentation of processes, material certification, standardization of equipment and processes, defect analysis, and environmental safety. These cover the PCB/Chassis/EMS parts of the supply chain.
- Quality System Assessment (QSA): Audit of a company's system documents. We conducted QPA assessments at 50 supplier sites in 2017. 40 were rated as excellent, 8 were rated as average, and 2 were rated as poor. QSA assessments were conducted 18 supplier sites in 2017. 16 were rated as excellent, and 2 were rated as average.