1. Supplier Management Principles and Policies

1) The company's procurement department or support department should manage suppliers, with production, finance, and R&D departments providing assistance.

2) Sign a long-term supply cooperation agreement with chosen suppliers to specify the rights and obligations of both parties and mutual benefits.

3) Assess suppliers' credit rating, implement different management practices based on ratings.

4) Regularly evaluate suppliers; terminate long-term collaboration agreements with unqualified suppliers

5) Issue production matching licenses to component suppliers.

2. Supplier Selection and Evaluation

The company should establish an evaluation index system for screening and rating suppliers:

1) Quality level: incoming material yield rate, quality assurance system, sample quality, and issue resolution.

2) Delivery capability: timeliness of delivery, flexibility in extending supply, offering timely samples, and batch response capacity.

3) Pricing levels: discount rates, price increase absorption capabilities, and cost savings potential.

4) Technical capability: advanced technical processes, post-development capabilities, product design capabilities, and the ability to address technical issues.

5) After-sales service: sporadic ordering guarantees, compatible after-sales service capabilities.

6) Human resources: management team and employee quality.

7) Existing cooperative relationships: contract fulfillment rate, average annual sales burden and ratio, duration of cooperation, and harmonious inter-business relationships.

3. Supplier Selection Measures

1) For each type of material, the purchasing department conducts market research and proposes a list of 5-10 candidate suppliers.

2) The company establishes a supplier evaluation team composed of purchasing, quality management, and technical departments.

3) After the evaluation team preliminarily screens candidate manufacturers, the purchasing department performs on-site investigations, both parties collaboratively complete an investigation form.

4) By scoring each candidate manufacturer one by one and calculating the total scores to determine acceptance or rejection based on ranking.

4. Procurement Approval Process

The company will reassess suppliers annually. Suppliers that do not meet the requirements will be discarded, while eligible suppliers will be added to the candidate pool. The company may manage different suppliers by designating different credit levels. Follow the above supplier-screening method during the rating procedure. For the highest-rated suppliers, the company may offer benefits such as material exemption inspection and instant loan payment.

5. Supplier Management Measures

1) The company can dispatch dedicated employees to important suppliers' factories or conduct regular quality inspections of suppliers.

2) Regularly inspect supplied goods for quality, or perform on-site inspections.

3) The company should prevent over-dependence on individual major suppliers and distribute procurement risks.

4) The company should develop acceptance standards for various purchased items and delivery receipt procedures with suppliers.

5) The purchasing, R&D, production, and technical departments provide business guidance and training to suppliers, but ensure that core products or critical technologies are not unlawfully disclosed.

6) Companies can invest in and jointly own property rights with important, developing, and company policy-compliant suppliers.