Value Creation
FET Supply Chain Overview
In 2019, total procurement expenditure at FET reached NT$34.17 billion, accounting for 36.5% of total expenditure, and involved transactions with 1,131 suppliers. Procurement costs from transactions with top 100 suppliers accounted for 91.3% of FET's annual procurement costs. FET separately manages the five types of suppliers, namely information and communications (ICT), handsets, construction, general administration, and media/non-media. As reference for strengthening supplier management, FET has identified 74 first-tier critical suppliers using quantitative and qualitative standards. Furthermore, 20 second-tier critical suppliers were identified through questionnaire survey.
Analysis of Annual Procurement Costs
In 2019, FET has had 1,337 effective suppliers. This helps us to achieve diversified development and to effectively reduce the risk of supplier concentration. In particular, procurement costs for handsets and network devices amount to approximately nearly 90% of all FET procurements. In addition, there are 838 ICT suppliers, accounting for 62.7% of all FET suppliers. This category is mostly related to FET's Enterprise Business Unit, and works with the Network and Information Technology unit to serve the corporate customers inTaiwan. They are critical to FET's corporate transformation process.
Local and Green Procurement
Besides encouraging foreign companies to establish offices in Taiwan to promote local economic development, FET is also committed to supporting the local industry. If we deduct the orders from overseas companies and foreign brands, then in 2019 a total of 97% of FET's procurement was made with local companies in Taiwan. In addition, to support FET's "Environmental and Social Friendly Program" and to promote a green supply chain, FET encourages suppliers of all types and their respective supply chains to refer to the green procurement regulations during procurement. When the Procurement Department considers procurement bids, it also consults the Energy Saving Team for energy efficiency assessment, and includes energy-saving specifications as an open bid item. Monitoring mechanism is also established for all orders. In 2019, FET's green procurement expenses reached NT$307,070,034.
