VALUE SHARING

FET Supply Chain Overview

In 2020, total procurement expenditure at FET reached NT$36.37 billion, accounting for 36.2% of total expenditure, and involved transactions with 1,049 suppliers. Procurement costs from transactions with top 100 suppliers accounted for 94.8% 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 73 first-tier critical suppliers using quantitative and qualitative standards. Furthermore, 27 second-tier critical suppliers were identified through questionnaire survey.
Analysis of Annual Procurement Costs
Suppliers with transactions for two consecutive years are defined as FET's effective suppliers. In 2020, FET has had 713 effective suppliers. In particular, procurement costs for handsets and ICT amount to approximately nearly 87% of all FET procurements. In addition, ICT suppliers accounts for 61.3% of all FET suppliers. In 2020, FET adopt Prefer Vendor mechanism in ICT related business to reduce operational risks by reducing one-time cooperation vendors and strengthen the relationship with excellent suppliers. Therefore, the number of effective suppliers is decreased by 47%.
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 2020 a total of 99.7% of FET's procurement was made with local companies⁹ 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 2020, FET's green procurement expenses is increased by 6.9%.