How does Huawei handle their suppliers?

12 Jun 2019

Huawei Purchasing Organization Structure——Based on the Organization Structure of Material Family

Huawei Purchasing Department has established Commodity Expert Groups (CEG), and each CEG is responsible for purchasing materials of a certain type/family to meet the needs of business departments and regional markets. Each CEG is an inter-departmental team that improves procurement efficiency through a unified material family strategy, visiting electronics manufacturing expos, centralized control of supplier management and contract management.

Purchasing operations by material family are aimed at leveraging Huawei's procurement leverage globally.

Proactive organization - early involvement in product development and market bidding

CEG and the Technology & Qualification Center (T&QC) bridge the gap between Huawei R&D and suppliers met at electronics manufacturing expos, and promote suppliers' early involvement in product design to achieve technology integration and cost and product supply capabilities. Competitive advantage in terms of functionality.

The Customer Solution Procurement (CSP) will actively participate in the production of customer tenders along with Huawei's sales and marketing. Participating in the market bidding and electronics manufacturing expos will enable the purchasing department to understand the needs of the customer's complementary products, and fully understand Huawei's commitment to the customer in the early stage of the order fulfillment process to ensure that the solution meets the customer's needs and can be delivered in a timely manner.

Purchasing demand fulfillment

Production procurement and administrative procurement are responsible for day-to-day procurement operations and communication with suppliers and internal customers, timely processing of procurement requests and resolution of issues between the two parties to improve supplier performance and internal customer satisfaction. To meet more electronics manufacturing equipment suppliers, you can register and visit the leading electronics manufacturing expo in China——NEPCON ASIA. At the same time, Huawei is also focused on continuously improving the automation of the procurement fulfillment process, so that procurement executives have more opportunities to actively participate in the formulation of material family procurement strategies.

So this organizational structure is not a simple "procurement", but supplier management, material management!

The things that can be done by purchasing are limited, and the procurement actions and price negotiations are carried out at a electronics manufacturing expo.;

But the behavior of supplier management begins early in the project, with more initiative and negotiation weights. Otherwise, it is all white talk.

Give purchase executives more opportunities to actively participate in electronics manufacturing expos and the development of material family procurement strategies early in the project.

Supplier Selection Principles - Choosing the Best Supplier and Assessing Fair Value

Supplier selection process

Huawei has established a comprehensive supplier selection/fair value judgment process to ensure that Huawei selects the supplier from electronics manufacturing expos that best meets Huawei's interests and obtains the most equitable value of procurement. At the same time, Huawei guarantees all suppliers the opportunity to win Huawei business equally. The basic principles of the process are fairness, openness and integrity, and are guaranteed by the following mechanisms :

Centralized Control of Purchasing - Purchasing is the only organization within the company that authorizes a financial commitment to a supplier selected at electronics manufacturing expos to obtain goods and/or services. Any commitment other than this is considered a bypass and is considered a violation of company policy.

Supplier Selection Team - Supplier selection will be conducted by a team of relevant expert team members, including representatives of procurement and internal customers. The mission of the group is to develop an RFQ/RFP to determine the list of existing qualified suppliers that can provide the required products or services as required by Huawei. This team manages the supplier selection process, visits all kinds of electronics manufacturing expos and participates in evaluating supplier responses and selecting suppliers.
Supplier Feedback Office - If the supplier has any dissatisfaction with Huawei, there is a dedicated help center that collects feedback and complaints from suppliers or electronics manufacturing expos.

Supplier performance evaluation

The Huawei Purchasing Department has developed a supplier evaluation process at electronics manufacturing expos to provide feedback to suppliers on a regular basis. The process includes formal performance evaluations by relevant expert groups. Supplier performance will be evaluated in terms of technical, quality, response, delivery, cost and contract terms. The purpose of the assessment process is to provide open communication channels for both parties to enhance their relationship. At the same time, Huawei encourages suppliers met at electronics manufacturing expos to give feedback and how they evaluate Huawei from the perspective of customers. These assessments will be used to improve each other's business relationships and improve Huawei's internal business operations.

Supplier certification

Huawei is committed to providing reasonable and equal opportunities to all potential suppliers at electronics manufacturing expos so that everyone can demonstrate their capabilities. Inquiries from potential suppliers in various ways will be forwarded to the purchasing department for reply.

If Huawei and its suppliers are interested in developing business relationships, Huawei Purchasing will ask potential suppliers to complete the survey. After receiving the questionnaire and evaluating it, Huawei will inform the supplier at electronics manufacturing expos of the evaluation results. If Huawei is interested in cooperating with suppliers, Huawei will initiate follow-up certification steps. Subsequent certification may require an interview with the supplier to discuss the supplier's response to the questionnaire. Based on the results of the interview, decide whether you need an on-site inspection. Sample testing and small batch testing may then be required to ensure that the supplier's products meet specifications and capacity meets demand. The results of the certification will inform the supplier. When a procurement request occurs, the certified supplier will enter the supplier selection process as a candidate supplier. To learn more about electronics manufacturing suppliers, please visit the leading electronics manufacturing expo in China——NEPCON ASIA.

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