2019 Annual Report (^67)
With today’s highly globalized division of labor,
Huawei must rely on a wide variety of third parties
for procurement, manufacturing, logistics, and global
technical services. This makes BCM critical for Huawei.
Through years of ongoing investment, Huawei has
established a BCM system for domains such as
procurement, manufacturing, logistics, and global
technical services. This system covers end-to-end
processes, from suppliers to Huawei, and on to our
customers. As part of this system, we have developed
and established effective measures to manage risks
that arise during our daily work. Specifically, we have
built up management organizations, processes, and
IT platforms, prepared business continuity plans and
incident management plans, and organized BCM
training and drills for employees.
Key Initiatives for BCM in R&D and Procurement
■ Multi-sourcing solution: When designing a product,
we strive to source raw materials, boards, and
products from more than one supplier, prioritizing
the supply diversity in raw materials. We prefer
suppliers that have multiple manufacturing sites in
order to safeguard sustained product availability.
■ Scenario-specific stock-up: During mass production,
we prepare safety stock of raw materials,
semi-finished products, and finished products.
This allows us to better respond to fluctuations in
demand and supply.
■ Supply and demand visibility: Huawei works closely
with suppliers to ensure that demand forecasts,
purchase orders, and supplier inventory are all
visible through IT systems. This ensures that we
get timely demand information and have adequate
supply capacity to meet the demand.
■ Strategic partnerships: Huawei establishes strategic
partnerships with core suppliers to ensure stable
supply. We also sign long-term supply assurance
agreements with key suppliers to guarantee supply
capacity and availability, and avoid material
bottlenecks. Additionally, we encourage suppliers
to establish their own BCM systems, arrange for
special audits on suppliers, and follow up on their
corrective action plans.
Key Initiatives for BCM in Manufacturing,
Supply, and Spare Parts
■ Manufacturing and supply resource backups:
Huawei has established strategic partnerships
with multiple electronics manufacturing service
(EMS) suppliers. Board manufacturing and supply
capabilities are shared between Huawei and EMS
suppliers, and between multiple EMS suppliers,
to ensure there is always a backup. We have
also established supply centers in Shenzhen,
Europe, Latin America, and Dubai to also serve as
integrated equipment backups for each other.
■ Spare part reserves to support full-lifecycle
operations: Huawei reserves spare parts according
to market demand and historical usage before
product end-of-life (EOL) is determined. After EOL
is determined, we reserve enough spare parts for
the full-lifecycle of the product in one go. This
prevents any impact on the operational continuity
of live customer networks.
Over the past decade, we have faced many major
disasters, be they natural, political, economic,
trade-related, or simply open conflict. However,
Huawei has managed to mitigate these risks, ensure
supply continuity, and achieve timely delivery of
products and services. This shows that Huawei’s
BCM system – as part of our overall management
system – is functioning properly. Huawei is a global
company that works in the network infrastructure,
IT infrastructure, cloud services, and smart device
domains. We have worked with over 10,000
of suppliers and established sound, long-term
partnerships with them.
The Bureau of Industry and Security of the US
Department of Commerce successively added Huawei
Technologies Co., Ltd., and some of its non-US
affiliates, to the Entity List on May 16 and August 19,
2019, pursuant to § 744.11 of the Export Administration
Improving the BCM System
■ Huawei has passed comprehensive audits, and
regular reviews and assessments, all conducted
by many of the world’s top carriers, as well as by
major enterprise and industry customers. Audited
domains include financial robustness, quality
management, risk management, delivery and
services, supply chain management, knowledge
management, project management, trustworthiness
and software engineering, cyber security and
privacy protection, information security, EHS, CSR,
sustainability, and BCM. We aspire to become a
strategic partner that can assist our customers in
their future-oriented transformations.
coco
(coco)
#1