Supply Chain Management

Supply Chain Management

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Supply Chain Management

Supply Chain Management

 

Shih Wei Navigation regards each supplier a long-term partner to jointly establish a safe shipping supply chain and fulfill corporate social responsibility. Supplier evaluation is implemented for supplier management. In addition to requiring suppliers to meet requirements for prices, quality, and services, we also strive to urge them to comply with environmental regulations, improve occupational health and safety, and attach importance to human rights. Relevant standards have been included in the evaluation criteria in 2022 and the revision of the regulations is expected to be passed and implemented in 2023.

To implement the sustainable policy, the Head Office gives priority to purchasing equipment and appliance with environmental protection labels and energy-saving labels. Based on the principles of local procurement and procurement for public welfare, we purchased related products from local smallholders. In terms of fleet management, we still uphold the same principle of local procurement. However, due to the characteristics of the industry, relevant procurement, maintenance, contracting and so on are mainly arranged in the port of call, and therefore the procurement is mainly from the local suppliers to reduce the carbon footprint. In 2022, the proportion of overseas procurement reached 98.2%.。


Overview of the Supply Chain in Marine Transportation

 

We have cooperative relationships with hundreds of suppliers globally, including agencies, ports, docks, ship repair providers, and so on. We hope that through the collective efforts with the cooperative suppliers, better environmental, safety and health standards can be further developed.

In addition to requiring the suppliers to comply with local government laws and regulations to meet the environmental, industrial safety, hygiene, and human rights requirements, oral explanations are given and contracts are signed for the suppliers to assume their responsibilities.

The Marine Department, Crew Management Department, Risk Management Department, and the IT Office are in charge of logistics management and support in accordance with the type of demands to maintain the normal operation of the software and hardware equipment of the ships so as to achieve safety of lives, safety of ships, safety of cargos, and safety of environments, assisting the Business Department with cavassion and enabling better efficiency of the safety management system for the Risk Management Department



 
Item Content
Supply The ship submits applications to the Company for demands for materials, accessories, nautical charts, various electronic devices, and so on, and the Company will then place orders and arrange delivery from the suppliers according to the appropriate port and look for suppliers with third-party verified MED (Marine Equipment Directive), ISO 14001, etc., and the delivery of materials is arranged by courier service providers.
Repair When the ship reports for equipment damage that requires repair, the Company will first provide technical guidance for the ship end to repair by themselves. If the equipment cannot be repaired, it will be repaired by third-party certified (such as the classification society) repair service providers and technicians. After the repair project is completed, the surveyor assigned by the classification association will conduct the inspection and acceptance.
Ship Survey To maintain the seaworthiness of the ships, the Company makes regular arrangement for relevant inspections (annual inspections), intermediate inspections (docking repair), and special inspection (docking repair), and the repairer/service providers and the classification association are entrusted to board the ship to jointly carry out the inspection items.

We practice - Born by the sea, Love for the sea, Protecting the oceans, Loving the Earth

 
  1. We adhere to the localization principle of the supply chain. By reducing transportation costs and carbon emissions, we can also decrease the overall carbon footprint of the supply chain and contribute to local employment opportunities.
  2. When selecting suppliers, we prioritize environmental criteria, including the absence of asbestos and the availability of Material Safety Data Sheets (MSDS) for specific products, which are considerations for environmentally-friendly materials.

We believe in and protect - a friendly and safe workplace

 
  1. The marine supplies are all verified to be in line with international regulations to maintain safety of navigation and safety of crew members
  2. We require our suppliers to declare that they will comply with relevant regulations of the Company in terms of environmental protection, occupational health and safety and labor rights. Please refer Human Rights Policy page.

Suppliers Management System

 

Shih Wei Navigation has formulated the e Supplier Management Measures for suppliers to follow so as to establish and maintain the requirements for the suppliers’ supply capabilities and quality. We also create a “supplier directory” to make regular evaluation of the cooperative situation between the Company and the suppliers. The evaluation indicators include the price, quality, and service attitude, and the evaluation is carried out every six months.

During the supplier selection process, we will additionally require credit investigation or ask the bank to issue a letter of guarantee to reduce the possible operational risk of the suppliers. In addition, the suppliers’ service performance is also evaluated through the daily work contact and irregular mutual visits for our suppliers to make continuous improvement to meet the requirements.

Shih Wei Navigation is a shipping company serving the global market. We have always required our suppliers around the world to cooperate with the regulations of the Company and also the local laws and regulations in terms of environmental protection, safety and health, and human rights. By signing the contracts, the suppliers shall undertake its due responsibility to continue the improvement and advancement of various measures to jointly maintain the service quality. See Human Rights Management for the human rights policy of the Company.

 

When selecting suppliers, Shih Wei Navigation puts the environmental factors into consideration:

  1. Compliant with the considerations of non-asbestos or Materials Safety Data Sheet (MSDS) and other eco-friendly materials
  2. The Company’s marine spare parts are manufactured in Japan by Japanese brand, so most of them have to be ordered from several manufacturers in Japan, yet the ordered spare parts are uniformly arranged and delivered to the appropriate port by air by the freight company to reduce the transport costs (including carbon emissions)
  3. By adhering to the principle of localization of the supply chain, the procurement of materials is mainly based on the shipping schedule and local high-quality suppliers. Local procurement can reduce unnecessary costs, increase supply flexibility, shorten transport time, and reduce transportation costs and carbon dioxide emissions. It can also reduce the GHG emissions in the overall supply chain and create local employment opportunities
  4. If there is no long-term cooperative supplier at the port of call, we will select suppliers with GMP, ISO 9001, and HACCP certifications, or look for great suppliers from the ship supplier member list of the International Ship Suppliers Association (ISSA), ShipServ and so on to ensure the safety of delivery and for more secure transactions
  5. To ensure the smooth sailing of the ship, the stock of the cylinder oil on board is regularly checked. When making replenishment, the appropriate safe stock of the cylinder oil on the ship will also be confirmed, and the lubricating oil testing is regularly carried out. To ensure the safe navigation of the ship, the Company will also arrange the fuel sampling and testing when refueling
     

Supplier Evaluation

 
Evaluation of New Suppliers
 Hazardous substance process management is the manifestation of the sustainable development of an enterprise. Through the control of the Inventory of Hazardous Materials (IHM), a hazardous substance management system is established. From the selection of raw materials to the finished products, the prohibited substances having significant impacts on the environment should be grasped so as to provide supplies that are complaint with international regulations and also to avoid health or safety related impacts on the crew members. After evaluation in December, 2021, it was decided to entrust a third-party external laboratory to conduct sampling tests to get objective evidence showing that the products from the suppliers meet relevant requirements and do not contain hazardous substances, which can help the Procurement & Supply Division control whether the products in the supply chain meet the specifications.
Evaluation of Existing Suppliers

The Company has established the suppliers’ internal control system and the evaluation form. When there are new suppliers, evaluation in accordance with the following content will be conducted.

  1. The procurement unit shall evaluate the cooperative supplier and fill in the Records of Evaluation of Suppliers before submitting it to the responsible supervisor for approval. The same procedure applies when the supplier information is updated. The items for evaluation include price, quality, and service enthusiasm. The evaluation measures were revised at the end of 2022, and the aspects of environment and human rights were included. The revision of the regulations is expected to be passed and implemented in 2023
  2. The procurement unit shall conduct annual evaluation of the approved suppliers’ evaluation records
  3. For those evaluated as qualified or for our long-term contract suppliers, the procurement unit can directly make procurement from them without the price comparison and negotiation. However, it is still necessary to check the market conditions every year and conduct continuous appraisal of the suppliers on a regular basis to protect the interest of the Company. The revision of the evaluation method for suppliers was completed by the end of 2022, and the frequency of supplier evaluations has been changed to at least once a year. The implementation is expected to take place in 2023
     
 
  • Currently, the main suppliers Shih Wei Navigation cooperates with have all obtained relevant environmental certificates that will be provided together with the materials by the suppliers, such as the asbestos-free certificate.
  • Compared with 2021, Shih Wei Navigation had 3 new suppliers in 2022: 1 in Australia and 2 in Singapore.
  • A total of 107 suppliers were evaluated in 2022, all of which were qualified.

Quality Control of Suppliers

 
  1. Based on reply of the market conditions, delivery status, price, and quality details, procurement procedures meeting the regulations are taken

  2. Supplier management system verification: To respond to the environmental protection and safety of crews, suppliers capable of providing international verification and compliance with international regulations are priority cooperative suppliers

    • Provide asbestos-free marine products (does not contain substances harmful to the environment)
    • Cables and wire ropes are with certificates and breaking force test certificates
    • Tank cleaning agents are provided with the MSDS to ensure that there are no excessive toxic substances in the ingredients, or priority is given to eco-friendly cleaning agents
  3. Suppliers approved by third-party verification units such as the classification society, or suppliers quoted by local agencies and recommended by local manufacturers
  4. When abnormality is found in products, the suppliers will be informed that the preset requirements of the Company are not reached. When there are deficiencies, explanations and improvement are immediately required. If the improvement status is poor, the cooperation will be immediately terminated