ESG Report 2019

27 SUPPLIER QUALIFICATION When selecting new suppliers, we conduct a proper time, so as to ensure the overall quality comprehensive evaluation on the suppliers' and material quality of the supply chain. Only industrial standard, reputation, product price, the suppliers who meet the related quality of samples, etc. based on the internal requirements can be included in the list of principles of “5S”, namely proper price, proper qualified suppliers. place, proper quality, proper quantity and This production and operation model helps the explore room for improvement, and enhance Group to reduce the external demand for raw the sustainability of the supply chain. materials and materials in the production In addition, as a raw material supplier for process, lower the risk of unstable supply and many antibiotic companies, the Group has market price fluctuations on the supply chain, been giving quality the highest priority. The so that we can effectively control production intermediate products and bulk medicines costs and ensure the quality of products. In produced by the Group have passed many addition, full control of the supply chain also authoritative certifications such as Chinese helps the Group to retroactively manage the GMP, EU CEP, and US FDA. production process, so as to find the root cause of potential problems, continue to Besides, we will regularly conduct written or quality management. In addition, the Group on-site auditing on the cooperating suppliers. will confirm whether the suppliers have The audit content includes qualification established health records for their employees certificates, personnel qualifications, and whether they have verified the air environment and factories, equipment quality, purification equipment to manage the social m a t e r i a l m a n a g e m e n t , p r o d u c t i o n and environmental risks of the supply chain. management, product transportation and Regular audits help the Group to further The suppliers cluster in the nearby provinces, determine the performance and service which can effectively reduce transportation s t anda r d o f i t s s upp l i e r s , e l i m i na t e c o s t a n d c a r b o n em i s s i o n s d u r i n g inappropriate suppliers, so as to avoid any transportation. At the same time, the Group suppliers without related qualifications or with encourages the selection of suppliers that unstable product quality from entering the provide energy-saving products and supply chain of the Group and affecting the environmentally-friendly products promoted product quality of the Group. In terms of by the Country to lessen the impacts on the environmental protection, the Group observes environment. the principle of proximity during procurement. Supplier Selection Principles Contents “ 5S” Principles Proper price, proper place, proper quality, proper quantity and proper time Environmental Protection Principles Observes the principle of proximity during procurement Purchases energy-saving products and environmentally- -friendly products promoted by the Country Environmental, Social and Governance Report 2019 The United Laboratories International Holdings Limited