ESG Report 2023

8.2.2 Annual Review The Group also implements a supplier classification and rating system, conducting monthly assessments of our cooperative suppliers. The evaluation criteria include supply quality, pricing, delivery capability, financial strength, and service capability. This assessment is scored on a scale of 100, and suppliers with identified areas for improvement are deducted points based on the severity of the issues. These suppliers are then required to implement corrective measures for improvement. In addition to completing monthly assessment forms for suppliers, we also conduct regular written or on-site audits of their facilities, processes, and daily operations. The Group assigns employees or third-party auditors to conduct on-site or investigative evaluations of indirect/secondary suppliers' facilities and processes. The audit covers areas such as resource management, quality management, design and development management, production and procurement management, and warehouse management. After the evaluation, the auditor provides a report and recommendations based on the audit findings. The audit of daily operations includes qualifications and licenses, personnel qualifications, environment and facilities, equipment quality, material management, production management, product transportation, and quality management. Whether there are material returns or exchanges that affect the quality acceptance rate Whether there have been complaints arising from product use due to quality issues Compliance with the company's qualifications, transportation services, delivery documentation requirements, etc. Timeliness and quantity of deliveries in accordance with specified requirements Whether the lead time for commonly used materials exceeds one month Supplier Monthly Assessment Form Comprehensive Indicators Whether there have been instances where the supplier was unable to accept orders due to financial constraints or only partially fulfilled orders Timely and accurate issuance of invoices Instances of delayed after-sales service, communication difficulties, lack of honesty and integrity, etc. Management Indicators Willingness to independently provide energy-saving and environmentally friendly materials, collaborative development, and energy-saving measures to enhance factory efficiency Additional Indicators 54 Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited