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TWM provides integrated telecommunications and media services in the four major areas of T.I.M.E. We cooperate with more than 748 suppliers and firmly believe that supply chain management is an important part of the development of corporate sustainability. Our purchase of mobile phone products, tele-communications, network and other equipment from domestic and foreign vendors’ amount to NT$27.5 billion annually. Taiwan Mobile classifies suppliers into six categories according to the types, amounts and importance of procurement. In 2018, the sub-category of mobile phones in the category of "consumer electronic products" is categorized as a major contributor to procurement expenditure.
To further understand the overall supply chain situation and control risks, we identified the critical tier-1 suppliers according to the definition of purchase amount and market irreplaceability for differentiated management. Finally, a total of 102 critical suppliers were selected in 2018. Although the number accounted only for about 10% of the total quantity, the amount accounted for about 81.73% of the total procurement expenditure.
In addition, we identified 18 critical tier-2 suppliers that indirectly provided our services and are irreplaceable, such as software, hardware, equipment-bound materials of major information systems. We also further tracked the status of tier-2 suppliers through collaborative evaluation with tier-1 suppliers and public information to ensure the stability and sustainability of our services
In supply chain management, TWM has always implemented the concept of local procurement and created local employment opportunities, as well as continuously strengthened the flexibility of supply chain scheduling to reduce the risk of supply imbalance. We are constantly thinking about how to reduce the transportation costs of supply operations and reduce the carbon emissions caused by logistics transportation. We also hope to enhance the cooperation with sustainable partners by controlling and managing supplier selection and evaluation. In 2018, the total local procurement amount of Taiwan Mobile reached NT$26.3 billion, accounting for 95.82% of the total annual procurement amount. The quantity of suppliers and the proportion of expenditure from each category and the proportion of local procurement for various suppliers are shown in the following figure: