Supplier Management Mechanisms

LONGi has formulated the Supplier Management Procedures, the Supplier Recruitment Management Measures, the Supplier CSR Management Measures, and revised and added the Supplier Development Management, the Supplier Exit Management, Supplier Performance Management, and Supplier Communication Management, totally 17 internal management documents. These documents break down the management framework into detailed rules and processes, achieving systematic and standardized supplier management and control.

1. The procurement expenditure on LONGi’s significant tier 1 suppliers accounted for 85% of the total procurement budget, and 357 diversified have completing registration.

LONGi is dedicated to fostering a fair, just, transparent, and efficient supplier management system. In 2023, LONGi refined the structure of the Supplier Management Committee, clarifying functions at all levels to achieve a more efficient and professional specialization and collaboration. This ensures that management tasks are handled with a dedicated and meticulous approach.

LONGi categorizes suppliers based on their operational characteristics and cooperation performance, scoring collaborative suppliers monthly, biannually, or annually by the dimension of quality, costing, delivery, service, technique, and ESG performance. Based on the scores, suppliers are classified as A, B, or C grading, with corresponding rewards or penalties accordingly.

Supply Chain Risk Management

To ensure the stability and security of the supply chain, LONGi established a comprehensive risk monitoring mechanism, regularly assessing and updating supply chain risks to ensure promptness and effectiveness in risk management.

LONGi reviews suppliers’ environmental and social risks through internal and external assessments. In the supplier access process, we conduct rigorous social responsibility risk screenings. After the supplier are approved, during the whole cooperation process, we introduce authoritative third-party risk tools to supervise suppliers’ dynamic business qualifications, legal records, compliance risks, and environmental violations.

In 2023, LONGi conducted its annual due diligence surveys to identify suppliers ESG risks, covering environmental management, human rights and labor protection, health and safety, business ethics, and corruption prevention. We crafted and carried out supplier ESG risk surveys, clearly requiring procurement employees to record supplier performance in the Supplier ESG Risk Survey Form. At the same time, we conducted annual supplier ESG on-site audits. Based on scores and findings, suppliers were categorized and managed accordingly. For high-risk suppliers, we actively coached them to carry out rectification and conducted regular re-audits to ensure closed-loop corrections.