Work with the Value Chain to Achieve High Quality and Sustainability
—Speech by Eric Xu at the 2014 Huawei Core Partner Convention
Good morning, ladies and gentlemen. On behalf of Huawei, I'd like to welcome you all to the 2014 Huawei Core Partner Convention and wish you a pleasant stay in Shenzhen.
This year, we have revisited the company's quality objective and principle. Our renewed quality objective is to "make Huawei synonymous with high quality in the ICT industry", while our quality principle is to "win with quality". Over the past 20-plus years, Huawei has remained committed to the belief that quality is the lifeline for business. As such, we have worked to improve the quality of our products and services. These efforts have earned the trust of customers and paved the way for our success today.
However, we are aware that quality was not a winning factor for Huawei in the past; we often succeeded by providing value for money. Looking to the future however, we've made it clear that we have to "win with quality". To that end, we'll raise the bar for partners and suppliers for both quality and sustainability. I hope that all of our partners and suppliers will work to improve quality and build sustainability capabilities so as to keep pace with Huawei and embrace the future together.
To support the quality objective, our procurement policy has been adjusted to become "quality first", and we plan to gradually put in place quality standards for various procurement categories to help suppliers improve quality. In the future, partners and suppliers who perform outstandingly in quality metrics will be offered more opportunities; those who fail to meet quality standards and are unwilling or unable to make improvements will be phased out. Suppliers that consistently deliver high quality and ensure sustainability will have the opportunity to sell at a premium rate. In other words, Huawei will be willing to pay more for products and services that consistently demonstrate high quality.
The "quality first" policy requires much more than setting quality standards. We look forward to working with the entire value chain to deliver high quality and sustainability. Huawei's success today would have been impossible without our customers. We are grateful to them for giving us the opportunities and for trusting us, especially customers like British Telecom and Vodafone who have been helping Huawei to improve quality. For nearly a decade, they have pushed us to do better by setting out quality requirements and organizing field inspections. As a result, we have rapidly honed our quality management system, and improved our product and delivery quality while deepening cooperation with them. Looking ahead, we'll continue to regard quality as a lifeline for business, endeavor to win with quality, and pledge to deliver quality products and services. Our experiences with BT and Vodafone make us keenly aware that we cannot improve quality on our own. Instead, we must work with our customers, suppliers, and all other value chain players to build high quality. This is the only way we can achieve our quality objective. While working on the quality standards and implementing the "quality first" procurement policy, we hope to work with the entire value chain to deliver high quality to customers and achieve sustainable development. To that end, we will work with our value chain partners in many areas:
1.Along with our partners, we will actively participate in industry organizations to explore quality requirements and standards, raise quality management to a higher level, and improve the quality management system of the entire industry.
2.We will continue to work with customers to fully understand their quality requirements and expectations. Such a thorough understanding will allow us to better meet their requirements and expectations with quality products and services.
3.We will work extensively with suppliers and partners to fully communicate the quality requirements and expectations of Huawei as well as those of our customers. As what BT and Vodafone have done to Huawei over the past ten years, we'll strengthen quality evaluations on suppliers to encourage improved product and delivery quality from suppliers to meet our quality standards. This idea is to rally the entire value chain in creating quality products and services.
4.In the past, we paid little attention to our partners' processes or how to integrate their processes with ours. But as partnerships have grown, an increasing number of Huawei's value creation activities are undertaken by our partners and suppliers. If processes do not match, efficiency and delivery quality will be compromised. In the future, we will work with suppliers and partners to optimize and integrate our processes with end users in mind. The processes we will work on mainly include new product introduction, design introduction, and processes for testing and change management. We will also incorporate Huawei's quality standards and requirements into the new processes.
5.We hope that our partners and suppliers will invest more in production equipment, testing, and automation so that technical measures can be used to improve the quality of key materials and key production processes. We also hope that our suppliers and partners will extend their quality and sustainability management practices to their suppliers and their suppliers' suppliers.
6.According to our current five-year plan, Huawei expects to achieve annual sales of more than US$80 billion by 2019. We will work with our customers, partners, and suppliers to achieve sustainability by embedding various elements into our processes and management system. These include environmental protection, energy saving, cyber security, privacy protection, business continuity, and Environment, Health, Safety (EHS). We are aiming to jointly promote the sustainable development of the entire value chain, and the sustainable development of the economy, society, and environment.
At Huawei, we are committed to delivering quality products and services, and fulfilling the promises we make to our customers. We're fully aware that this cannot be achieved without industry organizations, our customers, our partners, and our suppliers. This requires a joint effort. We hope to work with all these stakeholders to achieve high quality and sustainability in the ICT industry and build a Better Connected World.
Thank you!
November 6, 2014
