Quality, cost and R&D ability form the basis for AAT's selection of suppliers. From this perspective, we draw up a list of promising suppliers and solicit their proposals. After the proposals have been submitted, our purchasers negotiate with candidate suppliers and begin quality assessments in cooperation with the cost-analysis and quality departments.
The most difficult thing in choosing a local supplier is adapting their technical expertise to the level required by AAT, which currently deals with approximately 140 component manufacturers. AAT exports more than 70% of all of its vehicles and parts to the international market and therefore all suppliers must meet global standards. Consequently, AAT encourages suppliers to gain QS 9000 of the ISO 9000 Series Quality Management System, and has introduced Ford's Q1 System* as an evaluation tool for suppliers.
We are also working with suppliers to improve quality. Through technical instruction and support and the education of suppliers in order to eliminate hazardous chemical substances, our ratio of local suppliers that was initially less than 10% has gradually risen to 14%. Moreover, we apply Ford's basic labor standards to our suppliers, and pay attention to abolishing child labor and ensuring our employees' work safety and health management.
* Ford's quality assurance system, Q1 requires scores to be maintained for suppliers on such factors as product quality, acquisition of environmental and other certifications, and quality defects (recalls, suspension of shipments).