Procurement Risk Management

strengthen the sustainability risk management of the supply chain, Unimicron gradually strengthens the sustainability performance of the supply chain, especially through four steps to review and improve the sustainability risks faced by the supply chain.

We integrate supply chain risk management into daily procurement operations and construct a Procurement Risk Management Procedure under the supply chain risk management framework. Using the PDCA cycle process, we continuously review the risk status and compile the risk index through the results of quantitative risk analysis. At the same time, the risk heat map is drawn, and the risk occurrence frequency and the degree of impact are used as the assessment basis to formulate the periodic review of the mitigation plan and to implement control of the supply chain’s sustainability risk.
Finally, we communicate and cooperate with suppliers, and through the establishment of mitigation plans, we can gradually reduce the risks faced by supply chain by targeting any high-risk factors that may cause continuous business interruptions, such as single supplier, regional policy changes, and insufficient production capacity, through introducing alternative suppliers or conducting second-supplier or second-origin certification programs according to their supplier attributes.

Procurement Risk Management Process

Procurement Risk Assessment Factors

Supplier Sustainability Audit and Advocacy

Unimicron has been conducting on-site audits of suppliers since 2011 and has been increasing the number of suppliers audited year by year. In 2022, Unimicron conducted 44 on-site audits of key suppliers in Taiwan and China (the audits were conducted by Unimicron and its subsidiaries), and the results of the on-site audits showed that although there were still deficiencies, no suppliers were classified as high-risk. The main audited deficiencies of suppliers in Taiwan and China were in the aspects of labor, health and safety and supplier risk management.

Unimicron requires audited suppliers to complete or propose improvement plans within the improvement deadline, and by the end of 2022, the suppliers’ deficiency cure rate was 45% in Taiwan and 100% in China. For suppliers who have not completed the improvement or proposed improvement plans, Unimicron will continue to ask suppliers to complete the improvement and uphold the spirit of coexistence and co-prosperity, cooperate with suppliers to promote ESG works, and jointly move towards the goal of sustainable development.

Supplier Sustainability Audit Process

Supplier Sustainability Audit – On-Site Audit

(Unit: times)

2022 Supplier Audit Violations

Findings and Improvement Actions of 2022 Supplier Audit in Taiwan Facilities

Supplier Communication Platform Shares Sustainable Information to Drive Supply Chain Sustainability

Unimicron follows international standards and regulations such as the RBA Code of Conduct, ISO 14001, ISO 45001, and QC 080000. We have also established comprehensive supplier management regulations based on the environment, human rights, safety, health, and ethical principles outlined in the above international standards to promote CSR. We launch campaigns on quality/green products, OSH, information safety, and sustainable management, and communicate with suppliers to create a win-win partnership. Since the COVID-19 pandemic has not yet subsided, the annual suppliers' meeting in Taiwan had been changed to an online advocacy through the suppliers' platform, and it was held in the form of supplier commitment letters and emails for factories in China. All suppliers who have business dealings with Unimicron are the subjects of the advocacy and the advocacy had completed 100%