Supply Chain Management

Key Achievements

Guided by its philosophy of sustainable operations, SNI continues to promote its corporate social responsibilities and utilizes supplier meetings as a platform for direct advocacy, consultation, communication, and interaction with suppliers, so as to announce SNI’s latest version of restricted hazardous substance management procedures, future environmental protection policies, quality requirements, and labor & ethics management. At the same time, it addresses various issues such as the RBA Code of Conduct, effects of GHG emissions, energy resource depletion, and climate change in order to work together with suppliers to fulfill its corporate social responsibilities. SNI urges its suppliers to adhere to the guidelines specified in the RBA Code of Conduct and complete their supplier corporate social responsibility self-evaluation forms since the company shares its green knowledge and experience in energy-conservation and carbon reduction with suppliers through such platform. This is also a way to build consensus and awareness of the green supply chain philosophy among SNI suppliers. The company can jointly develop a comprehensive green supply chain system that can achieve the goal of multiple wins by creating green products that are environmentally friendly, beneficial to improving people’s quality of life, and capable of achieving a harmonious coexistence and shared prosperity for all.

In 2019, ratio of local purchasing was 82.38%.

In 2019, statistics of conflict mineral investigation were conducted 420 suppliers.

In 2019, outstanding supplier award to Qualcomm, Broadcom, Marvell, NXP, Qorvo.

In 2019, a total of 59 suppliers responded CSR self-evaluation forms.

In 2019, the ratio of primary material suppliers which are based in Taiwan was 91%.

In 2019, SNI recycled 1,261K pcs of partitioning trays.

 

In 2019, ratio of reduction of transportation vehicle trips was 8.79% and saved about 660 liters of diesel fuel.

Supplier Requirement

To become an SNI material supplier, vendors are required to go through extensive investigation and evaluation based on various aspects like material selection, identification, and incoming materials management, scale of facilities, supply capacities, QA system, and relevant inspection instruments. This ensures that suppliers comply with SNI requirements for FQC, delivery time, and use of restricted substances in order to facilitate smooth manufacturing operations. By purchasing materials at reasonable prices, SNI is able to generate profit for the company.

SNI’s purchasing department conducts audits on a monthly basis to evaluate major material suppliers based on their performance with regard to FQC, delivery time, degree of cooperativeness, and business reputation (i.e. environmental and labor conditions, human rights, society, and other negative impacts). SNI has incorporated the RBA Code of Conduct provisions in its purchasing contracts and expects all suppliers to comply with relevant requirements as indicated in the remarks section for orders.

SNI encourages all suppliers to abide by the RBA Code of Conduct by completing the Supplier Corporate Social Responsibility Self-Evaluation Form and promoting energy conservation and carbon reduction management. It is hoped that suppliers work together with SNI to promote the latter’s supply chain system, creating a positive image that embodies labor rights, human rights, safety, and environmental sustainability so as to build customer confidence.

Since 2017, SNI has been requesting all major material suppliers to submit their Supplier Corporate Social Responsibility Self-Evaluation Forms. A total of 59 suppliers responded and 49 were found to be compliant; the remaining 10 failed to meet the requirements. As such, SNI has planned to conduct a on-site audit counseling in 2020 to help suppliers fulfill their obligations pertaining to corporate social responsibility, energy conservation, and carbon reduction management. Suppliers that failed to meet the requirements have been notified to take corrective actions before the specified deadline. If they fail to do so, they will be replaced by backup suppliers.

Purchasing Policy

1. Comply with relevant company policies, generate profit for the company by establishing a harmonious coexistence and shared prosperity with suppliers based on fair and reasonable principles.

2. Select and cultivate competent purchasing personnel and implement job rotations to improve work ability.

3. Know the sources of supply; actively support outstanding suppliers, outsourced vendors, and secondary sources.

4. Ensure control over four major elements; namely, quality, delivery time, pricing, and after-sales service in order to create more profit for the company.

5. Learn about market supply and demand, enhance professional knowledge, and ensure adequate communication and coordination to improve purchasing efficiency.

Manufacture Management

Transportation and Logistics Management

With regard to personnel transportation activities, SNI continues to optimize the service routes of its shuttle vehicles and has adjusted its service schedules in order to increase vehicle occupancy rate while reducing vehicle mileage. SNI also ensures that all its vehicles are properly maintained to keep them in optimal condition so as to improve mileage and reduce energy consumption as well as carbon emissions.

In terms of cargo transport, SNI facilitates interdepartmental coordination to achieve collective transport of loose cargo in order to reduce the number of vehicle dispatches. Moreover, it keeps track of the number of trips made by each vehicle in order to optimize its vehicle and personnel dispatch plan for product delivery, achieving the highest possible utilization rate of vehicle storage space in accordance with pre-established routes. Goods to be delivered on the same route are transported by the same vehicle in order to reduce the number of trips to be made. This helps reduce expenses and increase transportation efficiency by effectively eliminating convective transport, thereby alleviating potential traffic congestion.

In 2019, SNI completed its statistics on the number of trips made by transport vehicles, which totaled 1502 trips. With changes made, SNI was able to reduce the number of trips by 132 (1370), which translates to a reduction of 8.79%, saving about 660L of diesel fuel. In 2020, it endeavors to complete its statistics on the number of transport vehicle trips and reduce it by 1%.

Local Materials

SNI understands the significance of preserving energy resources and the convenience and advantage of local supplies. Given the importance of meeting product functional requirements and complying with customer and legal requirements, SNI has sought and cultivated local suppliers to develop and test their samples in accordance with new material recognition and introduction procedures while implementing purchasing solutions in the hopes of reducing energy resource consumption and environmental impacts. In terms of material selection, SNI prioritizes materials from local suppliers aside from considering competitive pricing and materials designated by customers. The company continues to purchase materials locally to the best of its abilities in order to prevent unnecessary costs and energy waste from air or ocean freight.

SNI’s Ratio of Local Purchasing

Note:Calculation is based on the proportion of local purchase amount to the total purchase amount.

Statistics of Suppliers Completing the Conflict-Free Smelter and Due Diligence Form

Unit:Company

Note:The investigation was conducted on primary and secondary suppliers.

SNI’s Conflict Mineral Policy

As an upright corporate citizen, SNI is committed to fulfilling its corporate social responsibilities, respecting human rights, and reinforcing conflict minerals management by requiring its supply chain to comply while implementing the following policy:
- The company does not support or use metals sourced from areas affected by armed conflicts, illegal mining operations or poor mining conditions. These minerals are also called conflict metals.
- SNI suppliers assures that none of its products containing gold (AU), tantalum (Ta), stannum (Sn) and tungsten (W) have been sourced from conflict mineral areas.

This policy has been disclosed to all SNI employees and supply chain, requiring compliance of all concerned parties.