Responsible Supply Chain Management
Key Performance in 2023
Tier 1 Suppliers and Significant Suppliers in Non Tier-1 have completed risk screening
Significant Tier-1 Suppliers have completed the comprehensive assessment
Significant Tier-1 Suppliers evaluated to pose negative ESG impact have devised a corrective action plan
Significant Tier-1 Suppliers evaluated to pose negative ESG impact have received capacity development to improve ESG practices and performance
Key Progress in 2023
Devlop a proactive supplier sustainability audit model which corresponds to international standards, industries, business sizes and products
Promote education and support SMEs in pledging the Declaration of the Thai Collective Action Against Corruption (CAC)
Established programs to develop construction suppliers and transportation contractors (capacity building) to improve ESG approach and performance
Organize buyer development training on sustainability procurement course for executives, employees, and involved parties in the procurement process
Significantly Affected Key Stakeholders
Supporting the SDGs
SDG 4 Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
4.4 Substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship
SDG 8 Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services
SDG 12 Ensure sustainable consumption and production patterns
12.7 Promote public procurement practices that are sustainable, in accordance with national policies and priorities
Performance Against Goal
2030 Goal
100%Tier 1 Suppliers with high sustainability risk (significant suppliers) must receive comprehensive assessment and improved
Progress against goals
Performance Summary 2023
Supplier category identification
Tier-1 Suppliers
Significant Suppliers in Tier-1*
Significant Suppliers in Non Tier-1*
*Criteria for considering Significant Suppliers
1.Suppliers with a high risk of negative environmental Social and Governance (ESG) impacts and/or
2.Suppliers with significant business relationships with the Company, which means that the suppliers are at risk of dependence of the Company, such as high value suppliers and or suppliers that can affect the competitive advantage, market success and or irreplaceable suppliers
*A total of 124 significant Tier-1 suppliers (56 existing and 68 new) were subjected to risk assessments in 2023 using the company's criteria. This evaluation covered both suppliers due for reassessment and newly onboarded suppliers
Proportion and purchase value
Total spend on domestic suppliers in Tier-1
Total spend on significant suppliers in Tier-1
Total spend of SMEs*
*Remark: The purchase value from SMEs encompasses agricultural products, community products, community enterprise products Suppliers Spending Analysis
Tier-1 Suppliers Engagement
Communicated for Suppliers Code of Conduct
Written Acknowledgement for Suppliers Code of Conduct
Training Provided for Responsible Supply Chain Management
Significant Tier-1 Suppliers Engagement
Communicated for Suppliers Code of Conduct*
Written Acknowledgement for Suppliers Code of Conduct*
Suppliers with ESG impact participate in the Capacity Development Program*
*Remark: Goal 2023: 100%
Managing suppliers risks with significant environmental, social, and governance (ESG) implications
*Remark: Goal 2O23: 1OO%
Total suppliers assessed via desk assessments or on-site assessments
*Remark: Percentage of suppliers that may have a negative impact on all suppliers assessed
Total suppliers assessed with substantial actual or potential negative impacts
Total suppliers with substantial actual or potential negative impacts that were terminated
*Remark: Goal 2023: 100%
(100% is not included significant non-tier 1 suppliers)
Total suppliers with Substantial Actual or Potential Negative Impacts with Agreed Corrective Action/Improvement Plan
*Remark: Goal 2023: 100%
(100% is not included significant non-tier 1 suppliers)
Total suppliers Supported in Corrective Action Plan Implementation
*Remark: Goal 2023: 100%
(100% is included significant Tier 1 and non-tier 1 suppliers)
Significant Suppliers (Include Tier1 and Non-Tier1 Suppliers) Have been capacity building
Risks and Opportunities
Companies generally manage respective supply chains with focus on economic efficiency, an approach which potentially leads to human rights infringements, child labor, forced overtime work, and unsafe environment, etc. The mentioned grievances affect Company image, disrupts business operations, and impact stakeholders. Therefore, responsible supply chain management, with a focus on suppliers, will elevate production, delivery and services to consumers efficiently. Imporve the quality of the product production process. Selecting effective suppliers and promoting respective capacity building, maintaining supplier relations, and integrating sustainability supply chain management, can potentially reduce expenditure risks, raw materials shortage and inventory risks, and human rights violations risks. The Company therefore aims to promote capacity of all supplier groups to enable mutual growth while considering social, environmental, corporate governance and human rights issues throughout the supply chain. The mentioned approach increases business opportunities, reduce operational risk, increase competitiveness and ushering change while promoting strengths and supplier business alliances for mutual growth.
Management Approach
The Company institutes policies for sustainable procurement through the Supplier Code of Conduct which takes into consideration society, the environment, efficient supply chain with transparency and fairness, human rights commitment, and material issues. The mentioned issues comprise basic human rights, child labor, working conditions, compensation, occupational health and safety business, ethics, environmental standards in processes, supplier products and services, supplier support in establishing sustainable procurement policies, engagement with all stakeholder groups, and operational support alongside Tier-1 and Critical Non-tier 1 suppliers.
The Company simultaneously established screening for Tier-1 suppliers encompassing various groups, including high purchase values suppliers, strategically important critical component suppliers, suppliers of limited numbers within respective categories, non-substitutable suppliers, medium purchase value suppliers, and small purchase value suppliers, including suppliers that may create an ESG impact to identify significant suppliers and conduct assessments to comprehend significant supply chain management risks. Additional focus includes supporting life quality creation and fostering good relationships with communities and society, engagement in mitigating environmental and ecological impacts within sustainable supply chain management policy and operational goals.
Supply Chain Management Strategy
Provisions, procurement, contracting, procurement management of equipment, products, services, and construction according to specifications at the highest level of service (product quality, cost, after-sales service, and delivery)
Integrated demand and supply chain management (through balancing data utilization and reflecting on cost and supply management)
Develop and co-create innovative products, services, and equipment with partners/suppliers to increase variety and operational efficiency
Strengthen strategic alliances and manage sustainable business partnerships
Suppliers’ Code of Conduct and Guideline
In 2022, the Company updated the Suppliers Code of Conduct and Guidelines to cover Tier-1 Suppliers and Non Tier-1 Suppliers throughout the supply chain through incorporating 16 guidelines, effective from 1 June 2022. Training courses on Buyer Development Training on Sustainability Procurement were organized to communicate to employees at all levels to gain comprehension of the Suppliers Code of Conduct and Guideline, which serves as the Company sustainable supply chain management guideline in operations.
Throughout the past 4 years, the Company has communicated the Suppliers Code of Conduct and Guidelines to Tier-1 Suppliers totaling 2,242 suppliers and in 2023 the Company communicates the Suppliers Code of Conduct and Guidelines to 121 new Tier-1 Suppliers, accounting for 100% of Tier-1 Suppliers.
Sustainable Supply Chain Management Process
| Sustainable Supply Chain Management Process | |||
|---|---|---|---|
| Integrate the concept of sustainability, reduce risks throughout the supply chain | Value and Develop Creation Support SMEs | ||
01 Communicate expectations, recruit, and select capable suppliers while considering sustainability criteria |
02 Supplier sustainability risk management (screening and assessment) |
03 Promote and support capabilities development |
04 Build and maintain a long-term relationship |
1. Communicate expectations, recruit, and select capable suppliers
The Company's Board of Directors has placed a strong emphasis on responsible, efficient, and human rights-respecting supply chain management. This commitment is reflected in the Company's Sustainable Procurement Policy and Guidelines, which integrate sustainability considerations into every step of the new supplier selection process. The Company's new supplier selection criteria encompass the following key aspects: Product quality and safety, Capable manufacturing and cost management practices, Responsible business partners who operate in accordance with all applicable laws and regulations, Delivery capabilities and ESG performance evaluation based on the Company's ESG supplier selection criteria.
The Company selects and contract award with suppliers in a transparent and fair manner based on their Good ESG performance are preferred by applying a minimum weight to evaluation scores against the Company's ESG criteria. This selection process considers traceability and includes evaluating potential suppliers' compliance with relevant laws, regulations, and requirements, as well as their ESG performance. Suppliers who cannot achieve the minimum ESG requirements within a set timeframe specified by the company will not be considered for contract award. In 2023, 121 new suppliers, accounting for 100% of suppliers, were selected using criteria which integrates sustainability issues covering environmental, social and human rights dimension, governance and economic.
The Company communicated the organization's expectations based on the Code of Ethics and Guidelines for Partners to all partners. Partners were required to acknowledge receipt of the Code of Ethics and Guidelines for Partners. In 2023, the Company communicated the Code of Ethics and Guidelines for Partners to 121 new Tier-1 Suppliers, representing 100% of new Tier-1 Suppliers.
In addition, the Procurement Unit continuously monitors and reviews its sustainable procurement practices on an annual basis to ensure they are aligned with the Supplier Code of Conduct and to avoid potential conflicts with the company's ESG requirements. The Unit also disseminates sustainable procurement policies and practices through training, knowledge sharing, and various awareness-raising activities for procurement executives, employees, and relevant stakeholders across the supply chain.
In 2023, the company organized a Sustainable Procurement Development Training for company’s buyers involved in the procurement process within the organization. The course also aimed to raise awareness and their roles in supplier ESG Programs among executives and employees at all levels about the updated Code of Ethics and Guidelines for Partners (2022) to serve as a guideline for the company's sustainable supply chain management practices. A total of 566 participants attended the training.
2. Manage Suppliers’ Sustainability Risks (Screen and Assessment)
Companies recognize the significance of supplier screening as a crucial step in identifying and assessing potential risks associated with partnering with each supplier. These risks can encompass financial instability, product quality issues, operational disruptions, legal compliance concerns, and reputational damage. By proactively identifying these risks, companies can make informed decisions regarding supplier selection, develop effective risk management strategies, and mitigate potential negative impacts on their business operations.
To ensure sustainable growth and mutual success with its partners, the company has implemented a systematic, continuous, and annual supplier screening and risk assessment process. This comprehensive approach aims to enhance the performance of each supplier, fostering a collaborative environment for long-term growth. The process entails the following key steps:
| Supplier Assessment Process | |||
|---|---|---|---|
| Manage Supplier’s Sustainability | Promote and support capacity development | ||
| Supplier Screening and Identify Significant Suppliers | Supplier Assessment | ||
| - Screen suppliers using ESG indicators (Environmental, Social, Governance) and Business relevance - Methodology for suppliers screening by country-specific risk, sector-specific risk, and commodity-specific risks - Identify Significant Tier1 suppliers |
- Methods of Supplier Assessment (1) desk assessment (2) on-site assessments by 2nd party (3) on-site assessments by 3rd party - Audit procedure using SMETA standards - Assessment Results and Corrective Actions |
- Supplier information and trainings - ESG benchmarks against peers - Support on implementation of corrective action plan - Support programs to build capacity and ESG performance |
|
Supplier Screening and Identify Significant Suppliers
The Company mandates Supplier Screening for all Tier-1 Suppliers, including both Existing Suppliers and New Suppliers. This is the responsibility of the Procurement and Supply Chain Risk Assessment teams to identify potential supplier risks using Risk-Based Due Diligence tools on an ongoing basis.
In assessing supplier risk, the Company considers the level of risk in each assessment category: Country-Specific Risk: This arises from fluctuations in economic, social, and political conditions, as well as other external factors such as natural disasters in the supplier's operating area. Sector-Specific Risk: This stems from the specific characteristics of the industry in which the supplier operates. Commodity-Specific Risk: This arises from the products the supplier manufactures or sells. The topic of assessment of important sustainability risk issues as follows:
Environmental: E
Social: S
Governance: G
Business Relevance
Supplier Assessment
When the initial supplier screening conducted by the procurement and supply chain risk assessment teams identifies potential sustainability risks within the supply chain from an ESG and business dependency perspective, the company will proceed to conduct an in-depth supplier assessment to identify the actual residual risks. This in-depth assessment will follow a structured approach outlined as follows:
Example of a supplier assessment document
Example of a supplier assessment document, which includes a total of 16 criteria with a full score of 100 points
Here are some examples of documentation that suppliers can provide to demonstrate they have undergone ESG risk assessment and evaluation by a certified independent expert (3rd party assessment):
After completing each assessment process The company will prepare a report summarizing the results of the audit to the business partners. Contractors and business partners The report will include a total score. Scores covering environmental dimensions Social and governance aspects Comparison information with other suppliers (ESG Benchmark) including identifying issues discovered and recommendations from inspectors. In cases where partners, contractors, and business associates receive scores lower than the company's established standards, they are required to confirm and develop Corrective Action Plans (CAPs) addressing the implementation and effectiveness of their ESG operations. These CAPs must be submitted to the company within 15-30 business days.
Examples of a report depicting supplier ESG risk assessment results
In 2023, the Company conducted risk screening for 2,242 Tier-1 Suppliers, accounting for 100% of Tier-1 Suppliers, and assessed 124 Significant Tier-1 Suppliers, accounting for 100% of Significant Tier-1 Suppliers, and 19 suppliers assessed for actual or potentially significant negative impacts, equivalent to 15.32% of significant suppliers tier-1. The summary results from the assessment found 46 significant risk issues.
| Environmental Dimension | |
|---|---|
| Non-Conformity Issuse | Mitigation Plan |
| Environmental Management | |
| - Sewage management according to the announcement of the Ministry of Industry | - Notification of registration to the Ministry of Industry and prepare various permission applications according to Announcement from the Ministry of Industry |
| Social Dimension | |
| Non-Conformity Issuse | Mitigation Plan |
| Labor Management and human righst | |
| - Employee health screening according to risk factors | - Prepare a health examination manual based on risk factors and conduct health checks for employees |
| Occupational safety and health Human Rights | |
| - Organize training on "Fire fighting training and fire escape drills" for employees and making emergency plans in case of emergencies | - Create a trining plan along with organizing annual training and make a summary report on the training |
| - Organize trining on "Operational safety" for employees | - Create a safety manual and prepare training plans for employees |
| - Inspection of the operating environment | - Prepare an annual inspection plan for the operating environment by the agency that has been certified - Analyze inspection results and improve and correct according to the law |
| - Checking the condition of working equipment | - Prepare a plan to inspect the condition of work equipment and stop incidents ready to make and indicator sign |
| - Wastewater quality measurement | - Prepare a plan to check the quality of wastewater adn resolution plan in the case water quality is not up to standard |
| Corporate Governance Dimension | |
| Non-Conformity Issuse | Mitigation Plan |
| Compliance with lows and regulations | |
| - Paying the minimum wage according to the law | - Prepare and employment contract and prepare evidence of payment of wages To be consistent with the law Put it in writing in a language that employees understand |
| - use of dangerous chemicals | - Prepare a list of hazardous chemicals and details of safety information on hazardous chemicals and report to goverment agencies |
| - Announcement of appointment and registered Personnel or safety agencies At the management level, supervisors, etc | - Appoint personnel at various levels in accordance with legal regulations and send them for training as well as inform them of further registration. Office of Labor Protection and Welfare |
In addition, the Company encourages suppliers to develop sustainability risk management measures within their own departments and continuously monitor progress in improving and resolving suppliers risks and supports suppliers potential in development, business, efficiency and sustainable growth alongside the Company.
3. Promote and support capacity development
The Company organized various projects to provide knowledge and increase suppliers sustainability capacity to internal and external personnel through suppliers ESG programs through various channels. The mentioned effort includes online and offline training, manual preparation for sustainable and responsible ESG principles relevant to conducting business, suppliers assessment, and suppliers business ethics and guidelines development including best suppliers practices in sustainable operations, etc.
In addition, the company places a strong emphasis on promoting and supporting its partners in closing ESG gaps to enhance their sustainability performance and align with the company's expectations. This is achieved through the following initiatives:
Supplier information/trainings on company’s supplier ESG program, process, and requirements
Supplier access to ESG benchmarks against peers
Supplier support (remote/on-site) on implementation of corrective actions
In-depth technical support programs to build capacity health & safety management topic for transportation contractor
Sustainability risk results analysis of suppliers (Non-Compliance (Potential Fact Finding: PF)) according to the law revealed common risks issues in 2023 inclusive of occupational safety and health.
The Company has therefore developed programs to provide in-depth technical support to improve occupational health management potential and safety in logistics and develop in-depth safety management potential for logistics contractors. This approach raises transportation
vehicle safety standards for vehicles involved in Company operations. Plans to regularly monitor progress from 2022 - 2023 are as follows:
Impacts and Benefits
Logistics contractors gain better transportation safety comprehension
Transportation accidents reduction
 39% |
|
(representing 6O.98% of 2O22) |
The Company is committed to continuously developing suppliers capacity, through 3 approaches as follows:
In 2023, the Company has undertaken a variety of projects to provide knowledge and enhance suppliers sustainability capacity. The outstanding projects are as follows:
Suppliers capacity development continuation project
The Company proceeded with capacity development projects for contractors for the seventh continuous year as a measure to prepare contractors prior to operations initiation. This approach raises work safety awareness through training courses on workplace safety specifically for construction contractors, electrical work, repair work, specialized work, and transport contractors. In 2023, 106 contractors participated in the training.
In addition, the Company organized a training program for the Coalition Against Corruption of the Thai Private Sector (CAC) in 2023 for 58 SMEs entrepreneurs in an online. format according to the New Normal way to create values, promote operations with honesty, transparency, and without corruption.
121 New suppliers received training and education regarding the Suppliers Code of Conduct and Guideline via online format. The content scope covers international practices for the environment, instance energy management, social, waste management, labor practices, occupational health and safety and corporate governance, which consists of personal data protection and anti-corruption.
“Vendor Conference 2O23” Project
CPRAM is committed to fostering good relationships with strategic suppliers in addition to communicating organizational policies, guidelines, and directions. The company is ready to exchange knowledge, including managing the production process throughout the supply chain and quality assurance management during the beyond border era and has therefore organized the "Vendor Conference 2023" under the concept of ALL FOR ONE, ONE FOR ALL, with lectures on the Sustainable Development Goals - ESG, with suppliers as strategic partners. Over 200 important organizations attended the event
ALL Delica Alliance (ADA) Project
CPRAM continues to support and cooperate in the development of appropriate technologies and innovation throughout the value chain through establishing the ALL Delica Alliance (ADA) project, a food alliance for sustainability vital towards project success achieved through adopting the FOOD 3S (Food Safety, Food Security, Food Sustainability) concept. This management approach for the entire food suppliers supply chain offers greater depth and breadth to develop collective strength among members of the ADA project. The dissemination of exchange knowledge and experience from business management experts in product development, marketing, production process improvement, quality assurance and appropriate cost management is conducive towards robust suppliers partnerships with the goal to propel forward in terms of the economy, society, community, and further national progress.
7-Eleven alongside Thai Farmers continuation project
The Company has operated the 7-Eleven project alongside Thai farmers for the 10th year in a row to enhance farmers’ quality of life and provide customers with better access to agricultural products through post-harvest technology innovation implemented to the production process. The innovation adds value to Homthong Banana products and has since expanding to include fresh vegetable products, seasonal fresh fruits, salads, trimmed fruits and ready-to-cook vegetables, as well as promoting good manufacturing practices (GMP) in manufacturing plants. The joint development of packaging adds value to products.
Impacts and Benefits
were participated in the project
4. Build and maintain a long-term relationships with suppliers
The Company emphasizes responsible supply chain management and strengthen suppliers through "smart and good" progress to collectively develop sustainability. Therefore, the Company continues to foster good relationships with suppliers through seminars and announcements Company policy direction, collaboration with strategic suppliers to establish business growth development guidelines and visiting suppliers on an annual basis for opinion and suggestion exchanges. In exchanging necessary information and knowledge, implementing various cooperation projects including developing environmentally friendly packaging and post-consumer packaging management, capacity development, joint technology and innovation development to add value to SMEs products to satisfy market demands and consumer behavior in addition to increasing operational efficiency for suppliers throughout the supply chain.
Case Study: Triple Fresh Company Limited
7-Eleven collaborates with SMEs with potential for growth opportunities in the domestic fruit market and 7-Eleven team experts to provide advice on product quality development, marketing, and packaging development. This collaboration enables reduced processing and time associated with fresh fruit delivery which allows consumers to receive over 10,000 packs of fresh and high-quality products per day sold in over 8,000 7-Eleven stores in Bangkok and surrounding areas.
ESG Integration in SCM Strategy
The Company has integrated ESG in SCM strategy as follows:
| Key objectives | ESG-related objectives in supply chain management | Overall supply chain management strategy linking to ESG |
|---|---|---|
Empowering SMEs |
Enhance SMEs capability in diffe rent perspectives, e.g. financial, product development, packaging development, logistics, sustainability, etc. Our supply chain management focuses on co-creation initiatives according to SDG 8.2, Striving for results entails creating positive economic impact alongside improving the quality of life of society and communities |
Create shared value "development and promotion of SMEs", CP ALL is committed to improving the potential of business partners, especially small and medium-sized enterprises, by providing training, consulting and advice on standard inspections. Root management Including co-inventing innovations to create efficiency in treatment Environment and friendliness to society and community |
 Reducing plastic waste from packaging |
Reduce volume of packaging usage from suppliers within the general waste management process, consistent with CP ALL’s circular economy goals. This aims to fulfill SDG 12.6 and CP ALL Sustainability Framework “Biodiversity and Ecosystem Protection” through packaging design, materials, and reduction programs. through packaging design selection of materials with an aim to reduce the amount of plastic waste packaging development project, to be friendly to the ecosystem and environment |
7 Go Green “environmentally friendly packaging” reduces the use of plastic in packaging and integrates sustainability concepts into various operations, especially in packaging design and material selection. The joint projects between packaging suppliers include developing processes which reduce the amount of material used, etc. |
In addition, the Company has applied the sustainability criteria to assess the risks of its existing and new suppliers manufacturing Private Brand: PB products whereby suppliers must undergo sustainability risk assessments through the Suppliers Self-Assessment Questionnaires (SAQ) system. Selected suppliers meeting Company criteria standards must score a minimum of 50% on sustainability performance. The established Company established sustainability criteria include product and production standards, employment, welfare, and environmental management.
Supply Chain Management’s Success Indicators
The Company has set the index to measure the success of supply chain management. In 2023, there are indices that measure success goals, and operating results as follows:
| Supply Chain Key Performance Indicators (KPIs) | Target | Performance for the previous 3 years |
|---|---|---|
| Tier 1 Suppliers considered Significant Suppliers in terms of sustainability must be proactively audited (Comprehensive Assessment) for development and improvement | 100% of Tier 1 Suppliers with high sustainability risk must receive comprehensive assessment and improved by 2030 | |
| Procurement spending on SMEs | Procurement spending on SMEs increased by 10% by 2025 (compared to base year 2020) | |
| Supplier Engagement | 80% for supplier engagement level by 2030 | |
| Plastic packaging within the Company's control (Private Brand) must be reusable or reused or biodegradable | 100% of plastic packaging within the Company's control (Private Brand) must be reusable or reused or biodegradable for companies operating in Thailand by 2025 and for companies operating overseas by 2030 |
Related Policy and Guideline
| News and Activities | Visit Page |
| Sustainable Sourcing Policy | Download |
| Supplier Code of Conduct and Guideline | Download |
