Responsible Supply Chain Management

Responsible Supply Chain Management

Key Performance in 2023


100%

Tier 1 Suppliers and Significant Suppliers in Non Tier-1 have completed risk screening

100%

Significant Tier-1 Suppliers have completed the comprehensive assessment

100%

Significant Tier-1 Suppliers evaluated to pose negative ESG impact have devised a corrective action plan


100%

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

2242  suppliers

Tier-1 Suppliers

68  suppliers

Significant Suppliers in Tier-1*

17  suppliers

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
*68 significant tier 1 suppliers reported was the risk assessment cycle in 2023, based on the company's criteria, covering both the suppliers at the evaluate anniversary and the new suppliers

Proportion and purchase value

Total spend on domestic suppliers in Tier-1

Total spend on significant suppliers in Tier-1

74911  million Baht

Total spend of SMEs*

*Remark: The purchase value from SMEs encompasses agricultural products, community products, community enterprise products

Tier-1 Suppliers Engagement

2242  suppliers

Communicated for Suppliers Code of Conduct

2242  suppliers

Written Acknowledgement for Suppliers Code of Conduct

2242  suppliers

Training Provided for Responsible Supply Chain Management

Significant Tier-1 Suppliers Engagement

68  ราย

Communicated for Suppliers Code of Conduct*

68  ราย

Written Acknowledgement for Suppliers Code of Conduct*

19  ราย

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

68  suppliers

*Remark: Goal 2O23: 1OO%

Total suppliers assessed via desk assessments or on-site assessments

19  suppliers

*Remark: Percentage of suppliers that may have a negative impact on all suppliers assessed

Total suppliers assessed with substantial actual or potential negative impacts


0  suppliers

Total suppliers with substantial actual or potential negative impacts that were terminated


19  suppliers

*Remark: Goal 2023: 100%

Total suppliers with Substantial Actual or Potential Negative Impacts
with Agreed Corrective Action/Improvement Plan

19  suppliers

*Remark: Goal 2023: 100%

Total suppliers Supported in Corrective Action Plan Implementation

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

01

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)

02

Integrated demand and supply chain management (through balancing data utilization and reflecting on cost and supply management)

03

Develop and co-create innovative products, services, and equipment with partners/suppliers to increase variety and operational efficiency


04

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 establishes guidelines for effective responsible supply chain management which prevents human rights violations through the integration of sustainability issues in recruiting and selecting suppliers throughout all processes in addition to setting potential and qualification criteria for suppliers which encompass: New people every step of the way as well as setting criteria for evaluating potential and qualifications for selecting new business partners covers important issues as follows: 1. Product quality and safety 2. Appropriate production capability and cost management 3. Suppliers’ compliance with relevant regulations and laws 4. Capacity to deliver and performance in Sustainability (ESG), measured from supplier fulfillment of Company determined sustainability criteria (ESG). Suppliers are excluded from contracting if they cannot achieve minimum ESG requirements within a set timeframe. Suppliers Spending Analysis

Additionally, Suppliers receive communication regarding Company expectations in accordance with the Suppliers Code of Conduct and Guidelines. Purchasing practices towards suppliers are continuously reviewed to ensure alignment with the Suppliers Code of Conduct and to avoid potential conflicts with ESG requirements in addition to sustainable purchasing awareness. Training for Company’s buyers and/or internal stakeholders in their roles within the supplier ESG program. Stakeholders include contractors and suppliers playing critical roles in propelling the Company forward to reach ESG performance goals throughout the supply chain.

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.

2. Manage Suppliers’ Sustainability Risks (Screen and Assessment)

The Company requires supplier risk screening coverage for all Tier-1 suppliers, both existing suppliers and new suppliers, with the procurement departments and supply chain risk assessment departments assuming responsibility to continually investigate preliminary supplier risks utilizing the Risk-Based Due Diligence tool.

In considering criteria specific risk levels, the following sustainability risk factors are evaluated: 1. Country-Specific Risk entailing risks arising from fluctuations in economic, social, political conditions, and external factors inclusive of natural disaster occurrence within supplier operating vicinity, 2. Sector-Specific Risk due to industry characteristics of respective supplier, 3. Commodity-Specific Risk from supplier manufactured or sold products. The topic of assessment of important sustainability risk issues as follows:

Environmental: E

  • Climate Resilience
  • Sustainable packaging management
  • Sustainable waste management
  • Sustainable raw material sourcing
  • Ecosystem and biodiversity protection

Social: S

  • Human rights and labor management
  • Occupational health and safety

Governance: G

  • Health and well-being (Product quality and safety)

Business Relevance

  • Appropriate production capability and cost management
  • Capability and efficiency in product delivery and logistics

In 2023, the Company conducted risk screening for 2,242 Tier-1 Suppliers, accounting for 100% of Tier-1 Suppliers, and assessed 68 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 27.94% of significant suppliers tier-1. The summary results from the assessment found
46 significant risk issues.

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.

Buyer Development Training on Sustainability Procurement

CP ALL Public Company Limited organized sustainable procurement development training courses on for procurement employees within the organization and created awareness among executives and employees at all levels in terms of the revised 2022 Suppliers Code of Conduct and Guidelines, which serve as a guideline for the Company sustainable supply chain management operations. 566 participants received the training.

In addition, the company encourages suppliers, they can access their own ESG assessment results, as well as those of their peers through the Sustainability Risk Assessment Report.

Examples of a report depicting supplier ESG risk assessment results

In addition, the Company has established guidelines for suppliers needing corrective action if sustainability issue requirements are not satisfied through dedicated onsite and online channels. The mentioned guidelines for developing ESG operations efficiency within a mutually agreed period are provided.

Example of onsite and online supplier meetings

The Company recognizes the importance of developing suppliers capabilities to enhance sustainable operations and satisfy Company determined ESG standards. Noteworthy in-depth technical support programs to develop suppliers capacity and ESG performance are as follows:


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:

  • A working group on transportation safety and product quality standards was appointed to determine measures to reduce accident risks, both during and outside working hours, and establish product quality control standards during delivery. CP ALL executive representatives and transportation contractors participate in meetings twice a month to efficiently develop relevant safety standards
  • Continuously organize training, communication, and awareness programs associated to transport vehicle safety among involved parties.
  • Establish safety standards for transport vehicles and inspect vehicle condition prior to journey
  • Designate stopovers on long-distance transport routes over 25O kilometers or journeys over 4 hours
  • GPS installation on 100% of transport vehicles
  • Establish road condition and emergency reporting systems including accident risk locations in each area potentially affected by floods and alternative bypass routes
  • Organized “TELETEC DRIVING CONTEST PROJECT” safety promotion activities, where the competition period is 1 month per area, continuously throughout 2022-2023
  • Prepare daily reports and follow-up on transportation accidents

Impacts and Benefits

Logistics contractors gain better transportation safety comprehension

Transportation accidents reduction

Number of aooidents in 2O22 : 164 Cases
 39%
Number of aooidents in 2O23 : 1O1 Cases
(representing 6O.98% of 2O22)

The Company is committed to continuously developing suppliers capacity, through 3 approaches as follows:

  • Joint Business Plan : develop business plans with strategic suppliers
  • Project & Initiatives : provide knowledge to suppliers through various activities
  • Implementation & Evaluation : organize training courses on sustainability

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

2954  persons

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
SMEs Purchase Growth (Procurement Spending) SMEs product purchase growth 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 ActivitiesVisit Page
Sustainable Sourcing PolicyDownload
Supplier Code of Conduct and GuidelineDownload

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