Supply Chain Management
Cascading Responsibilities Through Out the Value Chains
Key performance in 2019
Supply chain management is the heart of the Company’s business operation, and so are the trading partners. Efficiency in supply chain management is one of the factors that give the Company its competitive advantage, mitigate the business risks, and uplift its capability to fulfil consumers’ needs. The Company also aims to balance out its relationships with both major and minor business partners to apportion the trading opportunities to smaller firms the same way it does to large corporations. Risk management protocol that is too rigid may eventually lead to deprivation of opportunities, which would consequently hinder smaller firms to grow in a sustainable way—a situation far from what the Company envisions its value chain to be. Concurrently, the Company also integrates sustainability issues into its supply chain management policies to encourage improvement and propel the growth of the organization, society, and the environment sustainably and in unison.
CP ALL Plc. and its subsidiaries (“the Company”) is resolute in continuously managing our supply chain with great efficiency and integrating the sustainability principles into every step of the supply chain operation. In addition to sustainable procurement of raw materials, the Company also advocates sustainability operation among Tier-1 business partners to promote sustainable growth for both the suppliers and the organization and to nurture society and the environment.
The Company encourages its business partners of all business models and industries to employ the 16 topics in the Suppliers’ Code of Conduct and Guideline. The Company has communicated with supplier all sectors about its 4 steps in sustainable operation, listed as follows.
1. Procure and select high-functioning suppliers
The Company incorporates sustainability movement into every step of new business partner selection to make its policy and expectation clear to potential suppliers. In addition to partnering with suppliers who comply with the law and regulations, the Company also takes the capability to produce, quality factors, food safety, traceability, and sustainability protocol into account. In the light of supplier assessment criteria, the Company prioritizes different factors for different suppliers. For example, contractor suppliers for Siam Makro PCL are considered based on the ability to promote safe work environments, management quality, factory standard, product control, and environmental management. Additionally, the Company also audits the potential suppliers for recruitment procedure and freedom to unionize. As for agricultural suppliers for CPRAM Co., Ltd, the emphasis is put on good agricultural practices.
2. Suppliers’ Risk Assessment
The Company performs Environmental, Social and Governance (ESG) Risk Assessment on its potential suppliers based on the suppliers’ business models and industries. The methodology is using the Risk Base Due Diligence system evaluated by merchandising team in tandem with Supplier Self-Assessment Questionnaires (SAQ) completed by existing suppliers
3. Foster and promote suppliers’ capability
The Company is steadfast in supporting its suppliers for capability enhancement through the 3 Supplier Capability Enhancement Schemes. Working together with the suppliers to develop strategic business plans is one of the ways to reinforce collaborative relationships between the Company and its trade partners to create novel projects. Training and seminars about various topics from the Company to its suppliers are also important elements to the increment of the suppliers’ competitive advantage and operation efficiency—for the sustainability of both parties. The examples of such programs include preparation for negotiations with third-party players, ethics and good practices for the development of a sustainable business, and suppliers’ self-assessment guidelines.
A variety of projects targeting the boost of suppliers’ sustainable efficiency are also crucial to accomplishing the Company’s goals. Self-scan for product expiry dates at the points of sales using data matrix are now available for consumers’ utilization, aiming to reduce the number of complaints on product quality, to build consumers’ trust, and to increase product credibility. To elevate the traceability measurement, consumers can also trace back to a product’s source of origin and manufacturing procedures through QR Code scan. The Go-Green Roadmap is also being implemented to reform product packaging. Additionally, annual supplier on-site audit is also employed to review suppliers’ performance on the Company’s regulated metrics. The opportunities also facilitate experience and opinion sharing between the Company and its trade partners to further co-improve the efficiency and procedures more proficiently.
For More Detail —> SMEs Promoting and Capacity Development Guideline
4. Build and maintain long–term relationship with suppliers
Forging and nourishing long-term relationships with business partners have been a life-long mission of the Company. These are done by encouraging knowledge sharing, transferring knowhow of agricultural innovations to partnered farmers, and setting up a team to expand suppliers’ expertise and skills to co-develop new products. The Company also organizes annual supplier meetings to exchange viewpoints, to co-construct business plans, and to strengthen relationships with the business partners.
Key project in 2019
Suppliers’ Risk Assessment project
Objective to performs Environmental, Social and Governance (ESG) Risk Assessment on its potential suppliers based on the suppliers’ business models and industries. for existing and new suppliers.
The Company performs Environmental, Social and Governance (ESG) Risk Assessment. In 2019, the Company released 4 evaluation criteria:
Results and benefits
- the Company to identify 130 high-risk suppliers or 1.87% on sustainability issues
- the Company performed on-site sustainability audit as the figures below:
- Following the results obtained from Supplier Self-Assessment Questionnaires (SAQ). The on-site audit revealed several sustainability risks (e.g., compliance to law and regulations, occupational health and safety, and environmental impacts). As a result, the Company called for cooperation from its suppliers to create its own sustainability risk management protocol. 100% of suppliers evaluated as risky from on-site auditing had protocol’s requirements that are commendable within one year. Examples of the requirements are as follows:
- The Company tracked the progress of the amendment using both desktop and on-site reviews, with the 18 topics of sustainability expectations taken from auditing 11 supplier sites. Suppliers that ability to improve negative impacts are 100% out of all suppliers. However, the Company is pushing forward with the usage of sustainability risk assessment results to support suppliers’ improvement on operating a sustainable business. The ultimate hope is to join forces in ushering a holistic environmental and social responsibilities and grow together with all suppliers in a sustainable way.
ESG Training for Siam Makro Project
Objective To provide a training, educate on business operations with the sustainability practices.
Siam Makro PCL is determined to become an excellent business partner by sourcing quality products and selling them at reasonable price points to allow profitability for its suppliers. The company also helps suppliers to effectively manage the liquidity of cash flow for feasibility in growth. The mission to become an excellent business partner for Siam Makro PCL is also reflected in corporate social responsibilities and good governance. In November 2019, the company organized a training session to educate suppliers on its sustainability expectations, hoping to provide business expertise and follow the sustainability practices through seminars, educational training, on-site audit, and performance tracking. Siam Makro PCL also focused on communicating the good sustainability practices to the suppliers, so that they could adapt the practices into their organizations.
Results and benefits
From overall post-seminar evaluation, participants achieved noticeably higher post-test average score, comparing to the pre-test average score.
Capacity Building for Small Partner Contractors Project
Objective to equal opportunity company to both major and minor contractors
the company is an equal opportunity company to both major and minor contractors. selects its partners with fairness and provides opportunities for contractors to showcase their talents in the construction of both shops and office buildings. supports and enhances suppliers’ efficiency, hoping that they could sustainably grow alongside the company
CP ALL plc. is an equal opportunity company to both major and minor contractors. The company selects its partners with fairness and provides opportunities for contractors to showcase their talents in the construction of both shops and office buildings. CP ALL plc. supports and enhances suppliers’ efficiency, hoping that they could sustainably grow alongside the company. Providing consultation on topics such as lawful management and operation, alien labors, and safety management is one of the actions CP ALL plc. has taken to boost suppliers’ capability. The company also communicates with contractors its policies and guidelines of responsible business operation. Furthermore, openness to opinions and suggestions through the annual contractor convention is also vital as the voices gathered can be used to reinforce future collaborations.
Results and benefits
Communicate and understanding of sustainability
Identifying the Supplier and Spending Analysis
The Company has identified the Critical Tier1 Suppliers by criteria:
- High Spending
- Critical Components