Supply Chain Management
Supporting the SDGs Goal
Goals
Performance Highlights 2024
Commitment, Challenge and Opportunity
The Company recognizes the role of the supply chain as a key mechanism connecting business operations with the creation of shared value for stakeholders across the entire production and service process. Committed to developing a network of responsible, transparent, and sustainability-aligned suppliers, the Company emphasizes the promotion of environmental, social, and governance (ESG) standards at all levels of the supply chain to enhance long-term business stability, resilience, and competitiveness.
However, operations in this area still face challenges due to the diverse structure of suppliers, particularly small enterprises that may lack the resources or readiness to comply with the sustainability standards set by the Company. Additionally, limitations in accessing information and effective monitoring systems may affect the overall continuity and transparency of the supply chain.
At the same time, the Company recognizes significant opportunities to elevate collaboration with suppliers toward joint sustainable development. This is achieved through promoting understanding, supporting knowledge sharing, and utilizing technology to enhance supply chain management efficiency,
which will increase business resilience, build stakeholder confidence, and support the organization’s overall sustainable development goals.
Management and Operational Approach
The Company is committed to sustainable supply chain management, covering from supplier selection and risk assessment to the development and promotion of suppliers for mutual growth. Emphasis is placed on efficiency, transparency, and responsibility toward environmental, social, and governance (ESG) aspects. The Company’s approaches include:
- Establishing a Supplier Code of Conduct that upholds human rights, environmental responsibility, and good governance throughout the production of goods and services.
- Conducting ESG risk assessments with key suppliers, particularly Tier 1 suppliers, to establish shared standards in environmental performance, safety, labor, and governance.
- Systematically selecting and categorizing suppliers based on transaction volume, strategic importance, and business impact.
- Conducting regular onsite audits with key suppliers to ensure proper compliance with ESG requirements.
- Promoting the use of environmentally friendly materials or products within the supply chain, such as eco-products and biodegradable packaging.
- Establishing a system to monitor and report supply chain risks to address emergencies or potential disruptions.
- Communicating business policies and codes of conduct to partners to ensure mutual understanding and support long-term sustainable growth.
Supplier Risk Assessment
- Critical Tier 1 suppliers undergo ESG risk assessment through self-assessment at least once a year.
- All 25 Critical Tier 1 suppliers’ facilities have been visited onsite, achieving 100% coverage.
- The assessments cover environmental, social, and governance topics, such as greenhouse gas emissions, child labor, workplace safety, data protection, and anti-corruption.
- Risk scores are assigned based on a defined index, with results categorized into three levels:
- A (0–20%): No significant Risk
- B (20.01–70%): Moderate Risk
- C (70.01–100%): High Risk, Requiring a Corrective Action Plan (Cap)
Assessment and Monitoring Process
- The Company conducts assessments annually, analyzing both the likelihood and severity of impacts (Impact × Likelihood).
- For suppliers identified with high risks, follow-up on improvements is conducted according to the specified plan, with a re-assessment carried out within six months.
- Suppliers that are unable to meet the required standards may be considered for discontinuation of cooperation in the future.
These approaches reflect the Company’s commitment to developing a supply chain that is resilient, transparent, responsible, and capable of adapting to changes in all contexts of modern business.
Supplier Risk Assessment Process
Projects / Activities
Identification of Critical Suppliers
Suppliers, including both Tier 1 and Non-Tier 1, are prioritized based on purchase value (Spend analysis), strategic importance, and potential risks.
ESG Risk Assessment for Critical Suppliers
Conducted ESG (Environmental, Social, and Governance) risk assessments for 25 key suppliers in the Critical Tier 1 group.
Onsite Audit
ESG audits were conducted with 25 key Critical Tier 1 suppliers to ensure compliance with sustainability standards.
Development of the ESG Supplier Assessment Framework
Developed a supplier assessment framework across three main dimensions: Environmental, Social, and Governance, with plans to apply it to new partners starting in 2025.
Total of Suppliers
Stakeholders Directly Impacted
Customers
Benefits Received
- Receive products that are high-quality, safe, and produced through transparent processes.
- Able to verify the origin of raw materials (traceability).
- Confidence in the environmental and social standards of the products.
Potential Impacts
- Product prices may increase due to the use of raw materials or production processes that meet ESG standards.
- There may be limitations in product variety during the transition of supply chain management.
Employees
Benefits Received
- Gain new knowledge and skills related to sustainable supply chain management.
- Work within a system that is standardized, safe, and responsible.
- Take pride in being part of an organization that cares about the environment and society
Potential Impacts
- Need to adapt to more stringent procurement or audit processes.
- Increased workload from monitoring suppliers’ ESG information.
Shareholders
Benefits Received
- Enhance ESG and sustainability image, increasing the organization’s credibility in the capital market.
- Reduce risks from environmental violations within the supply chain.
Potential Impacts
- Initial costs for supplier auditing and development may increase.
- Payback period may be extended due to the transition to a sustainable system.
Business Partners
Benefits Received
- Receive support to develop capabilities according to ESG guidelines, enhancing competitiveness in the market.
- Build long-term business partnerships and trust with the Company.
- Increase opportunities to enter new markets that prioritize sustainability.
Potential Impacts
- Need to adjust production systems or raw material sourcing to comply with ESG requirements.
- May incur additional costs from adaptation or be impacted if failing to meet the Company’s selection criteria.
Communities and Society
Benefits Received
- Affected by business operations that reduce environmental impact in the area.
- Have opportunities to collaborate in developing the local economy, such as sourcing materials from the community.
Potential Impacts
- If supply chain management is not stringent, it may cause environmental or social impacts in the surrounding area.
- There may be misunderstandings or misaligned expectations regarding the standards set by the Company with local suppliers.
Government and Others Agencies
Benefits Received
- Receive cooperation from the Company in driving green economy policies and supply chain audits.
- Obtain transparent and verifiable information to be used in assessing the sustainability of the industry.
Potential Impacts
- Increased workload in monitoring compliance of operators and suppliers with standards.
- Policies need to be updated to keep pace with changes in the sustainable supply chain system.
