To ensure efficient supply chain management operations,
The Company conducts a review of its procurement policy, code of conduct for business partners, and supply chain management processes at least once a year, which cover social, environmental, and corporate governance (ESG) issues, and communicates with its subsidiaries as an operational framework for all employees and business partners in alignment with the nature of each company’s business operations.
Supply Chain Management Process
1. Evaluation of Suppliers in Compliance with the Code of Conduct for Business Partners
Which covers social and/or environmental issues in procurement, and evaluation of prices and quality before adding them to the Vendor List, including assessing them during the year.
| Selection of Suppliers | Consideration of Suppliers during the Year |
|---|---|
| Source suppliers through the procurement process. | Monitor suppliers through assessments of their compliance with the Code of Conduct for Business Partners, including environmentally friendly operations under the Green Procurement principles and social responsibility, along with quality assessment after using their services. |
| Request for quotation and other evidence for consideration. | |
| Evaluate suppliers on compliance with the Code of Conduct for Business Partners, including environmentally friendly operations under the principles of Green Procurement and social responsibility, along with evaluating price and quality. | Consider retaining them in the Vendor List system. |
| Add selected suppliers to the Vendor List system. |
2. Supplier Grouping
Once the suppliers have been included in the Vendor List system, the Group will group suppliers according to the specified criteria to ensure effective risk assessment and preparation of operational plans with each group of suppliers. The suppliers are classified into three groups as follows:
| Key Suppliers (Critical Tier 1 Supplier) |
Direct suppliers with an annual trading value of “high” or “high” shipments, and/or a small number of suppliers who cannot find replacement of goods or services based on the Group’s needs. |
| Secondary Suppliers (Non-Critical Tier 1 Supplier) |
General direct suppliers with an annual trading value of “medium or low” or “medium or low” shipments, and/or suppliers who can find replacements for goods or services. |
| Key Indirect Suppliers (Critical Non-Tier 1 Supplier) |
Suppliers who do not trade directly with the Group but trade with the Group’s suppliers. They are selected from suppliers who are in the Critical Tier 1 Supplier group. |
3. Risk Assessment of Key Suppliers
The Group will identify environmental, social, corporate governance, and economic (ESG) issues that may affect the Group’s operations based on the evaluation of suppliers on compliance with the Code of Conduct for Business Partners and conduct the assessment of such key suppliers. The Group ranks risks and potential opportunities according to the level of crisis (high, medium, and low). If a key supplier is considered to be at high risk in ESG for three consecutive years, the Group will conduct a visit to the establishment (On-site ESG Audit) of such a supplier to monitor the implementation and jointly plan to prepare preventive or corrective measures and develop guidelines for ESG operations.
