Supply Chain Management
Supplier Management
Significance & Commitment
Supply chain management plays an important role in moving the Company forward as efficient management does not only reduce the risks of business interruption but also enhances the operational efficiency. Promoting ESG principles across the supply chain is thus one of the Company’s missions.
Management Approach
The Sustainable Supply Chain Policy was announced as a commitment to creating long-term value for all stakeholders. Moreover, 5-year strategic plan (2018-2022) was also developed as roadmap. The Supplier Code of Conduct has been published as a guideline for all existing and potential suppliers to ensure that they operate the business in adherence to environmental, social and governance (ESG) principles.
At present, the Supplier ESG Due Diligence is under standardization. When this process is fully implemented, critical suppliers will be identified and carried out a preliminary ESG risk assessment. In the case where a critical supplier is identified as high ESG risk, the supplier shall prepare preventive or corrective measures with a comprehensive audit plan. The Company then conducts an audit as specified in the plan once a year.
Furthermore, the spending analysis has been performed in each country to identify areas for cost reduction as well as process improvement opportunities. The Company also supports local procurement by seeking to engage goods and services with local suppliers in the areas of business operations. However, the data collection system for local procurement is under standardization for all business units.
Supply Chain Risk
Risk Mitigation Measure
Inability of suppliers to deliver coal or natural gas in accordance with required price, quality, and delivery timelines
· Use of the IRIS application for real-time monitoring
· Establishment of long-term sales contracts or forward purchase agreements
· Expansion of coal storage capacity to buffer against supply disruptions· Use of the IRIS application for real-time monitoring
Machinery part shortage due to procurement delays
· Maintain inventory of critical spare parts at power plant sites
· Conduct site visits to supplier facilities for proactive issue resolution and timeline tracking
Operation & maintenance (O&M) contractor failing to meet plant reliability, safety, and quality expectations
· Provide targeted training programs to improve contractor competency
· Implement a Safety and Occupational Health Management System (OHSMS) to ensure performance alignment with operational standards
Business
Example of Customer Relationship Approaches
Mining
· Customer satisfaction survey
· Regular customer site visit
· Knowledge-sharing session
· Quarterly performance report
· Open house event
Thermal power
· Customer satisfaction survey
· Regular customer site visit
· Technical support
Solar rooftop
· Customer satisfaction survey
· Technical support
· Returns on investment evaluation report
· 24-hour customer service
Energy trading
· Customer satisfaction survey
Year in Review
In 2023, the Company conducted comprehensive analysis of supplier segmentation using the Kralic Matrix at 3 pilot areas: General procurement at the head office in Thailand, Banpu NEXT’s operation in Thailand, and the mining business in Indonesia.
In addition, the Company initiated developing standards for supplier ESG screening and selection and supplier ESG assessment to enhance the supplier screening and performance evaluation processes. By embedding the ESG criteria into these standards, the Company selects suppliers who not only meet the operation needs but also align with the commitment to sustainability. This approach applies not only to existing suppliers but also to new suppliers seeking to collaborate with the Company.
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