ThaiBev analyses its procurement spend and suppliers to effectively prioritize commodities and suppliers as well as defining sourcing strategy for each item.

Most of ThaiBev procurement activities are based on online platform meaning that all of the data are maintained and updated systematically on real-time basis, ensuring that any procurement decisions made are based on accurate and up-to-dated information.

Direct Material

Indirect Material

ThaiBev believes that a stable national economy begins with comprehensive income distribution to local communities so that they achieve self-reliance. Therefore the Company consequently privileges suppliers operating in the vicinity of its factories.

Not only does this practice contribute to local job creation and add value to raw materials in each locale, it also minimizes transportation-related pollution.

ThaiBev defines its critical suppliers considering both commercial and sustainability factors. The most significant factors which are supplier’s sustainability maturity level and business goal alignment with ThaiBev Group’s vision are given the highest weightage. Suppliers are deemed critical when their total criticality score are equal to or higher than 60. Critical tier 1 suppliers are small in number but contribute to high amount of annual procurement spend. All of them supply direct materials which are component of the products that contribute largely to the company’s revenue.

CRITICAL TIER 1 SUPPLIERS

PROCUREMENT SPEND CONTRIBUTION

ThaiBev performs detailed analysis on critical tier 1 suppliers to define suitable sourcing strategy and risk mitigation plan which includes classification by product category and operating locations. Non-tier 1 suppliers who supply goods and services to ThaiBev’s tier 1 suppliers are also rated in order to identify Critical Non-tier 1 Suppliers. ThaiBev works closely with its tier 1 suppliers to identify Critical Non-tier 1 Suppliers and assess their sustainability risks to improve the assessment quality and gain more insights to risks in the supply chain.

In 2020, ThaiBev includes the requirement for ThaiBev Business Partner Award Program 2020 participants to identify their own critical suppliers and to implement their supplier code of conduct to these suppliers as well as to have formalized processes to evaluate them.

Effective risk management is the keystone to ThaiBev’s supply chain management. Aside from the commercial aspects, ThaiBev also assesses sustainability risk factors in its supply chain which includes environmental, social, and governance. The sustainability risk management is embedded in every step in the procurement process starting from new supplier registration, supplier qualification, tendering and awarding, supplier performance evaluation, and on-going monitoring.

With the coming of the digital era, ThaiBev has adopted several online solutions to enhance its supply chain risk management and improve overall supply chain transparency. Multiple sustainability risk identification processes have been implemented to ensure that 100% of its active tier 1 suppliers and critical non-tier 1 suppliers are assessed and monitored.

ThaiBev assesses 100% of its active suppliers to determine the risk exposure in its supply chain, using three approaches: third-party risk database, online assessment, and on-site audit. The degree of comprehensiveness of the assessment depends on supplier’s criticality, spending, and product category. In 2020, ThaiBev includes the requirement for ThaiBev Business Partner Award Program 2020 participants to identify their own critical suppliers and to implement their supplier code of conduct to these suppliers as well as to have formalized processes to evaluate these critical suppliers.

Spending

Number of Supplier

ThaiBev has implemented multiple risk management approaches in the supply chain to ensure the all of its critical suppliers and active suppliers with high ESG risks are audited on an annual basis.

	Document Audit / Online Assessment	On-site Remote Audit	*Proxy On-site Audit
ACTIVE SUPPLIERS
CRITICAL TIER 1 SUPPLIERS
CRITICAL NON-TIER 1 SUPPLIERS
SUPPLIERS OF CRITICAL MATERIALS
SUPPLIERS OF FOOD CONTACT ITEMS
SUPPLIERS EXPOSED TO HIGH ESG RISKS

Following the audit, ThaiBev identifies non-compliance issues founded and sets out mandatory requirements for the audited suppliers to submit corrective action plan within designated period if it detects any non-compliances and monitors closely how actions are taken to resolve the issues. ThaiBev shall suspend any suppliers who fail to resolve major non-compliances within the agreed window of time from having any business transaction until further actions are properly taken and satisfy ThaiBev’s requirements