Procurement is the starting point of ThaiBev’s supply chain, particularly in regards to the selection of raw materials and products used in the production process. ThaiBev has established the Supplier Code of Practice which outlines the pre-qualification criteria and stringent quality standards for suppliers. The Code is enforced upon 100 percent ThaiBev’s suppliers to ensure that the products go through a standardized procurement process and demonstrate environmental and social responsibility. In addition, ThaiBev places great importance on risk management in the supply chain. All suppliers must together find ways to mitigate risks in order to increase transparency and effectiveness in all the processes in the supply chain.
Agricultural raw materials are the main ingredients used in ThaiBev’s production. ThaiBev is committed to sourcing high quality agricultural raw materials in an environmentally and socially responsible manner. These raw materials are the main components of alcoholic beverages, non-alcoholic beverages and food; namely malt, sugar, palm oil, tea leaves, coffee beans, and cocoa. ThaiBev aims to source 100 percent of these materials responsibly and in compliance with applicable local or international standards.
- Encourages and supports malt and hops suppliers to become active members and follow the Sustainable Agriculture Initiative Platform (SAI), a global standard for agricultural practices.
- Supports large sugar producers by applying the Bonsucro (Better Sugar Cane Initiative) international standard. This platform promotes sustainable sugarcane production throughout the entire supply chain, covering sugarcane farmers and sugar producers.
- Supports large-scale palm oil producers and small-scale farmers in the responsible and efficient production of palm oil and to be certified with the Roundtable on Sustainable Palm Oil (RSPO) international standards. In 2019, 100 percent of ThaiBev’s suppliers were RSPO certified factories.
- The tea leaves used in ThaiBev’s production of non-alcoholic beverages are certified by the Organic Agriculture Standard issued by Ministry of Agriculture and Cooperatives, Thailand.
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In 2017, ThaiBev initiated the CROSS project with the aim of increasing supply chain visibility and raising the standard of procurement by focusing on fostering stakeholder collaboration, process re-engineering, and online connectivity. The project activities are classified into three dimensions, including the professionalization of procurement personnel, process improvement through automation and optimization, the development of new technological capabilities that allow for various systems to work in coordination, transparent data accessibility, and better data analysis.
In 2019, ThaiBev introduced the CROSS Procurement solution and connected it with the Supplier Life Cycle Management (SLCM) system. Currently, the SLCM system acts as the central interface between suppliers and ThaiBev. It is here that a supplier can register with ThaiBev, undertake their sustainability risk assessments, confirm orders, and exchange documents online. The CROSS Procurement solution will also play a role in fulfilling the procurement process: the solution instantly records the purchase of products and services that take place throughout ThaiBev’s operations. This is to ensure that procurement is fair, transparent and traceable. The solution consists of four features:
This is for the selection of potential suppliers by taking into account the environmental, social, and governance dimension as well as the supplier’s capability. CROSS Source connects with the Supplier Life Cycle Management (SLCM) system and covers the entire supplier qualification processes from the Supplier Code of Practice compliance, to supplier registration, supplier screening, supplier selection, and bidding.
This is for contract creation and agreement with suppliers through a traceable and transparent system. It also covers contract compliance: managing the purchase of products in line with contractual terms.
This is for purchase order issuance to, and confirmation with the determined suppliers and for purchasing products through eCatalogs (online product catalogs).
This is for suppliers’ sustainability risk assessments which cover environmental, social, and governance dimensions, and other areas such as supplier credibility, financial liquidity, operational risk and negative media coverage that may affect suppliers’ reputation. The risk input is derived from third-party databases specializing in corporate risk assessment such as the World Economic Forum, Dunn & Bradstreet, GDACS and Semantic Visions.
Initiated in 2016, the Business Partner Award is a program for promoting supplier capacity-building, stimulating business competition, and spurring industry innovation. The award-winning business partners are those with excellent operational standards and are leading models for sustainable business practices for other partners. This year, over 150 business partners consisting of manufacturers and service providers participated in the award program. The participants comprise partners from various industries, such as packaging, commodities and promotional goods. ThaiBev presented the Sustainable Collaboration Award. The Business Partner Award Committee selected the winners based on the quantitative environmental, social and governance benefits arising from the projects and the number of stakeholders gaining such benefits. One of the projects awarded in this category is the “Can 2 Can” project, which is a collaborative effort between ThaiBev and its tier 1 supplier, an aluminum can manufacturer, and non-tier 1 supplier, an aluminum sheet manufacturer. Through this project, ThaiBev and its partner have successfully created a sustainable and closed-loop packaging management system.
ThaiBev realizes the importance of engaging with business partners, who are crucial in steering business towards the goals of ThaiBev’s Vision 2020. The ThaiBev Business Partner Conference 2019, which is part of a two-day ThaiBev Sustainability Day 2019 event, has been arranged with the objective to communicate ThaiBev’s steadily and business direction, both short-term and long-term, to its partners and help them seize opportunities to grow steadily and sustainably with ThaiBev. The event also provides a stage for ThaiBev and its business partners to exchange insights as well as goals and challenges related to the dynamic of consumer behaviors, and to keep pace with sustainable development goals. ThaiBev launched the “Thailand Supply Chain Network” (TSCN), in collaboration with its strategic business partners, with the aim to establish intercorporate relations among Thai companies. Through TSCN, companies will be able to exchange information, share experiences learned from their investments as well as operating businesses overseas. This knowledge will assist Thai entrepreneurs to strengthen their supply chain and thus, allow them to be able to expand their businesses to different markets.
Set standards for the procurement of agricultural raw materials that are the main raw materials used in the production process, namely malt, sugar, and palm oil in accordance with internationally recognized standards such as Bonsucro, RSPO, and SEDEX to ensure that raw materials are carefully selected through socially and environmentally responsible procurement processes.
By performing on-site audits at suppliers’ facilities on a regular basis, particularly the Critical Suppliers including non-substitutable suppliers, high-volume suppliers as well as suppliers exposed to high risk (suppliers without adequate environmental management or whose employment practices are not in line with the universal standards). Both internal and independent verifiers take part in the audit: for instance, production process inspection, safety and hygiene in product storage, and product transportation. In addition, the audit process examines the sustainability of suppliers’ business operations, such as waste management, labor practices, employees’ occupational health and safety.
ThaiBev collaborates with its Critical Suppliers to assess non-tier 1 suppliers, especially the suppliers of critical materials, in order to manage end-to-end risks throughout the supply chain. ThaiBev regularly liaises with key suppliers to exchange information about risks of non-tier 1 suppliers and may assign ThaiBev’s personnel to participate in non-tier 1 supplier on-site audits alongside critical supplier auditors to properly identify and mitigate potential risks in the supply chain.
of active suppliers must accept
and comply with ThaiBev’s
Supplier Code of Practice
In order to promote the domestic
economy and local income distribution,
ThaiBev is committed to maintaining
local procurement proportion in terms
of number of local suppliers at
of all new potential suppliers
must accept and follow ThaiBev
Supplier Code of Practice and pass
a sustainability risk assessment.
ThaiBev has set a target for
of its active suppliers to
be assessed and examined
for sustainability risks.
ThaiBev will procure agricultural raw
materials which are the main raw materials
in the production process