Supply Chain Management
Challenges (GRI 103-1)
EXECUTION (GRI 103-2)
Supplier Code of Conduct
|Supplier Code of Conduct|
|Business Ethics||Human Rights and Labor||Safety and Occupational Health||Environment||Social Responsibility|
Sustainability Practices for Suppliers
In 2018, CKPower began working on supplier sustainability assessment by creating questionnaires, formulating guidelines, and defining its assessment guidelines and procedure. The Company began conducting supplier sustainability assessment as well as prescribed an additional goal of conducting on-site audits to ensure that suppliers operated in compliance with the supplier code of conduct. CKPower also strives to continuously improve the supplier sustainability assessment to ensure its consistency with its sustainability policy.
|New Vendor Selection||New Vendor Evaluation|
|CKPower has prescribed new vendor evaluation with criteria covering sustainable topics in economic, social, and environmental dimensions, such as product and service warranty, product delivery, environmental policies and social responsibility, compliance with labor laws, and safety standards. At the same time, the Company also actively and continuously promotes and communicates its supplier code of conduct to all suppliers.||As part of vendor selection, CKPower screens vendor candidates by evaluating their qualifications based on criteria covering environmental practices and social responsibility, product and service quality, delivery, experience, product warranty, safety standards, and legal compliance.|
Critical Supplier Analysis
CKPower classifies its suppliers into two major categories: critical suppliers and non-critical suppliers, to allow it to systematically analyze and formulate procurement strategies and assess supplier-related risks effectively.
|Critical suppliers: Suppliers with high-value contracts or high spending who supply hard-to-replace products and of components or devices vital to the manufacturing process. They present very high or high risks.||10%|
|Non-critical suppliers: Suppliers with moderate- or low-value contracts who present moderate or low risks||90%|
Supplier Performance Evaluation and Monitoring
Supplier performance or efficiency evaluation is based on a set of criteria and CKPower’s Supplier Code of Conduct and enables the company to collect data related to the capabilities of its suppliers across governance, social, and environment. Three types of supplier performance evaluation are conducted: yearly performance evaluation, mid-operation performance evaluation, and on-site audit.
Suppliers with low performance or failing to pass the evaluation will be suspended temporarily or removed from the approved vendor list. The evaluation is based on the site audit checklist. CKPower assists suppliers in resolving their issues and works with them to enhance their potential in order to increase their business capabilities.
Supplier Risk Assessment
CKPower has implemented supplier risk assessment to identify potential impact on its business in accordance with the criteria it has defined, which cover three key social related areas, namely governance, social, and the environment and include such topics as business ethics, labor treatment and human rights, occupational health and safety, workplace environment management, and social responsibility.
To manage risks related to payments from its customers, CKPower offers a credit term of no more than 30 days for its suppliers as it has deemed that credit risk will rise significantly if the payment is made after 30 days as specified in contract terms. In 2021, the average actual credit term was 20 days, which was consistent with the Company’s policy.
Strengthening Supplier Relationships (GRI 204-1)
CKPower seeks to strengthen its relationships with suppliers through a diverse range of training programs, seminars, and activities through which it can communicate its business approaches, policies, and practices to its suppliers for their acknowledgment, such as Safety Week 2020.
Safety Training for Suppliers
Nam Ngum 2 Power Company Limited conducted a training program on the topic “Operational Safety Training for Nam Ngum 2 Dam Suppliers” for 23 non-critical suppliers, in order to educate them on power plant work safety, rules, and regulations, instill safety awareness, and provide information on environmental measurement as well as ensure that the suppliers were aware of the Company’s business guidelines, policies, and practices. As a result, 100% of the participating suppliers were equipped with knowledge on power plant work safety, and the rate of accidents in the power plant was effectively reduced. In 2021, zero case of loss-time injury was reported among the power plant’s employees and its suppliers.
Green Procurement Program
Placing importance on environmental conservation, companies under CKPower Public Company Limited have instituted a green procurement policy that encourages eco-friendly procurement practices and promotes the use of products made from renewable resources and non-polluting products, such as those certified with the Green Label, in an effort to protect the environment, use resources sustainably, reduce risks to employees and the Company from exposure to hazardous materials, instill green consumerism within the organization and society at large, and reduce costs through sustainable and cost-effective consumption.