Supply Chain Management

การบริหารจัดการห่วงโซ่อุปทานอย่างยั่งยืน

Long Term Target 2028
Green procurement accounts for 25 percent.
2023 goal
Green procurement accounts for 17 percent.
2023 performance
Green procurement accounted for 28 percent.
Risk

The company risks damaging its reputation and image if suppliers neglect or conduct business without due consideration for the environment, society, and governance. Such negligence could be perceived as the company playing a role in endorsing irresponsible business practices, including violations of human rights, the use of child or illegal labor, and engagement that result in environmental pollution.

Opportunity

Opportunity arises when the company prioritizes and fosters an understanding of Environmental, Social, and Governance (ESG) factors among its suppliers. This commitment leads to ongoing collaboration between the company and its suppliers, instilling confidence in stakeholders regarding the delivery of high-quality products and services. Moreover, it underscores the company's responsibility towards sustainability across multiple dimensions.

The Company advocates for its suppliers to manage their operations responsibly, adhering to principles of good corporate governance. This extends beyond countering corruption, respecting human rights, and considering societal and environmental impacts. This commitment goes beyond the confines of the Company itself. It encompasses the management of supply chains and the procurement of services from suppliers who exhibit sustained operational standards. The selection of suppliers is based on their adherence to service quality, covering considerations for the delivery of products and services that minimize environmental impact (Green Procurement). The Company is dedicated to fostering sustainable growth collectively, guided by strategic operational approaches as follows:

Supply Chain Management
Supplier Risk Management
Supporting Products from Printing Houses Obtaining Carbon Neutral Certification or a Green Print Logo.
Policies and criteria for
supply chain management
Supplier Selection Process
Supplier Risk Management
Supporting and promoting
awareness of sustainable business
practices among suppliers
ShapeSupporting environmentally-friendly
products
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1.Policies and criteria for supply chain management

The Company stipulates a clear policy and guidelines that address economic, social and environmental issues so that they can be used as criteria for supplier selection and consideration of supplier(1) qualifications in its procurement or engagement or use of services as follows:

Business Partners Policy
Business Partners Policy

The Company adheres to the criteria and guidelines for utilizing services from business partners, aligning with the standards set by the Bank of Thailand and Krungthai Bank. These policies are periodically reviewed to ensure their suitability for business operations. The policies cover various aspects, including:

  • Roles, Responsibilities, and Accountability in Utilizing services from Business Partners.
  • Criteria and Terms for Utilizing Services from Business Partners.
  • Selection and Inspection of Service Delivery.
  • Terms of the Service Contract
  • Guidelines aligned with the Anti-Corruption policy, encompassing prevention and suppression of money laundering, financing terrorism, and the proliferation of weapons of mass destruction.
  • Monitoring, Supervising, and Risk Management.
  • Relevant Forms for Managing Risks Associated with Utilizing Services from Business Partners
  • Records of Agreements between the Company acting as the Data Controller and Business Support Service Providers and Partners acting as Data Processors (Data Processor Agreement).
Procurement procedure
Procurement procedure

The Company establishes procurement regulations, which encompass supplier selection methods, authority for procurement approval, inspection procedures for the delivery of goods or services, and more. These regulations serve as standards for consideration and guidelines on procurement operations within the specified scope of authority related to procurement roles defined in this regulation.

Supplier Code of Conduct and Confidentiality Agreement
Supplier Code of Conduct and Confidentiality Agreement

The Company furnishes a supplier Code of Conduct and confidentiality agreement for its suppliers. This is indicative of the Company's intent to engage in business with suppliers who pledge to conduct their business activities in alignment with legal requirements, corporate ethics, information confidentiality, and international standards. The scope and guidelines encompass the following issues:

  • Business Ethics and Legal Compliance
  • Human Rights and Labor
  • Occupational Health and Safety
  • Environment
  • Information Confidentiality

(Please refer to additional information in https://ktc.co.th/en/sustainability-development/corporate-governance under “KTC Supplier Code of Conduct and Confidentiality Agreement” topic.)

Remark : Supplier(1) consists of business partner* and general supplier. For more details about supplier classification, Please refer to sub topic “Risk Management of Business Partner and Supplier.

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2.Supplier Selection Process

Classification of Suppliers

The Company categorizes suppliers into two main types:
1. Outsources refer to business partners as defined in the Business Partners Policy of the Bank of Thailand. These include legal entities or individuals who have entered into contracts or agreements with the Company to provide services, acting either as business partners operating on behalf of the Company.
2. General Suppliers refer to vendors or service providers to KTC that have minimal or negligible impact on the core business operations or pose low risk.

Criteria for Identifying Key Suppliers

The Company establishes criteria for identifying key suppliers, encompassing suppliers hired through intermediaries, clearly defined according to job categories and expenditure levels, as follows:

Tier 1 พันธมิตรทางธุรกิจ
Tier 1 - Business partner
Suppliers Tier 1
Principal work groups not involved in strategic decision making and business support groups (defined in the policy on the use of services from business partners), and total amount of expenditure ≥ Baht 5 million
Outsources categorized within the main functional groups not directly involved in strategic decision-making (as defined by Business Partners Policy) and with expenditures Baht ≥ 5 million.
Tier 2 พันธมิตรทางธุรกิจ
Tier 2 - Business partner
Suppliers Tier 2
Principal work groups not involved in strategic decision making and business support groups (defined in the policy on the use of services from business partners), and total amount of expenditure ranges from 1 to < Baht 5 million
Outsources categorized within the main functional groups not directly involved in strategic decision-making (as defined by the Business Partners Policy) and with expenditures ranging from Baht 1 - < 5 million.
Tier 3 พันธมิตรทางธุรกิจ และคู่ค้าทั่วไป
Tier 3 - Business partner and general supplier
Suppliers Tier 3
Business partners aside from Tier 1 and 2 groups and general suppliers with a low or medium risk
Outsources apart from Tier 1 and Tier 2 suppliers, and general supplier groups.

Suppliers Selection

The Company has established practices for supplier selection, applicable in cases of new hiring, contract renewal, annual evaluation, and/or new job specifications. These practices entail varying criteria depending on the supplier group, with examples of criteria used for consideration, such as:

Suppliers Registration

Upon successful completion of the selection process, suppliers will receive a registration form from the Company, along with documents outlining KTC supplier code of conduct and confidentiality agreement. These materials serve as guidelines for operation. Suppliers must acknowledge and sign the KTC supplier code of conduct and confidentiality agreement.

In this regard, exempted are certain supplier groups, such as modern trade businesses or small-scale suppliers dealing with miscellaneous items that are of minor importance to the company's services.

Suppliers Procurement

The procurement process adheres to established procurement regulations, ensuring transparent and fair acquisition of goods and services. The process is open to scrutiny, with considerations given to various aspects such as quality, environmentally friendly products, and service delivery to minimize impact. (Green Procurement)

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3.Supplier Risk Management
  • Risk identification

    The Company has process to identify risks related to suppliers through annual supplier risk self-assessment. These potential risks encompass economic, social and environmental risk issues. Examples include

Economic Risks
  • Service quality risk and product or service delivery risk
  • Data security protection
  • Business continuity management
  • Corporate governance risk
  • Product or Service Quality and Delivery
  • Data security maintenance
  • Business Continuity Management
  • Corporate Governance
  • Modifications or early termination of contracts
etc.
  • Compliance with labor law
  • Human right violation
  • Safety
  • Compliance with Supplier Code of Conduct
  • Compliance with labor laws
  • Non-violation of human rights
  • Workplace safety
etc.
  • Compliance with environmental law
  • Environmental risk
  • Compliance with environmental laws
etc.
Risk management process
Risk Assessment from Utilizing Services from Suppliers

The Company has a supplier risk management process that addresses each type of supplier as follows:

Outsources: The Company conducts an annual self-assessment of the risks associated with utilizing services from outsources. This evaluation considers the levels of risk and the quality of risk management in various aspects, including:
Operational Risk Management involves evaluating actions taken in the selection, monitoring, and performance review of outsources.
o Customer Protection Measures encompass implementing safeguards, ensuring data security guidelines, addressing complaints, and managing and resolving issues for customers.
o Implementation of Business Continuity Management and Testing
Suppliers: The Company conducts assessments of adherence to supplier code of conduct and business practices, which include scopes and practices covering:

  • Business ethics
  • Human rights and labor
  • Occupational health and Safety
  • Environment
  • Legal and regulatory requirements

Consideration is based on, for example,
  • Financial status
  • Operation under the principles of corporate governance and legal compliance and respect for human rights.
  • Business practices as per rules set by concerned authorities.
  • Business partner’s* relationship with the Company’s directors or executives
  • Protection of customer data
  • Identify process, procedure, information and/or information system.
  • Identify where risks occur.
  • Identify risk causes and factors.
  • Identify risk control measures.
Consideration is based on
  • Risk level and quality of risk management
  • Operational risk management
  • Customer protection measures
  • Business continuity management and corporate governance, social and environmental risks etc.
There is a prioritization of potential risks that may affect KTC’s business operation.
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The scope and guidelines encompass
  • Business ethics
  • Human rights and labor
  • Occupational health and safety
  • Environment
  • Law and regulation
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Risk Management and Control

Risk management and risk mitigation measures

The Company has established measures for managing and controlling risks that may arise from suppliers, including:

Establish KTC supplier code of conduct
Establish KTC supplier code of conduct

to serve as a guideline for compliance with the code of conduct prior to becoming a supplier of the Company.

Establish Business Partners policy
Establish Business Partners policy

to emphasize risk assessment and control, with regular monitoring and inspection of business partner operations. This includes overseeing business continuity and customer service provision. Also, it is stipulated as part of the contract for outsource services that auditors have the right to inspect their operations.

Ensure transparent and fair procurement
Ensure transparent and fair procurement processes and procedures

considering factors such as price, quality, delivery of products and services. This is accompanied by creating benefits for the economy, society, and minimizing environmental impact.

Monitor, inspect, and control the quality of suppliers
Monitor, inspect, and control the quality of suppliers

to ensure their adherence to the agreed-upon terms in the service contracts, and use the information for continuous improvement of processes, products and services delivered.

Conducting Supplier Site Visits
Conducting Supplier Site Visits

to assess compliance with service agreements, KTC Supplier Code of Conduct, protection of the confidentiality of information and personal data, respecting human rights, fair labor practices in accordance with the law. Additionally, the Company emphasizes adherence to occupational health and safety standards, and environmentally friendly management practices. Regular assessments and interviews are carried out to oversee the operational domains of outsources. This involves scheduled assessments during contract renewals for Tier 1 and Tier 2 suppliers, along with unannounced inspections of Tier 3 suppliers, which have procurement value according to the specified criteria.

Establishing Service Level Agreements (SLAs)
Establishing Service Level Agreements (SLAs)

to set minimum standards that outsources must adhere to. This includes the ability to monitor, inspect, and report risks with reporting scheduled as deemed appropriate.

Transparent and fair procurement process and procedure
Transparent and fair procurement process and procedure take account of price and quality factors and product and service delivery that generates profit for the organization while also considering other benefits in terms of economic and social outcomes and mitigation of environmental impacts.

Supply Chain Management Outcomes

Total suppliers who signed an acknowledgement of the Supplier Code of Conduct from 2019-2022

Proportion of Tier 1-2 suppliers signing in acknowledgment of the Supplier Code of Conduct per total number of Tier 1-2 suppliers
96%
Proportion of Tier 1-2 suppliers signing in acknowledgment of the Supplier Code of Conduct per total registered suppliers
86%
Total number of key suppliers audited by site visit = 17. and 100% of these suppliers complied with Supplier Code of Conduct.
100%
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96%

(Data as at end of 2022)

Risk correction and mitigation

In case that If any supplier is discovered to be in violation of the established regulations, the company will follow a warning notification process, take a preventive approach, and provide a remedial period. If the supplier fails to comply, the company will terminate their contract and remove them from its supplier register.

Number of Tier 1 and 2 suppliers
whose practices violated the Supplier Code of Conduct accounted for
7
%
4
4.Supporting and promoting awareness of sustainable business practices among suppliers

The Company collaborates with a diverse range of suppliers, all of whom have received various quality certifications. These certifications include high-security standards for card production from Card Brands and adherence to industry standards such as the International Organization for Standardization (ISO). The Company ensures compliance in areas such as print security management, quality and service management, energy and environmental management, occupational health and safety management, and more.

The Company provides opportunities for partners to offer suggestions and collaboratively enhance operational processes to be fair and more efficient. This is achieved through shared experiences during regular meetings and seminars. Additionally, the Company, together with its suppliers, organizes training sessions annually to develop and improve the skills of its employees.

In 2023, the Company organized the following activities:

Sharing Knowledge

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5.Supporting environmentally-friendly products

Supporting Products from Printing Houses Obtaining Carbon Neutral Certification or a Green Print Logo

The Company has encouraged employees, customers, and suppliers to reduce unnecessary resource consumption, aiming to minimize environmental impact and operational costs. Initiatives include the reduction of printing materials for certain customer and partner groups. Additionally, the Company actively supports environmentally-friendly procurement practices (Green Procurement) with certifications, such as environmental labels (e.g. Green Labels, Carbon Reduction Labels). Examples of environmentally friendly products and services encompass furniture, writing tools, and eye-friendly paper used for the company's documents, including applications forms for credit card services or personal loans, among others.

การจัดซื้อจัดจ้างสินค้าและบริการที่เป็นมิตรต่อสิ่งแวดล้อม

In 2022, the Company’s green procurement expenditure amounted to
7.17 Million Baht
which was attributed to its operation and office renovation projects.
Green Paper
Successfully transitioned more than 95% of its paper procurement for operations to environmentally-friendly paper (Green Paper).
Green Paper
Procured a total of Baht 12.48 million in environmentally-friendly products and services.
• Baht 3.30 million for operational activities.
• Baht 9.18 million for renovation of new office spaces.