Value Chain Management
Challenges and Commitments
From the desire to become a leader in the oleochemical industry, GGC places great importance on managing and building good relationships throughout the value chain through efficient supply chain management. This covers everything from the process of selecting Critical Tier- 1 suppliers and partners, to assessing the risks from the operations of suppliers, as well as encouraging business partners to operate with regard to the impact on the environment, society, and good corporate governance according to the ethical business practices of manufacturers, procurement of goods, raw materials and services, along with customer satisfaction and respond to changing customer needs, whether in the development of a variety of products or good and quality service, to maintain the main customer base appropriately and promote sustainable growth alongside partners and customers.
Key Stakeholders
Customer
Supplier and Business Partner
Goals
92 percent
for Customer Retention through the development of long-term customer satisfaction
Management Approach
Supplier Code of Conduct
GGC has set business guidelines for suppliers and business partners in line with the Company's good corporate governance policy. GGC assigns the Corporate Governance and Sustainable Development Committee to review and improve the Board of Director's oversight of implementation of supplier ESG programs to comply with regulations, laws, as well as human rights and labor, safety, occupational health, and environment issues regularly along with conducting business audits of suppliers and business partners that cover ESG issues and complies with relevant laws, regulations, requirements, criteria and standards, to promote transparency and traceability. This practice also builds confidence among all groups of stakeholders throughout the supply chain.
In 2022, 100% of suppliers are informed about the Business Code of Conduct Handbook, which contains guidelines for suppliers under the Supplier Code of Conduct, which covers the topic of ethics in business operations of manufacturers, suppliers of goods, raw materials and services.
For more details about the Supplier Code of Conduct, see Good Corporate Governance and Business Ethics Handbook
Training for the Company’s Buyers Officer
GGC has organized a training program to develop the potential of staff in the procurement department to enhance knowledge and understanding of operational principles related to procurement that are in line with the Company's sustainability strategy and goals by applying information technology to increase the efficiency of the procurement process to be more accurate and time efficient.
For more details about the Training for the Company's Buyers Officer, see the Company's Integrated Sustainability Report 2022
- Smart Work Request App Project: The company uses the Smart Work Request System or “SWR” procurement software system from GC Group's Share Service to develop a more efficient work order management system and various reports with business partners. The partners and suppliers can access the system to prepare quotations. Said quotations will be stored in a central database. Furthermore, the procurement staff can contact partners and suppliers and urge them to come in to work according to the contract through the same system.
Supply Chain Management
GGC manages the supply chain efficiently in order to be able to deliver quality products to customers by promoting the procurement of products, raw materials, and services that are environmentally conscious in line with the goal of achieving Net Zero emissions by 2050 through the Decarbonization Pathway, which focuses on creating environmentally friendly chemical products (Portfolio-Driven). GGC divides its suppliers into 3 main groups, namely Feed Suppliers, Non-Feed Suppliers, and Service Suppliers.
Supply Chain Management Process
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Relationship management and communicating the Business Code of Conduct Handbook to the Company's partners |
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Annually suppliers’ assessment. This covers ESG risk screening, supplier selection and registration process, and supplier ESG risk management for supplier identification |
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Suppliers promote and support on capacity development through various projects to raise awareness. This includes developing suppliers to be more socially and environmentally responsible. |
Supplier Assessment
GGC has prepared a Self-Assessment Questionnaire (SAQ) to be used to assess suppliers annually under 5 key areas and annually assess suppliers' ESG risks in order to develop and monitor the operations of suppliers in accordance with the business ethics guidelines in the Supplier Code of Conduct regarding business operations of manufacturers/suppliers of goods, raw materials and services, in line with the Company's sustainability goals, such as compliance with laws, ethics, human rights and safety, occupational health and environment. This also includes compliance with international standards such as ISO9001, ISO14001, RSPO, etc. The company also conducts onsite audits by the company’s procurement staff or the purchasing agency using the ESG audit form.
In addition, GGC has implemented a sustainability management platform that is certified according to international standards of EcoVadis, to assess and monitor the sustainability performance of its suppliers. The Company has categorized its suppliers into Very Good, Good, Moderate, Moderate Watchful, and Low-quality suppliers.
5 Key Areas of Supplier Assessment
Industry State
Supplies' Flexibility and Bargaining Power
Accounting Finance and Other Perspectives
Ability to Deliver Raw Materials and Services
Competitiveness of Suppliers
ESG Risk Screening
GGC has a process for selecting suppliers by considering the type of risk. This covers many dimensions, such as environmental, social and governance (ESG) risks, Commodity-specific risks regarding procurement risks and fluctuations in the cost of products and raw materials, governance risks, Country-specific risks regarding laws and politics, as well as Sector-specific risks, such as the use of resources, operational efficiency, emissions, etc.
In 2022, GGC assessed 84 Critical Tier-1 suppliers and found that all suppliers did not operate in violation of labor rights, human rights, or good corporate governance business ethics There were no complaints related to human rights, ethics and legal compliance, or business ethics through the Company’s Vender Criticism channel.
Supplier Selection and Registration Process
In addition to the aforementioned ESG risk assessment process, GGC has assigned the GGC Credit Rating Committee to select and register suppliers by evaluating the qualifications of suppliers who can be registered to the Approved Vender List (AVL) through the Vendor Qualification, which covers environmental, social and governance (ESG) and business relevancy consisting of assessment criteria covering technical, quality, safety, occupational health, environment, finance, ethics, legal compliance. and social responsibility.
For more details on the Supplier Selection and Registration Process and the number of new suppliers and total suppliers in 2022, see the Company's 2022 Integrated Sustainability Report 2022
Supplier ESG Risk Management
GGC has applied the Supply Positioning Model (SPM) to manage risk and prioritize suppliers by considering the relationship between the spend analysis and risk assessment, which covers the risks to the Company's operations and ESG risks. The results from the model analysis will be used to develop a relationship management plan for each type of supplier relationship. It will also be used to monitor and assess the performance of suppliers and to determine the potential development guidelines for suppliers in the future.
Based on the above model, GGC has divided the significance of suppliers into 3 levels: Strategics Supplier, Key Supplier, and Manage Supplier, resulting in increasing efficiency in supplier relationship management (SRM) and an increased level of procurement.
| Significance Level | Definition | Strategic Management | Management Tools |
|---|---|---|---|
| Strategics Supplier | Suppliers that are critical to the Company's operations. There is a high risk of impacting the community and the supplier's organization. This may have a serious impact on the business and corporate image. | Develop relationships and increase the potential of suppliers in accordance with the Company's policies and directions. |
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| Key Supplier | Suppliers who distribute products to consumers. There may be a high impact on the business and corporate image. | Set goals together to improve the service level. |
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| Manage Supplier | Most of the operational suppliers. There may be an impact on the community or nearby areas. There is little to moderate risk to the buyer. | Follow up on the operations of suppliers according to the conditions in the contract. |
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In addition, If the assessment results show that Tier-1 suppliers are posing a high risk, they will not meet the criteria. The Company will offer guidance and suggestions, along with corrective actions for relevant parties. This includes monitoring, reviewing, and re-evaluating. Should the supplier still be unable to comply with the agreement and specified timeframe, the Company may limit the purchase of raw materials and suspend procurement temporarily.
Example of suggestions or supplier corrective action/improvement plans include:
| Environmental | Suggestions or Corrective Action/Improvement Measures |
|---|---|
| Environmental Management |
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| Social | Suggestions or Corrective Action/Improvement Measures |
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| OHS Management |
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| Human Rights |
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| Governance & Economic | Suggestions or Corrective Action/Improvement Measures |
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| Compliance with Laws and Regulations |
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Supplier Promote and Support on Capacity Development
The Company places importance on the development and enhancement of suppliers’ potential to ensure that the operations of suppliers are in line with the Business Code of Conduct, the Supplier Code of Conduct and the Sustainable Development Goals throughout the Company's supply chain.
For more details about the Supplier Promote and Support on Capacity Development Program, see the Company's Integrated Sustainability Report 2022
- Supplier Conference: GGC, together with PTT Global Chemical Public Company Limited (GC), holds an annual supplier meeting for consultations and identifying solutions to problems, as well as developing ESG model operations with suppliers, to drive operations towards sustainable supply chain management.
- Sustainable Palm Oil Production and Procurement (SPOPP): GGC has partnered with the German International Cooperation Agency (GIZ) and the Thailand Oil Palm Smallholder Academy (TOPSA) to promote oil palm smallholder farmers in Thailand to proceed according to the standard and receive RSPO accreditation by jointly promoting, supporting, and improving the quality of life of smallholder oil palm farmers. The Company introduces the Thai Oil Palm Smallholder Development Program (TOPSA) to create a connection for the network of farmers with oil palm extraction factories and to prepare the farmers to enter the Roundtable on Sustainable Palm certification. Oil (RSPO) by 2024. In addition, the Company has followed up on the results of the project every year. Currently, the project is operated in 4 pilot provinces: Krabi, Trang, Phang Nga and Chumphon. There are 7 oil palm extraction mills and 1,000 farmers' networks participating in the project.
Customer Relationship Management
GGC strengthens and maintains good relationships with customers. GGC builds confidence and creates customer satisfaction by establishing a channel to receive complaints from customers through the customer relationship management system. GGC collects feedback and complaints from customers in order to establish a plan to meet the needs of customers accurately, appropriately, and effectively. In addition, GGC also analyzes customer needs and determines future business development and marketing strategies.
Customer Satisfaction Survey
GGC has an annual customer satisfaction survey process to measure the success of GGC's operations and make changes according to the results, so that operations are more accurate and efficient, contributing to customer satisfaction. GGC surveys our customer satisfaction levels through the Customer eQTM Index method, which is a tool and criteria used to analyze organizational management and is recognized internationally. The aim of this survey is to improve the processes, results, and the overall perspectives of the organization.
Factors Affecting Customer Satisfaction Survey
Product- Quality of products
- Consistency of product quality
- Whether or not the product can respond to the needs of customers
Delivery- Punctuality
- Speed of delivery
- Safe delivery
- Whether or not the quantity and quality of the products can respond to the needs of the customers
Communication & Marketing Promotion- Organizing activities such as conferences and seminars to educate the public
- Organizing Customer appreciation events
- Relevant and appropriate promotions and offers
Purchase, Ordering, Payment & Financial Support - Organizing activities such as conferences and seminars to educate the public
- Organizing Customer appreciation events
- Relevant and appropriate promotions and offers
Sales, Technical Support & Service Agent - Ease of contact and whether or not problems can be solved in an efficient and timely manner
- Fast and accurate coordination
More details about customer satisfaction results can be found at Performance Data
In 2022, GGC has evaluated its performance, divided into success factors and factors that should be improved as follows:
 Success Factors
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Communication and Positive Customer Relationship Building
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 Factors that should be improved
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Quality and sufficiency of products, on time delivery, and communicating the delivery status
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For more about the project management and building good relationships with customers, see GGC's 2022 Integrated Sustainability Report at Integrated Sustainability Report 2022
- Sodium Lauryl Ether Sulfate (SLES) Products Project to extend the business to the Home & Personal Care (HPC) market and respond to customer needs regarding environmentally friendly products.