Supply Chain Management
Management Approach
AOT operates sustainable supply chain management in accordance with the Public Procurement and Supplies Administration Act B.E.2560 (2017), Regulation of the Ministry of Finance on Public Procurement and Supplies Administration B.E. 2560 (2017), Guidelines in accordance with the Ministerial Regulation Prescribing of Supplies and Procurement that the State Needs to Promote or Support (No.2) B.E. 2563 (2020) including the Sustainable Practices of AOT Partners and the Code of Conduct on Procurement, and The Supply Operation Manual. All of which are which are enforced throughout the organization.
Public Procurement and Supplies Administration Act B.E.2560 (2017)
The Public Procurement and Supplies Administration Act B.E.2560 (2017) states that the procurement and supplies management of government agencies must bring the greatest benefit to its agencies and must comply with the following principles:
Worthiness
Transparency
Efficiency & Effectiveness
Verifiability
The procured supplies must possess qualities or characteristics that meet the usage purpose of the government agencies with a reasonable price along with a clear and appropriate supply management plan.
The procurement and supply management must be conducted openly with fair competition. All entrepreneurs are treated equally, and a reasonable and sufficient timeline allows them to submit proposals with clear evidence of operations. Procurement and supply management information are disclosed at every stage.
Effectively plan of the procurement and supply management in advance to ensure continuation with an appropriate schedule by evaluating and revealing the achievement of the procurement and supply management.
The procurement and supply management information must be systematically collected for verification.
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AOT has established the Green ICT Management policy to create a comprehensive and systematic approach to selecting environmentally friendly information technology. This policy includes reducing energy consumption and efficiently managing IT resources without compromising service quality. The policy focuses on four key components:
- Equipment Lifecycle
- End User Computing
- Enterprise Computing
- ICT as a Low-Carbon Enabler
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The Significance of Sustainable Practices Guidelines of AOT Partners
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Sustainable Supply Chain Management Process
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Screening and Evaluating Business Partners
AOT integrates sustainability requirements in the selection of new business partners and evaluation of existing parties. The selection of new business partners takes into account specific sustainability issues to each type of contract and business activity, such as compliance with occupational health and labor laws, possessing environmental management standards or standards for occupational health and safety management, integrity, reliability, quality of work, availability of resources to deliver products and services.
Acknowledging the Business Partner’s Code of Conduct in writing
All business partners of AOT must acknowledge Sustainable Practices Guidelines of AOT Partners, and try to understand with signature affixed for acknowledgment along with contract documents before executing the contract.
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Evaluation of Key Critical Business Partners and Supply Chain Risk Assessments
AOT has established an internal process for evaluating key partners and assessing supply chain risks. This aims to raise awareness of critical business partners, analyze the types and levels of risk associated with each partner group, consider the importance and urgency of each group, and implement risk management and control measures to acceptable levels in accordance with established standards and regulations. For example, evaluating contractors in construction using the ISO 45001:2018 system.
Additionally, AOT analyzes the evaluation results conducted by its personnel to identify ways to improve partner efficiency. For those who do not meet the evaluation criteria, AOT provides recommendations for development, such as training security personnel through the “3 M’s for Basic Security Standards” course.
3.1 Evaluation of Critical Suppliers
A critical Supplier means a business partner who delivers goods, raw materials, or services which have a significant effect on its ability to compete, succeed in the market or the survive in the business. The evaluation of AOT's critical suppliers is based on 3 key considerations which are:
- Suppliers with high expenses
- Suppliers with fewer competitors
- Suppliers who deliver materials which are important to the business
such as infrastructure contractors, construction project consultant, security service contractors and security equipment suppliers. Partners that have been evaluated to be critical suppliers will receive priority tracking in order to control the impacts that may occur on the company
3.2 Sustainability Risk Assessment Among Business Partners
AOT assesses sustainability risks of each group of trading partners. Taking into account trade issues and environmental and social issues. which covers human rights risks and risks in the supply chain of trading partners (Non-Tier 1) and next levels (In the case where the trading partner is a distributor or renter) AOT has reviewed and identified important sustainability risk issues in each dimension. In order to consider the level of impact including the likelihood of occurrence and take the results of consideration of each group of trading partners to prioritize in the form of a supplier risk assessment table (Sellers Risk Matrix) to identify the groups of trading partners that have. High sustainability risk As well as studying management measures that should be given priority, the results will be used to determine specific management measures for trading partners. Including important risk issues in order to effectively prevent and reduce risks.
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AOT's 10 Business Partners
| Construction | Service Contract | Product and Equipment | Rentals |
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| Construction |
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Sustainability Risk Issues for Consideration
| Environment | Society | Corporate Governance | Suppliers' Supply Chain Risks |
|---|---|---|---|
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Human Resources
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Seller's Risk Matrix
- Construction
- Installation and service contract in information and communication
- Maintenance, ground handling, buildings and spaces, and logistics services
- Security service contract and customer services
- Consultant, organizer, and other office works
- Capital equipment (CAPEX)
- Chemicals and consumable goods
- IT equipment and system rental service
- Rental car and transport service
- Other equipment rental services
Partner Groups of High-Risk Sustainability
However, AOT is in the process of formulating monitoring plan to control risks in the aforementioned partner groups and will report the progress in the Sustainable Development Report in the future.
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Management Evaluation
AOT has established an internal process to verify the compliance of partners’ and contractors' operations in accordance with the Terms of Reference (TOR), Sustainable Practice Guidelines of business partners and Code of Conduct of AOT. The Work Inspection Committee, independent to such projects, will be in charge of inspecting and examining the completeness of the delivered work regularly as well as determining improvement methods in case of inconsistency with AOT's TOR. In addition, AOT is in the process of developing a field-based audit guideline to monitor implementing measures progress to reduce future sustainability risks in the supply chain.
Last Updated: April, 26 2024