Supply Chain Management
Sustainable Supply Chain Management
BAFS has integrated sustainable development principles that consider social, environmental, and good governance factors, including human rights practices, into its business operations throughout the entire supply chain. Sustainable supply chain management is a key aspect of sustainability efforts to support business partners and stakeholders in adopting sustainable business practices. This approach is believed to help mitigate ESG-related risks from business partners that could directly and indirectly impact the Company’s reputation and operations.
Supplier Selection
- Supplier Registration Form
- Relevant Supporting Document
Supplier Registration
- Register vendors in the Company’s procurement system
- Evaluate new vendors based on service readiness and ESG sustainability criteria
- Rank key vendors categorized by purchase volume and irreplaceable products related to the fuel storage and distribution system
Supplier Evaluation
- Conduct an annual evaluation of both existing and new vendors based on service readiness and ESG sustainability criteria
- Perform annual site-visits
Supplier Development
- Provide evaluation reports and recommendations for service improvement
- Support data for future development
- Contribute to partner development through the annual partner seminar
Significant Supplier Classification
- Tier-1 Supplier - A Critical supplier is highly significant for the products and services related to the aviation fuel receiving, storage, and dispensing processes, where no alternative vendor/service provider is available, or the impact of replacement is substantial and time-consuming. The focus is on continuous joint development to create value that leads to cost reduction or benefits from improving collaborative work processes.
- Significant Tier-1 Supplier – Specific vendors/service providers account for 80% of total spending and are critical at the business unit level. There are alternative vendors/service providers available in the market, but switching vendors/service providers is not easily achievable. The focus is on quality and risk management.
- Significant Non-Tier 1 Supplier - General goods and service providers that do not impact the business and can be easily replaced in the market. The focus is on contract management to ensure smooth service, ease of performance measurement, contract-based delivery, and continuous cost savings.
Supplier Risk Assessment Process Based on the ESG Framework
The Company recognizes the importance of supply chain management that considers both risks and opportunities from ever-changing and uncontrollable situations. Therefore, assessing supplier risks is crucial to monitoring and mitigating risks while also seeking opportunities that may enhance the Company’s capabilities and limitations for sustainable growth. The Company establishes criteria for identifying and assessing the risks of business partners, covering economic, environmental, and social risks through the following process:
