BETTER TRIPS FOR BETTER LIFE

Supply Chain Management

Impact on Business and Stakeholders

BEM is committed to developing a supply chain and procurement process that considers sustainability risks, such as violations of human rights, business ethics misconduct, and environmental impact. This approach enables the identification of high-risk suppliers and the implementation of appropriate corrective actions, preventing impacts from such risks on the Company’s service provision and stakeholders. It also strengthens participation with suppliers and business partners to keep the Company’s products and services in line with quality and sustainability standards, and maintains good long-term relationships.

Commitment, Challenges and Opportunities

To create confidence and cater to the expectations of stakeholders, BEM has defined the Supply Chain Management Strategy and promotes sustainability in the supply chain to enable the delivery of quality, rapid, and continuous services in accordance with stakeholders’ expectations.

Supply Chain Management strategy

Enhance and develop procurement and supply chain management processes to support business operations in compliance with sustainable development guidelines and goals, as well as prioritize environmentally friendly procurement practices to meet stakeholders’ expectations.

Supply chain management framework

Supplier Screening and Registration

Online Registration
Acknowledge BEM’s Code of Conduct and Supplier Code of Conduct
Complete the self-assessment and pass sustainability criteria

Supplier Identification

Spending Analysis
Significant Supplier Identification
Geographic Risks

Supplier Assessment

Suppliers are assessed covering ESG aspect as follows:
- Desktop Assessment
- Self-Assessment
- Onsite Assessment
- Significant Tier-1 Suppliers Risk Assessment
- Supplier Evaluation

Supplier Development

Training programs for Suppliers on work safety
Contractor Scorecard Project
Sustainable Development Training Project for Suppliers

Supplier code of conduct

Action Plans

BEM has established the Supply Chain Management Policy, operational guidelines and sustainable supply chain management plans to ensure that procurement operations achieve both short-term and long-term operational goals. The Company has emphasized the importance of sustainable supply chain management by arranging training for procurement department personnel in order to develop their potential, imparting knowledge and understanding of basic business sustainability concept and sustainable supply chain management, so that they can apply the relevant guidelines and practices for more efficient in operations, as well as define action plans related to the supply chain management framework, encompassing supplier screening and registration, supplier identification, supplier assessment, and supplier development.

Actions in 2023

Arrange training sessions for procurement staff on the fundamentals of business sustainability and sustainable supply chain management to enhance the operational capabilities of employees, so that they can have knowledge and understanding, and be able to effectively apply their knowledge in their roles.
Establish and communicate the Supplier Code of Conduct to supplier.
All new suppliers are informed and follow the Supplier Code of Conduct.
Screen new supplier with sustainability evaluation criteria through self-assessment.
Conduct Desktop Assessment, using document analytic.
Establish criteria for supplier identification and review cycles.
Assess suppliers’ ESG Risk through self-assessment.
Provide Significant Tier-1 Supplier site visit for onsite assessment.
Offer training to suppliers who must work on the Company’s premises to enable safe and accurate operations that comply with rules and regulations as well as respond appropriately to emergency situations, in order to reduce the risk in suppliers' operations that may cause accidents and losses.
Develop the potential of suppliers through contractor scorecard project (Ongoing).
Supplier satisfaction and expectations survey (Ongoing).
Supplier performance evaluation (Ongoing).
Green procurement project (Ongoing).
Invite suppliers to join as partners in Thai Private Sector Collective Action Against Corruption (CAC).

Highlight Action Plan 2024

Raise awareness of the importance of supply chain management among personnel of the procurement department and suppliers (Ongoing).
All new suppliers must be informed and follow a supplier code of conduct (Ongoing).
Screening new supplier with sustainability evaluation criteria through self-assessment (Ongoing).
Assessing suppliers’ ESG Risk through Self-Assessment (Ongoing).
Onsite assessment through Significant Tier-1 Supplier site visit (Ongoing).
Offer training for suppliers who must work on the Company’s premises to enable safe and accurate operations that comply with rules and regulations as well as respond appropriately to emergency situations, in order to reduce the risk in suppliers' operations that may cause accidents and losses.
Arrange projects for encouraging participation in order to increase awareness and create incentives to develop the potential of suppliers.
Supplier satisfaction and expectations survey (Ongoing).
Supplier performance evaluation (Ongoing).
Review criteria for supplier identification and criteria for determining its significance.
Update the Company’s website to disclose supply chain management’s operations.
Organize training to educate about sustainable development principles and emphasis on Supplier Code of Conduct, as guidelines for them to conduct business with BEM.
Create PR media to provide knowledge about business operations that take into account ESG to suppliers continuously throughout the year.

Action Plan and Targets by 2030

100 % of new suppliers acknowledge and comply with Supplier Code of Conduct.
100 % of new suppliers pass sustainability screening criteria (environmental, social, human rights and labor, and business ethics).
100 % of Significant Tier-1 Suppliers assessed on sustainability through self-assessment.
100 % of Tier-1 Suppliers assessed on sustainability through self-assessment.

Performance 2023

Performance Highlights 2023

100 % of Significant Tier-1 Suppliers assessed
on sustainability risk assessment.

100 % of new suppliers acknowledged
and comply with the Supplier Code of Conduct.

BEM’s Key Performance Indicators and Targets

100%

of new suppliers acknowledge
and comply with Supplier Code of Conduct.

100%

of new suppliers pass sustainability screening criteria
(environmental, social, human rights and labor, and business ethics).

100%

of Significant Tier-1 Suppliers assessed
on sustainability through self-assessment.

59.21%

of Tier-1 Suppliers assessed
on sustainability through self-assessment.

Supplier Screening and Registration

BEM’s supplier management process begins with sustainability risk assessment. In order to apply for supplier screening, the supplier must make an online registration, acknowledge BEM’s Code of Conduct and Supplier Code of Conduct, and complete the self-assessment questionnaire, which encompasses qualifications regarding performance, sustainability risks and business potential, such as operations, goods and services, price, delivery of products and services, etc. New suppliers must obtain a minimum overall score of 65% in the self-assessment in order to be incorporated in BEM’s Approved Vendor List (AVL).

Supplier Identification

BEM classifies suppliers according to their level of significance to businesses and their geographic risks. Suppliers are categorized into three types, namely significant tier-1 suppliers, non-significant tier-1 suppliers, and significant non-tier-1 suppliers.
Significant Tier-1 Suppliers are the most important and are considered based on high trading volume, expertise, cooperation in key business processes, strategic relationship, and geographic risks. Supplier identification is carried out every three years.

Supplier Assessment

BEM continually assess suppliers to ensure that their work processes strictly comply with the Supply Chain Management Policy and the Supplier Code of Conduct. The guidelines for Supplier Assessment are as follows:

Desktop Assessment

BEM checks the reliability of suppliers and their management that considers the impact on safety, environment, occupational health, including the quality of products and services, before approving registration as BEM’s suppliers. This process involves examining information and documents
such as Business Registration Certificate, Certificate of Value Added Tax Registration (Form P.P. 20), certifications such as ISO 9001, ISO 14001, ISO 17001, ISO 45001 and ISO 50001, etc.

Self-Assessment

BEM requires new suppliers to conduct a self-assessment to evaluate their products and services, as well as assess sustainability in all 3 dimensions (environmental; social, human rights and labor; and business ethics). New suppliers must obtain a minimum overall score of 65% in the
self-assessment in order to be incorporated in BEM’s Approved Vendor List (AVL).
In additions, existing suppliers are required to evaluate sustainability risks by self-assessment to ensure that their operations are in compliance with the Supplier Code of Conduct. The goal in 2030, Significant Tier-1 Suppliers to achieve 100% compliance through screening based on sustainability criteria (environmental; social, human rights and labor; and business ethics).

Onsite Assessment

BEM has a plan for conducting site visits and assessing risk at the site of Significant Tier-1 Suppliers through onsite assessment by company personnel. Additionally, the Company schedules periodic reviews of the Significant Tier-1 Suppliers list and requires suppliers to perform
self-assessment every 3 years.
By the results of the self-assessment, no Significant Tier -1 Suppliers with high sustainability risks were identified. However, BEM plans to conduct onsite assessment or online assessment by the Company’s officers for all suppliers by 2025.

Significant Tier-1 Suppliers Risk Assessment

BEM conducts a Significant Tier-1 Suppliers Risk Assessment that may affect the organization's business operations. The assessment criteria established by BEM including the likelihood of risk occurrence and the severity of impact on various sustainability issues such as dimensions of corporate governance and economics, society and environment, covering business ethics, labor practices and human rights, occupational health and safety, environmental management , and responsibility to the communities and society is defined according to the type of suppliers across four levels.

Supplier Evaluation

Evaluating suppliers’ performance to reflect efficiency in product/service quality, delivery, responsiveness to needs, and resolution of issues and complaints (if any), is conducted by the requesting and procurement departments as a joint evaluator. The results of the suppliers’ performance assessment in 2023 are as follows;

Score & Grade	Performance level of Suppliers	Ratio of suppliers
A : More than or equal to 90 %	Excellent	60.30 %
B : 80 % - 89 %	Good	36.47 %
C : 65 % - 79 %	Standard	03.10 %
D : 50 % - 64 %	Improve	00.13 %
E : Lower than 50 %	Not qualified	00.00 %

In the case of complaints made against a supplier’s operations or failure to pass the assessment with a score of less than 50%, BEM will conduct a thorough assessment and discuss with the supplier to jointly develop corrective action plans. The supplier must complete the corrective actions within the specified period of 90 days before being assessed by BEM again. The supplier can be removed from the AVL if the complaint or risk is not resolved and mitigated within the specified period. In 2023, no suppliers failed the assessment criteria or were removed from the AVL.

Supplier Engagement

Suggest For Success Contractor project
“Suggest for Success Contractor” is a project that aims at encourage contractors to report and propose solutions to safety problems via an online channel. The proposals are evaluated by a panel of judges based on creativity and practicality criteria. Proposals that pass these criteria are forwarded to relevant departments for further action. Through the cooperation of contractors, BEM can improve the safety of work processes and working environment, reduce accidents, cut costs, and avoid delays in business operations due to injuries. The results of the proposals’ implementation are reported to the Contractor Safety Subcommittee meeting each month to ensure that the approved proposals have been implemented to correct errors. In 2023, there are 12 proposals submitted by contractors, a total of 9 proposals were considered and three of them were completed.

Safety Vibe project
This project was created to commend employees of contractors in an effort to boost their morale and encouragement in safety awareness. All contractors are eligible to nominate their employees and provide details of incidents, which are presented to the Contractor Safety Committee meeting. This activity has contributed to the positive image of the Company’s contractor safety operations that, in turn, has resulted in good cooperation in promoting safety. The criteria consist of the following:

Supplier Training
BEM offers training to suppliers who must work on the Company’s premises to enable safe and accurate operations that comply with rules and regulations as well as respond appropriately to emergency situations. The training programs focus on ensuring equipment readiness and safety to reduce risks in suppliers’ operations that may cause accidents and losses, and develop supervisor-level personnel with skills to train their own team. Refresher courses are also provided on a continuous basis. BEM requires that contractors performing tasks or providing services/maintenance on the Company’s premises must attend 100% of the training course related to operations and achieve at least 70% score in key courses. In 2023, a total of 25 courses were held for 42 suppliers, which are attended by a total of 1,343 participants.

25 Courses

42 Suppliers

1,343 Participants

In 2024, BEM has implemented a project of sustainable development training for Significant Tier-1 Suppliers and Non-Significant Tier-1 Suppliers, totaling 46 suppliers, to enhance understanding of sustainable development’s concept, promote suppliers’ cooperation in business operations with environmental, social, and governance (ESG) factors, as well as build good relationships with suppliers, and emphasize the Supplier Code of Conduct as guidelines for conducting business with BEM. The participated suppliers were granted souvenirs from the Company's "Waste Cycle Way" project, and after participating in the project, they gained knowledge and understanding by achieving a minimum score of 70% on the post-test assessment.
BEM has also created public relations media to invite suppliers to participate in sustainable development and learn the ESG 101 course offered by the Stock Exchange of Thailand (SET), which will help suppliers better understand the overall concept of sustainable development. There is also a plan to continue using public relations media to communicate with suppliers throughout the year.

Sustainable Development Training for Suppliers

Contractor Scorecard Project to Develop Supplier Capacity
This project was conceived to support the operations of contractors working on the premises of the rail business in terms of safety management. It allows the contractors’ safety officers to share safety-related activities and communications to other contractors. The proposed activities must incorporate the following three indicators:

Compliance : Complying with the requirements, regulations, and duties specified in the procedures and work instructions
Standards : Complying with laws regarding occupational health and safety
Behavior & Culture : Behavior, corporate culture or tradition defined or developed within the Company

Once the contractors have presented their proposal to the Safety Committee Meeting, they will receive awards according to the awarding criteria. In 2023, a total of 15 contractors participated in the project and demonstrated performance consistent with Compliance, Standards and Behavior & Culture as targeted. This has contributed to a positive image in BEM’s safety performance and led to good cooperation in promoting safety to benefit the contractor’s personnel with a safe work location, passengers with safe services, and the Company with continuous service provision, etc.

Human Resource Development for the Procurement Team
BEM regularly communicates sustainability policies, regulations, and guidelines to the Company’s procurement officers and arrange for them to attend sustainability trainings organized by the Stock Exchange of Thailand (SET) to enhance their knowledge and understanding of the importance of supply chain management while enabling them to apply relevant principles and practices to achieve work efficiency. In this regard, the procurement officers who attended the training courses passed the criteria of all the courses. In addition, executives at the section manager level and above (manager, director, and assistant managing director) associated with procurement operations will receive training on sustainable procurement, organized by the Purchasing and Supply Chain Management Association Thailand.

Green Procurement Project

BEM is committed to environmental responsibility and has both an environmental policy and a sustainable development policy. Therefore, to ensure that the procurement process aligns with this policy, the Green Procurement Policy was created. This policy establishes environmentally friendly procurement guidelines for executives, employees, and all individuals involved in procurement, enabling them to practice and maintain consistency with the Company's environmental and sustainable development policies as follows:

Promote products and services that are environmentally friendly and give importance to managing the cycle of related products and services in a cost-effective manner
Procurement of goods and services will be given priority to sellers or service providers with environmentally friendly products
Promote education and awareness campaigns for employees and stakeholders in environmentally friendly procurement and the selection of products or services that support reducing environmental impacts. Internal communications have also been established to encourage and raise awareness among employees about purchasing environmentally friendly products and services, including providing information and inviting them to use Green Label, Green Hotel and Green basket products.

Average Supplier Payment Period
BEM has a policy of treating all suppliers with equality, fairness, and transparency by adhering to compliance with various conditions and contracts. The Company also has strict working procedures and processes for reviewing and controlling operations as well as a good internal control system that can be transparently verified. This ensure that payments are made correctly and on time, typically within 30-45 days after delivery of products or services, and receipt of the invoice from the supplier, depending on the agreement made with each supplier (may be more or less than 30-45 days).

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BETTER TRIPS FOR BETTER LIFE

Supply Chain Management