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Supply Chain Management 

Management Approach 

BDMS sets out the policy and guidelines on supply chain management by integrating the sustainability issue in the procurement practices while emphasizing fair, honest, transparent and ethical business operations. Besides, the Company avoids purchasing products and services from the business partners violating human rights or intellectual property or those operating business illegally. The Company also acts in accordance with international standards and regulations related of product and service quality while preventing any environmental and social risks to ensure compliance with the Supplier Code of Conduct. In addition, the Company strives to strengthen the relationship with all suppliers to concurrently prosper. 

Board Responsibility in oversight of implementation of the supplier ESG programs 

The company has developed a sustainable supply chain management system through the Center Procurement process to enhance the efficiency of business operations while considering ESG impacts. The implementation of ESG into supply chain management is overseen by the Board of Directors to ensure responsible management, promoting consistent efficiency, transparency, fairness, and accountability for every stakeholder group.

BDMS Procurement Policy  

BDMS enforces the Procurement Policy to ensure integrity and confidentiality in the procurement process which shall be in line with the regulations to enhance procurement efficiency while fostering Green Procurement. BDMS Central Procurement Department has the responsibilities as follows:

1. Supplier Selection 

Performed by the Integrated Buying Team in case the purchase value exceeds Baht 1 million. The team consists of procurement officers and experts in related products and services through competitive bidding and value analysis.  

2. Registration of New Supplier  

Register new supplier on Approved Vendor List (AVL) which shall be regularly reviewed and updated.  

3. Green Procurement  

Emphasis green procurement and green label products. Ensure domestic procurement while communicating and promoting the suppliers to conserve natural resources throughout the manufacturing process and services.  

4. Supplier Evaluation  

Implement the supplier audit and supplier evaluation. Regularly support the evaluation and monitoring the performance to evaluate performance efficiency, respond to the customers’ needs and minimize risks of business operations.  

Supply Chain Sustainability Management 

BDMS sets out a strategy and guidelines for supply chain sustainability with suppliers covering the Approved Vendor List (AVL) and sustainability risk assessment, particularly for the identified critical suppliers. In addition, BDMS devises a performance development plan for sustainability throughout the supply chain. 

Supply Chain Management Strategy  

Strategy 

1. Risk management and supplier sustainability development 

Manage the supplier’s sustainability risks in line with the Supplier Code of Conduct and monitor the performance through evaluation and collaborative projects with the suppliers.  

• Key Performance Indicators : All tier-1 suppliers must sign the acknowledgement and comply with BDMS Supplier Code of Conduct

2. Digital transformation in supply chain  

Implement e-procurement to improve the operation efficiency and data analysis to ascertain a competitive advantage.  

• Key Performance Indicators : Paperless purchase order, terms of reference, quotation  

3. Achieving excellence in cost control  

Apply effective cost control throughout the product and service procurement of each type 

• Key Performance Indicators : Present the cost-saving performance on products and services

4. Develop new products, services and innovations  

Encourage the suppliers to develop new innovations and create mutual value. Enhance efficiency and effectiveness to combine with sustainable operation.  

• Key Performance Indicators : Develop “Clear, label-free, small cap bottle” used in 12 BDMS hospital subsidiaries nationwide

Supplier ESG Program 

Purchasing practices towards suppliers are continuously reviewed to ensure alignment with the Supplier Code of Conduct and to avoid potential conflicts with ESG requirements 

BDMS enforces the Supplier Code of Conduct to enhance the relationship with the suppliers and create sustainable values for all internal and external stakeholders covering the economy, society, environment, and corporate governance. In addition, the policy focuses on continuing development throughout the supply chain. Supplier performances are monitored via assessment program to ensure alignment with Supplier Code of Conduct. 

Supplier selection process 

BDMS has established ESG requirements for its supplier selection process. Suppliers with better ESG performance are given preference in supplier selection and contract awarding. Additionally, the Company has imposed specified timeframe for supplier, who does not meet the criteria to improve their performance prior to the selection process. In case the supplier cannot meet those criteria, they will be excluded from the contraction. 

Pre-qualification process for supplier selection

 The following are examples of minimum ESG requirements, but not limited to: 

• Compliance with business ethics policy and regulations
• Adherence to labor laws and regulations
• Conformance to occupational health and safety standards such as ISO 18001 or ISO 45001
• Adherence to environmental standards such as ISO 14001 or Green Procurement

Supplier ESG program training to BDMS’s Central Procurement 

In 2023, BDMS conducted sustainable supply chain management training for procurement officers, aimed at equipping them with ESG knowledge and integrating it into supply chain management practices. Procurement officers were introduced to relevant international standards used to guide the management of sustainable supply chains. The objective was to provide understanding and awareness of how their day-to-day actions and decisions contribute to reaching the company’s ESG objectives outlined in the sustainable development policy throughout the supply chain. 

Supplier Screening 

BDMS Sustainability Criteria in Supplier Screening and Assessment 

BDMS procures products and services from new and current suppliers registered in the Approved Vendor List (AVL). All suppliers must undergo competitive bidding procurement and evaluation in line with the sustainability criteria and the Supplier Code of Conduct. Besides, BDMS will classify the suppliers based on their significance via the supplier system and such suppliers must have business relation with the organization. The company classify supplier based on 1). ESG risk, which assessed using industrial risks(sector-specific), specific risks regarding the location of the country and commodity specific risk methodology and 2). business relevance factors (e.g., spending volume). The assessment of these two factors combined help the Company to identify the critical supplier and design appropriate approach to manage those suppliers in the long run. 

Supplier Assessment 

BDMS performs supplier desk assessment to allow suppliers to self-assess their own ESG performance based on recognized standard so called “SMETA.” The suppliers are evaluated on a wide range of ESG topics, such as labor management, health and safety, environmental efficiency and ethic and graded from A-F based on their performance and submitted evidence. BDMS Central Procurement (2^ndparty) will then perform on-site assessment to verify suppliers’ performance based on the self-assessment result. Consequently, supplier with graded D-F must establish corrective action plan to improve their ESG performance. BDMS Central Procurement will perform remote monitoring and consistently provide suggestion for supplier to ensure their performance develop as planed (within 1 year). 

Supplier Development 

Supplier’s ESG training program 

BDMS provide training related to Supplier Code of Conduct for supplier to understand the importance of the code, and how BDMS would assess supplier performance according to ESG criteria listed in the Supplier Code of Conduct. 

Suppliers’ ESG peers benchmarking program 

BDMS's suppliers in Grade D to F that are required to improve their ESG performance can view their ESG performance compared to peers in the sector. This initiative aims to help suppliers recognize their ESG performance relative to others and identify potential areas for improvement. Those suppliers will receive email communications regarding their ESG performance to help them understand their standing relative to peers. 

The ESG benchmarking details supplier’s current performance in sustainability aspects compared to the average score, maximum score, and minimum score, as shown in the example picture below. 

Suppliers’ in-depth technical support programs 

BDMS Central Procurement Department organizes the activities to promote the supplier engagement in 2023 with the objectives to provide 100% training to tier 1 suppliers. Apart from the suppliers, the department also provides knowledge to their procurement officers in the area of environmental sustainability and under the topic of “Upcycling in Healthcare”. 

In this event, the company fostered the awareness of waste management and waste reduction by employing the Upcycling technique with pieces of materials, coupled with the green design and experiences in waste management in the organization. The results of this comprehensive capacity-building activity enabled the suppliers to enhance their waste management practices and implement effective waste reduction strategies throughout their operational processes.