Supply Chain Management

RATCH operates in various businesses from electricity generation and infrastructure to services that involve a diverse range of stakeholders. Paying attention to the management of all stakeholders throughout the business supply chain is thus a crucial factor for business success and sustainable growth.

The company is aware of the importance of supply chain management and gives it importance. The guidance on treatments of stakeholders are enshrined in the Code of Conduct that encompasses shareholders, employees, creditors, business partners, suppliers or vendors, competitors, the government sector, community, society and the environment.

The supply chain involves with 4 main business stages: 1) Project development 2) Construction 3) Production and service and 4) closing a business. Success factors are business partners, suppliers, customers, community and the environment. The management approach for these stakeholders is set as follows:

Nurturing of relationship with business partners
Management approach	Synergize specializations to strengthen business Establish long-term cooperation with transparent and fair practices Set fair and equitable contractual conditions Comply with agreements/ contracts and safeguard each other’s confidentiality
Management /Action	Set expectation criteria and clear designation of duty, responsibility and decision-making authority Prepare written agreements Align financial management with investment plans Clearly set the procurement criteria, condition and method Set executive-level discussion to formulate mutual solutions for all parties Set a clear exit plan from joint investment, if necessary

Generating shared values through collaboration
Management approach	Stress compliance on Supplier Code of Conduct Create fair and transparent procurement Assess supplier risks Do not violate human right Control and manage occupational health and safety in line with laws and international standards Seek long-term strategic cooperation Supervise and monitor legal compliance
Management /Action	Adopt an appropriate and standard assessment/selection criteria as well as contract formats Ensure an appropriate and fair selection process, enabling fair and equitable competition Set up a system to monitor compliance with contracts to prevent fraud and corruption at all stages Improve and nurture sustainable relationship with quality suppliers Prohibit executives/employees from soliciting or making dishonest payments when dealing with suppliers Promptly notify suppliers in advance if unable to meet conditions, to jointly find a solution Prepare agreements or contracts for suppliers in line with the company’s standards and set penalties

Generating shared values through collaboration

Management approach

Stress compliance on Supplier Code of Conduct
Create fair and transparent procurement
Assess supplier risks
Do not violate human right
Control and manage occupational health and safety in line with laws and international standards
Seek long-term strategic cooperation
Supervise and monitor legal compliance

Management /Action

Adopt an appropriate and standard assessment/selection criteria as well as contract formats
Ensure an appropriate and fair selection process, enabling fair and equitable competition
Set up a system to monitor compliance with contracts to prevent fraud and corruption at all stages
Improve and nurture sustainable relationship with quality suppliers
Prohibit executives/employees from soliciting or making dishonest payments when dealing with suppliers
Promptly notify suppliers in advance if unable to meet conditions, to jointly find a solution
Prepare agreements or contracts for suppliers in line with the company’s standards and set penalties

Creating positive experiences for customers
Management approach	Deliver quality products and services per customers’ specifications and continually improve the quality Ensure fair and transparent delivery process Establish procedure/ channels for customers’ suggestions and complaints on products and services, for quick responses Strictly follow customers’ conditions Protect client confidentiality
Management /Action	Provide product and service warranty with an appropriate warranty period Promptly notify customers in advance if unable to meet conditions, to jointly find a solution Do not solicit or receive any dishonest benefits when dealing with customers Disclose complete, accurate and non-misleading information/news on products and services Protect client confidentiality and do not share the information for own benefits or related individuals’ Discuss production plans and customers’ specifications on a regular basis Survey customer satisfaction and make improvement plans based on their suggestions

Creating positive experiences for customers

Management approach

Deliver quality products and services per customers’ specifications and continually improve the quality
Ensure fair and transparent delivery process
Establish procedure/ channels for customers’ suggestions and complaints on products and services, for quick responses
Strictly follow customers’ conditions
Protect client confidentiality

Management /Action

Provide product and service warranty with an appropriate warranty period
Promptly notify customers in advance if unable to meet conditions, to jointly find a solution
Do not solicit or receive any dishonest benefits when dealing with customers
Disclose complete, accurate and non-misleading information/news on products and services
Protect client confidentiality and do not share the information for own benefits or related individuals’
Discuss production plans and customers’ specifications on a regular basis
Survey customer satisfaction and make improvement plans based on their suggestions

Responsibility for community and society
Management approach	Ensure legal compliance Control and manage occupational health and safety Establish procedure/channels for community suggestions and complaints Encourage tri-partite engagement and communications with community and society Employ local operators/ workers
Management /Action	Communicate with community and seek understanding in the company’s operations Establish a communication channel to welcome complaints/ recommendations from community and set clear problem-solving guidelines Control impacts on the community environment and safety, from activities of the company’s suppliers and business partners Give priority to recruit local job operators/ workers

Sustainable environmental management
Management approach	Optimize resource use efficiency Control and monitor compliance with laws and regulations on environmental management Monitor the prevention of operational impacts on community, the environment and biodiversity in surrounding areas Supervise the management of environmental impacts from the business activities of the company and the supply chain
Management /Action	Select environmental-friendly production technology Establish an appropriate environmental quality control and monitoring system Consider the application of 3Rs principles in the production process and office activities Hold discussion meetings to regularly monitor environmental management results

More Info:

The Code of Conduct

Nurturing of relationship with business partners

Seeking strategic partners is in line with S2-Synergy strategy in order to drive the company’s business expansion and branching out to new markets for sustainable and mutual growth of both parties.

Generating values through collaboration

In the quest to become a leading energy and infrastructure company, suppliers play a key role in supporting and driving the company towards its goals; for example, in providing products and services for the company’s operations in accordance to business plans and targets. Nevertheless, suppliers can create negative impacts on the operations through, for instance, violation of human rights, delivery of substandard services, impacts on the environment and greenhouse gas emissions. RATCH has to deal with a large number of suppliers for its electricity generation, infrastructure and related businesses. Awareness and emphasis on creating shared values with suppliers is essential in maintaining business continuity in a sustainable manner.

Suppliers in the supply chain
Significant suppliers in the supply chain that involves energy, infrastructure and related businesses are:

Suppliers	Project development	Project construction	Commercial operations	Decommissioning/ dissolution
Technical and investment advisory service providers		-	-	-
Environmental, social and health impact assessment service providers		-	-	-
Legal and technical advisory service providers
Insurance companies
EPC contractors	-		-
Providers of annual operation and maintenance services	-	-		-
Technology, machinery and equipment producers and suppliers	-			-
Fuel and resource suppliers	-	-		-
Waste processors	-
Onsite facilitators (security/cleaning services)	-	-		-

Management approach as shown in Supplier Code of Conduct
Realizing the importance of suppliers to success and sustainable business operations, RATCH has established the Supplier Code of Conduct that is aligned with the company’s Code of Conduct, legislation and relevant international standards such as the United Nations Global Compact and the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. Suppliers are required to follow the best practices and hold their suppliers responsible for the practices as well.

Supplier Code of Conduct
1. Business ethics	1.1 Legal compliance 1.2 Responsible operations 1.3 Fight against all forms of fraud, corruption and bribe giving/taking 1.4 Giving of gifts, souvenirs and receptions 1.5 Anti-competition practices 1.6 Disclosure of information as deemed necessary 1.7 Protection of intellectual property 1.8 Protection of confidential information and personal data
2. Treatment of labor and Respect for human rights	2.1 Respect for human rights 2.2 Respect for labor rights and human dignity 2.3 Prohibition and avoidance of child labor 2.4 Equal and non-discriminatory treatment for local and migrant workers 2.5 Treatment of female workers 2.6 Right to pursue freely chosen employment 2.7 Pay and benefits
3. Working conditions	3.1 Working period 3.2 Termination of employment or contract
4. Safety, occupational health and work environment	4.1 Safe work environment 4.2 Security management 4.3 Preparation for emergency
5. Environmental management	5.1 Compliance with legal environmental requirements 5.2 Management of environmental impacts 5.3 Resource utilization, control of pollutants and waste management 5.4 Management of hazardous materials and product safety
6. Social responsibility	6.1 Prevention of impacts on community and society 6.2 Management of partners in suppliers’ supply chain
7. Implementation of Code of Conduct	7.1 Management system 7.2 Grievance and complaint procedure 7.3 Investigation and problem-solving procedure 7.4 Continuous improvement

More Info:

Supplier Code of Conduct

Supplier risk management approach
RATCH has established Supplier Code of Conduct detailing best practices all suppliers must follow, to manage possible risks. The characteristics of suppliers’ own operational risks are also analyzed and the following preventive measures are drawn up to reduce the likelihood.

Issue	Supplier risk	Preventive measures	Performance in 2022
Governance	Suppliers’ financial status and stability	Require collateral/bank guarantee Probe financial track record dating back 2 years Examine job abandonment and blacklisting history	All suppliers complied with the company’s collateral/ bank guarantee requirement None of them had no job abandonment record
Governance	Sub-contractor management	Evaluate job risks Set ESG conditions on sub-contractors in the main contract with main contractors Probe their compliance with safety measures	4 sub-contractors were procured and complied with all the company’s requirements.
Fair practices	Price collusion and conflict of interest	Include this clause in supplier qualification assessment criteria Inquire suppliers’ history from previous hirers Examine the company certificate Put them in supplier blacklist if finding irregularities	No suppliers misconducted on price collusion and conflict of interest
	Abandonment/delivery failure/substandard products or services	Set penalties Confiscate guarantee Cancel contract File lawsuits Put them in supplier blacklist if they fail to honor contracts	No job abandonment and quality products or service delivery on time as agreed.
	Suppliers with contract worth more than Baht 10 million who fail to honor contracts	Require collateral placement Inspect compliance with contract and delivery Set a condition to make payment in instalments, based on work progress Make a company visit	Suppliers with over 10 million baht contract complied with all conditions
Human rights	Human rights violations (Employment of child and illegal labor/ Discrimination/ Treatment of the vulnerable)	Include this clause in supplier qualification assessment criteria Make a company visit Require reporting on on-duty workers’ information Require registration documents for migrant workers Put them in blacklist in case of violations	No complaint on human rights violation
Treatment of labor	Employment/wage payment/work conditions	Make the issue part of the supplier qualification assessment criteria Inquire information from previous hirers Make a company visit Put them in supplier blacklist if finding irregularities	No compliant about employment, pay, compensation and work conditions
Treatment of labor	Occupational health and safety	Demand job orientation and risk assessment at all assignments State the provision of specified safety equipment in contracts Require contractors to provide insurance to operators for high-risk jobs	Job risk assessment was conducted as required Fatal accident on sub-contractor’s employee was properly conducted remedy and investigated cause of the incident and sought out corrective and repetitive prevention measures.
Environment	Suppliers’ environmental and waste management	Make the issue part of the supplier qualification assessment criteria Make it part of the contracts and monitor compliance Make a company visit	Including environmental management conditions in the contract with all environmental risk suppliers 12 suppliers were certified environmental standard / or compliance with requirements of EIA and ISO 14001.
Consumers	Delivery of quality goods and services/ sustainable consumption	Specify this condition in contracts and monitor compliance Make a company visit	All suppliers met the company’s criteria.
Consumers	Protection of consumer information and information privacy	Inquire information from previous hirers Examine the company certificate Specify this condition in contracts and monitor compliance Set penalties Abolish contracts File lawsuits	No information privacy of consumers and the company’s suppliers breached.
Engagement and community development	Socially-responsible operations without causing impacts on community	Include this clause in supplier qualification assessment criteria Specify this condition in contracts and monitor compliance Make a company visit	No compliant about supplier’s activities from community

Supplier selection
In selecting goods and services suppliers, RATCH will consider the list of suppliers whose qualifications meet the clauses in the Supplier Code of Conduct. The qualification assessment criteria has been in place, to select desirable suppliers.

Supplier qualification assessment criteria
Governance dimension	Integrity/transparency/ responsibility No record of all forms of corruption No record of abandonment
Governance dimension	Conflict of interest Executive/Director hold no position in a competing bidder No personal relationship with the company’s executives/employees
Environmental dimension	Environmental management and accountability Certification on environmental standards (ISO 14000) or compliance with environmental regulations (EIA) Compliance with environmental law/ regulations and environmental impact management process
Social dimension	Labor, community and social stewardship Zero employment of child or illegal labor Respect for the human rights of employees/workers and no infringement to basic human rights Socially-responsible operations without causing impacts on nearby community

Procurement transparency
RATCH outlined the procurement procedures that involve producers or distributors of products and services along with the designation of persons authorized to approve the procurement, for transparency, clarity and verifiability.

Price negotiation	Price Inquiry method	Competitive bidding method	Special procurement method
Value ≤ Bath 100,000	Value ≤ Baht 5 million	Value > Baht 5 million	Urgent cases Specific product and service/task or services that demand special expertise Value > Baht 100,000
Authorized persons: Department Heads or higher-level executives	Authorized persons: Executive Vice President or higher-level executives	Authorized persons: Chief Executive officer	Authorized persons: Chief Executive officer

Supplier performance assessment
The Procurement Division and the requesting unit will assess supplier performance after the delivery of goods or services. The assessment focuses on quality, work load, delivery and compliance with specified criteria as well as Supplier Code of Conduct. Suppliers with passing scores will be included in the supplier list for future procurement. In 2022, 3 supplier that fail the assessment. RATCH will send suppliers that fail the assessment recommendations for improvement. If the recommendations are rejected, the suppliers will be included in the blacklist.

Management of long-term cooperation
In 2022, RATCH completed the Supplier Code of Conduct for a more concrete improvement in supplier management. The code of conduct was aligned with international standards and is imposed on all suppliers, requiring their strict compliance and extension of those practices to their suppliers. Products and services from the Company’s supply chain will then be welcomed and the suppliers will continue enjoying new orders in the long run.