HOW WE ADDRESS THE ISSUE
To build a strong eco-system through win-win growth strategy
By acting responsibly in collaboration with our suppliers, we aim to minimize risks and create stable, long-term business relationships with our partners. It is also an important strategic lever for AIS in safeguarding both its global competitiveness and the supply of materials and services. For this reason, the company applies not just economic standards, but also environmental, social and corporate governance standards in choosing new suppliers or continuing its relationships with existing ones. These standards are defined in AIS’ Supplier Code of Conduct, which generally forms the basis for our collaboration with suppliers.
AIS has set environmental criteria and requirements for bidding and plans to adopt a Green Purchasing Guideline. Action taken by procurement offices under the Green Procurement program are as follows:
- Set clear Green Procurement requirements in line with international standards for all products and services
- Communicated Green Procurement policies to all sellers covering joint operations and expectations of support via https://aisprocurement.ais.co.th and by Email.
- Adapted Green Procurement principles, methods and practices to the purchasing process starting with “durable articles”. Sellers were provided with details of desired environmentally-friendly products at the quotation stage.
- Organized Green Procurement training using environmental academics from the Department of Pollution Control of the Ministry of Natural Resources and Environment to ensure compliance with set principles.
Quality control standards for distribution channels
AIS has set criteria for measuring the quality of these channels. These standards vary according to the operating capabilities of primary partner channels.
1. Determine criteria for selection of major distributors
in order to acquire distributors with operational capabilities, including knowledge and expertise in sales, stable financial status, ability to adapt quickly to business conditions and competition, fair and legal practices in both business and employment. We also assessed the sustainability risks in this selection process in order to prevent any negative impact to AIS as well as to ensure the sustainable growth of the whole value chain.
2. Announce the supplier code of conduct
as a guideline for our suppliers. All suppliers who would like to conduct business with AIS are required to acknowledge and declared their commitment and compliance against this code of conduct before submitting their request to become AIS’s partners or suppliers. Existing suppliers also must give their written consent and acknowledgement of AIS’s supplier code of conduct before contract signing.
3. Establish guidelines for distributor and dealer operations to ensure quality and service standards
under AIS brand, such as in the selection of location, store development, advertising and sales promotions.
4. Set criteria for the quality measurement of sales and services
in order to develop and control the quality to ensure that it meets standards. This includes, for example, surveying and measuring customer satisfaction with distributor service through the Customer Satisfaction Index (CSI), competency testing and quality testing of distributor and dealer employees in various core areas.
5. Establish self-assessment guideline
to determine compensation and to provide fair and appropriate compensation for distributors in each category, taking into account store size, distribution area, quality income generation, and promotion of new products according to AIS targets.
6. Evaluate dealer satisfaction
through the Dealer Satisfaction Index (DSI) with annual assessments via interview, and measure and compare results against industry averages regionally, globally, or against the previous year, in order to improve distribution channel management
7. Conduct supply chain risk assessment and due diligence process
through various methodology such as management workshop to identify human rights risks in supply chain, the annual survey and supplier self-assessment in order to prevent or mitigate risks arising from our suppliers
8. Conduct on-site audit with the suppliers
who have been identified as a critical suppliers1 and suppliers with high sustainability risks2. In doing this, AIS assigned the purchasing team to be a key responsible person. The team have set an annual plan and target for on-site audit at least once a year.
Definition of critical supplier
1. Definition of critical supplier volume spending more than Baht 100 mn per annum, critical component suppliers, non-substitutable suppliers as well as suppliers which their products or services have been used in our network or customer service system in great amount
2. Definition of supplier with high sustainability risk critical tier 1 suppliers who do not meet our sustainability standards in defined aspects such as Human rights, environmental management, anti-corruption.