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Management of sustainable supply chains
Progress Against Plan
 
Plan 2018 Target​ 2018 Accomplishments ​2019 Target
​On-site audits Conduct on-site audits on 13 hydrocarbon suppliers and 100% audits on critical indirect procurement supplier.

Assessed 100% of  non-hydrocarbon suppliers in critical supplier group.

Assessment of hydrocarbon suppliers will be conducted in the second half of 2018 under PTTOR. Therefore, no assessment was conducted by PTT in 2018.

​Assess 100% of  non-hydrocarbon suppliers in critical supplier group .
 
PTT does not have a target in assessing hydrocarbon suppliers, as PTT no longer operate in oil business .
​Value creation through Hydrocarbon Supply Chain Management 65 million baht was generated by managing supply chain to add value, increasing customer satisfaction and reducing environmental impacts. ​1,102 million baht was generated by managing hydrocarbon supply chain and 315 million baht from non-hydrocarbon suppliers to add value, increasing customer satisfaction and reducing environmental impacts. ​175 million baht to be generated by managing non-hydrocarbon suppliers to add value, increasing customer satisfaction and reducing environmental impacts. This is because Oil business unit has been segregated.
PTT Group Strategic Sourcing Increased in value by 5% of product and service spending from a collectively procurement  to create added value and synergy within PTT Group. Increased in value by 12.75% of product and service spending from a collectively procurement.  Increase in value by 12% of product and service spending from a collectively procurement.
​ ​ ​Non-hydrocarbon Suppliers ​ ​
​Satisfaction rate in  2018 at 85% ​​86% ​87%
 
 

Local Procurement

2016​ ​2017 ​2018 ​2019
Target ​95% ​>95% ​>95% ​>98%
​Performance​ ​95% ​95% ​98% -​​
 

Reduce Major Accidents from Transportation
Long-Term Target: Reduce major accidents from transportation to zero in 2023

2016​ ​2017 ​2018 ​2019
Target
0.05 times per 1 million KM
0.05 times per 1 million KM 0.05 times per 1 million KM 0.05 times per 1 million KM
​Performance​
0.07 times per 1 million KM
0.05 times per 1 million KM 0.04 times per 1 million KM ​-
 
 

Supplier Satisfaction in Working with Procurement Functions

2016​ ​2017 ​2018 ​2019
Target
85%
85% 85% 85%
​Performance​
87.03%
83.96% 85.84% ​-
 

Procurement Spending

​Year 2015​ 2016​ ​2017 2018​​
 Tier 1 Suppliers ​3,340 ​3,215 ​3,218 3,090 ​
Critical Tier 1 Suppliers ​ 13​ ​25 ​25 ​73
Critical Non-Tier 1 Suppliers ​ ​NA ​9 ​35 ​8
 
 
Indicators​ Procurement Spending (Thousand Million Baht)​ ​ ​ ​ ​
​Year ​2015 ​2016  ​         2017 ​2018 ​2019  Target
​Result ​449 ​394 ​473 ​307

​360

  
The Fatty Acid Methyl Ester Biodiesel (B100) Inventory Management
In 2018, PTT encouraged supply chain sustainability through supporting national alternative energy policy by managing the Fatty Acid Methyl Ester Biodiesel (B100) inventory to maintain palm oil market stability and minimize impacts on raw material overstock. These could sustainably drive supplier forward with PTT and correspond to PTT Pride and Treasure vision.
 
Logistics improvement for U-TA-PAO
PTT has developed the capacity in transportation via support from PTTGC Distillery in transporting jet fuel to U-Ta-Pao Airport. This is in replacement to transportation of fuel tanks from Lum Lookka, Pathumtani. The arrangement helps reduce the cost of transportation and enhance the effectiveness of logistics management. PTT is able to be responsive to requirements downstream. Following the project implementation, the cost of transportation was reduced by approximately 21 million baht per year.
  
Sustainable Material Sourcing
PTT demonstrated its commitment to sustainable materials sourcing in alignment with the public sector’s efforts, by developing a Sustainable Procurement Requirements Manual encompassing 23 procurement classifications. The Manual supports various departments in systematically applying environmental requirements accurately and appropriately, along with disseminating knowledge and understanding on environmentally-friendly procurement to suppliers and employees. This includes organizing seminars for suppliers, communicating examples of environmental requirements and knowledge sharing on different types of eco-labels. As of 2018, PTT has promoted and driven Amazon’s Roasting Plant, which is under a PTT Subsidiary; as well as promoting suppliers to operate in compliance with Green Industry by Department of Industrial Works. The number totals to 10 companies.
 
PTT Procurement Management
PTT prioritizes the efforts to ensure procurement management is transparent, efficient and effective, to foster all stakeholder group’s trust. In 2018, Procurement Management Committee (PTTMC) appoints Procurement Management Audit Committee (PTTPMAC) to monitor and review process relevant to packaging procurement and non-hydrocarbon commercial procurement. The Committee ensure process is fully in compliance with related regulations, laws, rules, criteria and other aligned process. Additionally, PTTPMAC also provided consultation regarding procurement practice for packaging and non-hydrocarbons. This creates opportunity for knowledge exchange within the organization, resulting in collaboration to improve procurement’s effectiveness and maintain standardization. This makes it possible for PTT to achieve the path to become an organization of transparency according to the strategy ‘PTT Pride & Treasure of Thailand.’
 
Procurement Officer Capacity Building
PTT and PTT Group companies reviewed and planned employee capacity building programs throughout the year to train procurement staff to respond to organizational changes effectively. In 2018, PTT announced the use of the PTT Group Sustainable Procurement and Supplier Management Policy and Sustainability Performance Assessment Form to procurement staff, relevant departments, and suppliers. PTT further trained procurement officers on skills to effectively and easily use the work system that was recently developed to support organizational procurement process and management. This allows for shorter duration spent, and a more systematic and effortless approach. It also enables employees to work more efficiently and effectively overall.