Page 87 - Tata Steel One Report 2024-Eng-Ebook HY

Business Operation and Performance Driving Business Towards Sustainability
Corporate Governance Policy Financial Statements Attachments
year, users can claim and report problems from usage. The Company investigates the facts, solves problems, and creates supplier development plans with all concerned units and the suppliers. If the supplier does not perform as per the required standard, they may be suspended from the Company’s procurement process, or have withdrawn from the Company’s vendor list. In tracking and evaluating the annual performance of suppliers, it was found that 135 suppliers were eligible for the Company annual evaluation considering the frequency and volume of their supplies. Last year, there was no supplier that the Company had to report to improve the quality of goods and services. Moreover, to have suppliers understanding, the Company’s requirements and increase suppliers’ potential to be able to do business with the Company in the future, the Company plans to develop suppliers’ potential by providing advice and support.
Supplier Relationship Management and Capability Enhancement
The Company has a policy for developing suppliers according to Supplier Relationship Management. Over the past year, the Company initiated an environmental project with partners and achieved reduction in NOx at walking hearth furnace (WHF) at SISCO from 226 ppm to 111 ppm via LCB formula adjustment. This change has resulted in reduced greenhouse gas emissions by decreasing the frequency of transportation, lowering the amount of packaging, and helping the Company save on costs. Additionally, the Company has regularly arranged training and meetings to develop suppliers as needed and deem appropriate, for example, training for contractors’ employees who operate in the plant area on working safely to reduce injury rate or accident from work, training for contractors and transporters who receive our products at the plant, etc. The Company also arranged the annual contractor safety meeting with suppliers to communicate the business direction, safety performance, sustainable procurement, and development, working rules and regulations, i.e., Tata Code of Conduct (TCoC), Policies of Anti – Bribery and Anti – Corruption, Providing or Receiving Gift, and Hospitality Policy, etc.
Key Vendor Engagement
The Company is committed to fostering long-term partnerships with key scrap metal suppliers to ensure sustainable growth and mutual success. Ongoing engagement and quality assessments are carried out consistently at both operational and executive levels.
Regular supplier visits are conducted across all three production sites to strengthen collaboration, evaluate service quality, and continuously enhance the procurement process. These efforts involve cross-functional teams from procurement, steel billet production, and administration, with a focus on improving supplier performance beyond pricing—emphasizing quality, reliability, and overall satisfaction.
In addition, the Company has established the VST Vendor Service Team, comprised of senior executives, who visit key suppliers on a monthly basis. This initiative aims to build trust, align strategic objectives, and support the continuous development of supplier capabilities.
Such sustained efforts have contributed to a notable improvement in the Company’s score under the Supply Chain Management category of the SET Sustainability Awards 2024, exceeding the industry average and reflecting tangible progress in managing supplier relationships in a responsible and sustainable manner.
Raw Material Procurement
and Other Service Procurement
To enhance procurement effectiveness, the Company has encouraged users to try alternative raw materials that have better total cost of ownership, increase channels in having raw materials from many sources, reducing the risk of raw materials shortage or dependence on few suppliers as well as control the cost of products and increase competitiveness. The Company also considers the procurement of goods and services with local suppliers continuously to expand revenue to locals tangibly, which stimulates the overall economy.
The Company utilizes an E-auction system for raw materials, MRO, production supplies, and CAPEX procurement, ensuring transparency and competitiveness while strengthening the vendor selection process.
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