SUPPLIER DUE DILIGENCE
Raw material procurement and due diligence
Company has supplier base of total 500 plus material suppliers. Out of this, around 350 were local suppliers. In line with our focussed endeavour to boost local economy, reduce logistic complexities, minimise transportation and associated environmental impacts, we promote local procurement and source raw materials locally, to the maximum extent, but it needs to import some of the specialized raw materials as there is no local alternative.
As a part of due diligence with respect to its raw material supply, company has introduced mechanism to evaluate local vendors based on various criteria such as compliance with statutory requirements, environment management system, safety management system, sourcing from conflict region etc.
|Raw Materials (in %)||FY 2014-15||2015-16||2016-17||2017-18||2018-19||2019-20||2020-21|
*Data as on 31st March 2021
All suppliers are evaluated through a comprehensive audit system, based on varied parameters, through factory visits as part of due diligence. During the year under review, we conducted supplier audits for 30 existing suppliers, of which 3 were raw material suppliers while 27 were packaging material suppliers.
Also, in FY 2019-20, 21 new vendors were added to our approved manufacturer list, and subsequently 7 of them were audited and regularised. These included local as well as international vendors.
Majority of packing material used is sourced from local and/or small suppliers within 10 kilometres radius of production sites. KNPL actively encourages and works with local and small producers to improve their capability and capacity through quality programmes, suggestions, price competitiveness feedback, vendor ratings, and audit at supplier factories by purchase, as well as interactions with senior management.