Procurement and Vendor Governance
Sime Darby Group’s Supply Chain / Procurement Landscape
The Sime Darby Group is supported by Vendors* to provide a wide range of products and services to the many companies, operating units and subsidiaries in key growth sectors, namely, plantation, property, motors, industrial equipment and energy & utilities.
The Group strives to:
- continuously build long-term and mutually beneficial partnerships with vendors by working towards a common goal – value creation and operational excellence; and,
- improve all steps of the procurement process to realise this goal which will benefit all stakeholders in the end-to-end procurement value chain, including its vendors and customers.
This can be realised through better integration commencing from vendor registration, market intelligence and planning, strategic sourcing up to tactical procurement methods to satisfy the procurement need.
An overview of Sime Darby’s Supply Chain is shown in the illustration below:
Sime Darby’s operational excellence objectives is achieved with strong procurement governance and vendor management.
The principles of good procurement governance within Sime Darby are sustained through maintaining and upholding our procurement policies and procedures with help from our available tools and control systems.
Group Procurement Policies and Authorities
As part of the Government Transformation Project, the ‘Red Book,’ prepared by the Putrajaya Committee on GLC High Performance (PCG) in 2005, lays out the recommended best practice procurement guidelines for use by Government Linked Companies (GLCs) Board members, Chief Executive Officers (CEOs) and Chief Procurement Officers (CPOs).
Sime Darby’s Group Procurement Policies and Authorities (GPPA) had been developed incorporating elements from the Red Book, procurement objectives, procurement best practices in the Head Office/Divisions/Subsidiaries, and Sime Darby’s corporate objectives in particular:
- Drive value creation and minimise Total Cost of Ownership
- Increase procurement process efficiency
- Enhance transparency
- Enhance organisation capabilities and governance
- Improve vendor management, including vendor development
- Support national development
Code of Business Conduct (COBC)
As our counterparts or business partners, Vendors are expected to adhere to standards of behaviour aligned to promoting a fair, honest and ethical business environment.
Sime Darby’s COBC, derived from the Group’s Core Values and Business Principles provides guidance to these standards of behaviour when dealing with or on behalf of the Group.
The Vendor Letter of Declaration (VLOD)
The Vendor Letter of Declaration (VLOD) is a formal affirmation by any Vendor who intends to conduct business transaction(s) with the Sime Darby Group, that the said Vendor:
- Will comply with all applicable laws or regulations;
- Is not involved with any offence of bribery, corruption or fraud; and
- Will not engage in bribery, corruption or fraud with the Sime Darby Group.
The VLOD is one of the Group’s procedures for the prevention of corruption that applies specifically to Vendors.
It is a compulsory requirement for Vendors to sign the VLOD upon registration so as to enable them to be selected as a prospective Vendor and subsequently be included in Sime Darby’s Approved Vendor List (once pre-qualification requirements and procedures have taken place).
Procedures (Vendor Management)
As part of our standard operating procedures, vendor management plays a key role to manage compliance of our overall strategic goal.
All vendors are required to undergo the processes of registration and pre-qualification in order for the Group to manage a quality and comprehensive Approved Vendor List.
By fulfilling pre-qualification requirements, Sime Darby’s business needs will be more likely fulfilled through sourcing efforts via precise vendor selection procedures.
Each Division/Company/Operating Unit/Subsidiary within Sime Darby will conduct further evaluation to assess vendors’ suitability of work categories and nature of business against the business needs.
Continuous performance evaluations will be carried out to ensure these business needs are well met.
An overview of Vendor Management within Sime Darby is shown in the illustration below:
Tools and Control
Apart from ensuring our operational procurement steps are captured through clear terms and conditions with our vendors, Sime Darby is also continuously implementing electronic procurement (eProcurement) capabilities to help put our policies and procedures in action.
Sime Darby continues to work closely with its vendors to help ensure that these capabilities are mutually beneficial in our procurement activities. Some examples of these eProcurement tools are Online Vendor Registration, eTendering, eBidding and Procure-to-Pay modules accessed through our Sime Darby eProcurement Portal.
*A Vendor refers to a person or business that supplies goods and/or services to the Sime Darby Group, including Suppliers, Contractors and Consultants.
Back to top