Supply Chain Management and Raw Material and Product Inventory Management

Supporting the SDGs Goals

Goal 9:

Industry, Innovation and Infrastructure

Goal 12:

Responsible Consumption and Production

Stakeholders Directly Impacted

Business Partners

External Service Providers

Goals and Performance Highlights

Goals

The proportion of key vendors that have undergone ESG training is

% or more, increasing by at least % annually

The proportion of key vendors complying with ESG guidelines is

% or more, increasing by at least % annually

Performance Highlights 2025

Major service providers have readiness and possess foundational ESG knowledge

%

The proportion of key service providers complying with ESG guidelines across all three dimensions was

%

ESG Performance Data

Commitment, Challenge and Opportunity

Sustainable supply chain management is one of the company’s strategies to enhance business competitiveness. The group places importance on evaluating the environmental, social, and governance (ESG) impacts of various activities in the supply chain, including the procurement and purchasing process, production process, quality inspection process, information technology, storage, transportation, and delivery of goods to customers or consumers. All of these processes play a crucial role in the sustainable growth of the business. Therefore, the group selects and assesses the risks of external service providers to pass on value and responsibility through high-quality products and services, ensuring maximum customer satisfaction and reducing business risks that may arise from negative impacts by external service providers.

Management and Operational Approach

The group has established a Code of Conduct for external service providers, covering environmental issues, human rights, fair employment and working conditions, occupational health and safety, as well as business ethics of external service providers.

Sustainability Plan

BLC sets an operational plan to improve the supply chain management efficiency as follows:

Raw Materials and Packaging Delivery Efficiency Plan

The Company set a key performance indicator (KPI) of 97% for on-time delivery of raw materials and packaging. While the year-end performance was 96.47%, falling short of the target, the plan did not meet its objectives.

Raw Material and Packaging Quality Improvement Plan

The Company tracks quality indicators such as the on-time delivery rate of compliant raw materials and packaging with no deviations, and the raw material rejection rate. Targets are set at 95% and 98% respectively, and performance reached 96.47% and 98.66%, exceeding those targets and ensuring the plan’s success.

Raw Material Production Response Plan

The Company uses a key performance indicator (KPI) to measure its ability to supply raw materials in line with the production plan, targeting a rate of 97% or higher. Full-year performance was 96.76%, falling short of the target and preventing the plan from reaching its objectives.

Packaging Production Response Plan

The Company monitors packaging availability against the production plan, targeting a fulfillment rate of at least 97%. Actual performance reached 98.50%, exceeding the target and ensuring the plan was successfully met.

Product Delivery Accuracy Plan (Based on Tax Invoice Quantities)

The Company uses a key performance indicator (KPI) to measure the accuracy of product delivery against the invoice count, aiming for 100% accuracy. Performance results met this target completely, ensuring the plan’s full achievement.

Product Inspection Error Reduction Plan

The Company has set a target of no more than 0.5% error rate for product and document inspection, based on the number of tax invoices per month, and 0% for complaints regarding product and documentation. Performance results indicate an error rate of 0.28%, which meets the target. However, complaints were reported at a rate of 0.0009%, preventing the plan from fully achieving its goals.

Cost Reduction Plan

The Company tracks cost reductions using a rate-of-reduction indicator based on 2024 figures, with targets of at least a 2% reduction in raw material costs and a 5% reduction in packaging costs. This also includes negotiating property purchases at least 5% below the asking price. Results show raw material costs were reduced by 3.32%, packaging costs by 8.12%, and property purchase prices by 15.85% below the asking price, successfully achieving the cost reduction plan’s goals.

The company evaluates external service providers based on the ESG criteria and develops a plan to promote and encourage external service providers’ participation in ESG and sustainable business development.

Operational Achievements in 2025

At least 50% of key external service providers have completed training on ESG evaluation criteria, with a minimum annual increase of 10%

Proportion of Key Suppliers Who Completed ESG knowledge Training

(ESG 101)

Click to Enlarge

Trained

Not Yet trained

The proportion of key external service providers that comply with the Company’s ESG assessment criteria is targeted at 10% or higher, with an annual increase of at least 5%

In 2025, the Company integrated environmental, social, and governance (ESG) factors into its analysis and review of key external service provider groupings, considering their relevance to core activities, risk levels, and impact on the supply chain. Consequently, the number of key external service providers was reduced from 89 in 2024 to 53 in 2025.

Proportion of the external service provider's location area

(counted by product items)

Unit : Product