Collaborative association with our value chain partners plays an intrinsic role in attaining mutually beneficial outcomes and steering responsible business practices. We regularly engage with them to understand their modus operandi, business-critical concerns, and expectations from their relationship with Marico.

Throughout our engagements we try to synchronise our vision towards a socially inclusive and sustainable future with the actions that are currently being taken by our partners. Our efforts are maneuvered towards elevating local economy and outspreading positivity in lives of those who are linked with our value chain while maintaining business continuity.

Responsible Sourcing Practice

We continue to take forward Marico’s responsible sourcing program, Samyut, to educate our value chain partners about our sustainability vision of upholding ethical, social and environmental commitment through strong governance.

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Ensuring ethics and integrity across the value chain

Marico's Code of Business Ethics (MCoBE) encompasses the organisation’s philosophy, vision, policy and actions towards integrating human rights and ethics in every stratum of the business ecosystem.

All value chain partners must adhere to the mandatory guidelines on MCoBE that constitutes a non-negotiable component of every business contract.

The following components of MCoBE ascertain that our partners understand and reciprocate on our value towards protection of business ethics and human rights across the value chain.

• Anti-bribery and corruption
• Human Rights (Child Labour, Forced Labour, Wages, Working conditions)
• Diversity & Inclusion
• Safety, Health and Wellness
• Prevention of Sexual Harassment
• Environmental commitments

Raw Material & Packaging Material Suppliers

Upstream supply chain, especially of raw and packaging materials, prompt production and distribution patterns that tacitly influence consumption behaviour. We prioritise supplier relationship management that operates with the philosophy of creating synergistic business goals and inspire our partners to deliver excellence and efficiency. Some of the important facets of supply chain that we pay special attention to, while maintaining supplier relations are described here.

Supplier Selection Process

The supplier selection process is applicable for procurement of commodities and non-commodities by the organisation. The policy guidelines elucidate the following stages in the standard vendor evaluation process:

Vendor identification: The identification of appropriate vendors is done based on the business needs and is influenced by critical factors like the vendor’s current business share, price, availability of the material etc.

Vendor Evaluation: Scrutinisation of vendors’ competence, credibility, and background verification are performed on the identified vendors considering illustrative parameters such as tenure in business, local credentials, market credibility, production capacity, alignment with Marico’s pre-requisites and mandatory compliance with regulatory requirements (VAT, PAN registration etc.). The vendors are also be assessed on the geographical area of operation.

Vendor Application & Registration: Once the background screening process is completed, the shortlisted vendors are requested to fill Marico’s Vendor Application and Registration form with all relevant details as required.

Vendor audits: Based on the nature of goods procured (commodities or non-commodities), the Consumer Quality audits are conducted based on predefined audit boundaries. The outcomes of these audits help the procurement team to ascertain the technical and financial credibility of the vendor, ahead of the selection process. In other instances, the audits help in periodic tracking of the vendors’ performance on specific requirements.

Vendor Selection: Recommendations from the dedicated Vendor Evaluation (comprising of the Procurement Head, respective procurement managers and commercial experts from buying team) are sought at this stage, to validate credentials provided by the vendor. The final selection of vendors take place on the basis of technical parameters, quality aspects and cost considerations. The absolute must-haves derived from Marico’s responsible sourcing principles (ethical responsibility, environmental conservation and social commitments) are also vetted at this stage, in case the vendor qualifies as a ‘critical vendor’ in the respective category.

Delegation of Authority: All documents submitted by the vendors are scanned and maintained on the Vendor Master Gateway. Based on the size of the business share, the

Supplier Development & Supply Assurance

We embrace the expertise of our diverse suppliers and work closely to align their performance with our broader goals. New vendors are identified from diverse background and are on-boarded after rigorous screening assessment. Capacity Development programs are organised intermittently to resolve quality issues, drive innovation, enhance performance and assure time-bound supply, that in turn, strengthens our long-term relationship and earns competitive advantage.

Quality within Supply Chain

The procurement and central quality assurance team at Marico jointly drives the Supplier Quality Excellence (SQE) program which aims at capacitating our valuechain partners to accelerate performance and deliver excellence.

Encouraging local procurement

Sheltering numerous sustainable implications, local/indigenous procurement has reserved our preference. It reinforces flexibility, transparency, and control over supply chain, thereby establishing stability in operations.

As of FY22, 94% of our procurement by spends were from local/indigenous suppliers.

Convertors

Our salient ally with convertors or third-party manufacturers ensures uninterrupted operations. They share the responsibility of transforming our products into packaged finished goods, that are ready for dispatch. We assist our business associates in upgrading their facilities to make best quality products with minimum environmental footprint. We also provide on-site assistance to our convertors with respect to technology upgradation, quality management, capability building, process modification, operational excellence and safety, health, and environment (SHE) initiatives.

Our key coconut cluster convertors have FSSC 22000 certification on food safety management. Some of our packaging partners also undergo commercial audits conducted by external agency. In FY22, in addition to external audits and certifications, Marico team has conducted several training and upskilling programs for dedicated third-party manufacturers on machinery maintenance procedures, 7QC tools, food safety, operational SOPs, quality management system and safety procedures as a part of our common development goal.

Some of initiatives undertaken in FY22 to improve operational efficiencies of our filling and packaging associates include:

1 New mold installation for productivity improvement

2 Automation initiatives like online conveyors, auto capping machines

3 Projects on rejection moulding

Depots and Warehouses

Synchronised functioning of our downstream value chain partners, depots and warehouses, facilitate smooth delivery of our products in different regions. We aid their capability elevation journey by means of several engagement programs.

Hyderabad, Sonipat, Coimbatore & Bhiwandi Warehouses

Depots with Warehouse Management System

Automation in Warehouses

Incorporation of ‘Warehouse Management System’ (WMS) in four of our major warehouses has helped us improve operational efficiency and stocks accuracy by automating elementary functions like goods receipt, storage, warehouse control, picking and retrieval of goods.

Logistics and Transportation

Strategic involvement with logistic and transportation throughout planning, execution and monitoring of product movement is crucial for enhancing customer experience while bypassing geographical limitations. Our initiatives with logistics partners are thoughtfully designed to build an agile and sustainable distribution network with wider market coverage at competitive costs.

Occupational Health & Safety systems at Depots and Warehouses

Considering health and safety vulnerabilities in our supply, we have adopted an integrated approach on identifying potential risks and hazards, prevention of hazards and protection of personnel against occupational risks.

spent in FY22 towards safety trainings to depot staff and contractual workers on themes like fire safety, electrical safety, loading/unloading techniques along with storage/handling, crisis management, Leakage & Damage, Food Safety, DQR & QMS Goods In Transit and waste management.

Zero major incident reported in any of the depots and warehouses. This has been the trend for the last 5 years.