🤝 Supplier Management · P-POL-006

SOP5 - Supplier Evaluation

Ongoing performance evaluation of suppliers via scorecards, annual surveys and corrective-action loops.

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Group Policy & Procedure	Document No.	P-POL-006
Group Supply Chain	Ver. No. \| Rev Date	0.4 \| 08 APR 2026
Title: Supplier Evaluation & Management	Effective Date	08 April 2026

BUKHATIR GROUP

Strength through Diversity

Group Policy and Procedure

Group Supply Chain (GSC)

Supplier Evaluation & Management

Lifecycle, KPIs & ASL Governance

Document No: P-POL-006

Revision Control

This document is issued under the authority of Bukhatir Group and applies when carrying out the activities described. Revisions may be issued as necessary under the authority of the Group Head of Procurement. Revision history is recorded below with every revised policy.

Revision History

Ver. No.	Effective Date	Description
02	September 2016	Original Procurement Policy
0.3	March 2026	Procurement Policy – Supplier Evaluation & Management
0.4	08 April 2026	Redesign, content modernization & flowcharts – Supplier Evaluation & Management

Revision Sign-Off

Approving Committee	Name	Signature
Endorsed by — Group Head of Supply Chain	Mohamad Koussa
Reviewed by — BIIL CEO	Mr. Ayman Ismail
Reviewed by — Group Chief Financial Officer	Mohamad Adnaan Sait
Approved by — Group Vice Chairman & Group CEO	Mr. Salah Bukhatir

Distribution List

#	Departments
1	Business Unit Procurement Departments
2	Group Supply Chain (GSC)
3	Finance, Legal, Compliance, Internal Audit
4	Business Unit Management

1. Purpose & Objective

This SOP defines the end-to-end process for managing suppliers across the Bukhatir Group — from pre-qualification, through onboarding, performance monitoring and periodic review, to off-boarding. It establishes risk-tiered due diligence, quantitative KPIs and governance of the Approved Supplier List (ASL).

2. Scope

Applies to all suppliers of goods, services, works and sub-contracts to any Group Business Unit.

3. Four-Stage Supplier Lifecycle

Stage	Purpose	Key Outputs
1. Pre-qualification	Screen and shortlist prospective suppliers against minimum criteria	Pre-qualification questionnaire (PQQ), risk classification
2. Onboarding	Formal admission to the ASL with appropriate due diligence	Signed Supplier Code of Conduct, ASL entry, master data
3. Performance Monitoring	Measure delivery performance against KPIs	Quarterly scorecards, NCRs, corrective actions
4. Periodic Review / Off-boarding	Confirm continued suitability or exit supplier	ASL Committee decision: Approved / Warning / Suspended / Removed

4. Risk-Tiered Onboarding

Onboarding rigor scales with supplier criticality and risk exposure.

Tier	Classification	Due Diligence
Tier 1	Critical / Strategic	Full financial health check, extended questionnaire, site visit, references
Tier 2	Important / Recurring	Standard questionnaire, document verification, references
Tier 3	Transactional / Low-risk	Streamlined onboarding: basic KYC, trade licence, VAT registration, bank details verification

5. Quantitative KPIs

Supplier performance is measured on the following KPIs, captured in Oracle and aggregated into a quarterly scorecard.

KPI	Definition	Target
OTIF	On-Time, In-Full delivery rate	≥ 95%
Quality NCR Rate	Non-conformance reports per 100 deliveries	≤ 2
HSE Incident Rate	Incidents per month at Group sites	0
Invoice Accuracy	% invoices passing three-way match first time	≥ 98%
Responsiveness	Avg. response time to RFI / clarification	≤ 2 business days

6. Performance States

State	Criteria	Action
Approved	All KPIs on/above target	Continue as ASL; eligible for all events
Warning	One KPI below target	Corrective action plan within 30 days
Suspended	Multiple KPIs below target or HSE/compliance breach	Temporary exclusion from new awards; root-cause review
Removed / Blacklisted	Persistent failure, serious breach, fraud or Code of Conduct breach	Removal from ASL and Oracle; notification to all BUs

7. Supplier Code of Conduct

Every supplier shall sign the Group Supplier Code of Conduct at onboarding. The Code covers ethics, anti-bribery, HSE, data protection and sub-contracting. Breach of the Code is grounds for immediate suspension pending investigation.

8. Annual Two-Way Supplier Feedback Survey

Once per year GSC runs a two-way feedback survey: the Group rates the supplier and the supplier rates the Group. Results are shared with the supplier and used to drive joint improvement actions. Low Group-side scores (e.g., late payment, unclear specifications) are actioned by GSC and Finance.

9. ASL & Blacklist Governance

GROUP-LEVEL ASL GOVERNANCE

The Approved Supplier List (ASL) is governed at Group level by the Group Procurement team, chaired by the Group Head of Procurement. GSC maintains the Blacklisted Suppliers list. All BU Procurement teams shall communicate to GSC whenever they wish to blacklist a vendor, with supporting documents.

A quarterly ASL Review Committee — chaired by the Group Head of Procurement and including Finance, Legal, Compliance and BU Procurement — reviews all performance states and admission/removal decisions.
Suppliers with no transaction for 24 consecutive months are archived from the active ASL. Re-activation requires refreshed onboarding.
Oracle shall not allow POs to non-ASL suppliers without formal exception approval.
Blacklisted vendors are removed from Oracle after clearing any outstanding financial obligations, preventing any BU from issuing POs to them.

10. Definitions & Acronyms

Acronym / Term	Definition
ASL	Approved Supplier List
BU	Business Unit
DOA	Delegation of Authority
GSC	Group Supply Chain
HSE	Health Safety and Environment
KPI	Key Performance Indicator
NCR	Non-Conformance Report
NDA	Non-Disclosure Agreement
Oracle	Enterprise Resource Planning System
OTIF	On-Time In-Full
PQQ	Pre-Qualification Questionnaire
SRM	Supplier Relationship Management