31 / 54
CASE STUDY
Our supply chain network involves over 1,000 suppliers and subcontractors,
and how we work with them has a significant impact on the quality of our
products and services, and our reputation. We are committed to building
collaborative, long-term and mutually beneficial relationships with our
business partners.
Managing Our Supply Chain Risks
As part of our supply chain risk management, we avoid excessive reliance on a small number
of suppliers. Less than 30% of our purchases in 2014/15 were sourced from our five largest
suppliers. The rest of our purchases is from a large number of different suppliers. For
example, our Construction Department spent 83% of its overall purchases to hire more than
110 subcontractors, whereas our property management subsidiaries sourced more than 56%
from 600 facilities contractors.
We manage each business line supply chain differently. For example, physical safety is
the top priority of our construction business, whereas food safety is crucial to the catering
arm of our hotel business. We summarized our most significant categories of suppliers by
expenditure in the reporting period to illustrate the diversity of our suppliers across our
supply chain.
Creating value through collaboration
with our business partners
Johnson Controls, our supplier, is a technology company that specializes in providing
energy saving solutions for buildings. Sun Hung Kai Centre is a 34-year-old commercial
complex with 53 floors. Over the years, we have implemented various initiatives to
retrofit SHKC to improve its energy efficiency.
Through working closely with Johnson Controls, we upgraded the water pump system
in 2013 which contributed to an estimated annual energy savings of over 120 MWh
or HK$0.18 million in energy bills. In 2015, Johnson Controls leveraged innovative
technologies to optimize the chiller plant at SHKC. The new solution is expected to
achieve annual energy and cost savings of 10% from the baseline level of 2014 and
reduce the carbon footprint by 300 tonnes. This translates to annual savings of close to
HK$800,000 with an anticipated return on investment of only two years.
Proportion of our
procurement budget
spent on local suppliers
>
95%
Both SHKP and Johnson Controls look to increase
the operational efficiency of the Group’s buildings
while reducing energy consumption. Our shared goals
and objectives form the foundation of our lasting
win-win working relationship.
General Manager of Service Division,
Building Efficiency, Johnson Controls
K. O. Wong
We recognize the positive impacts we can
make in the market through experience
sharing and collaboration with other
members of the business community.
We joined Johnson Controls’ Customer
Reference Programme and showcased
our energy saving experience at SHKC to
other property developers, with an aim
that our peers and suppliers can repeat our
successes.
Value Created for Supply Chain
29
Sun Hung Kai Properties Limited Sustainability Report 2014/15