Supply Chain Management

The Group has set supply chain development as one of its materiality in pursuing the sustainability of its business and society. Recognizing the importance of dialogue with suppliers to build a sustainable supply chain, we established a Supply Chain Team in the Sustainability Department and established a Supply Chain Working Group* in July 2023 which is led by that team. We will work to manage supply chain issues and reduce risks by creating opportunities and environments for dialogue with suppliers.

Refer to Sustainability Promotion Structure/FY2023 Subcommittees/Supply Chain Working Group.

Tokyo Seimitsu revised its Basic Transaction Agreement in May 2024. In addition to clauses such as legal compliance, anti-bribery and anti-corruption, and personal information protection, we have added clauses to strive to comply with our standards (CSR Guidelines, Information Security Standards, and Green Procurement Standards) to clarify that we will work together to fulfill our social responsibilities throughout the supply chain.

We have declared our compliance with the Responsible Business Alliance (RBA) to meet the demands of the international community, including corporate responsibility for the safety of the working environment, worker dignity and environmental impact throughout our supply chain. Based on the RBA Code of Conduct, we have formulated the “Tokyo Seimitsu Supplier CSR Guidelines” that set out our requirements with regard to “procurement policy,” “human rights and labor,” “occupational safety and health,” “the environment,” “ethics,” “safety and quality,” and “information security.” We ask that our suppliers understand the purpose of these guidelines and cooperate with us in promoting sustainable procurement activities as well as provide us with written confirmation that they have checked and understand the content of the guidelines.

Tokyo Seimitsu promotes green procurement and has established the Green Procurement Standards, which indicate that we will prioritize the procurement of environmentally-friendly parts and materials from suppliers with well-established management systems.

Based on the “Green Procurement Guidelines” established in April 2003, these standards were established in April 2024 to comply with environmental laws and regulations which have become more stringent. In July 2024, we held a supplier briefing session hosted by the Supply Chain Working Group to promote understanding of these standards and cooperation based on them.

Since fiscal 2016, we have used the “SCM (Supply Chain Management) Check Sheet” to conduct supplier CSR surveys and have been conducting sustainability assessments based on RBA SAQ since fiscal 2022. In fiscal 2023, we surveyed major suppliers accounting for the top 80% of the value of purchases and received responses from 113 companies (response rate: 90.4%). The results of the assessment analysis are provided to suppliers as feedback. For items with low scores, suppliers are requested to take corrective actions and measures for improvement.

We ask our suppliers to use the "Environmental Management Structure Survey Sheet" or "Environmental Management Checklist" for survey and evaluation purposes, and to develop and manage systems to avoid environmental risks in the supply chain. Suppliers that outsource product manufacturing or services are required to participate in a survey conducted by our Company every two years regarding human health and living environments, including air pollution, water pollution, the Offensive Odor Control Act, vibration and noise facilities, and specially controlled wastes.

We are developing a “web-based system for suppliers” to share information with suppliers, broadly and without redundancy. This system will address the ever-growing need for information sharing, including supplier CSR surveys, notifications of disasters such as earthquakes and heavy rains, surveys of damage conditions, and communication of various notifications. We will use this system to build a structure for more sustained and active communication with suppliers.

On February 1, 2023, Tokyo Seimitsu announced its “Business Partnership Building Declaration” in support of the aims of the “Council for Promoting Partnership Building for the Future*.” We aim to build new partnerships by promoting collaboration, co-existence, and co-prosperity with business partners in the supply chain and businesses seeking to create value.

In December 2023, we launched our electronic transaction system (ACCRETECH Web-EDI System) into operation. Web-EDI is a system for exchanging information such as order information between companies electronically using a Web browser. In addition to making procurement operations more efficient, paperless, and compliant with invoice reporting and the Electronic Books Maintenance Act, the system can be used to strengthen compliance (compliance with laws and regulations such as the Subcontract Act) by accumulating and visualizing transaction information, and to strengthen BCP measures by quickly grasping the situation of suppliers in the event of a disaster.

We conduct training for employees in Procurement Section and Procurement Team to develop human resources who promote responsible procurement. In fiscal 2023, we provided e-learning- based training for our employees on the “Subcontract Act (Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors)” to all Tokyo Seimitsu employees.