Purchasing and Procurement

  • CSR Procurement

    Basic Stance

    As part of CSR in supply chain management, we clarify and put into practice our viewpoints and standards relating to CSR procurement and purchasing. Examples of this relate to improving the environmental performance of procured goods, encouraging environmental consideration, legal compliance and protection of human rights by suppliers, and also promoting fair tradepractices with suppliers.

    Corporate Code of Conduct

    6.Protect human rights

    The Teijin Group respects the human rights of its employees and all other people involved in its business activities and does not allow child or forced labor. With respect to these policies, the Teijin Group strives to obtain the positive understanding and cooperation of concerned parties in the value chain in which it is involved.

    9.Ensure fair and proper transactions

    In its operations, such as procurement and product sales, the Teijin Group negotiates in good faith and observes fair and proper practices. In addition, the Teijin Group neither accepts bribery nor is involved in any type of corruption.

    10.Respect intellectual property rights

    The Teijin Group respects intellectual property rights, including trade secrets, and vows not to violate the effective rights of other companies or groups, as well as to protect, preserve and utilize its own intellectual property rights.

    Basic purchasing and procurement policy

    In order for the Teijin Group to supply excellent products continuously and stably to satisfy customers, quality improvement is inevitable in the purchasing / procurement of raw materials, equipment, and services. To this end, we have established the basic purchasing and procumbent policy with the aim to build a sound business relationship with suppliers. Further, we have determined basic conditions for the attitude of purchasing / procurement staff by specifying actions for them to take in their purchasing / procurement activities in order to prevent inappropriate relationship with suppliers.

    Purchasing policy

    • 1.
      strive to understand local laws and regulations of countries related to the business, whether home or abroad, and take actions in compliance with them;
    • 2.
      make reasonable decisions by proper examination of various business values including quality, price, delivery time, and lead time;
    • 3.
      strive to pursue proper and fair business and will never involve in any cartel or bid rigging;
    • 4.
      pursue transactions in full consideration of the conservation of the environment, resources, etc.;
    • 5.
      make transactions in respect for corporate social responsibility through examination of the supplier´s business condition, technical capability, and corporate attitude; and
    • 6.
      strive for business transactions with ethical awareness by listening closely to the opinions of stakeholders.

    Attitudes of purchasing

    • 1.
      never conduct transactions that violate laws or regulations, and perform transactions in respect for industrial standards and trends by paying constant attention to them;
    • 2.
      perform transactions with priority on good and excellent quality characteristics by strictly evaluating goods and services offered by suppliers;
    • 3.
      strive to maintain a sound relationship with suppliers and will never demand improper discount, service, or donations abusing their positions;
    • 4.
      never have any personal interests with suppliers and never receive personal benefits including gratuities or gifts;
    • 5.
      promote the procurement of products and services that are eco-friendly or conform to requirements of green purchasing;
    • 6.
      pursue transactions with reliable suppliers and will not value companies that ignore social rules; and
    • 7.
      never reveal confidential information concerning transactions and never disclose any information or intellectual property rights provided to us without approval of the provider.

    (Established September 1, 2006; Revised March 29, 2007)

  • Overall Consideration of Supply Chains Based on CSR Procurement Guidelines

    To manufacture and distribute its products, the Teijin Group procures a large amount and wide variety of raw materials, equipment, components and services from many companies around the world. When selecting suppliers, we adhere to our purchasing guidelines based on fair and rational judgments.

    Furthermore, to implement CSR throughout the supply chain, we established the CSR Procurement Guidelines (see below) and we require our suppliers to conduct activities in compliance with our guidelines.

    The Teijin Group's CSR procurement activities are being promoted centering on the Machinery and Material Procurement & Logistics Management Department of Teijin Limited, and the Basic Purchasing and Procurement Policy and CSR Procurement Guidelines, which are published on the Teijin Group website in Japanese, English and Chinese.

    CSR Procurement Guidelines

    Regarding the Teijin Group´s procurement activities, we ask our suppliers to meet the following requirements.

    • 1.
      Quality and safety
      • Inclusion of items concerning "quality and safety" in company-wide policies, code of conduct, etc.
      • Proper management of "quality and safety" through establishment of a promoting department and manager.
    • 2.
      Human rights and labor
      • Inclusion of items concerning "human rights and labor" in company-wide policies, code of conduct, etc.
      • Proper management of "human rights and labor" through establishment of a promoting department and manager.
    • 3.
      Safety and health
      • Inclusion of items concerning "safety and health" in company-wide policies, code of conduct, etc.
      • Proper management concerning "safety and health" through establishment of a promoting department and manager.
    • 4.
      Fair trade and ethics
      • Inclusion of items concerning "fair trade and ethics" in company-wide policies, code of conduct, etc.
      • Proper management concerning "fair trade and ethics" through establishment of a promoting department and manager.
    • 5.
      Information security
      • Inclusion of items concerning "information security" in company-wide policies, code of conduct, etc.
      • Proper management concerning social responsibility for "information security" through establishment of a promoting department and manager.
    • 6.
      Philanthropy
      • Inclusion of items concerning "philanthropy" in company-wide policies, code of conduct, etc.
      • Proper management concerning "philanthropy" through establishment of a promoting department and manager.
    • 7.
      Biodiversity
      • Inclusion of items concerning "biodiversity" in company-wide policies, code of conduct, etc.
      • Proper management concerning "biodiversity" through establishment of a promoting department and manager.
    • 8.
      Specific minerals*
      • Inclusion of items concerning "specific minerals" in company-wide policies code of conduct, etc.
      • Prohibiting the use of specific minerals into the products through establishment of a promoting department and manager.
        • *
          Specific minerals mean the minerals such as gold, tin, tantalum, and tungsten mined in Republic of Congo and its peripheral regions(Sudan, Ugnda, Rwanda, Burundi, United Republic of Tanzania, Central African Republic, Angola, and Zambia).
    • 9.
      Environment
      • Inclusion of items concerning the "environment" in company-wide policies, code of conduct, etc.
      • Proper management of the "environment" through establishment of a promoting department and manager.
      • Official announcement of the policy or code that has provided matters concerning the "environment".
    • 10.
      Management of chemicals contained in products
      • Recognition of the latest information on the chemicals prohibited by law and regulations to be contained, and proper management of such chemicals based on facts and data obtained through in-house surveys etc.
    • 11.
      Management of chemicals used in the manufacturing process
      • Recognition of the latest information on the chemicals prohibited by law or regulation to be used, and proper management of such chemicals based on facts and data obtained through in-house surveys, etc.
    • 12.
      Approval and license concerning environmental conservation (air, wastewater, noise, vibration, etc.)
      • Proper management for notification on facilities or work for which appropriateness is required and election of administers, etc., as required by law and regulations.
    • 13.
      Environmental management system
      • Establishment and operation, and continual improvement of environmental management system.
    • 14.
      Minimize impact on the environment (air, wastewater, soil)
      • Recognition of current status with facts and data obtained from in-house surveys, etc., through formulation of self-imposed standards.
    • 15.
      Reduce the discharge of chemicals into the environment
      • Recognition of current status with facts and data obtained from in-house surveys, etc., through formulation of self-imposed standards.
    • 16.
      Effective use of resources/energy
      • Recognition of current status with facts and data obtained from in-house surveys, etc., through formulation of self-imposed standards.
    • 17.
      Reduce greenhouse gas emissions
      • Recognition of current status with facts and data obtained from in-house surveys, etc., through formulation of self-imposed standards.
    • 18.
      Waste reduction (3R)
      • Recognition of current status with facts and data obtained from in-house surveys, etc., through formulation of self-imposed standards.
    • 19.
      Disclosure of commitment to environmental conservation
      • Periodical summarization and disclosure of commitment to environmental conservation.
  • Supplier Surveys

    Surveys and Ratings of Suppliers

    The Teijin Group developed and launched an original system for surveying and rating the CSR of its suppliers. The system utilizes an online questionnaire to confirm whether or not suppliers are complying with the Teijin Group CSR Procurement Guidelines, and the results are used to determine their place in a 5-level ranking system. Suppliers respond to 70 itemized questions, receive a score and are then ranked according to the score and their credit status as ongoing suppliers. Using a matrix of these two rankings, suppliers are ranked from I to V (groups I - III equate to a CSR guidelines compliance ratio of 40% or more, and ranks IV and V to a ratio of under 40%).

    Number of Suppliers Surveyed

    In FY2014, we continued to survey our overseas suppliers, along with expanding the scope of surveyed suppliers to major manufacturers with whom we do business via trading companies. Previously, these manufacturers were not included in our surveys. In total, 504 suppliers were surveyed, one more company than in the previous fiscal year, covering 76% of the total purchase amount of our Purchasing Division in Japan.

    Using the 5-level ranking of our Supplier's CSR Management System, 98% of the suppliers were classified into groups I-III, the groups designated as "Okay to continue business" (97% in FY2013).

    FY2013 Group I:75%,Group II:17%、Group III:5%、Group IV:2%、Group V:1% Breakdown of Suppliers by Ratinga red star

    FY2013 Group I:91.2%、Group II:5.2%、Group IV:0.2% Breakdown of Purchase Value by Rating*a red star
    * The ratios were calculated excluding the purchase amounts of the General Affairs and Human Resources Division and those of our Group companies overseas.

    Guidance/Support to Improve CSR Activities of Suppliers

    Suppliers corresponding to groups IV-V in the results of the survey are the target of improvement guidance; that is, they receive individual guidance/support to enable them to continue as suppliers. The number of group IV and V suppliers decreased from 12 companies in FY2013 to 10 companies in FY2014, after feedback was provided to these suppliers via the CSR survey system. We believe that this indicates that our improvement guidance is having a positive impact on these suppliers.

    In FY2014, we conducted an audit visit of, and provided improvement guidance to, one Group IV-V supplier. As a result, this supplier improved its ranking to Group II in FY2014, compared to a ranking of Group V in the previous fiscal year.

    Supporting the Expansion of CSR Procurement to Society as a Whole Through Our Supplier's CSR Management System

    The Teijin Group developed and launched the Supplier's CSR Management System, an original system for rating the CSR of its suppliers in five levels. The system is now being managed by Fiberfrontier Co., Ltd., a company jointly established by chemical and synthetic fiber companies in Japan, and is supporting the expansion of CSR procurement to society as a whole.

    Introduce/Expand CSR Procurement Activities with a Global Perspective

    In line with its global expansion, to expand CSR procurement, beginning in FY2012 the Teijin Group started conducting surveys with suppliers in Europe, the USA and China using the same contents as the Japanese version.

    In FY2014, we conducted surveys for 25 overseas companies (a red star).

    As a result of the survey, all companies were evaluated and categorized as being in Group I, II, or III. This result is thought to be due to the comparatively high level of awareness of CSR at our overseas suppliers, who are large corporations. In FY2015, we plan to continue conducting surveys of all main suppliers worldwide.

    Care for Contractors and Work Contracts

    The Teijin Group is focusing on maintaining proper work contracts based on mutual trust and cooperation with contractors. In FY2007 in Japan, in response to the social issue of regulation of temporary/contract work management, the procurement department and manufacturing department cooperated to implement a series of independent inspections of work contracts. By FY2008, we completed actions to voluntarily improve contracts which are legally correct but require revisions to more closely reflect the demands of society (applying to 32% of all work). This particularly applied to contracts for non-regular work*. Following this, in order to maintain this status, we have been conducting regular awareness-raising activities at various worksites.

    In FY2014, in an environment where order volumes were expected to decline primarily at contractors that are engaged in business with Teijin factories that will be shut down or downsized due to structural reforms, we implemented measures to increase the motivation of the Company and its contractors. These measures were aimed at drawing more attention to the need for even higher levels of safety as well as maintaining and enhancing quality in a challenging environment.

    Notably, some contractors may expect to increase the number of new workers or to replace personnel frequently. In these and other cases, we show consideration for these contractors' needs by providing special training and revising various types of conditions.

    • *
      Non-regular work: Maintenance, repair or other work that are not part of regular duties. The number of occupational accidents that occur during this kind of work is relatively high.