Supply Chain Management

Basic Approach

In the course of developing our business, we must not only comply with laws and regulations, but also ensure that our various business partners, who provide us with goods and services, are also committed to addressing the demands of society in areas including labor, human rights, and the environment, thereby helping to build relations of long-term trust with our stakeholders. The Daifuku Group has established a Basic Procurement Policy and CSR Procurement Standards, and is advancing efforts to build a sound and sustainable supply chain.

Basic Procurement Policy

Our principles for dealing with suppliers are as outlined below, in keeping with the Management Policy and Group Code of Conduct.

Fairness, Impartiality
  • We will open the door wide, both in Japan and overseas, and provide opportunities for free competition.
  • We will select our business partners through the comprehensive evaluation of quality, technology development capabilities, economy and stable supply, as well as business conditions, etc.
  • We will establish a relationship of mutual trust with all our business partners and endeavor to conduct fair, impartial and transparent transactions.
Safety, Quality, Cost, Delivery
  • We will pursue the creation of a safe and healthy working environment.
  • We will pursue the optimization of procurement through the maintenance, improvement and enhancement of Q (quality), C (cost) and D (delivery).
CSR Procurement*
  • We will conduct CSR activities to fulfill our social responsibility in terms of compliance, human rights, labor, environmental preservation, regional contribution and so on.
  • *The activities carried out by an enterprise in the entire supply chain in the procurement of products and materials in cooperation with suppliers through the addition of CSR elements such as compliance, human rights, labor, environmental preservation and regional contribution to existing elements such as safety, quality, performance, price and delivery period

CSR Procurement Standards

Safety
  • To prevent labor accidents, etc., we will endeavor to secure the safety of employees, etc. by taking appropriate safety measures.
  • We will assess the state of labor accidents and work-related illness and take appropriate measures for the prevention of recurrence.
  • We will work on the creation of a safe and healthy working environment by placing top priority on ensuring safety and health at work.
Quality, Cost, Delivery
  • We will endeavor to maintain, improve and enhance quality, costs and delivery.
  • We will secure appropriate quality and delivery and pursue optimal costs.
  • We will endeavor to establish a production system that can provide stable supply and a crisis management system for incidents such as accidents.
Compliance
  • We will faithfully perform work according to laws and regulations, social norms and corporate ethics relating to all countries and regions in Japan and overseas.
  • We will properly manage confidential information and personal information and thoroughly ensure information security.
  • We will not provide benefits or facilities, including the grant and receipt of improper benefits and the demand for returns related to work.
  • We will not have any relationships with antisocial forces, including transactions, by taking a resolute attitude against them, and will conduct fair business.
Human Rights, Labor
  • We will understand the cultures and customs of countries and regions and work on the creation of a company where the human rights of all people are respected.
  • We will eliminate child labor, a poor environment, forced labor and working for long hours, and will work on the creation of a positive environment that is suitable for work.
  • We will endeavor to develop human resources with the knowledge, technologies and skills necessary to support business activities in Japan and overseas.
Environmental Preservation and Regional Contribution
  • We will promote environmentally friendly procurement.
    • *(The Green Procurement Guidelines (formulated in 2005, updated in 2021) shall apply to procurement in Japan.)
  • We will conduct energy saving activities such as resource conservation and waste reduction.
  • We will live in harmony with the communities and society where we conduct business activities.
  • We will endeavor to participate actively in social support activities.

Promotion System

We promote supply chain management initiatives focused on employees involved in procurement in our Corporate Functions and Business Divisions. Regarding our due diligence in the supply chain, a Human Rights and Supply Chain Subcommittee has been established under the auspices of the Sustainability Committee, consisting of members appointed from multiple divisions, including Procurement, Personnel, Legal Affairs, and Sustainability, to create internal policies and frameworks for CSR procurement and to ensure its reliable implementation. As initiatives to enhance our efforts in fiscal 2022, this Subcommittee will launch the Human Rights Due Diligence Promotion Project to promote human rights due diligence throughout the Group and the Sustainable Procurement Project to formulate guidelines and establish a framework for sustainable procurement.

FY2022 promotion system

Major Initiatives

Procurement Worker Qualification Course System

The Procurement Worker Qualification Course System, which primarily targets employees involved in procurement-related work, is an e-learning course held several times each year to allow employees to gain a compliance mindset and knowledge of the relevant laws and regulations necessary for order work, such as production and procurement, with the aim of engaging in ordering work with integrity and high ethical and moral standards in line with our management philosophy and the Group's code of conduct. Students obtain qualification by passing a confirmation test after taking the course.

Building a human rights due diligence mechanism

We aim to establish a framework for human rights due diligence through the Human Rights and Supply Chain Subcommittee established under the auspices of the Sustainability Committee. Beginning in fiscal 2022, we will work to establish a system that is continuously implemented and improved to identify, analyze, and assess negative human rights impacts related to all of our business activities, including our supply chain, and to correct, mitigate, and prevent such impacts. Should it be shown through these efforts that we have caused or contributed to an adverse human rights impact, we will endeavor to provide appropriate and effective remedial measures.

Human rights due diligence schedule (tentative)

FY2022
  • Global: Latent risk assessment
  • Japan: Manifest risk assessment
  • Japan: Addressing human rights issues
FY2023
  • Outside of Japan: Manifest risk assessment
  • Outside of Japan: Addressing human rights issues

Engagement with suppliers

Management/Safety Policy and Production Trends Presentation

A seminar has been held annually under the name of the Management and Production Trends Presentation, which invited major suppliers ranging from manufacturers and trading companies to processing, construction, the service industry, design, and software development companies. However, beginning in fiscal 2021, to help prevent the spread of COVID-19, the Presentation will be held jointly with the Safety and Health Seminar for Suppliers, and the name will be changed to the Management/Safety Policy and Production Trends Presentation. In fiscal 2022, 288 business partners were invited.

Supplier Quality Development (S.Q.D.) Award
In fiscal 2003, we established a Supplier Evaluation System and launched the S.Q.D. Award to commend outstanding goods-related suppliers (manufacturing subcontractors and goods purchasing), designers, construction and installation contractors, and others. In fiscal 2022, the S.Q.D. Award was presented to five suppliers at the Management/Safety Policy and Production Trends Presentation from among a total of 190 companies.

CSR surveys for suppliers

A visit in progress
A visit in progress

We promote CSR initiatives throughout the entire supply chain by encouraging an understanding of the need for CSR, such as through CSR surveys (self-assessment check sheets) for suppliers in Japan and by on-site monitoring.

Main questions in the CSR surveys
  • Safety
  • Quality, cost and delivery
  • Compliance
  • Human rights, labor
  • Protecting the environment and contributing to local communities

Supplier Operations Verification System

We are using a system to confirm the operational status of our suppliers in an emergency as part of a scheme to strengthen our business continuity plan. In the event of an emergency, this system confirms damage status of suppliers and safety of personnel by e-mail. We use this system with the aim of ensuring quick recovery and return to normal operations of the whole supply chain by sharing information quickly and accurately.

Green procurement

We believe that the manufacturing of environmentally friendly products is a mission it must achieve as a global company. Under the motto, "We will not buy, use, or sell any hazardous materials," we formulated our Green Procurement Guidelines in November 2005.

Action for fair and transparent transactions

In order to build fair and transparent relationships with business partners and conduct the transactions in accordance with healthy business practices, we have established internal rules that prohibit, excepting in certain circumstances, the reception of entertainment, gifts and other personal benefits or conveniences from business partners.