Supply Chain Management

Daifuku Group Procurement Policy

Basic Approach

The Daifuku Group will contribute to the creation of a sustainable society by engaging in sound business practices in accordance with our company creed, management philosophy, and Group Code of Conduct. In procurement, we shall select business partners based on appropriate criteria, comprehensively evaluating quality, technological development capabilities, economic rationality in terms of price and delivery time, as well as the status of environmental and social initiatives. We shall also require all our business partners engaged in the production, installation, and services for our Group’s products to understand and practice the Sustainable Procurement Guidelines that we have established separately, and we shall work together with our stakeholders to build a sustainable supply chain.

Basic Policy

We will ensure that all Group officers and employees are aware of this policy and promote responsible procurement.

Compliance with laws and regulations

We will comply with the laws, regulations, international codes of conduct, and other social rules of the countries and regions where we conduct business. We will stand firmly against antisocial forces or organizations that are a threat to the order and safety of civil society, and we will not have any relationship with them.

Fair and equitable trade

We will open our doors to a wide range of domestic and international companies, regardless of the country in which they are located or their size, to provide opportunities for free competition. We will conduct transactions through fair and equitable procedures, and we will eliminate misconduct such as the offering or receiving of inappropriate benefits.

Building partnerships

We will respect all business partners as equal partners and build long-term relationships of trust based on mutual understanding. We will commit to solving environmental and social issues in the supply chain by strengthening communication and collaboration to achieve mutual sustainable growth.

Pursuing quality and safety

We will pursue quality and safety in the products and services we procure. We will require our business partners to comply with the applicable laws, regulations, and standards of each country and region with respect to quality and safety, and we will provide guidance and support as needed to help them establish systems and management structures to achieve this.

Respecting human rights

We will respect the fundamental human rights of all people involved in the products and services we procure, and we will not be complicit in any human rights violations, including forced or compulsory labor, child labor, discrimination, abuse, and harassment. We will also give due consideration to the working environment and health and safety of our business partners. If it becomes evident that the Group's procurement activities have caused or contributed to an adverse impact on human rights, we will strive to take appropriate and effective remedial measures.

Responsible sourcing of minerals

We will not procure minerals such as tin, tantalum, tungsten, and gold that are mined in conflict-affected and high-risk areas (CAHRAs) and may involve corrupt activities, support for armed groups, human rights violations, environmental destruction, or other adverse activity. We will also request our business partners to not use conflict minerals and will work to establish a management system for this.

Reducing environmental impact

We will comply with laws, regulations, and agreements related to environmental conservation, and we will give priority to the procurement of products and services with a lower environmental impact. We will provide guidance and support to our business partners as needed, and we will address environmental issues such as climate change and biodiversity conservation throughout our supply chain.

Information security and protection of intellectual property rights

We will establish a management system and appropriately manage and protect confidential and personal information obtained through our business activities. We will also respect the intellectual property rights of third parties and business partners, and we will not violate them.

Formulation of a business continuity plan

We will work to identify and assess risks that will have a significant impact on business continuity and formulate a business continuity plan (BCP) in preparation for large-scale natural disasters and unforeseen circumstances. In order to fulfill our supply responsibilities to customers, we will implement measures in cooperation with our business partners as needed.

Information disclosure and communication

We will disclose the status of our initiatives based on this Policy in a timely and appropriate manner and communicate with our stakeholders.

Established: January 31, 2024

Sustainable Procurement Guidelines

In fiscal 2023, the Daifuku Group formulated the Sustainable Procurement Guidelines as a new standard for sustainable procurement activities. These guidelines are a complete revision of the CSR Procurement Standards, established in 2017, to promote further initiatives throughout the entire supply chain to solve a wide range of social issues. In order to identify and mitigate risks in the supply chain, we plan to disseminate these guidelines among our business partners, confirm their compliance, and conduct audits.

Sustainable Procurement Guidelines (PDF: 388KB)

Declaration of Partnership Building

The Group will continue its efforts to comply with the contents of the Declaration of Partnership Building in order to create new partnerships by promoting cooperation and coexistence with business partners in the supply chain and other value-creating entities.

Declaration of Partnership Building (Japanese only) (PDF: 440KB)

Promotion System

We promote supply chain management initiatives focused on employees involved in procurement in our Corporate Functions and Business Divisions. Regarding due diligence in the supply chain, we have established the Human Rights and Supply Chain Subcommittee under the jurisdiction of the Sustainability Committee. This subcommittee consists 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. In fiscal 2022, the subcommittee launched 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. In fiscal 2023, we established a new Production Innovation Division to oversee and manage the supply chain, and we are working across the business and corporate divisions to establish a system.

Major Initiatives

Engagement with suppliers

Management and Safety Policy and Production Trends Presentation

Daifuku holds the Management and Safety Policy and Production Trends Presentation to which we invite our major business partners, from manufacturers and trading companies to processing, installation, service, design, and software development. In fiscal 2023, we hosted the presentation jointly with Contec Co., Ltd. to report on production trends and safety and health initiatives in the business divisions of both companies as well as to request cooperation in addressing environmental and social issues throughout the Group’s supply chain. 311 business partners were invited in fiscal 2023.

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, designers, construction and installation contractors, and others. In fiscal 2023, three companies out of 189 eligible companies selected from across all of our business partners received this award at the Management and Safety Policy and Production Trends Presentation. The candidates were evaluated based on quality and environmental criteria. We support our suppliers’ development by sharing the best practices of the award-winning companies.

Informing suppliers of our policies

To ensure that our stakeholders around the world, including our suppliers, are fully aware of our sustainable procurement policies, we have published on our website the Group Code of Conduct, the Daifuku Group Human Rights Policy, the Basic Procurement Policy, the CSR Procurement Standards, and the Green Procurement Guidelines. After the Daifuku Group Human Rights Policy was formulated in 2021, the CEO invited major suppliers to the Management and Safety Policy and Production Trends Presentation held in June 2022 to promote understanding and implementation of the policy.

CSR surveys for suppliers

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

To ensure stable procurement of parts and other supplies in the event of a disaster, we have introduced a Supplier Operation Verification System that enables rapid collection of information on damage to suppliers. In an emergency, this system confirms the damage status of suppliers and safety of personnel by e-mail, which allows for timely restoration and return to normal business operations for the entire supply chain. Periodic training is conducted with suppliers to bolster operational proficiency, and in the event of an emergency, the system is used to confirm the viability of operations and the delivery date of parts.

Green procurement

At Daifuku, it is our mission to manufacture environmentally friendly products as we expand our business globally. Under the commitment that we will not buy, use, or sell any hazardous materials, we formulated our Green Procurement Guidelines in November 2005 to eliminate certain hazardous chemical substances and prioritize the purchase of materials and products that are resource-saving, energy-saving, and reusable. In recent years, regulations regarding the management of hazardous chemical substances have been tightened, and in fiscal 2022 we began revising our Green Procurement Guidelines to meet growing demand. In fiscal 2023, the Environmental Management Subcommittee, under the jurisdiction of the Sustainability Committee, launched the Green Procurement Project, which is an initiative toward building an internal system and framework to implement the new Green Procurement Guidelines.

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.