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Our Relationship with Business Partners
Basic Policy on Procurement
The TS TECH Group’s products are made from a wide variety of materials and components provided by its suppliers. In order to reliably offer quality products at competitive prices to our customers, solid partnerships with our suppliers are indispensable.
The Group has established the Four Principles of TS Procurement, explained below, to ensure fair, just transactions as well as to construct and maintain win–win relationships with suppliers globally. By following these principles, we strive to build a supply chain that can be relied upon by all stakeholders.
Four Principles of TS Procurement
- (1) Fair Trade
- When selecting a supplier, we offer our business to several candidates irrespective of their nationality, size, or past transactions and finalize our choice in a fair manner by comprehensively evaluating their ability to offer superior quality, expertise, price, delivery, and other elements, as well as competitiveness, rationality, efforts for business security and other relevant matters.
- (2) Mutually Beneficial Transactions
- We share with our trade partners business challenges such as development and competitive pricing, set goals from a common perspective, and conduct joint efforts to achieve targets. We afford the highest priority to mutually beneficial transactions in terms of results thus obtained and make continuous efforts to strengthen trust as the basis of mutually beneficial relationships.
- (3) Environmental Responsibility
- In our corporate activities, we attach the greatest importance to global environmental preservation under all circumstances. Accordingly, we practice “green purchasing,” granting preference to environmentally responsible products, services, companies, etc.
- (4) Legal Compliance and Confidentiality
- We respect the principle of legal compliance and thoroughly observe relevant laws and regulations and generally accepted norms. We handle with the greatest care all kinds of information obtained from our customers and trade partners and make the utmost effort to prevent the loss or misuse of such information.
Supply Chain Management Policy
In order to coexist harmoniously with society and be a company sincerely appreciated by all whose presence is valued by all of its stakeholders, management focused on ESG-related issues, not just the pursuit of profit, is necessary.
Based on the TS TECH Philosophy, the TS TECH Group aims to realize a sustainable society with its worldwide business partners by promoting initiatives that consider the environment, safety, human rights, compliance, and social responsibility not only independently but throughout its supply chain.
Application of TS TECH Supplier Sustainability Guidelines
We established the TS TECH Supplier Sustainability Guidelines in May 2019 to share and promote our views on sustainability with our business partners. We ask all business partners to comply with these Guidelines in the following five categories: (1) Safety and Quality, (2) Human Rights and Labor, (3) The Environment, (4) Compliance, and (5) Information Disclosure.
These guidelines are posted on our website and shared with all business partners. We use a survey to verify compliance by our major business partners with these guidelines, and in fiscal 2020, we surveyed a total of 40 partners. As a result, we were able to confirm that all 40 partner companies maintain the same understanding of these guidelines as the TS TECH Group. We will continue to implement this survey annually to ensure widespread observance of these guidelines.
Workflow for handling major business partners
Other Major Initiatives for Supply Chain Management
Annual Conference with Major Business Partners
The TS TECH Group facilitates communication with business partners by providing opportunities to share information regarding purchasing strategies and policies. We hold an annual conference with major business partners to explain the purchasing policies for the period and to exchange information.
Annual conference with major business partners
Supply Chain Surveys
To address procurement risks, the TS TECH Group works to prevent all “events that impact production,” including natural disasters, fires, and financial challenges affecting its business partners. The company considers procured components, etc., for which production is concentrated at a single supplier to be “high-risk components” and is working with business partners to prepare for emergencies (natural disasters, etc.) and secure alternate suppliers.
For business partners who are especially important to us from a production reliability standpoint, we confirm information on risk countermeasures both in writing and through interviews, and we work with partners who are experiencing challenges to implement improvement activities. These steps are effective in strengthening our risk management structure and enhancing business continuity.
Business Partner Assessments
In order to continuously supply high-quality products to our customers, we evaluate business partners once a year. We assess them in terms of Quality, Cost, Delivery, Development, and Management (QCDDM) to arrive at an evaluation of the total strength of each business partner. For business partners that need improvement, we work to improve their overall capabilities with the cooperation of each department.
Survey on Conflict Minerals
The Group checks whether conflict minerals* originating in or near the Democratic Republic of the Congo, as designated by the Dodd–Frank Wall Street Reform and Consumer Protection Act of the United States, are used in our products. We prevent the flow of money used to fund armed forces and/or illegal conduct such as human rights violations in conflict zones. We also refuse to use conflict minerals in order to avoid supporting such armed forces in any way.
In addition, we have conducted a survey on the origins of conflict minerals annually since 2013 to fulfill our social responsibility in procurement. Through the survey, regardless of its country of origin, we implement the appropriate measures with a business partner if a questionable mineral is found during an investigation.
- * Conflict minerals: Tin, tantalum, tungsten, and gold are defined as conflict minerals, and they are collectively abbreviated as “3TG.”
Promotion of Environmental Initiatives
TS TECH presents its business partners with targets for lowering CO2 emissions to reduce environmental impact and works with these partners to achieve them.
We are also working with business partners to comply with all laws and regulations concerning all materials and components that comprise products, and to manage chemical substances to reduce impact on the global environment and ecosystems.
Compliance with the Antimonopoly Act and Prohibition of Corruption
TS TECH has prepared and put into use its own Antimonopoly Act and Subcontract Act Compliance Manual, which sets forth the approach and considerations related to Japan’s Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (“Antimonopoly Act”) and the Act against Delay in Payment of Subcontract Proceeds, etc., to Subcontractors (“Subcontract Act”). The relevant departments utilize the manual in day-to-day operations in conjunction with an accurate understanding of the two laws and a thorough, close examination into the legality of individual events.
TS TECH has created mechanisms that allow relevant departments to liaise with the department responsible for legal affairs and consult as needed with attorneys on events that cannot be definitively decided based solely on the manual. Moreover, TS TECH provides proper, appropriate training on the Antimonopoly Act and the Subcontract Act in accordance with its stratified training programs to foster awareness of compliance among employees.
In March 2016, the Group issued new anti-corruption guidelines and anti-cartel guidelines as part of its continuing effort to build a solid framework for ensuring fair, honest business operations across all Group operations.
Compliance education at rank-specific training
