Co-Existence and Co-Prosperity with Suppliers
Building trust as a good business partner
As part of its manufacturing activities, AISIN Group procures a wide variety of items, including parts and materials, from numerous suppliers around the world. In each of these transactions, AISIN Group works to increase collaboration and establish trusting relationships with our suppliers based on our basic philosophy of seeking growth and prosperity as good business partners.
FY2019 Group Procurement Policy
Basic procurement policies
- Coexist harmoniously and share prosperity with suppliers with a view to stability in our trades in the long term
- Carry out open and fair trades
- Making safety and compliance the top priority and putting quality first
- Innovative measures to make AISIN Group more competitive
(1) Making AISIN Group more competitive with the aim of being top in the industry
(2) Strengthening mutual communication
(3) Improvements through cooperations between AISIN Group and its suppliers
(4) Support for activities to strengthen our global procurement base
- Strengthening the procurement base that provides fundamental support for our corporate activities
(1) Promoting reforms of our working practices
(2) Compliance with AISIN Green Procurement Guidelines
(3) Strengthening our BCP activities
AISIN Group’s procurement principles
AISIN Group believes in coexisting and sharing prosperity with our suppliers, and strives to achieve mutual development. To ensure that all of our procurement activities comply with AISIN Group’s policies along with relevant laws and regulations, we have translated AISIN Group Principles of Corporate Behavior into our suppliers’ languages, distributed the translations to our suppliers and asked that they comply with the principles. The principles include policies on points such as human rights, labor practices, the environment and compliance, covering both social issues, including child labor, forced labor, equal opportunities and prohibition of discrimination, freedom of association, collective bargaining, reduction of long working hours, minimum wage and health and safety, and environmental issues such as water usage and biodiversity. We have particularly stringent standards about the environment, asking our suppliers to reduce GHG emissions, recycle waste materials and resources, reduce water usage and preserve biodiversity according to our revised version of AISIN Group Green Procurement Guidelines.
All of our suppliers are certified with ISO 9001 and ISO14001, and safety, environmental and earthquake-proofing inspections are carried out. AISIN Group has inspected its suppliers for environmental risks according to AISIN Group Green Procurement Guidelines since FY2007 to prevent environmental issues from occurring at our suppliers’ sites. We also confirm that our 56 main suppliers are complying with environmental laws and regulations, and carry out initiatives to identify and address hazards.
In FY2019 , autonomous inspections were carried out at 20 companies, and inspection visits were completed at 100% of the companies where they were planned. In the future, our management will work with our Safety, Health and Environment Department to visit our suppliers and give instructions.
When selecting new suppliers, we carry out careful investigations including investigations based on ISO 9001 and ISO14001, credit checks, quality audits and account checks.
Affiliated groups and involvement in initiatives
Aisin Seiki’s Executive Vice President and Executive Officers belong to the general committee and the procurement and production division of Japan Auto Parts Industries Association (JAPIA). The officer in charge of our procurement planning and management division is a member of the Working Group for the Handling of Conflict Mineral Regulations in the Procurement and Production Subcommittee of JAPIA’s procurement and production division. Through this work, AISIN Group gathers information and implements measures against conflict minerals in our supply chain.
Jointly undertaking CSR initiatives with suppliers
AISIN Group is promoting CSR procurement activities jointly with suppliers, beginning with primary suppliers and going as far up the supply chain as possible. With its suppliers, AISIN Group promotes fair procurement activities based on the spirit of openness and fairness, and mutually concludes basic transaction agreements with suppliers placing greater emphasis on CSR-related clauses.
In FY2019, AISIN Group enhanced its management of substances that have an environmental impact, based on the Green Procurement Guidelines, to ensure a reliable response to environmental laws and regulations, which are becoming more stringent increasingly year by year in countries around the world. In order to accomplish this, AISIN Group requested surveys of chemicals contained in items purchased from our suppliers and had them disclose and register relevant information in a shared system for recording data on chemical substances.
AISIN Group is also engaged in initiatives as a group, such as making payments to all small- to medium-sized domestic suppliers in cash, with a view to achieving future-oriented trade practices with its suppliers. Additionally, AISIN Group has established a contact point for suppliers to make inquiries and seek advice on matters related to business ethics.
AISIN Group is also engaged in initiatives as a Group with a view to achieving future-oriented trade practices with its suppliers, such as by making payments to all domestic small-to-medium-sized suppliers in cash. Additionally, AISIN Group has established a contact point for suppliers to make inquiries and seek advice on matters related to business ethics.
Promoting minority procurement in North America
In the United States, there are demands to increase volumes of goods purchased from businesses owned by social minorities (minority-owned businesses), with the aims of promoting the growth and improving the competitiveness of these companies. Since expanding its operations into North America, AISIN Group has worked proactively to further procurement from minority-owned businesses.
Risk assessment and monitoring of suppliers
In AISIN Group, we conduct checks of our quality system to improve the quality provided by our suppliers. In FY2019, we gave 150 suppliers feedback about their compliance with our standards and provided the support they needed to make improvements by listing the issues discovered during our audit and creating an improvement plan. When we work with our suppliers on compliance issues, we identify the cause of each issue and set a schedule for corrective action, then provide advice and check the supplier’s progress until the issue is resolved.
Improving our suppliers’ skills
AISIN Group provides its main suppliers with training support to improve their technical skills and strengthen their corporate framework.
Aisin Seiki has established an apprenticeship program in Japan for our main suppliers, where future management from our main suppliers work in the division of their choice at Aisin Seiki, usually for two years. A total of 68 people have made use of this program. Employees are accepted based on the needs of the supplier.
Aisin Seiki also provides suppliers with support in various safety activities, environmental activities and activities aiming to improve productivity and quality through the Aisin Suppliers Network, an organization formed to enable Aisin Seiki’s suppliers to learn from each other’s best practices and help each other to improve. In FY2019, we continued the activities we worked on in FY2018, including training on cases under the Industrial Health and Safety Act and safety instruction.
Establishing a supply chain that is resilient to risks
With numerous disasters such as natural disasters and fires significantly impacting the stability of our production and procurement activities in recent years, AISIN Group has worked on a daily basis to ready itself for the occurrence of such disasters and to enable initial responses and recovery protocols to be implemented swiftly and reliably in the event of such incidents.
For many years, Aisin Seiki has worked to develop a supply chain data management system that enables us to receive data on parts and raw materials purchased from suppliers, tracing back as far as details of individual manufacturing processes. The system makes it possible to utilize this information in conjunction with map data and disaster information 24 hours a day, 365 days a year.
In FY2019, Aisin Seiki made use of this information to consider countermeasures for each individual product that it produces, envisaging the occurrence of various incidents. In particular, Aisin Seiki considered the level of impact on customers and formulated specific countermeasures to enable early-stage recovery, based on considerations of the distinct characteristics of manufacturing processes and raw materials used. We are also working to expand these activities to other group companies, and working to bolster our production and supply structure and increase its stability.
In FY2019, AISIN Group engaged in activities to promote greater mutual understanding with suppliers’ top-level management, with a focus on the prevention of water pollution. Through these activities, we identified issues in the workplace and linked these to various improvements. Looking ahead, AISIN Group will continue to engage in water pollution prevention activities with suppliers, with the aim of creating a positive upward spiral.
Measures against conflict minerals
Automakers listed on the U.S. stock exchange, which are Aisin Seiki’s end customers, are required to report to the U.S. Securities and Exchange Commission (SEC) regarding conflict minerals. In FY2019, AISIN Group once again worked with business partners and industry groups to conduct surveys to confirm the origin and history of minerals used in our products and ensure that conflict minerals are not used.