Supply Chain Initiatives
Supply Chain Management Policy
In order to coexist harmoniously with society and be a company sincerely appreciated by all and 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 Group aims to realize a sustainable society by promoting initiatives that consider the environment, safety, human rights, compliance, and social responsibility not only independently but throughout its supply chain.
| Category | Content |
|---|---|
| 1. Safety and Quality |
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| 2. Human Rights and Labor |
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| 3. The Environment |
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| 4. Responsible Mineral Sourcing |
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| 5. Compliance |
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| 6. Information Disclosure |
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Application of TS TECH Supplier Sustainability Guidelines
We established the TS TECH Supplier Sustainability Guidelines 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 six categories: (1) Safety and Quality, (2) Human Rights and Labor, (3) The Environment, (4) Responsible Mineral Sourcing, (5) Compliance, and (6) Information Disclosure. In August 2023, we revised the guidelines, mainly enhancing the two areas of “Human Rights and Labor” and “The Environment” in response to social changes.
The guidelines are posted on the company’s website and shared with all suppliers in and outside Japan. We also use surveys to confirm business partner compliance status, and in fiscal 2024, we surveyed 628 companies both in Japan and overseas. The Group recognizes this initiative as one of its materialities, and will continue to implement surveys annually while confirming the status of suppliers with low rates of compliance in an effort to build a sustainable supply chain.
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.
To realize fair and equitable transactions, as well as build and maintain win.win relationships with our business partners on a global scale, the TS TECH Group established the Four Principles of TS Procurement and published the Partnership Building Declaration. By putting these principles into practice, we aim to build a supply chain that is trusted by all stakeholders.
- (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.
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 suppliers to explain medium-term management plan and operating policies and to exchange information.
We also hold an awards ceremony to recognize suppliers who have achieved excellent results in terms of cost, development, and quality throughout the year, and in fiscal 2024, we established a new Sustainability Award to promote environmental activities. We have strengthened ties with business partners to enhance collaborations and promote the 15th Medium-Term Management Plan.
Supply Chain Risk Management
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. After visualizing information from upstream to downstream in the supply chain, we identify procured parts concentrated on a single supplier as “high-risk parts.” We implement initiatives in cooperation with suppliers to prepare for contingencies such as natural disasters and secure alternative procurement sources. As an initiative to minimize risk, we are also working to consolidate and streamline supply chains that have become complex in terms of distribution channels and hierarchy.
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 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 each business partner in terms of Quality, Cost, Delivery, Development, and Management (QCDDM) and ESG to evaluate overall capabilities. For business partners that need improvement, we work to improve their overall capabilities with the cooperation of each department.
Promoting Environmental Activities
CO2 emissions from Category 1 “Purchased goods and services” in Scope 3 account for 89.6%* of the CO2 emissions from the TS TECH Group’s business activities including the supply chain. We therefore recognize the importance of reducing emissions at our suppliers. Starting in April 2023, we have presented CO2 emissions reduction targets not only to suppliers in Japan but also to suppliers worldwide, promoting reduced emissions across our entire supply chain. To incorporate more specialized knowledge and increase effectiveness, we held an online Carbon Neutrality Seminar with an external lecturer and rolled out an effective emissions reduction process to our suppliers. In this manner, rather than unilaterally demanding reductions, we work together with suppliers to reduce CO2 emissions across the entire supply chain.
- Percentage of total Group CO2 emissions in fiscal 2024
We also examine components to ensure they do not contain chemicals prohibited by laws and regulations in each country and region. We do not permit the use of chemicals prohibited by laws and regulations, even in manufacturing processes within supplier companies. Additionally, we have established rules to monitor the emissions of specified chemical substances designated by laws and regulations, and to report any issues that may arise to the relevant government.
Survey on Conflict Minerals
The TS TECH Group’s procurement activities are founded on a basic policy of not using conflict minerals* in order to prevent the flow of funds to armed forces and situations that violate human rights. As part of this process, 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. In light of the recent increasing risk of social human rights infringement, we have also expanded our examination to include cobalt.
In this examination, we probe the origin of minerals, and if we identify a mineral of concern, we take appropriate measures in cooperation with the supplier.
- Refers to the four minerals: tin, tantalum, tungsten, and gold.
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 training on the Antimonopoly Act and the Subcontract Act in accordance with its rank-specific 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.
Aiming to Realize a Sustainable Society, We Will Meet the Expectations of Our Stakeholders
We have a wide range of business dealings with TS TECH, both in Japan and overseas, centered on fastening components* for automobile interiors. We received the Sustainability Award in recognition of our efforts to improve energy efficiency and move toward a low-carbon society. The automotive industry is currently undergoing a once-in-acentury revolution that is creating new forms of mobility, and as the importance of sustainability initiatives increases, PIOLAX would like to work together with TS TECH to proactively pursue activities aimed at realizing a sustainable society, based on the TS TECH Supplier Sustainability Guidelines.
In commemoration of our 90th anniversary, we formulated a new corporate philosophy, “The PIOLAX Way,” which will serve as the basis for our future management, while continuing to uphold the spirit and philosophy of our founding. Accordingly, in line with our purpose of “connecting people and society with technology for an exciting future,” we will meet the expectations of all stakeholders by connecting people with our technologies and spirit as a pioneer, and by realizing a more prosperous, safe, and comfortable future.
Note: Fastening parts, including fasteners and clips.
