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We are advancing efforts to build collaborative partnerships with all of our suppliers, and to maintain and enhance mutual understanding and relationships of trust. In this context, we work with partners who demonstrate consideration for CSR.
Whether in Japan or overseas, the Group uses proper, fair, and equitable procedures to select suppliers based on the Hitachi Group's common procurement policy, conducting a full assessment of the quality, delivery schedule, and price of the item to be procured, the supplier's technology development capabilities and acquisition of any environmental certification, and whether or not the partners fulfills their social responsibility (environmental conservation, protection of human rights, contribution to society, etc.)
With the cooperation and understanding of all of our suppliers, we are promoting CSR activities throughout the supply chain.
In selecting suppliers, the Hitachi High-Tech Group will comply with the proper prescribed procedures, giving full consideration not only to the quality, reliability, delivery times, and prices of the materials supplied, and the management stability and technology development capabilities of suppliers, but also to an assessment of whether those suppliers are fulfilling their social responsibility. More specifically, this assessment will focus on the performance of suppliers in terms of fair and transparent disclosure of information, compliance with laws, regulations, and social norms, respect for human rights, the eradication of unjust discrimination relating to employment and occupations, the abolition of child labor and forced labor, environmental conservation activities, activities that contribute to society, the creation of good workplace environments, and a shared sense of social responsibility with their business partners.
Our Guidelines for Procurement Activities are published on the materials procurement page of this website and we undertake widespread disclosure.
In order to strengthen business competitiveness, it is essential for companies to take steps to enhance product quality, reduce costs, shorten lead times, establish business continuity plans (BCP), and so forth throughout their supply chains. In addition, companies are being called upon to fulfill their social responsibilities to address social priorities such as ethical conduct, respect for human rights, labor practices, and environmental issues. Moreover, companies are being called upon to ensure that the products they provide to customers are manufactured in line with social priorities by not just evaluating their own activities but also those of their partners including during the process of selecting them.
The Hitachi High-Tech Group is also receiving growing requests from customers to undertake activities to address its social responsibilities throughout the supply chain, and strengthening supply chain management is a means of minimizing economic, social, and reputational risks.
The Hitachi High-Tech Group has adopted "Maintain Procurement and Strengthen Product Cost Competitiveness to Prevail against Global Competition, Based on Collaborative Relationships with Partners" as a key basic policy of its procurement strategy. To this end, we are focusing on "Strengthening procurement risk management," "Strengthening product cost competitiveness," and "Rigorously enforcing procurement compliance." We aim to make products that are competitive by unifying global strategies, product strategies, and robust supply chain building.
Based on the Group's basic philosophy, as mentioned above, we set to work on establishing common standards for supplier evaluation in FY2012 and released the Hitachi High-Tech Guidelines for Procurement Activities in FY2013. In addition, we are steadily facilitating global adoption of these Guidelines, such as by releasing English and Chinese editions of the Guidelines in FY2015.
When we start working with a new partner, we use the Hitachi Group Supply Chain CSR Deployment Guidebook issued by Hitachi Ltd. (revised in January 2017) as the basis for ascertaining the status of their activities related to social responsibility (ethical behavior, respect for human rights, labor practices, environmental issues, quality, safety, etc.) and confirming whether they are in line with the Group's procurement and selection policies.
Initiatives for CSR Procurement
Supplier briefing (Naka Division)
It is essential to establish a shared awareness of CSR through the dissemination of information to suppliers and two-way communication with them, so we hold regular briefings for the companies that supply our product manufacturing divisions. We hold briefings at each of the Company's manufacturing bases twice each year to explain the Hitachi Group's initiatives aimed at promoting green procurement activities and supply chain CSR activities. Since FY2013, the Hitachi Group Supply Chain CSR Deployment Guidebook issued by Hitachi Ltd. (revised in January 2017) has served as the common standard for evaluating suppliers, and we have been promoting CSR procurement activities by enhancing partner verification and deepening mutual understanding.
At supplier briefings in FY2018 we made direct requests to our partners activities specifically for prevention of global warming, cyclic use of resources, and ecological conservation in line with Hitachi Group's environmental vision and policies, as a way to strengthen green procurement activities, in an effort to build a framework for fulfilling social responsibility in coordination with our partners.
The Group practices green procurement, prioritizing environmentally friendly items in our procurement of products, components, and materials. With legislation such as the RoHS Directive becoming increasingly stringent, we manage the chemical substances contained in our products and respond to the extension of regulations governing chemical substances via the Hitachi Group's A Gree' Net green procurement system. In addition, we promote the Hitachi Group's Environment and CSR-Based MONOZUKURI activities, while our Naka Division has provided encouragement and support to ensure that all suppliers actively engage in environmental conservation activities. In FY2018, just under 90% of Naka Division's approximately 1,100 suppliers were verified and registered as green suppliers.*
Please click here for details of our initiatives to preserve biodiversity in conjunction with our partners.
Hitachi High-Tech Group sent guidance to our partners concerning the revised (in January 2017) Hitachi Group Supply-Chain CSR Deployment Guidebook and collected written confirmations of Hitachi's approach to supply chain management from them, aiming to share issues involved in such management as revealed in the confirmations and reduce risk.
In addition, since July 2012, in coordination with Hitachi High-Tech's Procurement Department, we have been visiting our partners' production bases in China and other Asian countries to conduct inspections of their CSR activities, for the purpose of evaluating existing suppliers in order to identify high-risk businesses. During an inspection, inspectors with RBA* authorization check the status of the supplier's efforts, mainly with respect to labor and human rights, safety, the environment, and ethics, based on the SA8000 international standard for work environment evaluation developed by Social Accountability International, a U.S. certification body. Hitachi High-Tech has evaluated one company per year since FY2015, inspecting six companies (five in China and one in Malaysia) as of the end of FY2018 and recognizing no major violations. We have also placed a requirement on each supplier to submit a plan for improvement measures and will continue to follow up until improvement has been completed based on the plan.
Hitachi High-Tech Group aims to continue fulfilling its social responsibility throughout its value chain. Hand-in-hand with all business partners involved in our business activities, we are striving to thoroughly ensure that our conduct is always legal, ethical, and fair. We are also making thorough efforts for CSR procurement activities with respect to the staff of the Procurement Department by providing reports on CSR procurement activities at the start of each six-month period in the Procurement Department and education (on environmental management, quality control, social responsibility, etc.) in line with the yearly curriculum. Since FY2017 we have included pre-registration confirmations of trading partners concerning corruption prevention and bribery in our procurement process, based on HGCP*, and have also been pursuing thorough implementation of those confirmations. There were zero cases of violations or sanctions in procurement in FY2018.