Supply Chain Management

Materiality
Related ESG: ES SDGs12
Supply chain management

Management Approach

Policy and approach

The Toyobo Group is contributing to achieve the SDGs, which support the development of a sustainable society, throughout our entire supply chain by establishing an appropriate trading policy and conducting procurement and logistics responsibly.

To realize this, we have formulated CSR Procurement Guidelines that deal with matters such as legal compliance, fair trade, consideration for the environment, and respect for human rights (including the prohibition of child labor or forced labor and discrimination based on gender identity including LGBT), and Green Procurement Guidelines that are considerate of the environment. In October 2020, we revised our CSR Procurement Guidelines based on various recent global issues.

Additionally, based on the principle of “2. Fair business practices” in the TOYOBO Group Charter of Corporate Behavior, we practice fair competition and dealings and responsible procurements and maintain sound relationships with society and stakeholders, including customers and business partners.

■ Toyobo’s Basic Policy

Advance strategic procurement optimized and improved for the entire company through “procurement innovation.”

  1. Strengthening relationships with good business partners based on an “open door policy”
    We will strengthen procurement structure by cultivating new business partners and applying a procurement value system to actualize shared issues with existing business partners so that we can align vectors.
  2. Promoting cost planning activities (development purchasing) with the aim of realizing prices in line with the needs of the market
    We are promoting organizational VA and VE activities based on standardization and revising prices for over-specced products in order to achieve cost price targets.
  3. Ensuring thorough compliance and fair business practice
    In relationships with business partners, we practice fair and highly transparent business in full compliance with procurement-related laws, such as the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors.
  4. Advancing CSR procurement

Procurement structure

We have positioned our Procurement & Logistics Division as a companywide procurement function supporting our other business divisions (manufacturing, sales, development). It operates as an organization for developing a collaborative structure unifying four parties, including good suppliers, based on a spirit of realizing win-win relationships, with the aim of providing mutual prosperity and as a result, supporting the growth of the Group’s business.

CSR procurement

We have formulated our CSR Procurement Guidelines and Green Procurement Guidelines with the aim of fulfilling our social responsibilities, such as ensuring product quality and safety and respecting human rights, and enhancing value throughout our entire supply chain through initiatives such as contributing to regional communities and environmental conservation. In addition to sharing these guidelines through our website, we carry out CSR surveys for business partners requesting their understanding and cooperation in actively advancing initiatives.

Targets and KPI

<Targets>

Throughout its supply chain, the Toyobo Group aims to realize procurement and logistics that involve fair and sincere transactions, respect human rights, are environmentally friendly, and consider impact on both society and the environment.

We will reduce CO2 emissions by promoting green logistics, such as implementing a modal shift to rail and sea transportation and improving loading efficiency.

<KPI and Results>

Initiatives KPI Targets Results (FY2020)
  • Realize sustainable, responsible procurement and logistics
  • Carry out transactions that are fair and respect human rights
  • Build a low-carbon society
  1. Ratio of CSR procurement surveys returned
  1. 90% or above
    (In years when a survey is not implemented, we carry out dialogue with business partners that past surveys have shown have issues)
  1. Ratio of reduction in CO2 emissions related to logistics
  1. Year on year reduction of 0.5%
  1. Year on year reduction of 0.6%

Initiatives

CSR survey

We conduct surveys among our key business partners, based on the CSR Procurement Guidelines. This allows us to verify the status of their CSR activities, as well as enabling them to deepen their understanding of CSR activities. We ask both new and existing business partners to cooperate with regular surveys. If the results of these surveys identify any issues, we then request that they make improvements.

Fairness and transparency in trade

We take a rigorous approach to ensuring fairness and transparency, based on sound trading. We do not give or accept gifts or entertainment in order to secure unjust profit or preferential treatment from our business partners, and we have established a prior consent system to strengthen our checking system to ensure that actions that go beyond what is deemed socially acceptable do not occur.

Green procurement

In order to contribute to the creation of a sustainable society, we carry out procurement from suppliers who actively work to conserve the environment and procure materials that have low environmental impact on a priority basis. Additionally, we have formulated Green Procurement Guidelines with the aim of promoting environmentally friendly procurement. We ask our business partners to understand our green procurement approach and provide the following information regarding chemical content.

(1) That the material does not contain any of the prohibited substances specified by Toyobo.

(2) That the content of hazardous substances specified by Toyobo has been identified.

In fiscal 2019, we revised our “Chemical Content Information Sheet” based on the information sharing scheme “chemSHERPA”, developed by Japan’s Ministry of Economy, Trade and Industry, and requested our business partners to respond. For general purchased goods, we are promoting green purchasing with the use of environmental labels.

Resolving social issues in logistics

To resolve social issues in logistics, we are pushing forward with initiatives to reduce the environmental impact and reform the work style in logistics. To reduce our impact on the environment, we are shortening the transportation distance by using the ports closest to our business sites, implementing a modal shift, and improving loading efficiency. We are also sharing logistics and storage with other companies (including joint shipment, making use of returning trucks, securing joint storage space), and are encouraging the introduction of systems that enable visualization of the logistics situation.

Additionally, we formulated a voluntary action declaration in support of the “White Logistics Movement”* advocated by Japan's Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Economy, Trade and Industry and Ministry of Agriculture, Forestry and Fisheries, which we submitted to the White Logistics Campaign. We disclose our various initiatives, including “Logistics improvement proposals and cooperation,” “Utilization of pallets, etc.,” “Modal shift to sea and rail transport,” “Consideration of compliance with applicable legislation when selecting logistics operators,” and “Safety measures for freight handling.”

  • * A movement in which all the parties involved in logistics cooperate to propose and implement mutually beneficial improvements

Toyobo’s Voluntary Action Declaration in Support of the “White Logistics Movement”

Action Details
Cooperation and proposed improvements regarding logistics We will deal sincerely with requests from business and logistics partners concerning cooperation and proposed improvements regarding logistics.
Use of pallets, etc. We will use pallets to transport some of our products, reducing the amount of work hours required for transportation.
Modal shift to sea and rail transport For long-distance transportation, we will shift from truck transport to ferry or rail. Additionally, we will encourage the use of the ports closest to our plants.
Consideration of compliance when choosing contractors When selecting logistics contractors, we will consider their record of compliance with relevant laws and regulations.
Safety measures during cargo handling We will implement measures to prevent accidents during cargo handling work, such as clearly demonstrating safe work procedures.

Response to natural disasters, etc.

In recent years, various areas of Japan have experienced significant damage from earthquakes, typhoons and sudden localized rainstorms. We have gained knowledge in the process of responding to these events, and aim to realize even more stable procurement and logistics.

As part of our Business Continuity Plan (BCP), we strive to identify and manage risk throughout the supply chain. For procurement, we are looking to procure raw materials from multiple regions, and for logistics, we are establishing alternative transportation means and routes in collaboration with logistics operators.

The spread of COVID-19 has led to supply uncertainty and logistics delays in some areas. We are endeavoring to gather information from suppliers, logistics partners, and others and share this information throughout the company in a centralized manner, and are taking measures including the use of alternative parts and routes in order to minimize damage.