Supply Chain Management

Basic Approach

KOITO believes that it is important to fulfill its social responsibility through the entire supply chain to practice “Eco-friendly Manufacturing for People and the Earth” through all business activities. Therefore, KOITO has established the Procurement Policy to respond to social demands and expectations and deliver high quality service to our customers while cooperating with suppliers.
 The Procurement Policy consists of the reinforcement of activities to quickly establish the lowest cost and optimal specifications with suppliers and the enhancement of reliability based on the elimination of quality problems, CSR practices, and risk management.
 KOITO is also describing expectations on the cost, quality, and the elimination of industrial accidents to individual suppliers to achieve goals together.
 KOITO is aiming to realize a sustainable society through the entire supply chain while cherishing the close relationship with its suppliers in the production process.

Reinforcement of CSR in the Supply Chain

KOITO helps its suppliers to understand our CSR activities* through procurement policy briefing sessions and other opportunities in addition to providing advice at all times. At the annual procurement policy briefing sessions, we ask our suppliers and other business partners to thoroughly comply with laws and regulations. KOITO has established a system for business partners so that they can inform us and promote compliance in the event of their violating the law.
 During fire and disaster prevention inspections to our suppliers or to other business partners, KOITO conducts annual questionnaire surveys based on their status on environmental certification, and confirm the management system or the amount of organic solvents used. In the event that there is a problem with suppliers' or other business partners' management system and etc., we request them to submit an improvement plan and follow up their measures. We also provide annual training designed for suppliers on complying with the Subcontract Act.

*KOITO's CSR activities

  1. Measures based on the "Guideline for the Right Transaction of Automobile Industry"
  2. Continuous investigation on the inclusion of environmental impact substances
  3. Continuous annual investigation on conflict minerals
  4. Thorough compliance with laws and regulations concerning human rights and labor
  5. Thorough implementation of compliance issues in general
    (Concluding contracts to eliminate anti-social forces, etc.)
As for suppliers and business partners who conduct business with the KOITO Group, we ask them to implement environmental and social measures to realize a sustainable supply chain.

[ Environmental requests ]

  • Acquire external environmental certifications such as ISO14001 and EcoAction 21
  • Ban the use of certain materials under RoHS Directive
  • Ensure transparency on substances under REACH Directive
  • Ensure traceability of nanomaterials contained in products
  • Formulate environmental policies covering the automobile industry's key challenges

[ Social Requests ]

  • Abolish child labor, forced labor and discrimination
  • Promote occupational safety and health
  • Secure decent wages and working hours
  • Prevent other inhuman behaviors
  • Conduct responsible procurement of minerals

Promotion of Fair Procurement Activities

In order to further strengthen our fair procurement activities, KOITO holds training sessions on the Subcontract Act for employees of relevant administrative divisions and business partners of subcontractors. In fiscal 2019, a total of 286 people participated in this training, and we are working to improve their knowledge of procurement activities.

Measures on Conflict Minerals

That some minerals mined in the Democratic Republic of the Congo and nearby nations have been the source of financing for armed forces engaging in human rights violations has become an international concern. The United States defined the four types of minerals of tantalum, tungsten, and gold produced in these regions as “conflict minerals" in the Dodd-Frank Wall Street Reform and Consumer Protection Act and mandated annual investigations of the use of these minerals and disclose the information.
 KOITO avoids the use of conflict minerals along with its suppliers by conducting regular annual investigations on conflict minerals not to assist human rights violations and environmental destruction and to fulfill its social responsibility through the supply chain. When starting business with a new business partner, we carefully examines the results of conflict minerals investigations and considers the feasibility of conducting such transactions.