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Procurement

Please see procurement information on Furukawa Electric Group's from this link.

Furukawa Electric Co., Ltd.

Optimum Purchasing on a Steady, Ongoing Basis

Basic approach to procurement

We contribute to  create the social infrastructure combining information, energy, and mobility through the relationship and co-creation with our partners. In order to realize a truly affluent and sustainable society, we have been conducting fair and sincere procurement activities to take the consideration about the safety and environment, under the Furukawa Electric Group Procurement Policy.

Furukawa Electric Group Procurement Policy

  1. Fairness and Integrity
    We are open to any and all business partners in accordance with the principle of free competition and we all act with fairness and integrity.
  2. Compliance with Laws and Regulations and CSR Procurement
    Toward the realization of a sustainable society, we conduct our procurement activities considering environment preservation and safe operation in comply with all applicable laws and regulations and we do fulfill our Corporate Social Responsibility.
  3. Partnership
    We always value relationships of mutual trust with our business partners to create new values by collaboration.
    We pursue to optimize our procurement conditions from the viewpoint of quality, cost, delivery, technological capabilities and CSR activities.

(note) In the Group, we call our business suppliers as the “Partners” to collaborate the value creation.

Furukawa Electric Co., Ltd.

Conducting Training on Subcontracting Transactions

Conducting Training on Subcontracting Transactions

In order to forge sound relationships with business partners through fair transactions that comply with rules and regulations, Furukawa Electric Group provides training for employees on subcontracting transactions. In fiscal 2019, the training courses which have been previously conducted and the employee education which newly incorporates e-learning were conducted, and we aimed to make thoroughly known the contents of the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors.

Partners Meeting and Partners Evaluation Scheme

We carry out partner evaluations for partners (80% of materials and equipment purchase amount) selected based on purchase amount and importance. For fiscal 2019, this meeting was held in June and was attended by 59 main business partners.In addition to the existing “Excellent Partner Awards” and “Group Global Partner Awards”, We have newly established the "Best Effort Partner Award" to evaluate improvement and efforts, and the "Best Performance Award" to evaluate excellent performance, and have incorporated multifaceted evaluations.We also evaluate main business partners on the basis of quality, technology, price, delivery system, degree of social contribution and credit condition, and then, we provide feedback on our findings, in partners meeting. In addition, we discuss the results of our evaluations with them to more closely align our awareness of procurement activities. As part of that, we accelerated the activities of Procurement Logistics in fiscal 2018. By selec ting the best means of the transportation within the value chain, such as the effective use of the returning vehicles, we are continuing to deal with the cost reductions, CO₂ reductions during procurements, and “the risks of the soaring logistics costs and becoming difficult to transport”.

In fiscal 2019, we evaluated some 199 business partners and provided feedback to them. Furthermore, we requested ongoing cooperation from  business partners on business continuity and stable supply initiatives.

Furukawa Electric Co., Ltd.

Promoting CSR in procurement activities

Promoting CSR in procurement activities

We are promoting the ESG procurement activities in mindful of the “Environment” and the “Social” issues. Based on our CSR Deployment Guideline for Business Partners, Existing partner and we are working together to engage in procurement activities with “full legal compliance and fair trading practices”, “conside ration for human rights, safety   and the environment”, “reduction of an environmental impact” and “elimination of conflict minerals”. We are also continually providing encouragement at partners meeting by explaining the state of our efforts to our business partners, asking for their cooperation with our activities, and so on.We encourage new partners to comply with the CSR Promotion Guidelines at the start of transactions with us.

Value chain BCM (Business Continuity Management)

Furukawa Electric conducts regular questionnaire surveys on its main partners about their BCM measures. In fiscal 2019, we held questionnaire surveys for main partners and placed the results we received from our business partners onto a database. In this way, we have become able to quickly identify which partners are mostly likely to be affected during a natural disaster.

Conflict Minerals (note)

Regarding the action associated with the conflict minerals, we have established the group policy as a part of compliance activities of RBA (Responsible Business Alliance) Code of Conduct, in the “Responsible Mineral Procurement Initiatives” and making efforts to inform the group companies and the business partners.

In fiscal 2019, we continued the surveys on the usage status of the conflict minerals for the main products of Furukawa Electric and the group companies. At the same time, we are actively promoting the procurement from the smelters certified by the RBA conflict-free smelter program.

Going forward, in addition to requesting the cooperation of group companies and our business partners in the responsible sourcing of minerals, we will work with the Japan Electronics and Information Industries Association (JEITA), an industry organization, on initiatives targeting the responsible sourcing of minerals.

(note) Defined as minerals (tantalum, tin, gold, tungsten or their derivatives) that originate in or near the Democratic Republic of the Congo that may help to finance armed conflict.

Challenges and Future Policy

We want to fully grasp the state of our CSR activities along the value chain by regularly asking our partners to complete a questionnaire on their understanding of our CSR Deployment Guideline for Business Partners. We will also seek to deepen BCM by giving encouragement to partners based on the results of our BCM questionnaire and manufacturing site survey, with the aim of improving crisis response levels along the entire value chain. Internally, we have held exercise and seminars on the handling of BCM in order to raise our awareness. In addition, we are implementing the work style reform through the RPA (Robotic Process Automation) and also making efforts to reduce internal risks through the standardization and duplication of the procurement operations.

Targets and Results (Procurement)

Achieved:Achieved Partially achieved:Partially achieved Not achieved:Not achieved

FY 2019 FY 2020
Targets Results Achievement Targets

Strengthen strategic relationships with partners

  • Ongoing implementation of the partner assessment system and utilization of feedback discussions
  • Continue to inform partners about the "CSR Deployment Guidelines"
  • Examination and implementation of measures to strengthen the value chain by utilizing BCM questionnaire surveys and site surveys results
  • Carry out conflict minerals survey (data update survey)
  • Promotion of the strategic “Purchasing process” activities in consideration of
    the value chain.
・Conducted partner evaluations of about 199 main partners and held partners
・Introduce our CSR Deployment Guideline by procurement system online
・Reviewed and increased the number of supply points (and sometimes recommended to hold inventory) for important products
・A conflict materials surveys (data update surveys) was done
・CO2 reductions during procurements
Number of partners 18 companies in 2018
⇒ 24 companies in 2019
Achieved

Promotion of procurement activities that fulfill social responsibility to solve the SDGs
 

・Continue partner evaluation system
・Continue to inform partners about CSR Deployment Guidelines
・Communication with partners with a view to strengthening the Value chain based on the results of BCM questionnaire surveys
・Conflict minerals survey (data update survey)
・Promotion of the strategic “Purchasing process” activities in consideration of
the value chain.
Furukawa Electric Co., Ltd.
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