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Procurement

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

DFF Inc., ビジネス基盤変革本部 サステナビリティ推進室, ものづくり改革本部 安全推進室, ものづくり改革本部 資材部, ものづくり改革本部 品質管理推進室, 総務・CSR本部 CSR推進部

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.

DFF Inc., ビジネス基盤変革本部 サステナビリティ推進室, ものづくり改革本部 安全推進室, ものづくり改革本部 資材部, ものづくり改革本部 品質管理推進室, 総務・CSR本部 CSR推進部

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 2020, the employee education which 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 and management practice of mold.

Partners' Meetings and Partner Evaluation and Recognition System

We carry out partner evaluations for partners (80% of materials and equipment purchase amount) selected based on purchase amount and importance. At the annual Partners Meeting, we explain our CSR Procurement Guideline and our environmental and social procurement policies, targets, and initiatives directly to our partners in order to deepen their understanding of our company. In FY2021, an online meeting was held in June in consideration of the COVID-19 virus situation, with 57 major partners participating. In addition to the "Excellent Partner Awards," "Group Global Partner Awards," "Best Performance Awards," and "SDGs Awards," we also present "Special Awards" to partners who have made special contributions to our business activities, recognizing their multifaceted efforts. 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 2020. By selecting 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”.

For the partner evaluation in FY2021, we expanded the scope to 248 partners in consideration of more importance and provided feedback to them. Furthermore, we requested ongoing cooperation from  business partners on business continuity and stable supply initiatives.

DFF Inc., ビジネス基盤変革本部 サステナビリティ推進室, ものづくり改革本部 安全推進室, ものづくり改革本部 資材部, ものづくり改革本部 品質管理推進室, 総務・CSR本部 CSR推進部

Promoting CSR in procurement activities

Promoting CSR Procurement activities

Furukwa Electric Group has established "CSR Procurement Guideline" for its partners and promotes ESG procurement activities that take into consideration "Environment" and "Social". At the end of FY2020, we published the CSR Procurement Guideline (3rd Edition), to which we added the latest social requirement items with reference to the RBA Code of Conduct and JEITA Guidelines.
We ask new suppliers to agree to comply with our CSR Procurement Guideline as a prerequisite for starting business with us.
Based on our CSR Procurement Guideline, we work together with existing partners to ensure "strict compliance with laws and regulations and fair trade," "consideration for human rights, safety, and the environment," "reduction of environmental impact," and "nonuse of conflict minerals" in our procurement activities. 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.
In addition to the existing partner questionnaire, we have started a self-assessment questionnaire (SAQ) for major partners in accordance with the contents of the CSR Procurement Guideline in FY2021 as a risk survey for existing partners. In the event that a partner falls under any of the survey items that we have identified as high-risk, we will reconfirm the situation through interviews and other means, and encourage the partner to correct the situation as necessary. In the future, we will expand the scope of SAQ partners and further promote CSR procurement activities throughout the Furukawa Electric Group.

Value chain BCM (Business Continuity Management)

Furukawa Electric conducts regular questionnaire surveys on its main partners about their BCM measures. In fiscal 2021, 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 2020, 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 2020 FY 2021
Targets Results Achievement Targets

Strengthen strategic relationships with partners

  Achieved

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

  • ・Performance of the partners evaluation and the enhancement of CSR procurement questionnaire surveys
・We evaluated 198 key partners. To prevent infection, the Partners Meeting was canceled, and feedback on evaluation results and an outline of the company and explanations of its procurement policy were provided through individual meetings with each partner. ・Performance of the partners evaluation and the enhancement of CSR procurement questionnaire surveys
  • ・Continue to inform partners about the "CSR Deployment Guidelines"
・We published the CSR Procurement Guidelines (third edition) with reference to the RBA Code of Conduct and other materials and fully informed all people concerned. ・Continue to fully inform all of our partners of our CSR Procurement Guidelines. Perform SAQ for key partners.
  • ・Discuss measures to reinforce the value chain based on the results of the BCP questionnaire, such as having multiple procurement partners.
・Reviewed and increased the number of supply points (and sometimes recommended to hold inventory) for important products ・Discuss measures to reinforce the value chain based on the results of the BCP questionnaire, such as having multiple procurement partners.
  • ・Carry out conflict minerals survey (data update survey)
・A conflict materials surveys (data update surveys) was done ・Carry out conflict minerals survey (data update survey)
  • ・Promotion of the strategic “Purchasing process” activities in consideration of the value chain.
・CO₂ reductions during procurements
Number of partners 24 companies in 2019
⇒ 25 companies in 2020
・Promotion of the strategic “Purchasing process” activities in consideration of
the value chain.
ビジネス基盤変革本部 サステナビリティ推進室, ものづくり改革本部 安全推進室, ものづくり改革本部 資材部, ものづくり改革本部 品質管理推進室
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