Toyoda Gosei’s Supply Chain

Promotion System (Global Collaboration)

Global Collaboration

As our business expands globally, we are collaborating with purchasing managers in each region to further promote local procurement, with consideration of quality, cost, risk avoidance, and all other parameters. Global Procurement Liaison Meetings are held twice yearly as a forum to share information. At these meetings, regional managers share information and hold discussions to resolve issues related to quality, cost, and delivery (QCD), and well as environmental issues and other sustainability activities. We are also strengthening our global procurement network through mutual support, such as sharing buyer education materials and localization information.

Business With New Suppliers

We have an entry form on our website for open dialogue regarding new proposals and business dealings.

In addition to QCD assessments at the start of new business dealings, we also check the status of the other party’s management activities based on their level of support for our sustainability guidelines and other factors, to manage risks starting from our first transactions.

At the same time, together with the signing of contracts and memorandums of understanding, we explain the various guidelines that Toyoda Gosei has developed and seek their understanding.

New Supplier Assessment

We have established and are implementing internal rules for selecting new suppliers when we start doing business with them.

In addition to examining a potential supplier’s financial conditions and other factors, we also check the status of their quality management certification, such as ISO9001 and IATF16949, and investigate sustainability issues to determine whether or not to initiate business with them.

Responsible Procurement of Materials

With the globalization of business, supply chains are becoming increasingly global and diversified. However, places where workers’ rights are not taken into consideration still exist in the world, including forced labor and labor in poor conditions.

As one example of this, Toyoda Gosei recognizes the problem of conflict minerals mined under poor labor conditions, and this is an important issue in our supply chain.

We have revised our Supplier Sustainability Guidelines specifically with this in mind, and we request our suppliers to procure resources and raw materials responsibly based on these guidelines.

We will continue to work with our suppliers to avoid the use of minerals of concern throughout our supply chain.

We also conduct a conflict minerals survey once a year with the cooperation of all relevant suppliers. In the FY2022 survey, we found no serious matters related to conflict materials in the responses of the suppliers surveyed.

As the market changes and the targeted minerals increase, we will regularly review the risk targets and consider how best to respond as a company.

Environmental Risk Assessments

● Environmentally hazardous substances

To ensure compliance with environmental regulations, Toyoda Gosei works with suppliers to investigate the chemical substances contained in the products they deliver to us.

● New suppliers

As part of our environmental risk assessment of new suppliers, we check whether they have obtained ISO14001 or third-party certification before starting to do business with them. In cases when certification has not been obtained, we check for compliance with Toyoda Gosei’s own guidelines. If there are items that are not in compliance, we request corrective action and confirm the results.

Anti-bribery Initiatives

The Toyoda Gosei Group has established the Global Anti-Bribery Guidelines based on the Toyoda Gosei Group Charter of Corporate Behavior, and the entire Toyoda Gosei Group endeavors to prevent bribery, accounting irregularities and other corrupt practices. We also demand that all suppliers doing business with Toyoda Gosei not engage in bribery in their relations with government or administrative officials, and not give or receive gifts of entertainment or money to or from third parties for the purpose of obtaining or maintaining unfair advantages for the Toyoda Gosei Group.

Promoting Carbon Neutrality in the Supply Chain

To achieve our goal of carbon neutrality throughout our entire supply chain, we need to advance efforts not only within Toyoda Gosei itself but also in conjunction with our suppliers.

For this, we are working to promote thorough understanding of carbon neutrality and reduce CO₂ emissions while providing assistance to suppliers through measures such as our Energy Saving Dojo, which exhibits Toyoda Gosei’s energy-saving know-how, and support for measuring actual energy usage, based on an understanding of CO₂ emissions during manufacturing processes and logistics at suppliers’ own companies and other individual issues.

Strengthening Our Relationships With Suppliers

Every April, we hold procurement policy briefings where we explain our management philosophy, the business environment and company policy to about 250 of our major suppliers in Japan. After sharing our initiatives and targets related to safety, compliance, sustainability, quality, production, and cost, we hold regular discussions to confirm results and make improvements through anticipated value roundtables.

We have also designated December of each year since FY2019 as Supplier Month. This is an opportunity for us to listen humbly, and with gratitude and respect, to suppliers’ true thoughts, and to seriously consider whether there is anything we should change or act on to build a better relationship. We exchange opinions with suppliers on how to respond to future changes in the business environment, and present them with letters of appreciation to express our gratitude for their daily efforts in such things as improving quality and responding to production changes in the COVID-19 pandemic.

We hold procurement liaison meetings six times a year to introduce examples of fire and disaster prevention initiatives and share information on production volumes, quality, compliance, and cybersecurity. In addition, we hold seminars on carbon neutrality and other social issues.

In FY2020, we established Management Troubleshooting Consultations for suppliers and other business operators. We receive candid inquiries from them on various management issues, including corporate management, finance, human resources, and legal matters. This is done in small groups, where we try to give advice on effective solutions.

• Procurement policy briefing
• Supplier Month
• Presenting a letter of appreciation to a supplier

Supplier Evaluation System

Toyoda Gosei seeks to strengthen partnerships with the establishment a supplier evaluation system used to strengthen the corporate culture of suppliers and to award excellent suppliers.

• Supplier awards

Support for Suppliers So That We Can Grow Together

Supplier Training

Companies in the sustainability field face a rapidly changing environment, and we believe it is important for the entire supply chain to understand current trends and take appropriate actions. This is why we conduct training for our major suppliers.

Briefings on topics such as overall sustainability, the environment, and human rights, as well as carbon neutrality and enhanced cybersecurity, are held as appropriate to ensure that our major suppliers understand the importance of these initiatives throughout the supply chain.

Monitoring Supplier Information

We ask suppliers with whom we have ongoing business to submit a supplier survey form on management information at least once a year. The submitted information is shared with the entire Purchasing Division. If there are major changes, we visit the supplier and conduct interviews to quickly grasp the changes that have occurred, mitigate risks as soon as possible and solve problems.

We also conduct supplier evaluations, including QCD, to better understand each company's strengths, weaknesses, and challenges before considering the details of our business transactions.

Employee Education and Training

We participate in industry associations such as the Japan Auto Parts Industries Association (JAPIA) and the Japan Rubber Manufacturers Association (JRMA). Our company president serves as an officer (director) of JAPIA.

Through our activities in these industry associations, we seek to achieve sustainable growth together with our suppliers, such as through the Declaration of Partnership Building promoted by the Ministry of Economy, Trade and Industry.

We are also participating in the revision of the JAPIA BCP Guidelines by the general affairs committee of JAPIA for not only earthquakes but also wind and water damage and pandemics. In this and other ways we are contributing to the formulation of BCPs by suppliers in the auto parts industry.