Supply Chain Management
The Toyoda Gosei Group has set a basic procurement policy based on the idea of coexistence and co-prosperity with our suppliers. We aim to deepen our partnerships with suppliers while achieving sustainable growth for us both.
1. Optimum Global Procurement
We procure best raw materials, products, and equipment fairly from a global perspective while considering cost, quality, technology, and production. We also welcome proposals from suppliers for new technologies and methods and new products.
2. Mutual Growth Based on Mutual Trust
We aim to raise the collective strength of the Toyoda Gosei Group based on open and fair relationships with suppliers, strengthening our mutual corporate cultures, introducing innovative management, and building mutual trust.
3. Moving Toward Sustainable Societies
Toyoda Gosei has set activity norms as guidelines for initiatives that should be made for the SDGs and other social issues, and shared them with suppliers in carrying out activities. We also aim to ensure complete legal compliance and confidentiality in corporate activities, including our supply chain.
Toyoda Gosei’s Supply Chain
The number of suppliers we have direct dealings with is 419 for products and parts and 327 for materials and equipment. When suppliers not in those areas are included, the total number is 772 companies.
|Number of suppliers [Toyoda Gosei Co., Ltd.]||419||327||26||772|
Promotion System (Global Collaboration)
|Purchasing Div.||Purchasing Planning Dept.||Supplier quality and manufacturing improvement support|
|WS and FC Parts Purchasing Dept.||Automotive Parts||Weatherstrips, Functional Components|
|IE Parts Purchasing Dept.||Interiors and Exteriors, Electronic Products|
|SS Parts Purchasing Dept.||Safety Systems Components|
|Material and Machine Purchasing Dept.||Raw materials (used for automotive and specialized machinery products), production equipment, fixtures and tools|
|Life Solution Business Planning Div.||Life Solution Purchasing Planning Dept.||LED Products||Optoelectronic products and the raw materials and processed components used in them|
|General Industry Products||Air conditioning products, housing-related components, agricultural / building / industrial machinery components|
|Mold Business Management Div.||Mold Business Planning Dept.||Molds and mold parts used throughout the company|
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.
Initiatives With Suppliers
Initiatives for Sustainability Over Entire Supply Chain
Based on rising expectations for sustainability initiatives in companies, we have created Supplier Sustainability Guidelines and requested that our suppliers thoroughly understand and practice them. We also provide selfcheck sheets for early measures when potential risks are noticed, and ask companies to conduct self-assessments.
These guidelines set policies related to human rights and labor, the environment, compliance, and other matters. In addition to social aspects (child labor, forced labor, no discrimination and equal opportunity, freedom of association, reduction of long working hours, compliance with minimum wages, and health and safety), we ask suppliers to observe environmental aspects such as water use and biodiversity.
With regard to the environment, CO2 reductions, recycling of resources including waste, and control of chemical substances is demanded in our Green Procurement Guidelines. For conflict minerals, we ask suppliers to be responsible in their procurement of resources and raw materials. Once a year we conduct a survey on conflict materials with the cooperation of all our suppliers.
As described above, we are accelerating initiatives needed for sustainable growth over our entire supply chain, matched to the various changes in social conditions.
- Key contents of Supplier Sustainability Guidelines
- Human Rights, Labor
- Ethics and Compliance
- Safety and Quality
- Risk Management
- Information Management
- Environmental Initiatives
- Responsible Procurement of Materials
- Social Contribution
- Promotion of Sustainability Activities
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.
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.
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.
Support for Suppliers So That We Can Grow Together
To support our suppliers, we implement various initiatives from the perspective of safety, quality, cost and production. Safety initiatives include prevention activities based on fire prevention inspections of painting and other production equipment and risk assessments. Initiatives related to production include manufacturing site improvement through manufacturing reform activities. Both of these areas are related to personnel development.
We also provide indirect support for the activities of the Kyowa-kai, an organization formed by suppliers for the purpose of mutual improvement and sharing of best practices, and are involved in their activities for human resource development and to achieve carbon neutrality. During Supplier Month (December), we once again express our sincere appreciation for the daily efforts of our suppliers and try to strengthen our support for their sustainability activities.
In 2022, the Kyowa-kai held the Winning (Value) Technology Exhibition with the aim of strengthening each other’s competitiveness by, for example, leveraging the knowledge that suppliers have developed to enhance the added value of our products. The introduction of each company's special technologies, value-added products, and sustainability activities for carbon neutrality and other matters will lead to the creation of new value and corporate growth throughout the supply chain.
Toyoda Gosei Kyowa-kai
The Toyoda Gosei Kyowa-kai is a cooperative association established in 1970 in response to growing social needs for quality. Its aim is the mutual development and prosperity of Toyoda Gosei and our major suppliers. The Kyowa-kai consists of three subcommittees: Equipment & Molds, Rubber & Metals, and Plastics. It conducts various activities in cooperation with Toyoda Gosei, such as holding subcommittee meetings on quality, fire prevention, disaster prevention and safety; workplace improvement and QC circles presentations; participation in Toyoda Gosei level-specific education and domestic and overseas training; and a year-end meeting with company top management.
Partners in together creating future value
Since 1970, the Kyowa-Kai has been working together with Toyoda Gosei, and all companies involved have refined their own technology while meeting Toyoda Gosei’s needs, including for safety, quality, and defect reduction. However, as the automotive industry undergoes major changes, we believe that it is essential to review the association’s activities in order to increase competitiveness. We decided to set a new direction through serious discussions among members, for example through young people’s study groups. The first step in this process is the establishment of a philosophy that clearly states the goals of Kyowa-kai and the launch of three committees. All of these committees are led by members of the Kyowa-kai and are characterized by voluntary activities.
Kyowa-kai is not only an association that focuses on day-to-day production activities, but also a partner that takes a long-term perspective and together creates future value for Toyoda Gosei. We will use these strengthened activities as an opportunity to actively exchange opinions with people at Toyoda Gosei to enhance our partnership and promote activities for the realization of Toyoda Gosei’s business strategy.
President of Kondo Seisakusho Co., Ltd. and Chairman of the Toyoda Gosei Kyowa-kai
Know more about Toyoda Gosei, and tell them more about us
I recently visited a technology exhibition held at the Kitajima Technical Center and was impressed by Toyoda Gosei’s technological development and bold moves into non-automotive fields. I also strongly felt the importance for the Kyowa-kai of sharing our own technical capabilities. There are many cases of Kyowa-kai member companies adding value through diverse technologies, such as applying core technologies developed as suppliers of Toyoda Gosei to non-automotive parts. With thoughts in mind of wanting people to know more about the Kyowa-kai and showing that there is still more we can do to help, we launched the One Team, One TG Committee and planned a Winning Technology Exhibition as the first activity to present the winning technologies and value technologies of each company. The three main objectives of the exhibition are to “improve our ability to communicate and appeal to the public,” “hear firsthand about Toyoda Gosei’s strategy, direction, and problems,” and “improve our ability to respond to customer needs.” Through these activities, we would like to communicate with people in areas where we have little contact, and together create exciting projects that lead to increased added value.
President of Suzuki Chemical Industry Co., Ltd. and Kyowa-kai officer
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.
Company Internal Initiatives
Employee Education and Training
We strive to follow the “Toyoda Gosei Guidelines for Business Ethics” so that each and every employee engaged in procurement operations can conduct their activities in a manner that is open, fair and equitable toward suppliers.
To achieve sustainable societies, we also make efforts throughout our supply chain with a view to social issues and circumstances. The Procurement Subcommittee holds regular monthly meetings to ensure that procurement activities correspond to various changing social conditions, and all Purchasing Division members are given compliance (subcontracting laws, bribery, etc.), safety, and carbon neutrality information.
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.
Declaration of Partnership Building
In August 2020, Toyoda Gosei announced its participation in the “Declaration of Partnership Building” framework of the Cabinet Office, the Ministry of Economy, Trade and Industry, and others. A Declaration of Partnership Building is a declaration of mutual prosperity for the entire supply chain, and new cooperation that transcends scale, affiliation, and other factors.Declaration of Partnership Building