Enhancement of Supply Chain Management
Background for Implementing Ethical Procurement
It is often said that in areas of Asia where production bases are concentrated, on-site labor issues and insufficient environmental measures tend to result in such problems as labor disputes and factory fires.
Not being immune to this rule, FUJIFILM Manufacturing Shenzhen has faced issues regarding stable operation and supply, including suspension of the company’s production line due to delayed delivery of components, which was caused by suppliers’ CSR risks (regarding labor affairs, human rights, the environment and corporate ethics). To help minimize these risks, Fuji Xerox has been implementing measures for ethical procurement since 2007.
At present, we assemble multifunction devices and printers, which are our mainstay products, primarily at our factories in China and Vietnam. Accordingly, we attribute importance to enhancing the foundation of CSR management with considerations toward the environment, corporate ethics, and human rights etc. across the supply chain, particularly in China and Vietnam.
CSR Assessment System for the Supply Chain and the Results
To foster ethical procurement, FUJIFILM Business Innovation (1) Notifies its procurement policies to suppliers (including the code of conduct for suppliers and the CSR management guidelines); (2) assesses suppliers’ CSR risks; and (3) asks suppliers with high CSR risks (for the environment, human rights and labor, and corporate ethics) to make improvements and then supports the improvement activities.
As a result of asking suppliers to make continuous improvements to their CSR management (to give more consideration to labor affairs, human rights, environment and corporate ethics) every year through our ethical procurement activity, the number of production line stops caused by suppliers’ CSR risks was reduced to zero in fiscal 2015.In addition, FUJIFILM Business Innovation Hai Phong (VIetnam) has since fiscal 2016 continued operating with zero line stops attributable to ethical risks.
We will continue to enhance our activities to minimize suppliers’ CSR management-related risks at other production sites to consistently realize zero line stops and achieve coexistence and co-prosperity with suppliers. Through these activities, we will contribute to solving issues related to the environment, human rights and labor, and corporate ethics in the regions where we operates and across our supply chain toward the creation of a society where people can live safely and enjoy decent work.
Features of FUJIFILM Business Innovation’s Support to Suppliers
What is particularly distinctive among our ethical procurement initiatives is the point that our staff specialized in the environment, personnel affairs, and other fields visit suppliers' factories and give them advice on points needing improvement. With this "visits and checks by experts,” we reduce the ethical risks of suppliers. FUJIFILM Business Innovation of Shenzhen began onsite checks of its suppliers by a team of its ethical procurement experts in fiscal 2008. FUJIFILM Business Innovation of Shanghai Limited and FUJIFILM Business Innovation Vietnam Company Limited introduced this initiative in fiscal 2017.
Through these visits and checks, FUJIFILM Business Innovation of Shenzhen enhanced its relationships with suppliers and is now requested by the suppliers to provide them with information and know-how to help them make quicker responses to the enactment, revision and enhancement of the related laws and regulations. To meet their request, FUJIFILM Business Innovation of Shenzhen has expanded its program for persons in charge at suppliers, including the organization of seminars and the establishment of an information-sharing platform, in addition to carrying out the visits and checks.
We will continue to work in partnership with the different sites to continuously strengthen our efforts to develop our human resources and to check the situation at our suppliers through visits made by our expert teams, so that we can work closely together with the suppliers to resolve the issues in our supply chain
Tools to Support Self-Motivating Efforts of Our Suppliers
FUJIFILM Business Innovation requests its suppliers to conduct CSR activities voluntarily for the environment, human rights and labor, and business ethics issues, for which we have prepared the Management Guideline and the Ethical Procurement Self-checklist. The Management Guideline describes the social background, including the related laws, regulations and international standards, the level of measures to be taken for the issues, and specific examples, and the Ethical Procurement Self-checklist is used by our suppliers to check the measures they are implementing. The CSR management guidelines cover items of the supplier code of conduct stipulated by RBANote1, an international framework organized mainly by companies from the electronic and electrical industries.
- Note1 RBA stands for Responsible Business Alliance.
Responsible procurement of minerals
As a Fujifilm Group company, FUJIFILM Business Innovation clearly declares that it will not be complicit, directly or indirectly, in supporting activities related to those disputes and human rights violations caused by the mining of mineralsNote2In order to identify, prevent and mitigate any adverse impacts of FUJIFILM Business Innovation’s business activities in regard to this issue, we conduct surveys and management activities in line with the Due Diligence Guidance set by the Organisation for Economic Co-operation and Development (OECD).
For “The Fujifilm Group’s Approach to responsible procurement of minerals”, please see here.
- Note2 The issue on minerals such as tantalum, tungsten, tin, and gold, which are considered problematic due to human rights violations at mining sites or unethical actions supported by funds earned from mining. (Conflict Minerals Issue)
Procurement Aimed at Local Development
At FUJIFILM Business Innovation, we aim not only to promote fair, impartial procurement with our suppliers, but to contribute to the local economy in Japan and abroad, where our production bases are located and to pursue optimal quality and prices. Our procurement plans include optimizing the local procurement rate of raw materials and parts. At the same time, however, we have been careful not to hastily transfer overseas some of our technologies and the production of certain parts. Instead, these parts are produced at and procured from the Japanese production sites of our suppliers.
We will deploy appropriate local procurement activities while seeking to optimize local content rates, thereby contributing to economic growth in the regions where we have production sites.