Supply Chain Management

Procurement BCP

As part of its Business Continuity Plan (BCP), TEL collaborates with suppliers for disaster preparation. We maintain a database of suppliers’ production sites so that if a crisis arises, we can promptly identify impacted suppliers and quickly collaborate in recovery efforts. During fiscal year 2018, about 17,000 supplier sites were registered, and post-disaster impact surveys were conducted six times.

We also conduct a BCP survey of key suppliers accounting for more than 80% of our procurement spend. We analyze their responses and the results are given as feedback to suppliers to promote further improvement. In the fiscal year 2018 survey, as well as the regular questions on earthquake countermeasures, questions on fire prevention measures were also set. Improvements in overall rating level were observed at 21% of suppliers and improvements in the overall raw score were seen at 48%.

CSR Procurement

TEL is committed to building and maintaining a robust and sustainable supply chain. In addition to sharing our Procurement Policy, Procurement Policy–Supplement, RBA Code of Conduct, and Guideline for Green Procurement, we also promote CSR activities with suppliers. Our promotion includes respect for fundamental human rights, strict compliance with labor laws and regulations, and reduction of environmental impact.

With an aim of keeping track of its suppliers’ engagement in CSR activities, TEL has conducted a CSR Survey since fiscal year 2014. The survey we conduct is in accordance with the RBA code of conduct. We analyze the responses and provide feedback to suppliers in an effort to build on improvements. During fiscal year 2018, we surveyed key suppliers accounting for more than 80% of our procurement spend. Improvements in overall rating level were observed at 21% of suppliers and improvements in overall raw scores were seen at 62%. No suppliers were engaged in any of the practices given particular emphasis in the RBA code of conduct, namely child labor, forced labor, bonded labor, inhumane treatment, false reports, falsification of records, or bribery. Neither were any suppliers of a sufficient size1 to be considered high risk in terms of
compliance. Our endeavors also included strengthening partnerships by providing training programs on the RBA code of conduct and confirming supplier agreement.

* 500 employees or more

Conflict Minerals

TEL regards taking action against conflict minerals (3TG2) obtained through illegal exploitation, including sources with human rights violations or poor working conditions, an important part of corporate social responsibility. Our resolute goal is to eliminate the use of raw materials made from these conflict minerals as well as any parts or components containing them.

In fiscal year 2018, we conducted our fourth annual survey on countries of origin and smelters of potential conflict minerals, using the reporting template (CMRT3) developed by the RMI.4 As a result, we identified 249 RMAP5 conformant smelters, providing us confidence that 3TG sourced from these smelters were conflict-free. None of the materials procured were found to contain conflict-affected 3TG.

*1 3TG: Tantalum, tin, tungsten and gold
*2 CMRT: Conflict Minerals Reporting Template
*3 RMI: Responsible Minerals Initiative.An organization that inspects 3TG smelters to certify they do not have conflict minerals
*4 RMAP: Responsible Minerals Assurance Process. A program promoted and led by the RMI for auditing smelters/refiners that do not use conflict minerals