Relationship with Business Partners

Fair Trade Practices

Nihon Kohden recognizes that ensuring sound, fair, transparent, and free competition, as stated in the Nihon Kohden Charter of Conduct, is an essential part of earning the trust of society and continuing to conduct our business activities. 
Nihon Kohden strives to practice sound and fair purchasing and achieve fair trade across the value chain including at our business partners. We also promote sustainability while giving due consideration to the environment and society. To further reinforce sustainability in procurement, we conduct in-house training on sustainable procurement and disseminate the concept to our business partners for gaining their cooperation.

Procurement Policy and Procurement Standards

To disseminate our stance on procurement to both inside and outside the Company and ensure that our commitment will take root, we have created the Nihon Kohden Procurement Policy and Nihon Kohden Sustainable Procurement Standards. The Nihon Kohden Procurement Policy represents Nihon Kohden’s basic policy on procurement. The Nihon Kohden Sustainable Procurement Standards represent the compliance items Nihon Kohden expects its business partners to observe.

Nihon Kohden Procurement Policy

As part of its corporate social responsibility efforts to become a more global company, the Nihon Kohden Group values its partnerships with its business partners and engages in procurement activities in good faith following the policy outlined below.
  1. We will comply with relevant laws and ordinances as well as social norms when carrying out business transactions.
  2. We will properly manage and protect confidential information and personal information obtained through business transactions.
  3. We will strive to build relationships of trust and carry out fair and equitable procurement activities.
  4. We will carry out proper quality, cost and delivery activities to satisfy the needs of customers.
  5. We will strive to reduce our impacts on the global environment and carry out procurement activities based on separately stipulated green procurement guidelines.

Nihon Kohden Sustainable Procurement Standards

  1. We will comply with laws, ordinances, and government circulars that apply to our business activities, such as the Companies Act, Anti-Monopoly Act, Act against Delay in Payment of Subcontract Proceeds, etc., as well as relevant labor and environmental laws and regulations.
  2. We will comply with relevant import and export laws and regulations and the laws of countries and regions where we operate.
  3. We will not infringe upon intellectual properties, including patent rights, copyrights, and trademarks, etc.
  4. We will prohibit bribery, corruption, embezzlement, and the supply or receipt of inappropriate benefits.
  5. We will not do business with anti-social persons or groups.
  6. We will respect the human rights of all people and we will not discriminate against employees in terms of their benefits and/or employment.
  7. We will adhere to requirements for minimum wage payments to our employees.
  8. We will not use child labor or forced labor.
  9. We will comply with the safety standards and regulations of all countries and regions.
  10. We will strive to maintain and enhance quality and build a quality assurance system that fulfills our required standards in order to meet the needs of customers.
  11. We will promote green procurement that is conscious of the global environment and strive to reduce the impacts our products have on the environment during their life cycle.
  12. We will properly manage and protect confidential information and personal information obtained through business transactions.

Adherence to the Nihon Kohden Sustainable Procurement Standards

In-house Training on Sound and Fair Business Practices

Nihon Kohden provides regular compliance training to all of its employees to ensure they have correct understanding and awareness of sound and fair business practices. Departments involved in procurement provide annual training on specific laws and regulations affecting their operations, such as the Fair Competition Code and the Act against Delay in Payment of Subcontract Proceeds. In FY2021, 57 people attended these training sessions.

Enhance Relationships with Suppliers

Nihon Kohden requests business partners to conduct self-assessment on their environmental and quality activities, and, moreover, checks business partners’ understanding of and adherence to the Nihon Kohden’s Sustainable Procurement Standards through their answers to the Sustainability Questionnaire conducted every year. In FY2021, we conducted a Supplier Questionnaire for approx. 60 suppliers both in Japan and internationally. 
Opinions expressed through the Questionnaire are fed back to procurement departments and utilized to realize fair and responsible procurement.

Results of the Sustainability Questionnaire in FY2021

In FY2021, we asked 82 of our business partners to answer our Sustainability Questionnaire and were grateful to receive cooperation from all of them. The questionnaire consisted of 20 questions in six areas: legal compliance and fair operating practices, human rights, quality, the environment, information management, and sustainability. In terms of questions about legal compliance and fair operating practices, and human rights, initiatives and implementation were underway, planned or under consideration in more than 90% of our business partners. In previous questionnaires, multiple business partners reported that they have engaged in social contribution initiatives and have signed the UN Global Compact. We continue to work with our business partners to deepen mutual understanding of our sustainable procurement standards and ensure fair trade practices.

Identification of key suppliers

We have identified the following suppliers as key suppliers: suppliers of orders with large purchase amounts, suppliers who provide parts for major and strategic models, and suppliers who provide non-substitutable parts.

Results of the Supplier Questionnaire in FY2021

In FY2021, we conducted a Supplier Questionnaire for approx. 60 suppliers both in Japan and internationally.
The survey consisted of four items: the environment, human rights, quality and governance.
Environment: Approx. 62% of suppliers surveyed answered that they have established an environment management system, but the ratio of suppliers who are actively working to address climate change is only approx. 8%. We will strengthen our efforts to mitigate climate change together with suppliers, because the reduction of Greenhouse Gas emissions including Scope 3 emissions is necessary to address this issue.
Human rights: The ratio of suppliers who have established a human rights policy is approx. 42% and only 12% of suppliers have conducted human rights due diligence. We will continue to provide them with education, support, and monitoring of human rights, as any human-rights violations by them may affect the Nihon Kohden Group.
Quality: We confirm that approx. 34% of suppliers have conducted risk assessments due to outbreaks of infectious diseases and other health issues. In addition, 10 suppliers have conducted voluntary recalls. We will further strengthen our efforts to prevent recurrence of recalls and improve quality throughout the supply chain.
Governance: We will continue to ensure thorough compliance with laws and regulations.
We will assess risks based on the results of the Supplier Questionnaire and promote communication with suppliers.
Survey Content
Theme Question 
1. Basic stance on environmental efforts
2. Reduction of Green House Gas emissions
3. Reduction of chemical substances specified by laws and regulations in manufacturing processes and products
4. Waste identification, management, reduction, and responsible disposal or recycling
5. Sustainable and efficient use of resources (energy, water, raw materials, etc.)
6. Management of wastewater and exhaust and reduction of generation
Human Rights
1. Basic stance on human rights
2. Prohibition of discrimination and respect for human rights
3. Prohibition of discrimination in employment
4. Health and Safety
5. Organizational structure and system
6. Proper wage payment
7. Biodiversity Initiatives
1. Basic stance on quality and safety of products and services
2. Ensuring the quality and safety of products and services
3. Appropriate response in the event of a product / service accident or defective product distribution
4. Responsible marketing / advertisement
5. Basic stance on the supply chain
6. Procurement
7. Supplier environmental assessment
8. ESG due diligence
9. Supplier audit
1. Building internal control
2. Efforts to prevent bribery and corruption
3. Fair corporate activity
4. Basic stance on information security
5. Data privacy and information security
6. Initiatives for social contribution activities

Initiatives to Maintain and Improve Quality

To respond to customer needs, we strive to maintain and improve the quality of the components and materials we procure. We have new business partners cooperate with audits to confirm the appropriate operation of quality management systems, and have existing business partners cooperate with periodic reviews of operations and quality audits based on the quality of delivered components. We strive to further enhance quality by getting business partners themselves to understand that the quality of delivered components can have a significant impact on the quality of our end products.