Supply Chain Management

Basic Policies and Implementation Structure

Basic stance for promoting sustainability across supply chains

Basic Policies and Implementation Structure

Basic Policies

Promoting sustainability efforts in the supply chain

Living up to the OMRON Principles, we at the OMRON Group are committed to solving social issues through business, while also contributing to the sustainable development of society by promoting ESG (Environmental, Social, and Governance) activities. In response to growing social demand, we are also working to enhance sustainable procurement. The executive officer in charge of company-wide purchasing has been designated as the person in charge of promotion, and strengthening of supply chain initiatives.

Basic Policies

To achieve sustainable procurement, we pursue activities in two stages: Initiatives with all suppliers and initiatives with critical suppliers.

With all suppliers, aiming to achieve stable procurement, we ask them to comply with OMRON Group Sustainable Procurement Guidelines that include purchasing policies covering human rights, environment, compliance among others. By defining minimum requirements across five management categories - environment, chemical substance, quality, contract, and financial management – we are working together to make improvements to meet all of these requirements.

In addition, internal rules stipulate that if minimum requirements are not met for two consecutive years, the company will consider switching suppliers, and if necessary ESG improvements are not implemented within a certain timeframe, the company will consider whether or not to continue transactions, etc. to ensure that those improvements are implemented.

With critical suppliers, we are committed to continuously making progresses by confirming RBA compliance policies with top levels at each organization, setting mutual targets to meet RBA requirements.

We will keep working to strengthen business relationships with our critical suppliers over the medium and long term, increasing purchasing ratios from them to strengthen sustainability in our supply chain more effectively.


Initiatives with all suppliers

We define minimum requirements under the following five categories, asking all suppliers to comply with the requirements, working together to satisfy all:

  • Environmental management
    Acquire ISO14001 certification or establish an equivalent management structure.
  • Chemical substance management
    Confirm the presence of a management structure that meets standards based on examination of documents related to Management of Chemical Substances in Products or as a result of on-site audit
  • Quality management
    Acquire ISO9001 certification or establish an equivalent management structure
  • Contract management
    Execution of a basic purchasing agreement including compliance with Sustainable Procurement Guidelines
  • Financial management
    Determine no risk of bankruptcy as a result of a financial assessment or credit review analysis

Initiatives with critical suppliers

In addition to meeting the minimum requirements above, we establish shared goals for RBA requirements, continuing to make improvements every year to achieve steady improvement.

Targets by Fiscal 2025

  • Commercial product suppliers: Achieve, maintain low risk level based on RBA Corporate Level SAQ assessment
  • Processed product suppliers: Achieve, maintain low risk level based on RBA-compliant self-check surveys

Progress of Major KPIs

The KPIs are under progress as follows. (As of March 31, 2023)

  KPI Target Progress
FY2022 FY2018 FY2019 FY2020 FY2021 FY2022
All Suppliers Ratio of purchase from suppliers who meet the minimum requirements *1 100% 74% 86% 90% 90% 92%
Critical Suppliers Commercial products: Ratio of suppliers to implement RBA Corporate Level SAQ *1 100% 100% 100% 100% 100% 100%
Commercial products:Achieve LOW risk level (RBA Corporate Level SAQ score of 85 or more) *2 100% 49% 76% 100% 100% 100%
Processed products: Ratio of suppliers to implement RBA self-check *2 100% 71% 69% 100% 100% 100%
Processed products:Achieve LOW risk level (RBA compliant self-check score of 160 or more) *2*3 100% 66% 58% 55% 94% 82%

Ratio of purchase from critical suppliers was 42% in fiscal 2018, 43% in fiscal 2019, 50% in fiscal 2020, 52% in fiscal 2021 and 52% in fiscal 2022. *1

  • *1Monetary value
  • *2Number of suppliers. Denominator for commercial product suppliers: Those who have been critical suppliers for two or more consecutive years.
  • *3The program is implemented once every three years, and suppliers that do not achieve the LOW risk level are asked to take corrective measures.

Identifying Critical Suppliers

We at the OMRON Group take the following approach to identify critical suppliers. The minimum supplier certification criteria are applied to all new and current suppliers.

Supply Chain Overview

Implementation Structure

Within the OMRON Group, we have established a network between the HQ procurement departments, overseas HQs, business units, and manufacturing facilities, led by an executive officer overseeing the purchasing function for the entire company. We share and implement the group's purchasing policies and strategies through regular meetings such as the Purchasing Managers' Meeting.

Sustainable Procurement Codes

To ensure supply chain sustainability, we have introduced specific action guidelines to be followed by in-house and suppliers, and promotes the observance of these guidelines.

Code of Conduct for CSR procurement

Sustainable Procurement Guidelines

When we sign basic purchase transaction contracts with suppliers, we ask all suppliers to comply with the guidelines that stipulate specific actions and behaviors suppliers are to take and comply with.

The Supplier Code of Conduct set forth in the Sustainable Procurement Guidelines conforms to RBA standards. When the RBA standards are revised, the content is revised and purchasing activities are also reviewed. We have also established and implemented a policies and procedures, such as reviewing transactions, for responding to serious incidents of noncompliance (including environmental, social, and economic aspects). In addition, we state in the preamble to the Guidelines and in the management structure section of the Code of Conduct that the content of the guidelines should be extended from primary suppliers to secondary suppliers.

Sustainable Procurement Guidelines

Supplier Code of Conduct

1) Freely Chosen Employment 2)Young Workers 3)Working Hours 4) Wages and Benefits 5) Humane Treatment 6) Non-Discrimination 7) Freedom of Association
1) Occupational Safety 2) Emergency Preparedness 3) Occupational Injury and Illness 4) Industrial Hygiene 5) Physically Demanding Work 6) Machine Safeguarding 7) Sanitation, Food, and Housing 8) Health and Safety Communication
1) Environmental Permits and Reporting 2) Pollution Prevention and Resource Reduction 3) Hazardous Substances 4) Solid Waste 5) Air Emissions 6) Materials Restrictions 7) Water Management 8) Energy Consumption and Greenhouse Gas Emissions
1) Business Integrity 2) No Improper Advantage 3) Disclosure of Information 4) Intellectual Property 5) Fair Business, Advertising and Competition 6) Protection of Identity and Non-Retaliation 7) Responsible Sourcing of Minerals 8) Privacy
1) Company Commitment 2) Management Accountability and Responsibility 3) Legal and Customer Requirements 4) Risk Assessment and Risk Management 5) Improvement Objectives 6) Training 7) Communication 8) Worker Feedback, Participation and Grievance 9) Audits and Assessments 10) Corrective Action Process 11) Documentation and Records 12) Supplier Responsibility
1) Securing product safety 2) Business Continuity Plan 3) Protection against information leaks 4) Prevention of network security threats 5) Export control management 6) Prohibition of providing improper benefits to antisocial forces (organized crime groups) 7) Employee health management system (EHMS)

For details, see:

In addition, OMRON has established a Group Biodiversity Policy, and is committed to implementing it across various aspects of its business activities throughout the entire value chain.

Supply Chain Overview

We at the OMRON Group conduct global procurement activities, working with suppliers to improve sustainability across the supply chain. (As of March 31, 2023)

Supply Chain Overview
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