Basic stance for promoting sustainability across supply chains
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 through its supply chain in order to fulfill even wider social responsibilities.
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 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. 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.
We define minimum requirements under the following five categories, asking all suppliers to comply with the requirements, working together to satisfy all:
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.
The KPIs are under progress as follows. (As of March 31, 2022)
| KPI | Target | Progress | |||||
|---|---|---|---|---|---|---|---|
| FY2021 | FY2017 | FY2018 | FY2019 | FY2020 | FY2021 | ||
| All Suppliers | Ratio of purchase from suppliers who meet the minimum requirements *1 | 100% | 52% | 74% | 86% | 90% | 90% |
| Critical Suppliers | Commercial products: Ratio of suppliers to implement RBA Corporate Level SAQ *1 | 100% | 90% | 100% | 100% | 100% | 100% |
| Commercial products：Achieve LOW risk level (RBA Corporate Level SAQ score of 85 or more) *2 | 100% | 42% | 49% | 76% | 100% | 100% | |
| Processed products: Ratio of suppliers to implement RBA self-check *2 | 100% | 43% | 71% | 69% | 100% | 100% | |
| Processed products：Achieve LOW risk level (RBA compliant self-check score of 160 or more) *2 | 100% | 26% | 66% | 58% | 55% | 94% | |
Ratio of purchase from critical suppliers was 40% in fiscal 2017, 42% in fiscal 2018, 43% in fiscal 2019, 50% in fiscal 2020 and 52% in fiscal 2021. *1
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.
We at the OMRON Group established a network consisting of HQ procurement departments, overseas HQs, business units, and manufacturing facilities, sharing and cascading group procurement policies and measures through regular procurement staff meetings. We are expanding initiatives related to procurement activities, including sustainable procurement, on a global basis, implementing these activities throughout the entire group.
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.
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 in the Sustainable Procurement Guidelines conforms to RBA standards, and also specifies a policy and procedure in place for dealing with violations of the guidelines, such as actions to review a contract should there be a critical compliance violation, including violations of environmental, social, and governance 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.
We at the OMRON Group conduct global procurement activities, working with suppliers to improve sustainability across the supply chain. (As of March 31, 2022)
