Enhancement of Supply Chain Management

As a manufacturer, the Group’s lifeline lies in its supply chain. In order to make it sustainable and strong, we will transform it into a robust materials purchasing system that can respond to rapid changes in the market, society, and the environment, while ensuring co-existence and mutual prosperity with our suppliers. We will also address various social imperatives, such as the reduction of GHG (greenhouse gas) emissions in Scope 3, the handling of hazardous substances, and human rights issues.

Establishment of the TOKYO KEIKI Group Sustainable Materials Procurement Policy

In addition to our existing requirements for materials procurement, we have established the Sustainable Materials Procurement Policy to declare our commitment as a company to building sustainable relationships with our suppliers and to procuring materials responsibly with regard to social issues such as human rights protection and conservation of the environment.

Supply chain management system

Our Group’s supply chain management system comprises the Material Management & Purchasing Office, the Headquarters’ administrative divisions; and the purchasing divisions of each internal company.
  As an organization under the direct control of the President, the Material Management & Purchasing Office supports each internal company’s purchasing activities. The Material Management & Purchasing Office engages in administrative tasks such as maintaining and managing basic companywide policies, the Standard Purchasing Rules, and the template of Purchase Agreement used by our Group. The office also provides companywide guidance on the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (Subcontract Act); supervises purchasing and procurement; maintains and manages our core information system (TBB system*); manages credit based on supplier management information; and supports the activities of cooperatives and partner association suppliers. In addition, the Office is in charge of procuring materials for product development in the Headquarters District.
  Each internal company’s purchasing division primarily purchases the production materials necessary for that company’s production activities, engaging in efficient, fair, and equitable transactions with our suppliers in Japan and overseas. When initiating a transaction, it is standard practice to conclude a Purchase Agreement. Actual purchasing is conducted using our TBB system, ensuring that the transaction is in accordance with the Standard Purchasing Rules.
  Each internal company engages in the development of the skills of its purchasers. The Material Management & Purchasing Office also urges purchasers of each internal company’s purchasing division to take a seminar on the Subcontract Act, and in fiscal 2022, 30 out of 55 purchasers took the seminar.

*TBB system: TOKYO KEIKI Best Buying system

Concepts regarding human rights

Our Group will respect human rights and will appropriately manage personal information. Under the idea that providing motivating workplaces while respecting the human rights, personalities, and individualities of employees aids in maintaining and strengthening our competitiveness, we aim to be a company where diverse human resources can play active roles regardless of race, nationality, gender, age, or other characteristics. We also monitor the business activities of overseas subsidiaries and suppliers in everyday work to ensure the absence of human rights violations.

Green partner initiative

The “Green Partner System” is an initiative to eliminate hazardous substances from production processes throughout the supply chain in order to encourage environmentally friendly manufacturing. TOKYO KEIKI is putting this system into practice alongside our suppliers.
  Under this initiative, suppliers who meet our management standards and have the ability to conduct independent quality management to prevent hazardous substances being used in or contaminating their production lines are certified as Green Partners. This eliminates the need to submit a non-inclusion certificate for each product or part and to conduct some of the tests on the chemical substances they contain. We also provide various services to Green Partners, such as support for the testing and analysis of chemical substances contained in parts and materials, provision of environment- related information, and support for environment-related education.

Engagement with suppliers

Business policy briefings for suppliers are held in May every year primarily at each of the Group’s production sites (the Nasu Plant, Yaita Plant, and Sano Plant) in an effort to share information.
  Quality audits are based on each internal company’s quality management system and are conducted at the start of transactions, on a regular basis, and on other occasions as deemed appropriate. The scale of our Group’s suppliers is varied. Many of our machined component suppliers, in particular, are small in scale, and with them we value face-to-face dialogue with purchasers. Placing importance on direct communication makes it easier to know a supplier’s working conditions and quality management, and also helps to build long-term relationships of trust with suppliers.

Calculating Scope 3 emissions

In order to understand supply chain GHG emissions across all of our business activities and effectively reduce them, we calculated the total emissions of all of our supply chains based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain from the Ministry of the Environment.
  The breakdown of Scope 3 emissions is shown in the table below. Emissions from Category 1 (purchased goods and services) were the greatest at 55.2% of the total, followed by Category 11 (use of sold products) at 33.7%. We have confirmed that understanding the actual status of these two categories and planning and implementing reduction measures are effective in reducing Scope 3 emissions, and will implement these measures accordingly.
  Since Scope 3 is expected to be replaced in the near future by calculations using primary data (actual data, rather than calculations), we have decided to set a target value for Scope 3 by fiscal 2025.

Overview of Scope 3 CO₂ emissions calculation (FY2022)