Practicing CSR throughout the Supply Chain
Epson selects suppliers using fair criteria and procedures based on its Basic Procurement Policy. We have established internal rules that set forth criteria for selecting excellent supplier candidates that can provide us with a stable supply of quality parts and raw materials at fair prices.
In accordance with this rule, we now undertake a new supplier evaluation that focuses on appropriate environmental management, fair employment practices, and legalistic approaches to human rights and so on. We decide our suppliers based on this evaluation.
We also conduct a comprehensive annual evaluation of every supplier with which we do regular business. This periodic evaluation covers five items relating to suppliers' performance: general management, environmental management, quality management, cost management, and delivery deadline management. By reviewing the evaluation result, we can gain a clearer picture of a supplier and its practices, therefore contributing to stable supply. If a supplier receives a poor evaluation, we ask the company concerned to submit a corrective action plan. We then re-evaluate the supplier and provide feedback about the results. This process aims to achieve better and stronger relationship with our suppliers. On the other hand, we have set a procedure to terminate transactions with suppliers that have consistently failed periodical evaluations. A supplier that demonstrates poor results for two successive years is put on a watch list, with transactions suspended if this continues for two more years.
In the 2015 fiscal year we evaluated approximately 1,300 business units of 900 companies. We also presented suppliers with Epson's Procurement Guidelines and communicated our approach to CSR, which aims to foster trust with all stakeholders, to develop goodwill with the local and international communities, and to contribute to improving society as a whole. We aim to use these activities as a start point to promote initiatives for socially responsible procurement in cooperation with our suppliers.
Aiming to work to high ethical standards and a social conscience, Epson conducts procurement in strict compliance with both the letter and the spirit of local and international laws and regulations in every country and region around the world. We consider employee training and education are the most important factors in achieving this.
Epson Group companies in Japan train employees on the laws, regulations, and social norms of various countries and regions around the world to ensure every employee acquires the necessary expertise and awareness.
All employees in Japan are required to receive online training courses, entitled an Introduction to Procurement (Ethics & Code of Conduct) and Subcontracting Law Fundamentals. Moreover, employees involved directly with procurement, including those with procurement approval authority, must earn in-house certification by successfully completing the Procurement and Compliance Management course. All procurement personnel are required to receive Procurement and Compliance Certification Renewal Training every five years to allow them to obtain up-to-date information and knowledge.
Epson will continue to provide regular training going forward to heighten compliance awareness and will strive to strengthen its internal processes to achieve the highest possible level of compliance management.