Supply Chain CSR Initiatives
Epson uses fair standards and appropriate procedures for selecting suppliers, in keeping with its Basic Procurement Policy.
Epson has internal rules that govern supplier selection so that when Epson starts doing business with a supplier for the first time, Epson can ensure a stable supply of components and materials with a reasonable price and quality. Following these rules, Epson conducts a new-supplier assessment that addresses environmental concerns, labor practices, human rights questions, fair business practices, and more. Epson then starts doing business with a supplier if it meets its internal standards.
Epson also performs a comprehensive evaluation once a year if it continues to do business with the supplier. These periodic evaluations evaluate the supplier comprehensively in the categories of management, environmental management, quality management, cost management, and delivery deadline management, which helps Epson to ensure a stable supply. If the supplier gets a low score, Epson asks them to submit a corrective action plan. Then Epson re-evaluates and uses the results as feedback for the supplier. This process is a foundation for building better relationships. However, Epson also has standards that provide measures to discontinue business if a supplier fails to meet Epson’s internal evaluation standards for two consecutive years.
In FY2016, as in the year before, Epson performed periodic evaluations directed at about 1,400 contact points at some 900 companies. In addition, Epson presented the Epson Group Procurement Guidelines to its suppliers. Through these, Epson shared the its stance on CSR, which expresses Epson’s desire to build trust with all stakeholders as it grows, and to prosper with communities and help to create a better world. With this as its starting point, Epson collaborates with its suppliers to advance its sustainable procurement initiatives.
In FY2016, moreover, Epson held sustainable procurement briefings for suppliers. Epson held such events a total of six times in Japan and China, bringing together 624 suppliers. The content we discussed is listed below.
- Epson sustainable procurement initiatives
- How detailed evaluations are performed
- Improving the accuracy of conflict mineral surveys
- Supply chain BCP initiatives
For our detailed evaluations in particular, we used an SAQ (Self Assessment Questionnaire), designed to encourage compliance with the Epson Supplier Code of Conduct, which conforms to the EICC Code of Conduct. We received responses from 220 companies. In FY2017, we are giving feedback and conducting on-site checks on suppliers deemed to be of high risk based on the SAQ results. We then encourage them to make improvements. Additionally, in FY2016, we conducted third-party audits on two suppliers in China who had taken the SAQ. This series of initiatives, including detailed evaluations (SAQ) and third-party audits, will continue in FY2017.
In FY2016, we brought in outside instructors to give sustainable procurement training to 70 staff, including people from Japan (Head Office and the procurement departments of Epson’s operations divisions) and manufacturing sites outside Japan. This training was given because for the Epson Group to practice sustainable procurement, it is critical to be familiar with CSR trends and understand the EICC Code of Conduct (which the Epson Supplier Code of Conduct conforms to) and the SAQ.
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.