Supply Chain
Basic Approach
In the process of creating products, SMK receives assistance from many suppliers. We recognize suppliers as partners and aim to develop mutually while building trusting relationships.
Basic Policy
SMK's supply chain is built with companies that understand our policies and Action Guidelines and can work together toward a sustainable society. To maintain this, we disclose the SMK Group Charter for Corporate Behavior, Environmental Charter, and Code of Conduct, present specific management standards and guidelines based on these, and have a basic policy of conducting business with suppliers who agree to them.
Governance Structure
Under the CSR/Sustainability Committee, the Production Meeting, chaired by the Production Management Officer, regularly discusses building and maintaining the ideal supply chain.
Identification of Significant Suppliers
We identify approximately 200 companies as significant suppliers, centered on procurement sources for important raw materials and suppliers with large transaction amounts.
Green Procurement
SMK aims to minimize environmental impacts from procurement and production activities while conducting environmentally conscious product development, working together with suppliers. We present "Green Procurement Guidelines" and the "Controlled Chemical Substances Standard" to all trading suppliers and promote green procurement by procuring materials that comply with these standards.
In addition, when starting new transactions and when deemed necessary for continuing transactions, we audit suppliers' environmental conservation activities and confirm their management systems.
| FY2021 | FY2022 | FY2023 | |
|---|---|---|---|
| Number of suppliers audited on environmental aspect | 138 | 139 | 142 |
CSR Procurement
SMK has established "SMK Supply Chain CSR Guidelines" in compliance with JEITA's "Responsible Business Conduct Guidelines" and RBA's Code of Conduct. We present these to all trading suppliers and request compliance along with submission of agreement documents. For significant suppliers, we aim to obtain a 100% agreement rate.
| FY2023 | FY2024 Target | |
|---|---|---|
| % of agreements received from significant suppliers | 99.3 | 100.0 |
Responsible Minerals Sourcing
SMK is committed to avoiding the use of conflict minerals, which are a global challenge. We request that suppliers of raw materials and components used in our products report using formats such as the Conflict Minerals Reporting Template (CMRT), provided by the Responsible Minerals Initiative (RMI). We also ensure transparency by sharing this information with our customers.
Communication with Suppliers
Based on the belief that communication with suppliers is important for maintaining and developing a healthy supply chain, we conduct activities in various aspects.
Business Partner's Conference
We hold Business Partner's Conferences each year to explain company policies and the business environment while sharing goals with suppliers. We also express our gratitude by recognizing suppliers who have contributed to SMK's production activities in terms of overall capability and quality assurance.
Supplier Questionnaires
We conduct questionnaires with significant suppliers every three years to improve the appropriateness of SMK's procurement activities through supplier evaluations. Questionnaire results are anonymized and statistically fed back to relevant personal, encouraging them to incorporate supplier opinions into daily procurement activities.
Supplier Performance Evaluations
For manufacturing companies among significant suppliers, we conduct annual evaluations including technical capabilities and environmental conservation activities in addition to QCD (Quality, Cost, Delivery). We meet individually with evaluated suppliers and disclose results to promote communication.
| FY2021 | FY2022 | FY2023 | |
|---|---|---|---|
| Number of suppliers evaluated | 95 | 87 | 87 |
For information on supplier communication regarding quality, please refer to the Quality and Customer Trust page.
Supply Chain BCM
Aiming to create a system enabling rapid alternative procurement, we conduct questionnaires every other year with significant suppliers to confirm in particular if systems are in place to quickly understand impacts on production. We request improvements from suppliers with insufficient BCM and work to strengthen business continuity capability in the supply chain.