Responsibility to Suppliers
Building trust as a good business partner
As part of its manufacturing activities, AISIN Group procures a wide variety of items, including parts and materials, from numerous suppliers around the world. In each of these transactions, AISIN Group works to increase collaboration and establish trust relationships with our suppliers based on our basic philosophy of seeking growth and prosperity as good business partners.
FY2021 Group Procurement Policy
- Coexist harmoniously and share prosperity with suppliers with a view to stability in our trades in the long term
- Carry out open and fair trades
- Making safety and compliance the top priority and putting quality first
- Building a procurement base to support growth strategies in areas that are crucial to our survival
- Groundbreaking measures to make us more competitive in existing businesses
- Strengthening our procurement base to provide fundamental support for our corporate activities
AISIN Group’s procurement principles
AISIN Group believes in coexisting and sharing prosperity with our suppliers, and strives to achieve mutual development. To ensure that all of our procurement activities comply with AISIN Group’s policies along with relevant laws and regulations, we have translated AISIN Group Principles of Corporate Behavior into our suppliers’ languages, distributed the translations to our suppliers and asked them to ensure that both they and their trading partners comply with the principles. The principles include policies on points such as human rights, labor practices, the environment and compliance, covering both social issues, including child labor, forced labor, equal opportunities and prohibition of discrimination, freedom of association, collective bargaining, reduction of long working hours, minimum wage and health and safety, and environmental issues such as water usage and biodiversity. We have particularly stringent standards about the environment, asking our suppliers to reduce GHG emissions, recycle waste materials and resources, reduce water usage and preserve biodiversity according to AISIN Group Green Procurement Guidelines.
Before trading with a new supplier, we carry out investigations based on accreditation such as ISO9001 and ISO14001 along with a credit check and quality audit. While trading, we continue to work with the relevant departments to carry out inspections from perspectives such as safety, environmental and earthquake-proofing inspections.
When selecting new suppliers, we carry out careful investigations including investigations based on ISO9001 and ISO14001, credit checks, quality audits and account checks.
Affiliated groups and involvement in initiatives
Makoto Mitsuya, a director and executive vice president of Aisin Seiki, belongs to the organizational affairs committee of Japan Auto Parts Industries Association (JAPIA) and the vice president of the group’s purchasing division belongs to JAPIA’s procurement & production subcommittee. By belonging to this committee, AISIN Group is involved in establishing industry policies to promote fair trade through regulations such as the Guidelines for Fair Trade in the Automotive Industry, and is carrying out initiatives to gather information for the purpose of compliance with conflict mineral regulations and responsible procurement of minerals in our supply chain.
Jointly undertaking CSR initiatives with suppliers
AISIN Group is promoting CSR procurement activities, beginning with primary suppliers and going as far up the supply chain as possible. With its suppliers, AISIN Group promotes fair procurement activities based on the spirit of openness and fairness, and mutually concludes basic transaction agreements placing greater emphasis on CSR-related clauses.
AISIN Group is also engaged in initiatives as a group, such as making payments to all small- to medium-sized domestic suppliers in cash, with a view to achieving future-oriented trade practices with its suppliers. Additionally, AISIN Group has established a contact point for suppliers to make inquiries and seek advice on matters related to business ethics.
Risk assessment and monitoring of suppliers
In AISIN Group, we conduct quality audits to improve the quality provided by our suppliers. We have plans in place to carry out regular audits of progress in establishment of and compliance with quality management frameworks every three years at 120 specific companies such as suppliers that handle parts requiring a high level of quality, such as security parts. 48 companies were audited in fiscal year 2020. In these audits, we check that the company is complying with quality standards. In the event of an issue, we identify the cause of each issue, make an improvement plan, set a schedule for corrective action and then provide advice and check the supplier’s progress until the issue is resolved.
We also have a system in place to handle risks to the stability of our supply chain posed by natural disasters, fires and other situations. Information on the production processes of the materials and parts we purchase from our suppliers is registered in a dedicated system and used to respond to disasters and carry out recovery measures quickly. When a disaster occurs, the supply chain information held by each of our group companies is used to quickly identify the impact on the group as a whole, enabling us to take the necessary measures early to ensure the continuity of our supply chains.。
Mutual improvement with suppliers
AISIN Group provides its main suppliers with training support to improve their technical skills and strengthen their corporate framework. Aisin Seiki has established an apprenticeship program in Japan where future management from our main suppliers work in the division of their choice at Aisin Seiki, usually for two years. Employees are accepted based on their needs. Aisin Seiki also provides major suppliers with advice on various safety activities, environmental activities and activities aiming to improve productivity and quality by supporting the work of Aisin Suppliers Network, an organization formed to enable Aisin Seiki’s suppliers to learn from each other’s best practices and help each other to improve. In fiscal year 2020, we continued the activities we worked on in fiscal year 2019, including safety instruction and training related to the amendment of labor laws.
Initiatives to prevent bribery
AISIN Group carries out thorough initiatives to prevent bribery, guided by our basic policy and specialist committee for the prevention of bribery, including establishing rules and raising awareness among our employees. We also require that no trading partners associated with AISIN Group’s businesses engage in bribery with governments or administrative bodies or give or receive special favors, money or other compensation to or from third parties for the purpose of acquiring or maintaining inappropriate benefits for AISIN Group.
In fiscal year 2020, we established AISIN Group Principles of Purchasing Behavior and Guidelines for Purchasing Practices. These indicate specific conduct required in order to comply with various laws and regulations, including the prevention of bribery, with the aim of ensuring even more thorough compliance by employees involved in procurement activities within the group.
AISIN Group’s procurement framework
To strengthen AISIN Group’s procurement functions, we began integrating the procurement functions of Aisin Seiki and Aisin AW ahead of the companies’ merger in April 2021 and formed a group purchasing division. We are working to create a single point of contact for suppliers, which will further strengthen communication between us and our suppliers and enable faster decision-making and more efficient operations by eliminating duplications between the two companies.
*As of the end of FY 2020