Engagement with Suppliers
Fuji Xerox will aim to engage solidly with our suppliers and develop a strong, competitive supply chain in a spirit of seeking mutual benefit.
Our Basic Approach
- By concerning ourselves not only with financial and other business-related matters, but with CSR in such areas as environmental and social issues and corporate ethics, we at Fuji Xerox contribute globally to the solution of social issues including those concerning the environment, human rights, labor, and corporate ethics.
- At Fuji Xerox, we view our suppliers as partners who share our philosophy and policies. By sharing CSR-related values and discussing the environment, human rights, labor, and corporate ethics with the aim of minimizing related risks, we promote ethical procurement globally with the aim of building mutually beneficial relations with these partners and enhancing both their competitiveness and ours.
Through the ethical procurement activities we have pursued incrementally to date, we have not only strengthened our relationships with suppliers, but over the last several years we have also seen a sharp decline in component delivery delays and line stops whose causes lie with our suppliers. We will concentrate our efforts on extending the processes and know-how of initiatives that have produced the best results in Shenzhen, China, to other overseas production sites, and will link this to still higher competitiveness.
Corporate Vice President and Executive General
Manager of Procurement Group,
Expanding Ethical Procurement
Features of Fuji Xerox Activities
In order to make our supply chains more competitive, we want to ensure that our suppliers understand the importance of CSR management and continue to make improvements. We therefore communicate frequently with our suppliers at all levels, from top management to those directly carrying out the work, and seek their understanding of the importance of CSR and the need for improvements as we strive to take our CSR engagement to a higher level throughout our supply chain.
Fiscal 2014 Performance
In fiscal 2014, we continued as in the previous year to strengthen our initiatives at our major overseas production sites. We focused in particular on communicating with our suppliers' top management, holding executive CSR seminars at a number of locations.
Strengthening Overseas Initiatives
- We are finding it effective to have visiting expert teams drawn from the procurement, human resources, general affairs, legal affairs, and CSR sectors of Fuji Xerox of Shenzhen, Ltd. give advice on needed improvements to our suppliers of production materials. We therefore increased the number of on-site checks by these teams and strengthened the team system in readiness for further expansion.
- In logistics, we worked with overseas suppliers whose self-checks had indicated low compliance rates the previous fiscal year. As a result, among suppliers completing the ethical procurement self-checklist for fiscal 2014, the ratio of logistics partners with a compliance rate of 90 percent or higher on "very important" items exceeded the target of 90 percent.
- In the indirect materials sector, we started sending expert teams to make on-site checks of the service providers who support Fuji Xerox of Shenzhen, Ltd.'s site operations.
Communication with Suppliers' Top Management
- In Japan and in China (Shenzhen and Shanghai), we held executive CSR seminars for our main production materials suppliers in August and September 2014. These seminars were designed to develop a common awareness with our suppliers'top management in such areas as recent trends in CSR and the growing social concern surrounding these issues, and matters identified in Fuji Xerox's ethical procurement policy as points in need of strengthening. In Vietnam, we held an executive CSR seminar for suppliers at Fuji Xerox Hai Phong (Vietnam), which came into operation in 2013.
Fiscal 2015 Initiatives
- There is an ever-growing demand for stronger ethical procurement initiatives (especially on human rights issues), both from international agencies and from nongovernmental organizations in the United States and Europe. In light of this international concern, we will redouble our efforts to determine the facts relevant to our environmental, human rights, labor, and corporate ethics initiatives at our production sites, and wherever problems are found we will pursue improvements.
- Further, through our ethical procurement initiatives we will provide more opportunities to share with suppliers what we have learned from our own work at our production sites in regard to labor affairs, environmental management, and personnel training. Enhancing ethical procurement on the basis of mutual trust with our suppliers will enable us to build an even stronger supply chain. Through this combination of CSR management at our production sites and ethical procurement from our suppliers, we will aim to establish stable production solidly rooted in the local community.
Case Study① Commencing Ethical Procurement in Vietnam
In November 2014, we held an executive CSR seminar for top management from 40 companies in the Hai Phong area that supply us in the production materials, logistics, and indirect materials sectors. This seminar-our first for suppliers in Vietnam-marked the start of our full ethical procurement program in that country, and it was also our firstever joint seminar covering the three sectors. We explained the background and objectives behind Fuji Xerox's emphasis on ethical procurement, outlined the process involved in our program, and asked the suppliers for their cooperation in carrying out self-checks. In the future, we will run a PDCA cycle of improvement in Vietnam, as we have been doing in Japan and China.
We also provided CSR training for the employees of Fuji Xerox Hai Phong. In addition, we offered practical training for ethical procurement champions and had them visit several suppliers and carry out actual on-site checks on the environment, labor safety, and hygiene in the production lines, cafeterias, and other areas. Based on these checks, we then exchanged information on CSR risks and how they should be addressed in plant management in the Hai Phong area, with reference to the environment, human rights, labor, and corporate ethics.
Case Study② Engaging with the Conflict Minerals Issue
In accordance with the US Dodd-Frank Wall Street Reform and Consumer Protection Act, companies are required to track and report the source and chain of custody of conflict minerals. In May 2014, such companies disclosed to the SEC the results of inquiries they had made in 2013 into the origins of certain designated minerals that they used. Such companies are now obligated to make these disclosures annually.
Although we at Fuji Xerox are not required to file these reports, in order to cooperate with the inquiries of our customers who do have this obligation and to determine whether there is any involvement of armed groups in our own supply chain, since 2013 we have been tracking the source and chain of custody of conflict minerals. The response rate from first-tier suppliers in our 2014 investigation was 92.4 percent (up from 87.5 percent in 2013). We identified 211 smelters in our supply chainNote1, and ascertained that, as of June 2015, 132 of these had been certified conflict-free under the CFSINote2 program of the EICCNote3. No information indicating involvement of armed groups in the supply chain was received.
At Fuji Xerox, we recognize conflict minerals as a major human rights issue, and our Basic Procurement Policy includes a clear call to deal in good faith with the issue of conflict minerals. Further, as a member of the "Responsible Minerals Trade Working Group" of JEITANote4, we join other companies in studying rational and effective measures to ensure that we are not a party to human rights violations. In our investigations from 2015 onward, we will aim for more precision as well as a higher response rate.
- Note1 This is the number of smelters meeting the description of standard smelters in the 2014 reporting template that were confirmed to be present in Fuji Xerox's supply chain; the figure is the total for the four designated minerals (tantalum, tungsten, tin, and gold).
- Note2 CFSI: Conflict-Free Sourcing Initiative
- Note3 EICC: Electronic Industry Citizenship Coalition
- Note4 JEITA: Japan Electronics and Information Technology Industries Association