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 governance, we at Fuji Xerox contribute globally to the solution of social issues including those concerning 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.
Engaging with the Conflict Minerals Issue
- Under the US Dodd-Frank Wall Street Reform and Consumer Protection Act, rules were enacted in 2012 requiring companies listed on the US stock exchange, among others, to track and report the source and chain of custody of conflict minerals. Although we at Fuji Xerox are not required to report, we are asked to do investigations by those of our customers who have this obligation, and we endeavor to carry these out appropriately and to exchange information with them regularly in order to grasp our customers' needs.
- At Fuji Xerox, we recognize conflict minerals as a major human rights issue. As a member of the "Responsible Minerals Trade Working Group" of JEITA,Note 1 we join other companies in studying and implementing rational and effective measures to ensure that we are not a party to human rights violations. In 2013, we stated our thinking in our Basic Procurement Policy, explained it to suppliers, and started to investigate the origins of four minerals utilizing the framework established by EICCNote 2 and GeSI.Note 3 The response rate in these investigations has been high (87.5 percent) and we have made progress in identifying refineries in the supply chain.
- In our investigations from 2014 onward, we will conduct the dialogue with suppliers in greater depth and aim for more precision as well as a higher response rate. Also, through our suppliers, we will ask that all refineries identified by the supply chain survey be certified as not dealing in conflict minerals.
- Note 1 JEITA: Japan Electronics and Information Technology Industries Association
- Note 2 EICC: Electronic Industry Citizenship Coalition
- Note 3 GeSI: Global e-Sustainability Initiative
Expansion of Ethical Procurement
Features of Fuji Xerox Activities
In order to make our supply chains more competitive, for the mutual benefit of Fuji Xerox and our suppliers, we want to ensure that our suppliers understand the importance of CSR management and continue to make improvements. We therefore communicate face-to-face and frequently with suppliers at all levels and, after sharing our CSR philosophy with them, we carry out CSR assessments. We also, with their understanding, encourage them to pursue efforts toward improvements where needed.
CSR assessments consist of self-checks by suppliers, basic onsite checks by the procurement personnel of Fuji Xerox, and onsite checks by a team of experts.
Fiscal 2013 Performance
- We strengthened our initiatives overseas at our major production sites. In China, our procurement personnel continued to make basic on-site checks of suppliers, completing basic visits to 82 percent of the Chinese suppliers' sites covered by this program by the end of FY 2013. To any suppliers judged to pose a serious risk to ethical procurement, our expert team or top executives made personal visits and ensured that labor management was improved. We also reviewed the contents and methods of the on-site checks to make them more effective.
- At Fuji Xerox Hai Phong (Vietnam), which entered production in November 2013, we did a survey of CSR risks and identified social problems, especially in labor management. Then, based on precedents and experience in making improvements at other overseas production sites, we began to improve the CSR management environment in light of conditions in Vietnam.
- In logistics, we maintained the record of all domestic suppliers being at least 90 percent compliant on very important items, and we also strengthened self-checks overseas. Wherever points in need of improvement were found, we worked with the suppliers to draw up improvement plans. By making information on their progress available to both sides at all times, we helped put in place a process whereby suppliers themselves run a PDCA cycle of improvement. As a result, 64 percent of our overseas suppliers attained at least 90 percent compliance on very important items in the first year of the program.
- Our management confirmed that ethical procurement is effective in reducing risks at production sites and strengthening competitiveness, and decided to strengthen it further from fiscal 2014 on.
Fiscal 2014 Initiatives
- We will further strengthen the initiatives pursued to date. Since face-to-face communication has proved effective in identifying risks and making improvements in China, we will endeavor to check more items during basic visits and to have the expert team make more frequent onsite checks. We will also proceed with identifying risks and strengthening measures for the logistics process as a whole, from the production site to delivery to the customer.
- Further, we will pursue new initiatives beginning in fiscal 2014. Fuji Xerox will commence full ethical procurement for Fuji Xerox Hai Phong's materials procurement, service providers at their production sites. We will also strengthen our system for promoting ethical procurement globally and will address issues in keeping both with local conditions at the national and regional level and with the type of industry and business of our individual suppliers.
- Our activities to date have taught us that ethical procurement based on mutual trust with suppliers is highly effective. In future, as we promote and strengthen our ethical procurement further to respond to social issues and demands, we will not only fulfill our supply responsibilities as a manufacturer, but will also demonstrate, to our customers and to society at large, our vision of ideal CSR management.