Aiming for a Better Relationship with Suppliers

Basic Policy

We build strong partnerships with our suppliers and put importance on mutual growth. In dealing with our suppliers, we comply with relevant laws and regulations. Based on a fair and equitable business relationship and from a global perspective, we procure — from Japan as well as from abroad — necessary materials and services after comprehensively evaluating criteria that include appropriate quality, price, delivery schedule, as well as consideration toward the environment and human rights.

• Basic Policies on Procurement

Laws and Regulations: Understanding and Compliance

In procuring materials, we are taking various initiatives, including in-house training, in order to thoroughly comply with the "Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (Subcontract Proceeds Act)."
In FY 2023, we continued conducting regular voluntary audits of departments which purchase materials, and enacted the necessary measures for items of concern in order to prevent violations of laws.
We also created new training materials for the Subcontract Proceeds Act. We conducted the necessary training in each department, and also constructed a mechanism for checking the level of understanding. In addition to purchasing staff, this training was also conducted for supervisors and staff in departments that engage with suppliers, and for staff at related companies in Japan. A total of 536 persons completed this training.

Business continuity management

In order to minimize the impact on customers in case of unforeseen circumstances such as a natural disaster or the bankruptcy of a supplier, we regularly perform verification activities such as checking the actual metal molds which are part of our assets, and monitoring the business situation of business partners. We also conduct practical activities based on the Disaster Confirmation Standards and Initial Response Methods that ESPEC has formulated. In FY 2022, we set up a new system to quickly identify suppliers operating in the area affected by a natural disaster.

Supplier evaluation

In our supplier evaluations, in addition to QCDESM (Q: Quality, C:Cost, D: Delivery times, E: Environment, S: Services, M:Management), we also evaluate supplier approaches to compliance and BCP (Business Continuity Plans). In FY 2023, a compliance/risk management evaluation was conducted in written form for 183 major suppliers, and visits were made as necessary to their sites in order to reduce risk.

Promoting Sustainable Procurement

ESPEC promotes sustainable procurement that considers the environment, human rights, labor issues, ethics, and other matters in order to increase social value.

Formulating Sustainable Procurement Guidelines

In March 2024, we established the ESPEC Sustainable Procurement Guidelines. In July 2024, we held explanatory briefings on this topic for our suppliers and otherwise worked to ensure compliance with these guidelines throughout the entire supply chain.

• ESPEC Sustainable Procurement Guidelines

Environmentally-friendly procurement

The ESPEC Green Procurement Standards were formulated to evaluate environmental management activities based on an environmental management system that includes ISO14001 certification, with the aim of ensuring environmentally-friendly procurement practices. In FY 2023, a total of 126 suppliers accounting for 95.4% of purchased parts were able to satisfy the certification standards.

Formulating the Responsible Mineral Procurement Policy

Profits resulting from trade in minerals mined in conflict areas and high-risk areas may be a source of funds for armed forces that are the cause of human rights violations, environmental destruction, and other conflict. ESPEC created the Responsible Mineral Procurement Policy in January 2024 and announced its approach to high-risk mineral procurement initiatives.

• Responsible Mineral Procurement Policy (For Suppliers: Procurement Activities)

Endorsement of the Declaration of Partnership Building

ESPEC Mutual Prosperity Meetings

Since 1981, we have been building mutual trust between our suppliers and our company, and, aiming at co-existence and co-prosperity, have held ESPEC Mutual Prosperity Meetings. We have worked to invigorate skill improvement training and QC Circle activities in order to improve quality strength, and these efforts have produced outstanding results. And We have introduced the ESPEC Excellent Supplier Award System to express gratitude to suppliers from whom we have received tremendous cooperation.

Market Information Briefing Seminar

At ESPEC, we invite our key business partners to our Market Information Briefing Seminar. Through this seminar, we provide the necessary information such as economic trends and order counts for business partners to use during production, which allows us to work toward ensuring stable procurement.