TDK aims to build solid partnerships with its suppliers and maintain a Win-Win relationship that benefits both guided by our "Global partnership purchasing principles." Global partnership purchasing refers to the practice of procurement worldwide that ensures rapid product development, essential to a company with manufacturing bases in Japan, Asia, North America, and Europe like TDK. Global partnership purchasing also emphasizes the crucial importance of close collaboration with our suppliers to TDK product quality and raising customer satisfaction. TDK has established the TDK purchasing policies to guide the Company's purchasing and put this principle into practice.
CSR procurement, which is TDK's purchasing policy, is another important issue for TDK. Since TDK is a manufacturer of components, it is necessary both to promote CSR itself from its position as a supplier and to request TDK's own suppliers to implement CSR.
Therefore, TDK requests suppliers to join our Supplier Partnership System* and to fill out a CSR check sheet.
The check sheet questions consist of 60 items in total that TDK considers especially important, primarily in the categories of human rights and labor, the environment, and fair trade and ethics. The questions are based on the categories in the Supply Chain CSR Promotion Guidebook of the Japan Electronics and Information Technology Industries Association (JEITA). To make suppliers aware of the issues and to increase their motivation for making improvements, the check sheet is designed so that results are shown on screen in real time after responding to a question.
By the end of March 2012, 1,693 companies in Japan and 1,025 companies overseas had replied to the questions (a response rate of 98% and 92%, respectively). TDK shares these results with all suppliers in the effort to promote CSR improvements. TDK also periodically improves the CSR check sheet, conducts CSR audits, and holds CSR seminars.
Briefing sessions for suppliers
In recent years, armed groups in the Democratic Republic of the Congo (DRC) or an adjoining country have been conducting illegal mining and smuggling of minerals to fund themselves. These actions not only serve to further conflict but constitute violations of human rights through forced labor and the abusive treatment of local people. In July 2010, the U.S. Congress passed financial regulatory reform legislation intended to restrict the flow of funds to these armed groups. The U.S. Securities Exchange Commission (SEC) now requires listed companies to disclose their sourcing and usage of tantalum, tin, tungsten, and gold?minerals from rebel-controlled mines and areas.
As a components manufacturer, TDK has no intention of supporting the above-mentioned violations of human rights. We place a high priority on communication in our supply chain with regard to such "conflict minerals." We ask our suppliers to disclose such information, and share that information as appropriate with our customers. TDK has also begun to prepare an internal system to meet requirements based on laws and regulations that are expected to come into force in the near future.
Consolidations guided by our business strategy also change the number of suppliers that we do business with. So that the TDK Group achieves joint and optimal purchasing overall, TDK informs every supplier throughout the Group of the company's purchasing principles and guidelines and requires that all suppliers practice them.
Moreover, as a way to emphasize the importance of CSR to suppliers, suppliers fill out an ongoing CSR Check Sheet. Obtaining accurate information about the manufacturing environment of suppliers will continue to be a TDK priority.