Procurement Activities

Supply Chain Management

With the establishment of the “Supply Chain Code of Conduct,” supplier evaluations have been expanded from the traditional "Q, C, T" to include T (Technology) and S (Stable Supply). Especially in stable supply, priority is given to BCP measures, environment, and compliance, with annual surveys and evaluations of suppliers’ initiatives.
Regarding the environment, alongside surveys on the non-use of environmentally hazardous substances, workshops on GHG emissions calculation were held for major suppliers (218 companies), and reports on GHG emissions were collected from each supplier.
In addition, regular surveys are conducted with suppliers on the origin of purchased parts and non-use of conflict minerals, and trade management compliant with various domestic and international laws is conducted for exports of products and repair parts.

Promoting Various Dialogues to Deepen Mutual Understanding with Suppliers

Communication activities with suppliers

The Yanmar Group conducts various communication activities to deepen mutual understanding with suppliers. At the beginning of the year, a “Yanmar Purchasing Policy Briefing” is held for major domestic and overseas suppliers regarding the fiscal year and medium-term plans, combining in-person and online formats, with many participants attending.
At “Yanmar purchasing policy briefing”, explanations about the Yanmar Group purchasing policy and current status and future plans of major businesses are provided by the heads of each business. Outstanding suppliers are presented with “Certificates of appreciation” to enhance motivation and promote mutual development.
Moreover, the Yanmar Group's trading partner cooperative “Seieikai” holds two general meetings annually to provide information on production status and topics related to the Yanmar Group. Especially excellent member companies receive the “Excellent Company” certification to facilitate smooth production activities and ensure stable procurement.

Stable supply

We conduct audits and provide guidance regarding suppliers’ management conditions, productivity, risk mitigation systems, and supply from overseas bases. Through these efforts, we work to secure stable supply volumes and ensure on-time delivery based on strong partnerships. In particular, regarding disaster response, we continue discussions with suppliers on damage mitigation and backup systems. Additionally, we have conducted surveys on the current status of successor issues with key suppliers.

Quality assurance

The “Supplier Quality Assurance Manual” clarifies quality assurance agreements with suppliers and, based on that, quality audits, guidance, quality meetings, initial stability management of new products, and the “Quality Priority Management System*” are implemented to ensure better quality of delivered parts.

• *Quality Priority Management System: A system for special guidance to suppliers with low quality evaluations annually.

Green procurement guidelines

Yanmar Group products are created using parts and materials supplied by many business partners. Therefore, to reduce impacts on people and the environment from environmentally burdensome substances at all production stages and to reduce greenhouse gas (GHG) emissions, efforts by Yanmar alone are insufficient, making cooperation with suppliers of products, parts, and materials essential.
In this context, the “Green Procurement Guidelines” have been revised to prioritize purchasing environmentally friendly products, parts, and materials.
Based on these guidelines, environmental conservation activities are promoted together with business partners.

Yanmar group’s response to conflict minerals

The Yanmar Group recognizes “conflict minerals,” which cause social issues such as human rights and environmental problems, as an important CSR challenge. The group adopts a policy of not using conflict minerals and requests suppliers’ agreement and cooperation in surveys on non-use of conflict minerals.
Although Yanmar Group is not obligated to submit reports on conflict mineral usage to the U.S. Securities and Exchange Commission under the U.S. Dodd-Frank Act Section 1502, inquiries from U.S. and Japanese customers subject to this obligation led to surveys of first-tier suppliers starting in 2013.
Surveys are conducted using CFSI* forms, results are reported to inquiring companies, and Yanmar works with suppliers to eliminate conflict minerals from Yanmar products.

• *CFSI (Conflict-Free Sourcing Initiative) is a non-profit organization established by EICC and GeSI to promote social and environmental responsibility and share efficiency in supply chains regarding conflict minerals issues.

Education and awareness activities related to purchasing

To ensure compliance, all employees receive planned annual education on various laws including the Subcontract Act, purchasing regulations, trade control, and environmental regulations. Regular training on basic purchasing knowledge is also held to improve skills, share knowledge and information among staff, and ensure fair and equitable purchasing activities with suppliers.