Enhancement of Supply Chain Management

It is often said that in areas of Asia where production bases are concentrated, on-site labor issues and insufficient environmental measures tend to result in such problems as labor disputes and factory fires.
Not being immune to this rule, FUJIFILM Manufacturing Shenzhen has faced issues regarding stable operation and supply, including suspension of the company’s production line due to delayed delivery of components, which was caused by suppliers’ CSR risks (regarding labor affairs, human rights, the environment and corporate ethics). To help minimize these risks, FUJIFILM Business Innovation has been implementing measures for sustainable procurement since 2007.
At present, we assemble multifunction devices and printers, which are our mainstay products, primarily at our factories in China and Vietnam. Accordingly, we attribute importance to enhancing the foundation of CSR management with considerations toward the environment, corporate ethics, and human rights etc. across the supply chain, particularly in China and Vietnam.

To foster sustainable procurement, FUJIFILM Business Innovation (1) Notifies its procurement policies to suppliers (including the code of conduct for suppliers and the CSR management guidelines); (2) assesses suppliers’ CSR risks; and (3) asks suppliers with high CSR risks (for the environment, human rights and labor, and corporate ethics) to make improvements and then supports the improvement activities.

As a result of asking suppliers to make continuous improvements to their CSR management (to give more consideration to labor affairs, human rights, environment and corporate ethics) every year through our sustainable procurement activity, the number of production line stops caused by suppliers’ CSR risks was reduced to zero in fiscal 2015.In addition, FUJIFILM Business Innovation Hai Phong (VIetnam) has since fiscal 2016 continued operating with zero line stops attributable to CSR-related risks.

We will continue to enhance our activities to minimize suppliers’ CSR management-related risks at other production sites to consistently realize zero line stops and achieve coexistence and co-prosperity with suppliers. Through these activities, we will contribute to solving issues related to the environment, human rights and labor, and corporate ethics in the regions where we operates and across our supply chain toward the creation of a society where people can live safely and enjoy decent work.

Regarding the environment, human rights and labor, and business ethics issues, FUJIFILM Business Innovation provides the CSR management guidelines and the CSR self-checklist for its suppliers . The CSR management guidelines describe the social background, including the related laws, regulations and international standards, the level of measures to be taken for the issues, and specific examples, and the CSR Self-checklist is used by our suppliers to check the measures they are implementing. The CSR management guidelines cover items of the supplier code of conduct stipulated by the Responsible Business Alliance (RBA)^Note1, which is dedicated to CSR in global supply chains.

In addition, we define the suppliers who greatly impact our competitiveness and business continuity as critical suppliers. We select these suppliers based on transaction amount, transaction continuity, substitutability and other factors, and we request these suppliers fill out the CSR self-checklist.

We identify suppliers in high need of risk assessment based on the result of the CSR self-check and from the perspectives of initiatives regarding quality, delivery date and other matters. We send our expert teams to these suppliers for onsite inspections. The purpose of this initiative is to reduce the CSR-related risks of suppliers by having our staff specialized in the environment, personnel affairs, and other fields visit suppliers' factories and give them advice on points that need improvement. FUJIFILM Manufacturing Shenzhen began onsite checks of its suppliers by a team of its sustainable procurement experts in fiscal 2008. In Shanghai and Vietnam, we introduced this initiative in fiscal 2017.

Through these visits and checks, FUJIFILM Business Innovation of Shenzhen enhanced its relationships with suppliers and is now requested by the suppliers to provide them with information and know-how to help them make quicker responses to the enactment, revision and enhancement of the related laws and regulations. To meet their request, FUJIFILM Business Innovation of Shenzhen has expanded its program for persons in charge at suppliers, including the organization of seminars and the establishment of an information-sharing platform, in addition to carrying out the visits and checks.

We will continue to work in partnership with the different sites to continuously strengthen our efforts to develop our human resources and to check the situation at our suppliers through visits made by our expert teams, so that we can work closely together with the suppliers to resolve the issues in our supply chain

As a Fujifilm Group company, FUJIFILM Business Innovation clearly declares that it will not be complicit, directly or indirectly, in supporting activities related to those disputes and human rights violations caused by the mining of minerals^Note2In order to identify, prevent and mitigate any adverse impacts of FUJIFILM Business Innovation’s business activities in regard to this issue, we conduct surveys and management activities in line with the Due Diligence Guidance set by the Organisation for Economic Co-operation and Development (OECD).

For “The Fujifilm Group’s Approach to responsible procurement of minerals”, please see here.

At FUJIFILM Business Innovation, we aim not only to promote fair, impartial procurement with our suppliers, but to contribute to the local economy in Japan and abroad, where our production bases are located and to pursue optimal quality and prices. Our procurement plans include optimizing the local procurement rate of raw materials and parts. At the same time, however, we have been careful not to hastily transfer overseas some of our technologies and the production of certain parts. Instead, these parts are produced at and procured from the Japanese production sites of our suppliers.

We will deploy appropriate local procurement activities while seeking to optimize local content rates, thereby contributing to economic growth in the regions where we have production sites.