Responsible Supply Chain
Konica Minolta’s Supply Chain Management
Supply Chain Management
Working to establish a sustainable society in which human rights are respected
As a global company, Konica Minolta operates in 50 countries around the world. The total value of the Group’s procurement is approximately 530 billion yen. By region, Japan accounts for 36% of this, China, for 26%, Europe for 14%, the United States for 13%, and ASEAN and other regions for 11%.
Konica Minolta carries out production activities utilizing its high-quality manufacturing skills as a manufacturer, with production sites primarily in Japan, China and the ASEAN region. The Konica Minolta Group divides procurement into the goods used directly in production and the goods and services needed indirectly for production, company operation, business activities, and development. It treats these as direct materials procurement and indirect materials procurement, respectively.
In direct materials procurement, distribution costs and environmental impact can be reduced by procuring parts and raw materials needed in production from regions close to the production site. Accordingly, the Group’s basic policy is to practice regional procurement, procuring close to the production site those materials that can be acquired locally. At the same time, it strategically employs global procurement, selecting optimal procurement sources worldwide, such as for materials that have cost savings when purchased in bulk and high-value added parts that require a high level of technical competence. In such cases, procurement departments in Japan conduct centralized procurement.
Due to large-scale chemical explosions and the tightening of environmental regulations in China in recent years, operations have been temporarily suspended at certain industrial parks within the country. This caused a halt to the supply of some raw materials to Konica Minolta, resulting in a temporary situation in which the stock of raw materials was running low in production. In order to ensure that such a situation causes no delay in the supply of products to its customers, Konica Minolta is working to trace the supply of routes of raw materials back to the crude raw materials, and to seek out suppliers outside of China, secure multiple suppliers, and consider alternative materials for high-risk raw materials.
Regarding indirect materials procurement, efficient procurement is pursued through a combination of expense items to procure at sites in each country and procurement optimized worldwide through global contracts.
In Konica Minolta’s primary field, the Office Business, service-related costs are incurred due to work required for equipment maintenance after sale. Service-related costs have also increased due to the expansion of the IT solutions the Group provides as the Group shifts to a business model based on the sale of services rather than the sale of products.
Konica Minolta is shifting from procurement in China to procurement in the ASEAN region, particularly Malaysia, in line with its digital manufacturing approach, which employs manufacturing system that do not overly rely on certain “people, places, countries, or trends.”
Konica Minolta views all of the suppliers that supply and produce materials such as raw materials and parts or provide logistics and other services as indispensable partners in its business activities.
Konica Minolta is working with suppliers to build a trusting relationship through transparent and equitable transactions in order to achieve the shared goal of providing innovative products and services in a timely manner to customers all over the world.
Konica Minolta recognizes that there are workers all over the world who are forced to work with no consideration of their rights or who have to work in deplorable circumstances, and child and foreign (migrant) workers are particularly susceptible to these negative circumstances.
Konica Minolta promotes CSR procurement throughout its supply chain,* helping to create sustainable societies. The company believes that enterprises are not only responsible for their products, but also socially responsible to improve conditions of labor (human rights), ethics, the environment, safety and health, throughout the supply chain that delivers products to customers. Konica Minolta practices CSR procurement in order to realize these improvements at its manufacturing bases, and works closely with the suppliers who supply raw materials and parts for its products.
In order to fulfill social expectations such as respect for human rights, Konica Minolta not only addresses this issue at Group production sites but also cooperates with manufacturing and logistics suppliers. It also believes this improves the corporate value of both Konica Minolta and its suppliers. Further, this cooperation enables the customers to purchase the company’s products with peace of mind and to know that, by doing so, they are contributing to the development of a sustainable society. Konica Minolta recognizes that CSR procurement is more than just the social responsibility of a global company; it is also convinced that improving working conditions make employee satisfaction higher and attrition rates lower. This in turn reduces business risk and raises quality throughout the supply chain. There are plenteous reasons for the proactive approach.
- Supply chain: The series of activities involved in delivering a product or service to a customer, ranging from procurement and production to distribution and sales.
Konica Minolta’s CSR Activities in the Supply Chain
Policies on Procurement
Establishing supply chain policies and continuously pursuing improvements
In fiscal 2008, the Konica Minolta Group established the Konica Minolta Procurement Policy as a policy covering procurement activities overall in order to promote initiatives related to fair procurement. The basic stance of the policy is based on the key words, “open,” “fair,” “global,” “compliance,” and “ecology.” The policy also clarifies requests to suppliers.
Building on this policy, the Group established the Konica Minolta Code of Conduct for Suppliers based on the exact text of the RBA* Code of Conduct when Konica Minolta joined the RBA in fiscal 2013. With this code, Konica Minolta asks for the compliance of suppliers in its supply chain to help create a sustainable society by ensuring continuous improvement in various areas. These areas include labor rights (forced labor, child labor, freedom of association, etc.), ethics (intellectual property, privacy, anti-corruption, etc.), the environment (energy use, impacts of climate change including CO2 and greenhouse gas emissions, water use, pollution, waste, resource use, etc.), and health and safety (emergency preparation, occupational accidents, occupational health, etc.). In addition, in fiscal 2014, the Group established the Konica Minolta Conflict Minerals Compliance Policy, based on which it is taking steps to address conflict mineral issues. The basic contract with suppliers includes “compliance with the Konica Minolta Code of Conduct for Suppliers,” and the Group requests suppliers to comply with this Code.
- Responsible Business Alliance (RBA): An organization that promotes CSR in the supply chain.
Konica Minolta Procurement Policy
The Konica Minolta Group pursues customer satisfaction by creating innovative products and services that contribute to the development of society, according to our management philosophy, “The Creation of New Value.” In procurement activities, we establish firm partnerships with our suppliers based on fairness and transparency, and aim to build a sustainable society by fulfilling social responsibilities with our suppliers.
We will build transparent and reliable relationships with our suppliers and manage procurement in an open manner, while sharing objectives from a long-term and global perspective.
We will carry out transactions under the principle of free competition with rational evaluation criteria, and seek mutual benefit with suppliers.
We will have a global outlook and carry out procurement in the regions that best suit our operational needs.
We will comply with all relevant laws and regulations, corporate ethics, and internal policies and regulations.
We will contribute to the international society and local communities by striving to take the lead in environmental protection, while reducing the impact of our operations on ecosystems.
Request to Suppliers
Based on strong partnerships with our suppliers, we ask our suppliers to focus on the following areas in order to increase customer satisfaction and fulfill social responsibilities.
- Excellent quality
Ensuring the safety of products and services, including compliance with the safety standards of each country and region, and improving quality to meet the demands of customers
- Reasonable prices
Pursuing prices with market competitiveness
- Response to changes in demand
Developing a stable supply system that can respond flexibly to changes in demand
- Compliance with laws, regulations, and corporate ethics
Complying with all laws and regulations of each country and region, and with corporate ethics
- Environmental protection
Undertaking environmentally conscious business activities and material procurement
- Respect for the human rights of workers
Respecting basic human rights, including the prohibition of child labor, forced labor, and discrimination based on ethnicity, gender, and any other grounds
- Health and safety
Providing safe and clean work environments
- Information security
Continuously improving information security
- Firm management foundation
Building a firm management foundation to ensure a continuous and stable supply of materials
April 1, 2014
Konica Minolta, Inc.
President and CEO
Structure for Promoting CSR Procurement
Establishing a structure for promoting CSR procurement throughout the supply chain
Konica Minolta has established a group-wide structure for promoting CSR procurement and addressing conflict mineral issues in order to fulfill its social responsibility across the entire supply chain.
Konica Minolta’s CSR procurement promotion structure is incorporated into its environmental management system, and they are both run by an executive officer. Under this structure, Konica Minolta reviews group-wide progress related to CSR procurement and conflict mineral issues and agrees on targets and action plans.
Konica Minolta’s structure for promoting CSR procurement