The DENSO Group's Procurement Policies

As a global corporation with operations in 35 countries and regions, DENSO aims for optimum procurement and purchases of components, materials, and equipment worth ¥2.7 trillion from some 7,400 suppliers each year (with a local procurement rate of about 80%).
DENSO has established five policies, shared by all Group companies, based on the principle of open, fair, and transparent transactions. Accordingly, DENSO has made an explicit commitment to an “open door policy” that provides opportunities for suppliers to participate in its business in a fair manner without regard to national origin, company size, or previous transaction history. DENSO is also committed to undertaking efforts to realize mutual development by designating suppliers as equal business partners and to comply with Japan’s Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and the laws and regulations of each country and region in which the Company is active.

As the global procurement Head Office, DENSO CORPORATION coordinates with the procurement departments of each overseas regional headquarters to promote local procurement.

DENSO uses its corporate website and its various opportunities for face-to-face interaction, including platforms for dialogue and the Supplier Appreciation Meeting, to share information on procurement and other policies and foster communication in order to facilitate mutual growth with its suppliers in the midst of global competition. The Company has also created the Constitution Assessment Program for Suppliers (CAPS) in an effort to strengthen partnerships. DENSO utilizes this program to help suppliers reinforce their business structures and to recognize outstanding supplier performance.
At overseas Group companies, the procurement departments of each regional headquarters are playing a central role in working through discussions with individual suppliers to deepen mutual understanding and establish policy to further the development of all parties.

In September 2020, DENSO CORPORATION announced the Declaration of Partnership Building, a framework introduced by the Cabinet Office and the Ministry of Economy, Trade and Industry in Japan. This declaration was adopted for the purposes of achieving coexistence and co-prosperity throughout the supply chain, creating new partnerships that extend beyond existing company size and business relationships, and ensuring compliance with desired business practices. Going forward, DENSO will continue to form new partnerships and achieve coexistence and co-prosperity with all of its suppliers in order to provide even more value throughout the supply chain.

At DENSO, our procurement divisions distribute the Code of Conduct for DENSO Group Associates, which clearly outlines the standards of conduct for each and every employee, to all members of the Group in order to entrench the principle of open, fair, and transparent transactions. At the same time, we distribute the Business Etiquette for Buyers, which lays out standards of behavior that should be adhered to within procurement activities, to all employees involved in procurement, thereby working to further increase awareness of such standards.
Moreover, we encourage suppliers to utilize our Internal Reporting System. We also ensure strict compliance in a variety of ways, including distributing the DENSO Compliance Declaration, which clarifies items to be observed in conducting business, to suppliers and procurement departments.

For DENSO, suppliers are a partner with whom we strive to achieve growth and foster trust through open dialogue and ongoing communication. In addition to spreading knowledge on and rigorously enforcing appropriate transactions both internally and externally, we have been working to create environments that make it easy for suppliers to voice their concerns and to alleviate said concerns. Going forward, we will make efforts to strengthen partnerships with suppliers and continue to offer customers fulfilling products and services through the procurement of parts, materials, equipment, and services that are superior in terms of quality, technology, cost, time to delivery, and environmental and safety compliance. In these ways, we will work toward mutual growth with our suppliers. DENSO will remain committed to establishing a positive economic cycle that encompasses all stakeholders, from customers to suppliers.