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 6,500 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.
Procurement basic principles
Open door policy
DENSO is open to all suppliers regardless of geographic location.
DENSO selects suppliers through fair competition, quality, technological capabilities, cost, delivery reliability, management organization and approach to kaizen, continuous improvements.
Growing together based on mutual trust
DENSO plans to grow together with its suppliers through relationships based on mutual trust and close communications.
Promoting “green procurement”
DENSO procures the parts/materials with a low impact on the environment from suppliers with environmental consciousness.
Contribution to the local economy
DENSO contributes to local communities as a good corporate citizen through globalization of its operations and the promotion of localization activities.
Compliance with relevant regulations and maintenance of confidence
DENSO's procurement activities thoroughly comply with all relevant rules and regulations. DENSO strictly maintains all confidential information acquired through its procurement activities.
As the global procurement Head Office, DENSO CORPORATION coordinates with the procurement departments of each overseas regional headquarters to promote local procurement.
Strengthening partnerships with suppliers
DENSO uses its corporate website, the Supplier Appreciation Meeting, and other means to share information on procurement and other policies 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.
Overview of Constitution Assessment Program for Suppliers (CAPS)
Supplier Appreciation Meeting
Attended by about 370 principal overseas and domestic suppliers each year
Declaration of Partnership Building
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.
Overview of Declaration of Partnership Building
Coexistence, co-prosperity, and partnerships throughout the supply chain
Desired business practices with suppliers
Support for enhancing the framework of suppliers
Ensuring that procurement departments practice open, fair, and transparent transactions
At DENSO, to instill a mind-set that supports open, fair, and transparent transactions, procurement departments are engaging in awareness-raising activities such as distributing and sharing the Code of Conduct for DENSO Group Associates, which outlines such a mind-set as well as standards of behavior for all employees involved with procurement.
Moreover, at DENSO, we distribute Business Etiquette for Buyers to all employees involved in procurement and encourage suppliers to utilize the Internal Reporting System. We 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.
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.