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
Growing together based on mutual trust
Promoting “green procurement”
Contribution to the local economy
Compliance with relevant regulations and maintenance of confidence
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
【TOPICS】2019 Supplier Appreciation Meeting
On May 20, 2019, the 2019 Supplier Appreciation Meeting was held at Nagoya Tokyu Hotel, with a total of 377 suppliers invited, including 10 from outside Japan. Under the theme of the 2019 meeting, “Smile,” DENSO shared its continued commitment to manufacturing for its future; strengthened its partnerships with suppliers; and pledged to promote initiatives for global change together. An awards ceremony was also held at the General Meeting of Suppliers to celebrate exceptional suppliers.
Comments from Award Winners in 2019
Supplier of the Year—Nichia Corporation
We began supplying LEDs to DENSO in earnest around the year 2000.
It is a great honor to receive our second Supplier of the Year award from DENSO, with which we have launched new products. Receiving such an award helps to heighten the motivation of all parties.
Going forward, we will incorporate the approach of the Toyota Production System to focus on reducing waste while concentrating our efforts on measures that generate added value and cost competitiveness from the production floor.
Top Performance Award - NDICA INDUSTRIES PVT. LTD.
We are greatly honored to receive the Top Performance Award. There has been a great response to receiving the award from all of our factories. All of our employees are proud to receive recognition from DENSO, which is known for QCD, Kaizen, and unceasing progress.
Going forward, I believe that the further promotion of Kaizen in the areas of quality, cost, and delivery will be required. We will promote the local procurement of materials to further heighten cost competitiveness.
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.