Society
Strengthening Supply Chain Management
Various Policies Regarding Supply Chain Management
Supply Chain Management
Sustainable Procurement Structure
Sysmex provides accurate test results and sound security by delivering high-quality products to the world. We ensure a stable supply of products and services based on our social mission to support healthcare. Strengthening supply chain management has been identified as a materiality, and the Senior Executive Officer Mitsuhisa Kanagawa has been placed in charge of overseeing risk management for the entire supply chain. He has been promoting sustainable procurement, beginning with supplier evaluations and the drafting of remedial plans. Furthermore, CSR survey response rates, the number of training sessions for suppliers, and other factors were set as sustainability targets, and the status of their related initiatives is reported to the Managing Board semiannually.
Supplier Screening and CSR Surveys
At Sysmex, taking into account the importance of sustainable procurement, we identify significant suppliers through desk assessments on supplier risk. For significant suppliers that have been identified, we conduct a CSR survey annually and monitor their status of sustainability-related initiatives.
In addition to procurement costs and difficulties in substitution with alternatives, desk assessments also take into account geopolitical risks, manufacturing country risks, competing risks* in securing raw materials for the production of medical products, as well as other ESG risks (i.e., human rights and labor practices, management of chemical substances in products, GHG emission responses, and corruption such as bribery). When selecting new business partners, we verify risks using a CSR survey that includes ESG criteria. In particular, by rapidly identifying high-risk materials, we avoided major supply issues amidst the COVID-19 pandemic from 2020 to 2023 and the dispute in Ukraine, providing a stable supply of diagnostic reagents to our customers.
For CSR surveys, we use the CSR/Sustainable Procurement Self-Assessment Tool Set developed by Global Compact Network Japan. This covers a wide range of issues such as human rights, labor practices (including the health and safety of employees), corruption, and the environment. We do not conduct business with new partners having inadequate CSR initiatives. In addition to CSR surveys, we hold management interviews with new business partners, and we undertake the same sort of initiatives for overseas partners. In particular, personnel in charge of procurement make local visits to determine the status of child labor and workplace environments in order to confirm that no problems exist. Furthermore, we review CSR survey results with buyers during the annual evaluation of business partners and ensure that supplied parts come from business partners with low-risk levels in the CSR surveys. We have been implementing CSR surveys of business partners since 2013 and of secondary business partners since 2021 with the support of our primary business partners.
Each Group company also conducts regular surveys of its business partners. Sysmex Europe and Sysmex America conduct sustainability surveys of all new business partners covering areas such as human rights and green procurement. Jinan Sysmex Medical Electronics holds quarterly meetings with its business partners to assess risks, in addition to environmental and occupational health and safety surveys. Sysmex Wuxi encourages its business partners to strengthen their environmental and safety management when carrying out periodic risk assessments.
- Responses for Each Type of Risk:
Geopolitical risks: Surveys were conducted for products manufactured in Europe at the onset of the dispute in Ukraine and for products manufactured in South Korea and northern China when North Korean risk was rising.
Manufacturing country risk: Surveys were conducted for diagnostic agent containers and disposables, leading to procurement from various countries.
Sector-specific risks (competing risks in securing raw materials): Surveys were conducted for glass bottles, rubber stoppers, biochemical buffering agents, raw materials for PCR, and raw materials for cultivation.
Results of CSR Surveys
The CSR survey conducted in fiscal 2024 for primary raw material suppliers maintained a high response rate of 94%, consistent with the previous fiscal year. We also analyze the results of the CSR surveys from the previous fiscal year and provide feedback to the business partners surveyed. By disclosing the average scores of companies in the same raw materials category, we help them identify their strengths and weaknesses. For items with existing risks, we encourage corrective actions and work together to advance improvement activities.
CSR On-Site assessment and Cooperation for Supplier’s CSR Initiatives
Sysmex conducted on-site assessments of eleven primary suppliers between fiscal 2022 and fiscal 2024 to further strengthen supplier risk management. When risks are identified, we request improvements and ask suppliers to submit improvement plans. In addition, with cooperation from Tier 1 suppliers, we expanded our CSR surveys of Tier 2 suppliers. During the three years since fiscal 2022, we have conducted CSR surveys of 195 Tier 2 suppliers.
In conducting these surveys, we provide survey formats and aggregation services to Tier 1 suppliers, thereby enabling them to conduct CSR surveys while reducing their burden.
Improving the Quality of Supplied Parts and Raw Materials
Sysmex provides a quality assurance agreement that clearly states our requirements for the quality of goods and concludes agreements with business partners after confirming their understanding of our procurement policy. We perform quality assessments of supplied goods and audits of business partners regularly to ensure that proper quality control is being carried out.
Conducting Briefing Sessions and Meetings for Suppliers
Sysmex strives to strengthen its relationships with trading partners by holding annual briefing sessions for our suppliers to ensure their understanding of our business and procurement policies.
At the fiscal 2022 CSR briefing session, we introduced examples of CSR initiatives of other companies to encourage initiatives that are in line with a single company’s size. In fiscal 2023, we hosted a briefing session for suppliers to explain our newly formulated long-term corporate vision, supply chain policies, and eco-social strategies. The session was well attended, with approximately 250 companies and 500 people. In fiscal 2024, we held an SBT briefing session and a study session on the importance and practice of calculating greenhouse gas emissions. We are actively working to reduce CO2 emissions across the entire supply chain.
We also hold regular meetings with overseas business partners to strengthen collaboration. Sysmex Europe periodically holds meetings with all of its business partners to check their compliance with Sysmex’s environmental and social responsibilities, as well as details of business activities. Sysmex Malaysia holds monthly meetings with local distributors to discuss customers’ needs and issues, aiming to improve product quality and customer satisfaction.
Compliance with Procurement-Related Legislation and Training for Persons in Charge of Procurement
Sysmex uses an electronic procurement system to prevent undue price reductions and product returns. In October 2020, we announced a declaration of partnership building and have been working to increase added value across the entire supply chain. Additionally, in observance of desirable transaction practices between large procuring enterprises and subcontractors (promotion standards based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises), we are proactively taking initiatives to correct transaction and business practices that hinder the building of partnerships with business partners.
To enable this, since fiscal 2023, we have been providing training on the revised standards of the Subcontract Act promotion standards, as well as on passing on costs such as raw material and labor expenses. In addition, the procurement departments at our domestic Group companies receive training related to the declaration of partnership building, the Subcontract Act, and the roles of companies placing orders in CSR activities. For new employees in the department, we conduct training on procurement policies, CSR procurement, and procurement risk.
Initiatives for the Optimization of Working Hours for Transportation and Logistics Work
In response to the Work Style Reform Law for transportation and logistics work, which comes into effect on April 1, 2024, we have stopped same-day shipping of normal temperature reagents and consumable goods and have changed to shipping the day after the order is received.* Through these efforts, we are eliminating cargo waiting times that lead to overwork by truck drivers. We are also mechanizing the handling of heavy loads to improve the working environment for warehouse workers and conducting surveys on respect for human rights, thereby proactively addressing the so-called “2024 problem” in logistics.
- We have been offering same-day order placement and next-day shipping for refrigerated reagents, equipment, and other products as before.