Strengthening Supply Chain Management
Reason for Priority
It is widely recognized that, within the product supply chain – covering every stage from raw materials and component procurement through manufacturing, logistics, inventory management, sales and product usage through to disposal after use – there is a global problem with respect to human rights violations, unsatisfactory working conditions, environmental destruction, and issues relating to conflict minerals, and these issues are particularly likely to affect raw materials procurement and tier 2 and tier 3 suppliers. Business enterprises are expected to aim for sustainable procurement, and to contribute towards the resolution of social issues by expanding the scope of their management activities to include not only the tier 1 procurement partners of the enterprise itself and its group companies, but also the supply chain in its entirety.
The Nikon Group has for some time now been working to optimize our supply chain through procurement reform aimed at building the foundations for continued growth. The recent COVID-19 epidemic has had a major impact on the Nikon Group’s procurement activities and, looking at society as a whole, it is clear that poverty-related human rights and labor issues have been exacerbated, making it even more important to pay due attention to supply chain management. At this time when changes in the social environment are accelerating, it is more vital than ever to strengthen the business relationship between Nikon and our business partners, and to aim for an enhancement of our procurement capabilities. By taking solid, optimized procurement infrastructure as the foundation, and by collaborating with and engaging in dialog with our procurement partners, the Nikon Group seeks to address social issues such as those relating to conflict minerals, in order to contribute towards the building of a sustainable society.
Corporate Vice President
General Manager of Production Technology Division
Chairperson of the Supply Chain Subcommittee
Main initiatives and results in the fiscal year ended March 31, 2020
Strengthening management through centralized handling of procurement information
The Nikon Group recognizes the importance of building appropriate procurement systems and optimizing the supply chain, so as to be able to respond rapidly and correctly to developments in today’s rapidly-changing business environment. To achieve this goal, it is vitally important to put in place a database that permits centralized management of procurement information throughout the Group.
In the fiscal year ended March 31, 2020, we established a cloud-based system to serve as the procurement information infrastructure for the Nikon Group. We completed the collection of procurement partner data for the Asia region (including Japan), and began system operation. In the fiscal year ending March 31, 2021, we intend to focus on expanding the scope of management to include procurement partners in Europe.
In addition, we will be working to strengthen supply chain management by utilizing the system’s business continuity planning (BCP) function for data collection, management and utilization of the information of tier 2 and lower suppliers.
Corrective action in relation to procurement partner CSR risk
Ratio of important procurement partners that are classed as high-risk
The Nikon Group has established the Nikon CSR Procurement Standards, and we ask our procurement partners, as well as their own suppliers, to act in a responsible manner. In order to verify the current situation and reduce CSR risk, we implement CSR assessments targeting those companies that account for the top 80% of transaction volume. On the basis of analysis of the assessment results, we implement CSR audits and request that corrective action be taken.
As of March 31, 2020, the percentage of important procurement partners that are high-risk had been reduced from 20% to 11%.
Nikon Sustainability Report
For more details, please see the Nikon Sustainability Report.