Working Together with Suppliers
Cooperative relationships with suppliers based on trust are indispensable for the promotion of sustainable procurement. ROHM Group is strengthening bilateral ties through close communication with them.
Briefing for Promoting CSR Procurement
The briefing provides an opportunity for ROHM to explain directly to suppliers on our expectations for CSR procurement, contents and plans of procurement activities.
An information exchange meeting is held for suppliers to deepen cooperation as a partner, such as ROHM Group's financial results and future business strategies.
Evaluation of Suppliers
1. All Suppliers
・Comprehensive Evaluation of Suppliers
ROHM Group comprehensively evaluates the activities of the suppliers once a year. The results of CSR procurement self-assessment, as well as the product quality, delivery time, price cooperation, and the status of BCP efforts are comprehensively evaluated and feedback are given to each suppliers.
ROHM Group has set a goal of conducting a comprehensive activity evaluation for all suppliers that account for 90% of annual purchases by 2025.
|Achievement Target for 2025||Achievements in Fiscal 2020||Targets for Fiscal 2021|
|90% or more||89.8%||90% or more|
In addition, we have set a goal of conducting a comprehensive activity evaluation for 100% of our critical suppliers by 2025.
|Target achieved (in 2025)||Achievements in Fiscal 2020||Targets for Fiscal 2021|
・CSR Procurement Self-Assessment
To confirm the progress of our suppliers’ CSR activities, each year, we ask them to carry out self-assessments as found in the Responsible Business Alliance (RBA) Code of Conduct. The self-assessments requested are on labor (including human rights), health and safety, the environment, ethics and their management system and procurement business continuity plan. These requests are made to the suppliers of ROHM Group production companies, including those located overseas. In FY2020, we made a request for self-diagnosis to and received responses from all 1,538 suppliers in Japan and abroad. In fiscal 2020, we achieved our goal of raising the percentage of highly evaluated (A and A-) supplier self-diagnosis results to 80%.
We will continue to work with suppliers and promote CSR activities so that the percentage of those with A or A- evaluation marks can be raised to 80% by 2020.
< Results of Assessments of ROHM Group Suppliers >
|Year||No.of Companies Surveyed||Percentage of Rating A, A- (5 Steps)|
Details of the assessment results of the suppliers that ROHM (non-consolidated) deals with are as follows. In the past three years (2018-2020), we conducted assessments of on-site residents.
< Results of FY2020 Assessments of ROHM (non-consolidated) Suppliers >
|Total Number||Assessment Results
Last Three Years
|Of which, Sustainability
High-risk Suppliers (*)
|Of which, Those
Stationed on the
*Sustainability high-risk supplier :
A supplier who is ranked B or lower in the self-evaluation of "labor (including human rights)", "safety and health", "environment", "ethics", "management system" and "procurement BCP".
< Breakdown of Resident Agents on the Premises >
(Unit : Companies)
< Results of Self-assessment Surveys of 15 Suppliers >
(Unit : Companies)
|A : 4.50～5.00||1||2||1||3||1|
|A- : 4.00～4.49||2||2||1|
|B : 3.00～3.99||1|
|C : 2.00～2.99||1|
|D : 1.99～|
ROHM Group has set a target of obtaining a B or higher rating from all suppliers who account for 90% of annual purchases by 2025.
|Targets for Fiscal
|90% or more||89.4%||90% or more|
- ※The evaluation is stratified into five levels as shown in the table below, based on the average score of each self-assessment response item (full 5 points).
2. Our Criteria Suppliers
The assessment results of critical suppliers are as follows. In addition, ROHM also defines important suppliers as follows.
< Ratio of Critical Suppliers Among Tier1 suppliers >
|Tire1 Suppliers (*)||Total||Ratio|
|Of which, Critical
*Only ROHM non-consolidated figures are included.
< Total Number of Critical Suppliers and Monetary Ratio to All Suppliers >
|Critical Suppliers||Total Number||Ratio|
< Results of Assessments of Critical Suppliers >
In the self-evaluation of "labor (including human rights)", "safety and health", "environment", "ethics", "management system" and "procurement BCP", ROHM ranks B or lower as a "high-risk supplier". The results of the 2020 assessment are as follows.
|Assessment Results||Of which, Sustainability
|On an Annual Basis||Last Three Years|
・ Achievement Target for 2025
We will work to ensure that 100% of critical suppliers are self-assessed by 2025. Based on the results of the SAQ implemented in FY2020, we will implement the following initiatives in FY2021 for 20 important Tier1 suppliers and 8 non-critical Tier1 suppliers (*).
*Excludes transactions between ROHM Group affiliated companies. In addition, we carry out self-assessment for 4 companies throughout the year, but in order to achieve the above target, we increased the number of self-assessment companies to 8 in FY2020.
< Efforts for 2020 Evaluation and Improvement of Critical Suppliers (FY 2020) >
|Measures to Improve the Level of Critical Suppliers|
|A : 4.50～5.00||17||6||Suppliers who meet the required level of ROHM CSR Procurement Guidelines with high standards are requested to provide feedback on the results and maintain the current level.|
|A- : 4.00～4.49||2||2|
|B : 3.00～3.99||1||0||Require suppliers who have not met some of the requirements of ROHM CSR Procurement Guidelines to make improvements. In doing so, support for improvement will be provided as necessary.|
|C : 2.00～2.99||0||0||CSR audits are conducted for suppliers that do not meet the requirements of ROHM CSR Procurement Guidelines. Identify risk factors through audits and request measures for improvement. In doing so, support for improvement will be provided as necessary.|
|D : ～1.99||0||0|
In fiscal 2021, we will evaluate 3 major Tier1 suppliers and 1 nono-Tier1 supplier that were not identified in the FY 2020 survey.
CSR Procurement Audit
In ROHM Group, we identify our main suppliers, and conduct direct visits and dialog with them. We verified the self-assessments along with factory conditions and implemented improvements as necessary to communicate ROHM Group's CSR Procurement Policy, approach to ROHM Group’s CSR Procurement, importance of consideration for environment, safety and human rights, and activities - with the goal of obtaining greater understanding and approval. In addition, we also conduct CSR procurement audit to 40-50 suppliers across ROHM Group each year to implement corrective actions if needed. In fiscal 2020, due to the impact of the COVID-19, we only conducted audits of 17 suppliers (including Web audits). We are promoting the spread and penetration of ROHM Group’s CSR Procurement, and then works on planning improvement actions for all suppliers who have conducted audit.
< Number of Suppliers Audited >
|Year||Number of Suppliers Audited|
- ※target : suppliers of all ROHM Group (domestic and overseas production site)
BCP of Procurement
As part of the Business Continuity Plan (BCP), ROHM Group deepens its cooperation with suppliers from normal times to maintain a system that can be quickly restored, and prepares alternative materials, so as not to interrupt customers' business even in emergency situations.
1. Definition of Risk in the Procurement Department
ROHM Group has established a Risk Management and BCM Committee to manage risk in each department. In addition to the four existing risks of quality, delivery, cost and compliance, the procurement Division also evaluates risks in stable supply and their impact, and checks the state of responses to the key risks identified each quarter.
2. Selection of suppliers
As also asked in the Basic Stance Requested of suppliers, information is shared across the entire supply chain, including our suppliers, during times of emergency. We therefore select suppliers who can do so and respond in a way that ensures a continuous supply. Furthermore, when entering into business relations, we respectfully ask suppliers for the understanding of our basic stance, and to submit written pledges.
3. Implementation of BCP Survey
To make it possible to quickly check whether suppliers are affected by a disaster, their safety and the status of supply in the event of an emergency, the manufacturers and manufacturing sites of parts and materials procured are investigated and recorded in a database. Efforts are being made to obtain an overall understanding of the BCP conditions of the supply chain by expanding the scope of these investigations to secondary suppliers.
In fiscal 2020, we achieved 100% of the production base survey implementation ratio of tier 1 suppliers in the main materials under the control of ROHM head office. In addition, with the aim of strengthening the BCP management system, in 2021 we expanded the scope to include auxiliary materials and some consumables under the jurisdiction of ROHM Group, and set the following goals.
Target for 2025
in Fiscal 2020
・BCP Initiatives for Critical Suppliers
[Prior Agreement on Emergency Response]
In addition to having important suppliers take the above-mentioned measures, we are exchanging a memorandum of understanding stating that ROHM will be given priority in supplying materials in the event of an emergency.
|Targets for Fiscal
Compliance Hotline for Suppliers
ROHM Group has established a "Compliance Hotline for Suppliers" as a contact point where suppliers can consult and report compliance issues related to transactions.
ROHM and other ROHM Group companies are advised to contact us if there is any behavior or behavior that violates the law or becomes an ethical issue. If the reporting is for a legitimate purpose, we will not treat the reporting person disadvantageously by reason of the reporting.