common_css

communication_title

Working Together with SuppliersSupply Chain Management

communication_main

Supplier Selection Criteria

ROHM Group has adopted the RBA Code of Conduct to pursue sound and sustainable procurement activities. Cooperation with suppliers is essential for promoting CSR procurement activities based on the RBA Code of Conduct.

When selecting suppliers, we make decisions based on rational criteria such as quality, price, delivery time, stable supply, environment, finance, human rights, and ethics, as described below. In addition, ROHM Group distributes the ROHM Group Supply Chain Management Guidelines, which specify ROHM Group's approach to CSR procurement, to all suppliers and requests them to promote activities based on the guidelines.

Supplier Selection Criteria

  • 1. Promotion of ROHM Group Supply Chain Management Guidelines
  • 2. Conclude "basic transaction contract" that encompasses the RBA Code of Conduct
  • 3. Properly ensure the quality, price, and delivery date of materials and services
  • 4. Stable supply capacity and ability to flexibly respond to fluctuations in demand
  • 5. Supply continuity plan to prepare for unforeseen circumstances, such as the occurrence of natural disasters
  • 6. Technological capabilities that can contribute to the product
  • 7. Sound business conditions
  • 8. Responsible mineral and green procurement to meet our demands
  • 9. Appropriate management and protection of confidential information obtained through transactions with us

Supply Chain Overview

ROHM Group's supply chain is as follows. (FY 2022)

Ratio of Suppliers by Region
Ratio of Purchase Amount by Region

Identifying Critical Suppliers

ROHM Group recognizes suppliers particularly important for business continuity as “Critical Suppliers”.

In identifying critical suppliers, we target suppliers of main materials that have fulfilled the certification conditions for all suppliers. In addition to the essential condition of agreeing to ROHM Group Supply Chain Management Guidelines, the selection criteria include procurement amount, product-specific risks, critical materials (or parts), and handling difficult-to-replace materials. In 2022, we selected 23 companies, and in 2023, we plan to add country-specific risks to the selection criteria.

Flow of Selection of Critical Suppliers

重要お取引先様選定フロー 重要お取引先様選定フロー

【 Measures for All Suppliers 】

When selecting suppliers, we request and support continuous improvement through establishment support of environmental, social, governance, quality, and BCP management systems and evaluation of their operation.

【 Measures for Critical Suppliers 】

We ask our critical suppliers to comply with the RBA Code of Conduct requirements to ensure sustainable transactions. Specifically, we request that suppliers aim to obtain an A or A- rating in the CSR Procurement Self-Assessment. In addition, through reviews of self-assessments conducted by suppliers, interviews, and audits, ROHM provides support to identify and improve our suppliers’ issues. We also report the results to the company management through management reviews to ensure the management of business continuity risk.

In order to promote sustainable procurement, it is essential to have a relationship of trust and cooperation with suppliers.
ROHM Group strives to strengthen these relationships through close communication with suppliers as well as evaluation and audit programs.

Assessment and Audit Program
1.Comprehensive Activity Evaluation
  • ①Product quality
  • ②Delivery time
  • ③Price
  • ④Continuity of supply
    *BCP initiative evaluation, financial evaluation by external evaluation organizations
  • ⑤Results of CSR procurement self-assessment shown below
2.CSR Procurement Self-assessment Self-evaluation of Labor (including human rights), Health and safety, Environment, Ethics, and Management systems that are in accordance with the RBA Code of Conduct, as well as ROHM‘s original items of Information security, Procurement BCP, and Logistics.
For suppliers identified as high-risk sustainability suppliers, ROHM provides support for corrective actions and improvements.
3.CSR Procurement Audits Through dialogue with suppliers, ROHM checks the contents of self-assessments, checks factories, and requests improvements as necessary, with the aim of gaining their understanding and endorsement of the ROHM Group's policies and approach to CSR procurement, the importance of consideration for the environment, safety, and human rights, as well as the content of our activities.
4.Procurement BCP Assess risks and their impact on stable supply, and quarterly check the response status to the identified critical risks.

Comprehensive Activity Evaluation

ROHM Group comprehensively evaluates its suppliers' activities, including the CSR Procurement Self-Assessment results described in the next section, as well as their product quality, delivery time, price, and BCP initiatives. The comprehensive evaluation is conducted at the following times.

  • 1)When selecting suppliers and concluding contracts
    If suppliers do not reach the minimum score set by ROHM in the CSR Procurement Self-Assessment, they cannot enter into a contract with ROHM until you do so.
  • 2)Periodically (once a year)
    We comprehensively evaluate our suppliers' activities over the course of a year and provide them with feedback. If suppliers do not receive the minimum score set by ROHM within a certain period of time, they will be excluded from the contract.
Subject 2020 2021 2022
Number of Companies Evaluated ROHM 242 205 203
Number of Companies Evaluated ROHM Group - - 1549

< Achievement target for the comprehensive evaluation of activities >

ROHM Group has set a goal of having all of its suppliers, which account for 90% of its annual purchases, undergo a comprehensive evaluation of their activities by 2025.

Achievement Target
(Year of achievement: 2025)
Subject Target for FY2022 FY2022 Actual Target for FY2023
90.0% or more ROHM Group - 79.2% 80.0%

< Measures for Critical Suppliers >

We will work with our important suppliers to achieve 100% implementation of the comprehensive evaluation of their activities by 2025.

Achievement Target
(Year of achievement: 2025)
Subject Target for FY2022 FY2022 Actual Target for FY2023
100% ROHM 100% 100% 100%

CSR Procurement Self-Assessment

Every year, ROHM Group asks suppliers to self-evaluate their CSR activities regarding Labor (including human rights), Health and safety, Environment, Ethics, and Management system as specified in the RBA Code of Conduct, as well as ROHM's original items of Information security, Procurement BCP, and Logistics, to check the progress of their CSR activities.
The ranks are assigned based on the overall score of the self-assessment, and suppliers’ ESG risks are identified.
We recognize critical suppliers with a rank lower than B and other suppliers with a rank lower than C as sustainability high-risk suppliers, and we request each supplier identified as a sustainability high-risk supplier to take corrective action and provide support for improvements.

< CSR Procurement Self-Assessment Process >

CSR Procurement Self-Assessment Process

< Self-assessment Achievement Target >

ROHM Group has set a goal of having all of its clients, which account for 90% of its annual purchases, achieve a rank of B or better by 2025.

Achievement Target Subject Target for FY2022 FY2022 Actual Target for FY2023
90% or more (in terms of value) ROHM Group 65% 78.3% 80%

< Self-assessment Evaluation Criteria >

Rank A+ A- B C D
Average Score 4.50~5.00 4.00~4.49 3.00~3.99 2.00~2.99 0~1.99

< Self-assessment results for suppliers >

Subject FY2020 FY2021 FY2022
Number of companies evaluated ROHM Group 1538 1603 1848
Percentage with a rating of B or higher
(in terms of value)
- - - 78.3%

We calculated the average score for each section of the FY2022 CSR Procurement Self-Assessment by industry, and the results are as follows.

< Percentage of ROHM (Non-consolidated) Suppliers (Resident Vendors on Premises) Conducting Assessments >

FY2020 FY2021 FY2022
Total Assessment
Results
of which
Sustainability High Risk Suppliers (*)
Total Assessment
Results
of which
Sustainability High Risk Suppliers (*)
Total Assessment
Results
of which
Sustainability High Risk Suppliers (*)
Manufacturing
Contracting
1 1 1 1 1 1
Security 2 2 3 3 2 2
Cafeteria 4 4 1 5 5 4 4
Cleaning 2 1 2 2 2 2 2 1
Equipment & Facilities 5 5 2 2 5 5
Other 3 2 6 5 4 4 2
Total Number of
Companies
(Percentage)
17 15
(88%)
1
(7%)
19 18
(95%)
2
(11%)
18 18
(100%)
3
(17%)

Sustainability high-risk suppliers:
Suppliers with an overall rating of C or below in the CSR Procurement Self-Assessment in the areas of "Labor (including human rights)," "Health and safety," "Environment," "Ethics," "Management system," "Information security," "Procurement BCP," and "Logistics" and who are judged to have negative impacts on sustainability aspects

< Assessment results for ROHM (non-consolidated) suppliers (resident contractors on premises) >

FY2020 FY2021 FY2022
A+ A- B  C  D  A+ A- B  C  D  A+ A- B  C  D 
5.00

4.50
4.49

4.00
3.99

3.00
2.99

2.00
1.99
5.00

4.50
4.49

4.00
3.99

3.00
2.99

2.00
1.99
5.00

4.50
4.49

4.00
3.99

3.00
2.99

2.00
1.99
Manufacturing Contracting 1 1 1
Security 2 3 2
Cafeteria 1 2 1 2 1 2 1 1 2
Cleaning 1 2 1 1
Equipment & Facilities 3 2 1 1 2 1 2
Other 1 1 3 1 1 1 1 2
Total 8 5 1 1 0 10 3 3 2 0 6 3 6 3 0

< Total Number of Suppliers and Critical suppliers, Value Percentage, and Assessment Results >

FY2022
Total Percentage of Total
Suppliers
Number of Significant Suppliers with Conducted Assessments Number of SustainabilityHigh-risk Suppliers Of which, Number of High-risk Suppliers, with Corrective and Remedial support Provided Of High-risk Suppliers, Number of Suppliers whose Contracts Were Terminated
Tire1 Supplier 148 - - 1 0 0
Of which, Critical Suppliers 18 80.20% 18 1 0 0
Suppliers other than Tire1 - - - 0 - -
Of which, Critical Suppliers 5 12.20% 5 0 - -

The above table covers ROHM on a non-consolidated basis only.

< Evaluation and Improvement Initiatives for Critical Suppliers >

Evaluation Criteria FY2020 FY2021 FY2022 Measures to Improve the Level of Critical Suppliers
Critical Tier1 Suppliers Suppliers besides Critical Tier 1 Suppliers Critical Tier1 Suppliers Suppliers besides Critical Tier 1 Suppliers Critical Tier1 Suppliers Suppliers besides Critical Tier 1 Suppliers
A+:4.50~5.00 17 6 16 4 13 4 No special action taken
A-:4.00~4.49 2 2 4 3 4 1
B:3.00~3.99 1 0 0 1 1 0 Request improvements to obtain A- or better.
Provide support for improvement as necessary..
C:2.00~2.99 0 0 0 0 0 0 Identify risk factors, and request and provide support for improvement.
D:~1.99 0 0 0 0 0 0

Correction and improvement activities are planned in FY2023 for one significant Tier-1 supplier that ranked B in the FY2022 survey.

CSR Procurement Audits

ROHM Group conducts CSR procurement audits in accordance with the RBA Code of Conduct.
The audits are conducted by CSR procurement staff in a second-party audit format, with on-site or online document checks and factory and dormitory inspections.
Audits are conducted on ROHM Group’s critical suppliers at least once every three years, and the scope of audits is reviewed every three years.
If corrective actions are deemed necessary during the audit, ROHM consults the suppliers and has them prepare and submit an improvement plan. Until the corrective action is completed, ROHM provides follow-up for the supplier.
The CSR procurement audit is not only a means of ascertaining the actual situation but also an opportunity to communicate the ROHM Group's policies, CSR procurement policies, and activities to suppliers, as well as a training opportunity to deepen mutual understanding of CSR activities with suppliers.

< CSR Procurement Audit Results >

Subject FY2020 FY2021 FY2022
Number of Suppliers Audited ROHM Group 17 9 13

target : suppliers of all ROHM Group (domestic and overseas production site)

Web-based audits in FY2021.

< CSR Procurement Audit Results >

Subject Number of audited
(2020-2022)
FY2020 Actual FY2021 Actual FY2022 Actual
Number of Suppliers Audited ROHM 15 4 2 9

We conducted audits of 100% of critical suppliers from 2020 to 2022.
We are planning to audit 19 companies from 2023 to 2025.

CSR Procurement Internal Education

ROHM conducts training on the CSR Procurement Self-Assessment Program for buyers and other relevant internal personnel every year. In 2022, training was conducted for 61 members of the ROHM Group Procurement Department.

CSR Procurement Internal Education

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.

①Definition 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.

②Selection 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.

③BCP Initiatives

In order to be able to promptly confirm the damage, safety, and supply status of our suppliers in the event of an emergency, we are researching and compiling a database of information on the manufacturers and manufacturing locations of procured parts and materials.

< Survey of Tier-1 Suppliers‘ Production Sites >

We are currently conducting a survey of all materials, equipment, and parts procured from tier-1 suppliers, with the goal of conducting a survey of 100% production sites by FY2025 so that we can instantly identify the scope of impact in case of an emergency. The results of these efforts are numerically managed as the “tier-1 supplier production site survey ratio“ and are monitored annually.

Target for
2025
Target for
2022
FY2022
Actual
Targets for
2023
Main Materials 100% 30.0% 31.0% 60.0%

・BCP Initiatives for Critical Suppliers

[Prior Agreement on Emergency Response]

In addition to the measures mentioned above with suppliers who handle critical materials, ROHM Group is promoting efforts to ensure that ROHM and suppliers agree in advance on how to respond to emergency situations. ROHM has set a goal of achieving 100% prior agreements by FY2025. We manage our efforts' results numerically as the "prior agreement rate for contingency measures" and conduct yearly monitoring.

Achievement Target(Year of Achievement: 2025) Target for FY2022 FY2022 Actual Target for FY2023
100% 10.0% 45.9% 60.0%

New_company localNavi.js

New_company common.js

questionnaire.html

Questionnaire

We want to hear
your opinion.

Click Here