A global procurement and sales network based on a spirit of cooperation and fairness
Yamaha Motor products are created through collaboration with numerous suppliers in Japan and other countries. In response to an expanding procurement and sales structure due to business globalization, the Yamaha Motor Group is working to establish cooperative relations with various business partners and dealers in Japan and overseas based on a spirit "mutual trust and prosperity.” For this reason, we strive to conduct fair business in compliance with the competition laws of all countries and regions while working to create partnerships that aim for mutual, sustainable growth.
As a Kando Creating Company, Yamaha Motor provides new excitement and a more fulfilling life for people all over the world, delivering unique, highly functional, high-quality products for use on land, on water, and in the air. To continue to do and build upon this, we consider it essential to take a broad, global view for our procurement of many types of high-quality parts and materials.
This is the thinking underlying our Basic Purchasing Policies, in which Yamaha Motor commits to “conduct fair trading, based on trust and cooperation, and to constantly strive to build better relationships with suppliers through activities to improve quality, price, delivery times, and other factors.” We have also implemented the policies in the five areas of an open door policy, just/fair trade, compliance/non-disclosure, respect to global environment, and mutual trust/prosperity.
The Basic Purchasing Policies and Procurement Policies for Sustainability serve a vital role as the foundation on which all procurement-related considerations must be based, including new transaction contracts, procurement activities and continued deals.
"Co-creation" is our expression for the approach where Yamaha and its business partners work together to create new value.
In our supply chain, we place great importance not only on "procurement through buying" but also on "procurement through creating" where we create new value and competitiveness together with our business partners.
One example of this is the deployment of "theoretical-value-based production*" among our business partners. This is a system where we analyze and set absolute values for production activities together with the suppliers and strive to increase value. To promote this, Yamaha Motor has dispatched employees as "theoretical-value instructors" to train its business partners. We are currently expanding the application of “theoretical value” beyond manufacturing processes to cover all activities related to procurement, including energy saving, as well. To help this system take root, we are also training supervisors who will work as employees of our business partners.
When it comes to quality, we send employees out to provide instruction on concepts and methods of quality control and we also train supervisors as we do for "theoretical-value-based production."
Furthermore, as the next stage of theoretical-value-based production, we are collaborating creatively with our business partners to apply smart factory technology and train the human resources needed for digital strategies. We have also begun an initiative where we incorporate cost price reduction ideas, suggestions for increasing value and the concerns and wishes of our business partners from an early stage in the development process. This kind of co-creation with our business partners plays an important role in improving the quality of the whole supply chain, and we believe that we must give it even greater importance going forward.
*Theoretical-value-based production: A method for improving production efficiency by analyzing the various tasks involved in production, designating only the tasks that truly create value as "value tasks" and endlessly striving to make the current situation meet that ideal. Unlike standard methods that work through the repeated elimination of waste from the current situation, theoretical-value-based production first analyzes and establishes value tasks in theory and then works on improvements to turn theory into reality. At present, we are employing that theoretical value-based approach not only in production but also in distribution and environmental energy.
Under the Yamaha Motor Group’s Basic Policies of Sustainability, we ask our business partners to support the intent of the policies and to act accordingly. To have suppliers engage in sustainability activities that enable them to respond appropriately to the demands and expectations of society, our Sustainability Guideline for Suppliers informs our business partners around the world of our policies with regard to issues including safety and quality, human rights and working environment, consideration for the environment, risk management, and thorough compliance from the perspective of the environment, society, and governance (ESG), and we obtain a Commitment form from each business partner and promote sustainability activities throughout the entire supply chain. We have covered an area of over 90% of the worldwide purchase value base.
When selecting and concluding contracts with business partners, we have established ESG standards that we use to make decisions in the selection process. Moreover, we take corrective measures regarding business partners who cannot meet our ESG requirements, keeping the option open to cease placing new orders with them if necessary. Additionally, based on our mindset that business partners are important partners that support the whole supply chain, we select them from the perspective of providing safe products for customers and society, and prioritize not only the financial amount but also quality and the procurement process.
Business partners are evaluated every year by the buyers in charge of them, using a comprehensive evaluation sheet that includes not only quality, delivery times, costs and technological capabilities but also governance, safety, human rights and other ESG factors. Business partners who do not meet a certain standard are requested to take corrective measures, and we encourage them to establish plans and make improvements, providing support by sharing information and implementing programs.
To build a stable procurement network, we use a supply chain risk management system to reveal the entire supply chain from raw materials to the finished procured parts and then strive to analyze and counter risk factors. We are also developing structures that accompany the initial response, such as building support systems for fast recovery from damage. We are also expanding our stable procurement system to counter global procurement risks in case of emergencies.
We will create a structure for business partners to evaluate the matters stated in the Sustainability Guideline for Suppliers themselves and confirm their effectiveness. Based on issues identified through this process, our subsidiaries in each region will create a risk control activity schedule outlining improvements for the entire supply chain. Information will be shared with the headquarters to help manage progress.
As part of our environmental efforts, we are working with our business partners to control and reduce substances of concern and use natural resources and energy more efficiently in accordance with our Green Procurement Guidelines.
From 2018, we incorporated information about chemical substances collectively stipulated by the automobile industry into the Yamaha Motor Technical Standards. We are ensuring that our business partners are aware of and thoroughly compliant with them.
We are working to strengthen our control structure to be able to obtain evidence for conformity with the Yamaha Motor Technical Standards, which is required for drawings and specifications, and deal with the regulations of all countries.
In response to climate change, we have declared a goal of carbon neutrality by 2050. Starting with our business partners in Japan, we plan to understand and visualize the amount of CO2 emissions at each company and then implement specific reduction strategies that fit the actual situation.
In 2019, we had a third party assess the labor environment including issues of human rights abuses at three Indonesian companies. In 2021, we collaborated with a third-party organization specializing in human rights and carried out discussions for identifying human rights risks. A decision was made to focus on foreign technical interns, who are working in Japan where our corporate headquarters is located. Foreign technical interns are at the center of attention in Japan. Questionnaires were sent to all business partners who had received the guideline commitment form, and we conducted assessments together with three business partner companies in Japan. And, we interviewed the foreign technical interns of the three companies upon advice of the third-party organization. In 2022, we followed up the three companies and added an assessment of one company. The results revealed no issues with forced labor, overwork or safety and hygiene, and we were able to confirm that positive working and personal relationships had been established. Based on detailed reports obtained from the third-party organization, we provided feedback and made suggestions to relevant business partners, and they are working to resolve any issues.
Furthermore, to mitigate the human rights risks in mineral procurement such as child labor or forced labor and conform to the U.S.A's Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), since 2013 we have been investigating the conflict minerals (gold, tin, tantalum, tungsten) included in the parts we purchase.
As our contact point with customers around the world, dealerships play an important role in conveying Yamaha’s “next Kando.” By strengthening relationships with dealers through regularly held dealer meetings and activities to promote safe driving and support local communities, the Yamaha Motor Group is building a sales network that provides common value.
In Japan, dealers mainly in Yamaha Sports Plaza (YSP), an official Yamaha sports bike dealer system, and Yamaha Motorcycle Sales Japan Co., Ltd., play an important role in building ties with local communities and society by cooperating in a range of measures including motorcycle infrastructure development, motorcycle etiquette training, motorcycle recycling, tree planting, and other environmental campaigns, as well as fundraising for seeing-eye dog training.
Furthermore, to boost awareness and our activities related to sustainability, we have created opportunities from 2020 at dealer meetings in Europe, which has where there is a high awareness of sustainability, to explain the importance of sustainability.