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. As our procurement and sales structures expand with our increasingly global business, the Yamaha Motor Group is establishing cooperative relationships with suppliers and dealers in Japan and around the world based on a spirit of mutual trust and mutual 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.
- Two Policies Underpinning Procurement
- Structure for Promoting Policy Development
- Important Partners in Supporting the Supply Chain
- Promoting Sustainability Throughout the Entire Supply Chain
- Addressing Human Rights Issues at Suppliers
- Addressing Procurement Risk
- Working Together on “Procurement for Engineering, Manufacturing and Marketing”
- Activities at Dealerships
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 are based on our CSR Procurement Policies, which state, “The Yamaha Group builds trust with its suppliers through positive communication, and strives to realize mutual prosperity.”
The Basic Purchasing Policies and CSR Procurement Policies play an important role as the basis for understanding all aspects related to procurement, from the conclusion of new contracts to procurement activities and ongoing transactions.
For the Yamaha Motor Group, our suppliers are vital partners in supporting the entire supply chain. When it comes to providing safe products to our customers and to society, we emphasize not only volume and monetary value but also quality and the procurement process. In particular, we strive to ensure that suppliers of important parts share and understand our vision and policies, and engage in activities to deliver excitement to our customers. Cooperation with our main suppliers is also important in terms of raising the quality of the entire supply chain, and must be assigned greater priority, going forward.
Under the Yamaha Motor Group’s Basic Policies of CSR, we expect 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 CSR Guideline for Suppliers informs our suppliers around the world of our policies with regard to issues including safety and quality, human rights and work environment, consideration for the environment, risk management, and compliance from the perspective of the environment, society, and governance (ESG), and we obtain a Commitment form from each supplier and promote sustainability activities throughout the entire supply chain. For the Medium-term Management Plan (2019–2021), we provided the CSR Guideline for Suppliers to more than 1,000 suppliers targeting approximately 90% of our global supply chain in purchase value terms, and we received a Commitment form from about 600 of them.
Matters stated in the CSR Guideline for Suppliers are evaluated by the suppliers themselves, and in 2019, the first year of the Medium-term Management Plan, about 60% of the business partners that submitted a Commitment form conducted self-assessments.
Going forward, we will review the figures obtained through self-assessments and incorporate them into our evaluation system for business partners, thereby promoting more effective measures. 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.
Specific environmental activities are covered in the Green Procurement Guideline, and cover ways in which Yamaha Motor works with its suppliers in areas like managing and reducing environmentally hazardous substances and the efficient use of resources and energy. From 2018 uniform information on chemical substances as determined by the automobile industry is included in the Yamaha Motor Technical Standards, to inform suppliers and ensure their thorough compliance. We use the International Material Data System (IMDS) as evidence for conformity with the Yamaha Motor Technical Standards, which is required in drawings and specifications. We have registered 10,000 parts as of the end of 2019. Going forward, we will work to further increase coverage of existing mass-produced parts while enhancing our system with the aim of registering all new parts.
In addition, the Basic Purchasing Contract that we conclude individually with each supplier guarantees legal and regulatory compliance by requesting that suppliers “comply with related laws and regulations, directives, and other guidelines.”
Meanwhile, we invite lawyers to hold workshops on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors for the procurement staff at the headquarters, in addition to other CSR training programs designed to raise awareness.
Approximately 50% (in value terms) of the parts used for our major products are sourced from Southeast Asia, and this region is generally said to be at high risk for human rights abuses. For these reasons, in 2019 we had a third party conduct trial assessments of our suppliers' labor environment including issues of human rights abuses.
Specifically, we chose three suppliers in Indonesia, the largest production base for Yamaha motorcycles, from sectors that are said to be at high labor environment risk, and assessed the status of policy creation and promotion; interviewed top management; investigated labor practices, actual work situations, remedial actions, etc.; and conducted on-site inspections. We fed back recommendations for improvement to the relevant suppliers, tier 1 suppliers that place orders, and our Group companies.
Based on a spirit of mutual trust and mutual prosperity, Yamaha Motor strives to prevent the occurrence and minimize the impact of events related to risks at business partners, including natural disasters, quality problems, and management issues.
With regard to management issues and quality problems, business partners are monitored annually by headquarters, which produces an evaluation of the partner in a total package that covers both business continuity planning and the non-use of environmentally harmful materials. Based on this evaluation, corrective measures are put in place if necessary, and the progress of those measures is confirmed.
In addition, supply chains from beginning to end are registered into a database, and this data is used to track procured parts until manufacturing is completed and to identify risk factors.
In our interaction with the supply chain, we do not simply procure by purchasing; we emphasize procurement for comprehensive engineering, manufacturing and marketing by working with suppliers so that procurement incorporates both cost and quality.
An example of these activities is the implementation of “theoretical-value-based production” with suppliers. This does not simply mean demanding cost reductions, but instead involves analyzing the absolute value of production activities together with suppliers, and then working to find more ways to improve cost competitiveness. In order to promote these activities, Yamaha Motor has trained some employees to serve as “theoretical-value instructors” at suppliers. We are currently expanding the application of “theoretical value” beyond manufacturing processes to cover all activities related to procurement as well. We are also training supervisors at suppliers to ensure that all suppliers’ employees thoroughly understand these policies.
In terms of quality, Yamaha Motor employees visit suppliers to instruct them in the concept and methods of quality management and to train supervisors, similar to how we implement theoretical-value-based production.
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.