Striving for Reciprocal Growth and Mutual Prosperity

To enable the building of better cars, Mazda believes in the importance of forging long-term, stable relationships with suppliers that are mutually beneficial. To this end, Mazda arranges a wide range of opportunities for the active exchange of information and takes steps to promptly brief suppliers on medium- to long-term business strategies and on matters related to sales and production.

We organize roundtable conferences with supplier executives once a year to explain our purchasing approach, annual liaison meetings with representatives of front-line business divisions and departments, and a monthly Supplier Communication Meeting. Through these meetings, we explain our priority measures and make requests relating to environmental protection and compliance matters. At Supplier Communication Meetings, besides distributing the My Mazda internal company magazine and the Mazda Technical Reviewl that introduces internal data on new research and technologies, we distribute special forms on which suppliers express their opinions, which we use to improve the way these liaison meetings are managed.

Furthermore, together with supplier-managed Purchasing Cooperative Organizations, we engage in close communication and strive for coexistence and mutual growth and prosperity for all parties.

Evaluating and Recognizing Suppliers

Every year, surveys are conducted from various perspectives to clarify Mazda's business status with each supplier. These studies assess the advisability of continuing the business relationship as-is and the necessity of remedial guidance. The results of these evaluations are passed on to our suppliers.

Based on these evaluations, we recognize suppliers demonstrating comprehensive excellence, particularly suppliers that excel in quality.

During FY2007, we gave awards to 66 parts suppliers and 11 materials suppliers. Two of these companies were recommended for the World Excellence Award, bestowed on Ford Motor Company's top business partners.

Expanding the Scope of Supply Chain Management

Mazda distributes a "Request for Total Compliance with Labor Related Laws" to strongly urge its suppliers to prioritize compliance with the law and corporate ethics.

We also value environmental performance in supply chain management and take measures to encourage green procurement activities. We have drafted guidelines for green procurement activities and urge our suppliers to create environmental management systems.

In FY2007, in accordance with Automobile Manufacturing Industry Transaction Improvement Guidelines, along with the goal of making these guidelines common knowledge internally, we asked at a briefing session for our primary business partners, the 342 companies that participate in Supplier Communication Meetings, and through them, to our secondary and tertiary business partners, to broadly propagate these guidelines. Also, we distributed Supplier Communication Documents to all of our business partners in Japan requesting strengthened initiatives to make these guidelines thoroughly and commonly known.

• Promoting Green Procurement

Supporting Suppliers' Business and Quality Enhancement Activities

To ensure mutual prosperity with its suppliers, Mazda believes it is important not only to make requests, but also to offer support.

An example of what we mean by giving guidance on business and quality enhancement is our Japan - Achieve Best Cost (J-ABC) initiative for suppliers that handle particularly large volumes. Mazda employees visit the plants of local suppliers to pinpoint wasteful and problematic manufacturing processes and discuss remedial measures.

Furthermore, we organized the J-ABC Tricks of the Trade Dojo to promote the ideas: "Don't gamble money, excel at creativity, and make work more fun" in accordance with our J-ABC activities.

In FY2007, we organized the 3rd J-ABC Tricks of the Trade Dojo between June and October 2007, enacting programs such as Theory (lecture on using text messages), Practice (lecture-based manufacturing), on-site guidance meetings, results announcement meetings and on-site inspection meetings, with the goal of raising productivity at each company.

Support for Suppliers' Human Resources
Development

Through its quality assurance and improvement guidance for local suppliers, Mazda supports human resource development at suppliers by organizing "Mazda Quality Classes" for their younger and mid-career employees who head quality and manufacturing divisions and departments. At these classes, through the examination of quality request documents and the study of actual cases of defects, as well as the exchange of opinions with attendees, Mazda is able to deepen understanding of its approaches to quality and hone perceptiveness in overall quality management.

These classes were held 11 times during FY2007, attended by 96 employees from 48 supplier companies. Responses in questionnaires filled in by participants indicated generally positive evaluations of the classes such as, "Now I understand the Mazda Group's initiatives for raising quality." Mazda plans to further enrich course content with Schedule Assurance Evaluation and Everyday Management (managing transitions, outsourcing, etc.) in response to strong attendee demand.

Carrying out Quality Management Training

Mazda has long organized Mazda Quality Training targeting local suppliers. This initiative, concentrated on staff at the core of suppliers' quality enhancement activities, provides an introduction to and training in improvement pathways and techniques from various quality control perspectives, empowering suppliers as quality enhancement leaders and advisors.

Previously, this course has been held near the end of the fiscal year, but since the start of FY2007 courses have been evenly spaced and the number of attendees from suppliers has more than doubled to over 200 people.