Implementing CSR in the Value Chain

Working with Mazda’s Suppliers

Mazda carries out a wide variety of activities in order to achieve mutual growth and prosperity with suppliers and dealerships, both in Japan and overseas.
In line with its basic purchasing policy, Mazda is taking its efforts to build open business relationships and ensure fair and even-handed dealings with its suppliers both in Japan and overseas.
In addition, Mazda is committed to promoting CSR activities aimed at building a sustainable society in full partnership with its suppliers. The Company bases its assessments of business dealings with its suppliers on a comprehensive evaluation that covers not only quality, technical strengths, pricing, delivery time and management approach, but also corporate compliance structure and initiatives for environmental protection.

Basic Purchasing policy

Mazda will, in the fullest sense of coexistence and mutual prosperity, engage in research and production for improved competitiveness. The Company will build open and fair business relationships to ensure sustainable growth and raise its level of contributions for social and economic development. (1994)

Number of Suppliers (As of March 31, 2015)

Automotive parts 533
Materials, etc. 152
Equipment and tools 410
Total 1,095

Purchasing Cooperative Organizations*1
(As of March 31, 2015)

Parts suppliers Yokokai 171
Materials suppliers
(Raw materials, equipment, molds, etc.)
Yoshinkai 81

*1 An autonomous management organization, comprising suppliers that have a certain degree of transaction with Mazda, with the purpose of strengthening relationships between Mazda and its suppliers as well as promoting mutual growth and prosperity.

Measures Based on the Basic Purchasing Policy
  • ■ Mazda extends opportunities to businesses throughout the world, regardless of nationality, scale or history of transactions with the Company.
  • ■ Upon receiving a request to start business with Mazda, Mazda assesses the company in question in a fair and even-handed manner according to its in-house criteria for evaluation of suppliers, and determines the feasibility of a business partnership.
  • ■ Mazda requests that suppliers comply with Mazda Supplier CSR Guidelines and Mazda Green Purchasing Guidelines.
<Examples of Specific Measures>
  • ■ Publishing of the “Request for Thorough Compliance with Labor Related Laws” for all suppliers (January 2005)
  • ■ Briefing sessions for employees and suppliers based on the “Guidelines for Appropriate Transactions in the Automobile Industry” formulated by the Ministry of Economy, Trade and Industry (2008)
  • ■ Clarification of the behavioral guidelines for appropriate transactions by formulating the “Promotion Manual for Appropriate Purchasing” (2008)
  • ■ Posted relative materials to exclusive access site for suppliers in order to continue supplier education (August 2011 -)
  • Example materials: “Behavioral Guidelines on Appropriate Purchasing,” “Causes of and Countermeasures against Problematic Transactions,” “Specific Handling Policies by Each Category of Disputable Transactions,” etc.

Mazda Supplier CSR Guidelines

To promote CSR activities among Mazda suppliers, in July 2010 Mazda created the Mazda Supplier CSR Guidelines with reference to the CSR Guidelines of the Japan Automobile Manufacturers Association. In addition to requesting total compliance with the laws and regulations of all countries and regions, the Guidelines outline six areas such as respect for people including the prohibition of child labor and forced labor, environmental protection and information disclosure, and request that all Mazda suppliers comply with the guidelines in these areas.
For the revision of the guidelines in July 2013, Mazda provided the clear policy toward disuse of raw materials, which should be the cause of social issues, including conflict minerals*2, and also requested suppliers to comply with it. The Mazda Green Purchasing Guidelines, which indicates the detail of the environmental protection area, is separately created and Mazda requests suppliers to comply with them.

*2 Conflict Minerals: Minerals and their derivative metals designated by Financial Regulatory Reform Article 1502 that are sourced from and used as financial source of armed groups in the Democratic Republic of Congo or the surrounding countries (Regulated minerals: tantalum, tin, tungsten, gold)

“Mazda Supplier CSR Guidelines” and “Mazda Green Purchasing Guidelines”

“Mazda Supplier CSR Guidelines” and“Mazda Green Purchasing Guidelines”

Mazda Supplier CSR Guidelines
Mazda Green Purchasing Guidelines

Questionnaire Survey for Suppliers

Aiming to establish a system to understand and evaluate the status of CSR implementation, Mazda conducts questionnaire surveys for its suppliers.

CSR Questionnaire

The CSR questionnaire survey was introduced in FY March 2014 for the purpose of comprehensively determining the status of CSR implementation of suppliers. In FY March 2015, the survey was carried out on 52 local suppliers engaged heavily in transactions with Mazda.

Results of Supplier CSR Survey

FY March 2015

Target: 52 local suppliers

  • ■ Confirmed that around 70% of the respondent suppliers have implemented CSR education.
  • ■ Confirmed that around 60% of the respondent suppliers have checked whether their materials contain conflict minerals.
Survey on Conflict Minerals

Believing that the status of use of conflict minerals should be clarified urgently and in detail, Mazda conducts a separate survey on this issue. In FY March 2015, the Company after a briefing session for 84 suppliers of Mazda and its production site in Mexico, Mazda de Mexico Vehicle Operation (MMVO), a pilot survey on their status of use was conducted.

The Supplier Evaluation System

When starting business with a new supplier, related departments coordinate together to confirm the supplier’s manufacturing site, control mechanisms, management status, CSR initiatives, technological/research & development capabilities, etc. in order to evaluate whether or not the supplier is compliant with the procurement/selection policies of the Mazda Group.
For each long-term supplier, Mazda conducts not only an evaluation based on quality, pricing and delivery status of procured goods or service, but also a comprehensive evaluation on the entire business including its quality control system, research & development system, and technological capabilities. For the supplier quality control system, Mazda employs a system that enables continuous grasping of issues, evaluation of the situation, and provision of guidance for improvement by receiving daily reports on product quality as well as voluntary audit results, and when a supplier is in need of quality improvement, conducts quality auditing that involves on-site confirmation of actual products at both domestic and overseas sites.
Also, Mazda comprehensively evaluates its suppliers every year (235 suppliers in 2014) from the perspectives of quality, cost, deadline accuracy, etc., in order to build more positive business relationships with them, and passes the results of these evaluations back to the suppliers. Outstanding suppliers are recognized with awards. The Company has also introduced CSR-based evaluation, giving special awards to suppliers that have made outstanding proposals on weight trimming, which greatly affects environmental performance such as fuel efficiency.

Supplier evaluation items

When starting business with a new supplier:
When starting business with a new supplier: Quality management system, research & development system, technological capacity, management status, production and delivery capacity

For long-term suppliers:
Quality management system, research & development system, technological capacity, management status, production and delivery capacity, quality of goods or services procured, pricing, delivery status, and other items in Supplier CSR Guidelines

Handling of Business Continuity (BCP) in the Supply Chain

Mazda is presently upgrading and expanding its business continuity plan (BCP) to prepare for risks and avoid long-term suspension of business that would extensively impact society. For procedures when suppliers are affected by disasters, the Company has compiled the Risk Management Procedures for Affected Suppliers, based on which procedures for building a response system, making an initial response, etc. are shared with the suppliers. Assuming a large-scale disaster, risks for each supplier were identified in terms of substitutability, location, and business continuity. By sharing the identified risks, measures against them will be developed. Mazda will continue to enhance BCP, which enables early recovery while placing the highest priority on human life.

Communicating with Suppliers

To enable coexistence mutual growth and prosperity for all parties, along with the overarching goal of building high-quality vehicles, Mazda Group, seeing all the suppliers as its important business partners, takes steps to promptly brief suppliers on medium to long-term business strategies and on matters related to sales and production, and arranges opportunities for the exchange of information on a regular basis.
The Company also maintains close liaisons with supplier-managed purchasing cooperative organizations*3. For example, staff from member companies visit each others’ offices in order to exchange examples of successful approaches and practices through subcommittee activities. For FY March 2015, 124 companies conducted a total of 58 activities.

Lecture at Supplier Communication Meeting “Mazda’s CSR initiatives” (September 2014)

Lecture at Supplier Communication Meeting “Mazda’s CSR initiatives”
(September 2014)

*3 Yokokai member companies: 171 parts suppliers, Yoshinkai member companies: 81 material suppliers
The procurement amount from member companies of Yokokai and Yoshinkai accounts for about 90% of the whole.

Major Channels of Communication with Supplier

Target participants Frequency Aims/content
Roundtable Conference with Cupplier Management Executive-level management at major suppliers Once a year
  • ■ Mazda’s president and CEO explains Mazda’s current status, the problems the Company faces and its policies, after which the general manager of the Purchasing Division explains Mazda’s purchasing policies in order to heighten participants’ understanding of Mazda and gain their cooperation.
  • ■ This conference also deepens friendly ties between Mazda and its suppliers.
Supplier Meeting Representatives of frontline business divisions and departments at major suppliers Once a year

■ Mazda’s specific purchasing policies are explained to representatives of frontline business divisions at suppliers, based on the explanation given at the roundtable conference by the general manager of the Purchasing Division. This helps to promote a better understanding of Mazda and provides useful input for the work that suppliers do.

Supplier Communication Meeting Representatives of frontline business divisions and departments at major suppliers Once a month

■ To facilitate smoother collaboration with its suppliers, Mazda provides them with information such as topics concerning daily operations between Mazda and its suppliers (including CSR), production/sales status, quality status of purchased materials, pilot construction schedules for newly developed models, and mass-production implementation schedules for new models.

Other As needed

■ Mazda also employs a range of other communication channels, by using the in-house “Mazda Technical Review”, highlighting new technologies and research.

Other Measures for Supplier Support

  1. 1. Change to the “milk-run” system: Mazda has shifted from the conventional system, with delivery of parts by each supplier, to the “milk-run” system (MRS), in which Mazda trucks stop at multiple suppliers to collect parts. This system reduces workload in logistical operations and contributes to reduced environmental impact.
  2. 2. Mazda provides advice on joint subscription systems for product liability insurance, which reduces manufacturers’ liability risks for parts.
  3. 3. Mazda provides information on third-party exhibitions and conventions to showcase the latest technologies and manufacturing methods.
  4. 4. Mazda ensures proper return of logistic pallets/containers at suppliers, based on the collaboration between purchasing and logistics related departments.

In-House Education to Ensure Fair Transactions

The following educational initiatives are conducted for those engaging in procurement operations in order to realize fair and equal transactions.

  • ■ Participation in the “Seminar for the improvement of subcontracting transactions” hosted by the National Association of Trade Promotion for Small and Medium Enterprises
  • ■ Administering comprehension tests on the Subcontractors Act
  • ■ Education on financial control
  • ■ Posting of guides and process rules regarding appropriate transactions on the Purchasing Division website on the Intranet