The Global Procurement Company works with some 14,000 suppliers worldwide to realize value that’s useful to customers. Our role in the years ahead is to build fair, appropriate, and sustainable supply chains by pursuing mutual prosperity with suppliers who share our values, not only financially but also in terms of environmental and social responsibility.
Creating new value and tackling social challenges together
As an organization, the Panasonic Group has shifted from a vertically integrated business in which most parts were sourced from within the Group, to a horizontally specialized business in which we source from suppliers big and small around the world. In response, the role of procurement has also changed dramatically over the past decade. Given this new structure, we recognize our social responsibility to build a sustainable supply chain with the cooperation of suppliers.
An illustrative example of these efforts is the ECO-VC activity, begun in 2009. This awards suppliers who propose ideas that add value to products not only by reducing costs but also by reducing CO2 emissions, or using minimal or recycled resources. Participating suppliers work closely with us from the design development stage, and have submitted 700 proposals annually on average. Together, these proposals and supplier partnerships have cut some 500,000 metric tons of carbon dioxide — a substantial contribution to climate mitigation.
Addressing human rights and labor issues in the supply chain, such as child and forced labor, is another priority. Since 2016, we've evaluated new suppliers using self-assessments of efforts made on human rights, health and safety, the environment, and ethics, and included a CSR clause in the first business contracts. Simultaneously, we had all existing suppliers outside of Europe and the US conduct the self-assessment during a two-year period. When necessary, we’ve conducted field surveys and urged corrective actions to ensure fair, appropriate, and sustainable transactions. And we’ve made the same commitment in our Clean Procurement Declaration, by which we adhere to higher standards of moderation and ethics in our relationships with suppliers.
Using our BCP system to meet stakeholder expectations on supply chains
Some client companies require strong business continuity planning (BCP), which includes our supply chain, in case of a natural disaster or other disruptive event. To satisfy these customer requirements, we've already built a system that enables us to report operational impacts of our first-tier and second-tier suppliers, including damages and their ability to continue supplying parts, within the first 24 hours of an event. Going forward, we plan to expand this system to third-tier suppliers and suppliers further upstream.
By strengthening management of sustainability information, we aim to expedite our responsiveness to the entire range of supply chain issues.
While building an effective system is not easy given the size of our supply chain, we hope that by promoting fair, appropriate, and sustainable practices with suppliers we will have an important impact on the Sustainable Development Goals (SDGs).