Overview of Supply Chain

Panasonic does business with approximately 10,000 companies worldwide.

Around 70% of these business partners are located in Japan and China. Industry-wise, 34% of them supply machined parts. Panasonic promotes activities with its global business partners across its entire supply chain in order to achieve its CSR-related goals.

Breakdown of Transactions by Region (%)

Japan 39%, China 34%, ASEAN & India 18%, North America 5%, Europe 3%, Latin America 1% Japan 39%, China 34%, ASEAN & India 18%, North America 5%, Europe 3%, Latin America 1%

Breakdown of Transactions by Product (%)

Machined Parts 34%, Raw Materials 24%, Electric / Electronic 23%, Other 19%

Management System

With a rising global demand for socially responsible procurement—taking into account the environment, human rights, satisfactory labor conditions, and fair trade—we strive to conduct our business with suppliers in a way that not only provides excellent technology and quality, but also fulfills our social responsibility, including towards human rights and labor, occupational health and safety, green procurement, clean procurement, compliance and information security.

Panasonic considers the CSR initiatives in our procurement department vitally important, and we regularly conduct management reviews.
In order to increase understanding of CSR procurement and raise awareness of employees involved in procurement activities, we have created internal rules and manuals on CSR procurement, and disseminated the necessary information via handouts, the company’s intranet and training sessions.

We ask each of our suppliers to agree to Panasonic Supply Chain CSR Promotion Guidelines, which bring together our management philosophy, CSR procurement policies, and other matters with which we want our suppliers to comply. We also ask them to perform CSR self-assessments before we start doing business with them. Additionally, we enter into a Standard Purchase Agreement with suppliers, which includes CSR-related items such as respect for human rights, safe working environments, and consideration for the environment.

Furthermore, in addition to evaluations related to quality, cost, delivery, and service (QCDS) standards and to business performance, we conduct regular evaluations of suppliers’ CSR initiatives.

Regarding conflict minerals, which are sources of funding for organizations involved in unethical practices in conflict areas, such as human rights violations, environmental destruction and corruption, we strive to adhere to the Organisation for Economic Cooperation and Development’s (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Through these efforts, we are working towards the creation of sustainable supply chains together with our suppliers.

Policy

Procurement Policy

Panasonic has summarized its core thinking on procurement in a 3-item set of Procurement Policy. The fundamental basis of this policy is the concept that, based on relationships of mutual trust, and through diligent study and cooperation, our suppliers are invaluable partners in creating the value our customers demand.

  • Implementation of Global Procurement Activities
    The Company globally establishes partnerships with suppliers to respond to production activities on a global scale, and works to create the functions and values our customers demand based on relationships of mutual trust and through diligent studies and cooperation.
  • Implementation of CSR Procurement
    Complying with laws and regulations, social norms, and corporate ethics, the Company promotes procurement activities together with suppliers that fulfill their social responsibilities, such as human rights, labor, safety and health, global environmental conservation, information security.
  • Procurement Activities Working Closely with Suppliers
    In order to achieve product values expected by customers, the Company serves as the contact point of suppliers with respect to information, such as the market trends of materials and goods, new technologies, new materials, and new processes, and works to ensure and maintain the quality of purchased goods, realize competitive prices, and respond to market changes.

Supplier Selection and Evaluation

When selecting new suppliers, Panasonic makes it a condition of doing business that they practice CSR. We conduct checks to verify suppliers’ performance regarding human rights, labor, health and safety, environmental protection and information security. Panasonic requests all suppliers to carry out CSR self-assessments. We conclude Standard Purchase Agreements including CSR requirements and then start trading only with suppliers that confirmed meeting our standards.

Panasonic also conducts CSR self-assessments of existing suppliers, and provides guidance for improvement or awareness-raising activities according to the assessment results.

Clean Procurement

Because Panasonic believes that "a company is a public entity of society", we engage in fair and equitable transactions with our global suppliers. We released in 2004 "Clean Procurement Declaration" aiming for "a more stringent sense of moderation and ethics" in our relationships with suppliers. We strive to carry out procurement activities in accordance with such our standards.

Throughout the year, we keep all our procurement personnel and departments well informed of clean procurement practices and visit our key suppliers to request their cooperation in implementing these practices.

  • Prohibition of receiving money and valuables from suppliers and prohibition of accepting any form of hospitality, entertainment or meals.
    Panasonic established "Rules on Gift and Hospitality for Anti-Bribery / Corruption" in its internal regulations, applied at the global level. These strict rules apply to the acceptance of gifts, meals, entertainment and travel invitations from our business partners, including suppliers.
    They stipulate general rules regarding the rationality and balance in light of the purpose, value and frequency of gifts, meals, entertainment and travel invitations, and local customs, and the absence of improper influence on business judgement. More detailed standards and stricter rules are also set for each region.
  • Establishment of a global hotline
    Panasonic aims to promote fair and equitable procurement activities based on our Clean Procurement Declaration.
    We have created a global hotline to act as a reporting system in the event that any of our procurement personnel or departments have violated any laws or regulations, agreements with suppliers, the Panasonic Code of Conduct, or other procurement rules, or are suspected to be about to do so.
    This hotline is also available to suppliers for the purposes above.

Education

We provide training to our personnel to disseminate fundamental knowledge on our approach to CSR and procurement compliance—including for instance prohibition of forced or child labor. We aim to develop human resources who can fulfill our responsibility to society in the context of procurement operations.

CSR procurement training is divided into two stages: CSR First Grade, which is meant to provide specialized knowledge so that buyers can solve issues when they arise on-site, and CSR Second Grade, which is meant to instill basic knowledge on how to carry out day-to-day procurement tasks while complying with CSR requirements.

In order to be certified as a professional buyer, procurement staff must both take CSR Second Grade classes and pass their test.

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

Number of times training for CSR 1st grade was held

1

2

2

1

2

Number of students who attended the above training

10

12

11

9

12

Number of times training for CSR 2nd grade was held

2

4

5

7

6

Number of students who attended the above training

99

174

248

278

194

Responsible Executive and Framework

The executive in charge of procurement is Yoshiyuki Miyabe, Senior Managing Executive Officer and Chief Manufacturing Officer (CMO) (as of August 2020).

The department responsible for responsible procurement activities is Panasonic’s Global Procurement Company. Each of our Divisional Companies, as well as their business divisions and other affiliated companies have their own procurement departments.

The Global Procurement Company collaborates with these Divisional Companies’ procurement departments to strengthen CSR procurement activities at the Corporate-wide level.

Each Divisional Company and business division follows the PDCA cycle by planning and promoting initiatives in line with Corporate-wide rules and manuals related to procurement operations. Issues that arise in this process are addressed and appropriate solutions devised through discussions during meetings attended by the personnel in charge of procurement functions in each Divisional Company and business division.