Supply Chain

Stable Procurement of Raw Materials and Supplies

The AGC Group carries out extended risk management of materials sourcing in order to ensure stable supply. The system defines “critical material” through 12 different criteria depending on its criticality to manufacturing operations, lack of alternative sources, and so on. The Group manages these critical materials according to three levels of priority depending on the business risk.

The list of critical materials is annually reviewed, incorporating social and economic factors, and the Group implements counter-measures to reduce related procurement risks, such as through the qualification of alternative suppliers.

Promoting Supply Chain Management

As a corporate enterprise that contributes to a sustainable society, the AGC Group is implementing initiatives designed to address human rights and labor practices, as well as to solve various environmental and social issues across the entire supply chain, including efforts with suppliers. The Group has emphasized the importance of corporate social responsibility in its AGC Group Purchasing Policy, and is encouraging suppliers to incorporate the policy and cooperate in its enforcement. At the time of making new contracts or renewing contracts with suppliers, the Group applies the most up-to-date contract formats containing CSR-related conditions.

In 2015, the Group distributed AGC reports to 239 of its main suppliers, including those outside Japan, as a means to promote the AGC Group Purchasing Policy and request cooperation.

AGC Group Purchasing Policy

(established in 2009)

AGC Group values the idea of the Group Vision “Look Beyond” and the “AGC Group Charter of Corporate Behavior” and will regulate our performances on purchasing which are explicitly stated in the following “AGC Group Purchasing Policy”.

1. Basic Purchasing Principle

  1. Fair & Equitable trade
    Our procurement policy is to consistently search for innovative technologies, product and services with a “Fair” and “Equitable” manner globally.
  2. Compliance to related Laws & Regulations, and Pro-environment behavior
    AGC Group will comply with the applicable laws and regulations of each country where our procurement takes place, and give due regard to safety and environment.
  3. Partnership
    AGC Group will establish a long-term, mutual prosperous partnership, based on our shared vision, to produce a better product with our business partners. To this end, we shall endeavor to keep close communication with our business partners to build and enhance our trusting relationship.
  4. Protection of information, intellectual property and other assets
    AGC Group will properly manage and protect the proprietary information, intellectual property and assets of our business partners while procuring goods and services.

2. Criteria for Selecting Business Partners

AGC Group will apply key criteria to evaluate and select business partners, as follows.

  1. Sound management, Steady supply and Flexibility to match with the fluctuating demand.
  2. Appropriate Quality, Pricing, Delivery date punctuality and technical service level.

3. Expectation of Business Partners

The AGC Group strives to be a company trusted by all its stakeholders, a company that meets the expectations of the world business community to grow and develop responsibility, and a company that significantly contributes to a healthier global society.

Essentially, CSR activities are performed on voluntary basis initiated by each individual company. However, for the AGC group, to pursue the CSR policy, it is imperative for all the supply-chain linked companies to pursue their individual CSR activities as well. Accordingly, to enable us to jointly work with our business partners, we kindly ask our partners to understand our policy and to cooperate.

The factors related with our Business Partners are,

  1. Concentrate to supply products and services with good quality, considering Safety & Environment and Compliance to Laws & Regulations of each country.
  2. Secure and proper managing of Proprietary information and Intellectual property.
  3. Not to be engaged to forced labor or child labor and never tolerate infringements of human rights.
  4. Make efforts to environment preservation and ensuring safety and security.
  5. Maintain adequate level of occupational health and safety.

Conducting a CSR Procurement Survey

The AGC Group began surveying its suppliers in 2013 in order to determine their status of implementing CSR activities. Guidelines and questionnaire forms standardized group-wide were prepared when drafting the survey, which was designed to confirm what CSR initiatives are being undertaken by suppliers, as well as whether or not designated CSR departments have been established and managers appointed, and if CSR policies and promotional frameworks have been put in place. It also checked whether suppliers have experienced related problems or violations, and how they handled such cases.

In 2013, AGC Asahi Glass carried out a survey for suppliers, who collectively account for about 60% of all purchases made by major sites of AGC Asahi Glass in the region. Similar surveys were implemented for major suppliers of Group companies in Europe and North America in 2014, and were expanded to a portion of Group companies in Asia in 2015. Also in 2015, on-site surveys regarding the survey answers were implemented as part of product quality audits for certain suppliers.

Supporting Training Programs for Business Partners

The AGC Group conducts its business in cooperation with a large number of business partners, and implements a range of measures with the entire supply chain.

AGC Asahi Glass holds CSR workshops for its major business partners every other month, plans visits to superior plants, shares each company’s CSR activities and holds lectures twice a year. In 2015, it hosted lectures regarding mental health and tours of
Faites Hall (Note 1), a facility established inside the AGC Monozukuri Training Center. In addition, it works in close cooperation with business partners on the safety promotion activities, whose purpose is to improve the level of safety and health activities, and the safety supervisors from each company participate.

The Group also holds seminars for business partners, with a view to fostering quality manufacturing and personal growth throughout the supply chain.

  • (Note 1) A facility that houses thirteen examples of failures regarding past labor accidents, quality and R&D.
Policy Briefing for Business Partners Hosted

A commemorative photo with business partners who received the CEO award

A commemorative photo with business partners who received the CEO award

The AGC Group has held an annual briefing session for business partners since 1997 in order to deepen communications with its partners, and expand and unify its business activities across the supply chain.

The Group invited about 200 business partners for the 2015 AGC Supplier Award ceremony. On the day, top suppliers were presented with letters of appreciation for their ongoing cooperation, and the Group CEO gave a presentation on AGC plus, the Group’s management policy. Following the meeting, a lively exchange of views took place involving everyone who attended, together with AGC Group division heads and executives.

Promoting Green Procurement

The AGC Group promotes green procurement, which combines environmental awareness with standard criteria of procurement. In 2005, the Group formulated the AGC Group Integrated Green Procurement Guideline, which provides a common approach for all business divisions. In accordance with these guidelines, green procurement guidelines for each business divisions were created to facilitate green procurement of raw materials and other materials suited to each business.

Initiatives Related to Conflict Minerals

Taking Conflict Minerals issue as an important CSR issue, the AGC Group improves transparency in the supply chain together with its business partners, ensures responsible mineral sourcing practices. By doing so, the AGC Group fulfill its social responsibility as a global enterprise.

With the passage of the financial reform bill in the United States in July 2010, targeted companies are now obligated to disclose use of designated minerals (so-called conflict minerals) mined in the Democratic Republic of the Congo and surrounding countries. For responsible sourcing, the AGC Group will take appropriate measures to work with its business partners in the event that there are concerns that any conflict minerals mined in the designated areas assist militant groups.

Ombudsman System for Purchasing

The AGC Group introduced the Ombudsman System for Purchasing in 2004, which has been a critical part of the Group’s efforts to ensure transparency in its procurement activities and prevent misconduct. Under this system, business partners who encounter problems in dealing with AGC Group employees can notify in writing the General Manager of the Purchase and Logistics Division. Every effort is made to hold such reports strictly confidential while taking immediate steps to solve any identified problems.

Taking Steps to Implement a Satisfaction Survey for Our Business Partners

Business partner questionnaire

Business partner questionnaire

Since 2008, AGC Asahi Glass has conducted a satisfaction survey by way of a questionnaire targeting major business partners, which is designed to help the Group build relationships of trust with its business partners and create a mutually beneficial environment that leads to the creation of better products.

Now that respondents know the survey will remain anonymous, the comments received are candid and honest. In 2015, the Group conducted a satisfaction survey among approximately 200 of its business partners, with whom the results of the survey were subsequently shared.

Going forward, the Group will make operational improvements based on the opinions collected in the surveys.

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