LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality for everyone, everywhere.
LIXIL seeks to ensure stable product supply and responsible procurement by identifying related risks and working closely with business partners.
LIXIL’s procurement is based on the Ten Principles of the United Nations Global Compact (UNGC) in the four areas of human rights, labour, environment, and anti-corruption. In accordance with the UNGC principles as well as our Procurement Principles and Procurement Compliance Policy, we seek to build sound partnerships with global suppliers to carry out procurement activities. Our LIXIL Code of Conduct also specifies the ethical behavior that is expected of all our staff, including prohibition of bribery.
Meanwhile, our Supplier Code of Conduct compiled in FYE 2018 requires that suppliers respect human rights, observe international labor standards, preserve the global environment, and ensure fair business conduct. At the same time, we request that they demand equivalent standards from their own suppliers.
Additionally, in January 2020, we created Green Procurement Guidelines outlining our policy and standards for procuring parts and materials that exert the least impact on the environment. We ask our business partners to understand and support our environmental initiatives and procurement activities based on these guidelines.
LIXIL is committed to responsible procurement.
Our Supplier Assessment Standards used to select business partners include criteria in the following areas: quality, cost, delivery, technical capabilities, and ability to deliver stable supply; environmental consciousness, such as sustainable use of resources and proper control of chemical substances; human rights; and labor safety. We require new business partners to understand and accept our Supplier Code of Conduct. Once suppliers are selected, we also conduct assessments of their products.
LIXIL Corporation ascertains the compliance of new business partners by checking written responses to surveys of labor management, occupational health and safety, anticorruption, and other practices.
In addition, we have established the Green Procurement Guidelines, which set policies and standards for procurement of parts and raw materials with less impact on the global environment, and ask for the understanding and cooperation to our environmental activities and procurement activities in line with the guidelines.
① Establishment of Environmental Management System
② Abidance by Environmental Compliance
③ Thorough Management of Chemical Substances
④ Reduction of Greenhouse Gas Emissions
⑤ Conservation of Water Resources
⑥ Promotion of Resource Recycling
⑦ Conservation of Biodiversity
We also conduct regular inspections of our existing partners. LIXIL employs the process outlined below to designate important suppliers, which will be prioritized when sharing procurement policies, conducting surveys, and checking progress towards improvement.
Based on transaction value, approximately 90% of LIXIL Corporation suppliers are located in Japan, followed by China, Austria, and Thailand. For major suppliers in Japan, we hold annual meetings to explain responsible procurement policies and request cooperation with surveys.
LIXIL identifies supply chain risks by conducting responsible procurement surveys and checking subsequent progress. Survey results form part of the basis for selecting suppliers or determining whether to continue business with an existing partner.
Details of the process are outlined below.
(1) Select suppliers to be surveyed based on previous year’s transaction value, etc.
(2) Conduct responsible procurement surveys for chosen suppliers, covering CSR management, fair business, human rights, labor, occupational health and safety, conservation of the global environment, and contribution to the community.
(3) Compile survey results, classifying suppliers with substandard conformity rates as high-risk.
(4) Manage high-risk suppliers individually to encourage improvement.
For suppliers classified as high-risk through this process, we provide site visits and other forms of individual guidance that help promote sustainable partnerships and strengthen our supplier base, the primary goals of our supply chain management strategy.
LIXIL Corporation reviewed its responsible procurement survey in FYE 2019. The new 47-question survey is easier to understand because it dovetails more closely with our Supplier Code of Conduct, revised in FYE 2018, and enables online responses. This has lightened the survey load for both suppliers and LIXIL’s procurement department, allowing efforts to be focused on improving any problems that are uncovered. The widening of the survey scope in Japan resulted in a lower conformity rate for FYE 2020, and we are working to improve this rate by offering guidance on potential improvements.
GROHE is also utilizing the same framework to help specify and mitigate risks.