Menu

Together with Suppliers

Menu

日本語

In line with its Purchasing Policy, the TOTO Group cooperates with suppliers in procuring raw materials and parts in a sustainable manner. In recent years, overseas suppliers have accounted for nearly 20% of our procurement expenses.

TOTO Group Purchasing Policy

The TOTO Group fulfills its corporate responsibility in all aspects of business management, the environment and society, and carries out balanced activities with the aim of achieving sustainable development of businesses, society and the Earth.
Through fair and equitable purchasing and in cooperation with suppliers, the TOTO Group continues to offer valuable products and services for customers.

Promoting CSR Procurement Together with Suppliers

PDCA Cycle for Supply Chain Management

PDCA Cycle for Supply Chain Management
The TOTO Group implements CSR activities together with all our suppliers. These activities are performed by mainly policy briefing sessions conducted for suppliers, and conducting surveys and on site audits while taking industry and other circumstances into consideration. For our overseas business sites in particular, with the aim of deeper mutual understanding and mutual growth with suppliers, we promote CSR activities that are in line with the conditions of each country while complying with its relevant local laws, regulations and practices. In addition, we actively hold briefing sessions and also monitor suppliers through company visits, while also striving to enlighten them on the necessity of CSR initiatives and support their endeavors. TOTO Group specifies critical suppliers with consideration for the volume of business and non-replaceable or critical parts in an effort to develop a procurement control system.


Suppliers include:

  1. Raw materials and components suppliers in Japan
  2. Raw materials and components suppliers overseas

Structural rate of procurement expenses

A Request to All Our Suppliers

We ask all suppliers that trade with us to comply with the following terms. Our suppliers are also requested to require their suppliers to set and follow similar rules.

Labor

  1. Do not illegally employ children or foreign workers.
  2. Avoid ignoring workers' will and do not coerce their labor.
  3. Observe minimum wage regulations and other laws concerning wages.
  4. Make sure to provide a safe and clean work environment and be mindful of employees' health.
  5. Permit employees to unionize.
  6. Permit group negotiation and consultations with labor unions

Prejudice

  1. Do not exhibit prejudice based on race, sex or any other reason.

Environmental preservation

  1. Engage in efforts to conserve resources and reduce waste.
  2. Do not illegally dispose of waste.
  3. Preserve the environment, such as through energy conservation.
  4. Prioritize the procurement of components and raw materials with small environmental load (green procurement).
  5. Procure raw materials in such a way that considers the effects of the local environment and biological diversity.

Commercial transactions

  1. Do not violate local commercial customs or legal ordinances.
  2. Avoid actions that prevent fair and free competition, such as engaging in cartels or bid rigging.

Achieving Compliance Item Standards

Transactions with suppliers should take place via fair and honest purchasing activities to build a system in which not only quality, cost and delivery date are considered, but corporate social responsibility is upheld in human rights, labor, sanitation and environmental precautions. These conditions must be ensured before transactions execute and are a condition that must be met in order to execute a transaction that achieve compliance item standards.

Responding to Disasters and Other Risks

To strengthen response to natural disasters in recent years, the presence of effects must be assessed immediately when a risk occurs and a system in which response measures can be implemented must be formulated with the cooperation of suppliers.
  1. Assess parts items and manufacturing sites
  2. Set up an office to manage information flows when the supplier chain is broken
  3. Run simulations of emergency measures

Parts and Raw Materials Procurement

Japanese suppliers

TOTO Group implements ongoing assessment and evaluation of CSR activities on the part of our suppliers.
We set requirements and achievement standards for suppliers in Japan who provide us with parts and raw materials used in our products. These must be achieved to make transactions. For fiscal year 2015, we revised the assessment by adding questions about human rights and labor and items to be observed. And we conducted  assessment targeting all suppliers over the past three years from 2015 to 2017. For suppliers who have not fulfilled the compliance items, we asked them to carry out improvement activities. Consequently, all suppliers in Japan have achieved our standards.

FY2017
Target : Achievement rate of compliance items 100%

Assessment items for suppliers

  • 1.Human rights/labor
    • (1) Prohibition of inhumane labor conditions and discrimination
    • (2) Wages and working hours
    • (3) Building constructive labor-management relations
  • 2.Safety/health
    • (1) Employee health management
    • (2) Workplace/facility safety measures
    • (3) Appropriate measures during emergencies and labor accidents
  • 3.Environment
    • (1) Chemical substances management
    • (2) Environmental preservation
  • 4.Information security
    • (1) Security measures against computer network threats
    • (2) Authentication system
  • 5.Supplier management
    • (1) Development at own company suppliers
  • 6.Fairness/ethical conduct
    • (1) Adherence to laws and regulations, prevention of misconduct, early detection system
    • (2) Prohibition of abuse of a superior bargaining position
  • 7.Quality
    • (1) Quality control
    • (2) Quality complaints
  • 8.Social contributions
    • (1) Contributions to local community and society

Result of questionnaire survey

Evaluation index FY2015 FY2016 FY2017
Number of suppliers who have participated in the assessment survey 275 161 140
Accumulated assessment inmplementation rate* 48% 76% 100%
Achievement rate of compliance items 100% 100% 100%
*Assessment implementation rate : Implementation rate by fiscal year when a assessment survey was conducted targeting all suppliers (listed companies and suppliers with whom we plan to discontinue business relationships excluded)

Policy Briefing Session for Suppliers

Policy briefing session for suppliers
Policy briefing session for suppliers
To encourage two-way communication with suppliers and deepen trust, we hold policy briefing sessions. These sessions were held at all Business Divisions in fiscal year 2017 to not only communicate TOTO purchasing policies, but to share production information and explain the importance of CSR as well. Recognition was given and commendations presented to suppliers who contributed to cost reductions, strictly adhered to delivery dates or improved quality.
Participants tell us that this event is conducive in the sense that they can learn about how the TOTO Group handles CSR, and share their peers' attitude toward it and cases that show how they work on it. We build relationships with suppliers for mutual benefit and we pledge to continue to improve efforts in the entire TOTO Group supply chain.

Results of Policy Briefings for fiscal 2017

Overseas suppliers

Discussion with overseas suppliers
Discussion with overseas suppliers
By procuring raw materials and parts from local suppliers, our overseas Group companies are furthering the localization of procurement and conducting community-based procurement activities. We are also actively migrating to CSR procurement.We continue conducting assessment with critical suppliers and remain updated regarding the facts. In FY 2017, we started to conduct a revised assessment that includes questions meeting overseas laws and regulations and social rules, and we will finish the assessment for all our critical suppliers during the two years of FY 2017 and FY 2018.
In addition, we are striving to raise suppliers' understanding of the importance of CSR while also pushing the level of their engagement upward.
There are differences in language, culture, religion, laws and other such factors, but TOTO aims to deepen mutual understanding and operate in harmonious coexistence by pursuing activities suited to the conditions in each country concerned.

FY2017
Target : Achievement rate of compliance items 100%

Result of CSR Assessment Survey for our Critical Suppliers

Monitoring of Local Suppliers

Our overseas group companies promote critical suppliers' CSR monitoring through company visits.
Example of monitoring (TOTO Vietnam)
In 2017, we conducted a CSR monitoring of 16 critical suppliers on-site in Vietnam, and confirmed that they met the standards that TOTO designated through the interviews mainly on CSR assessment items such as human rights, safety and health, environment, fairness and ethical conduct, and quality. We will continue the CSR procurement activities with suppliers.

Procurement Respecting Biodiversity

The TOTO Group positions global environmental preservation as a priority issue. We conduct our business activities with strong environmental awareness and make efforts to preserve biodiversity and achieve sustainable use of resources to help create a sustainable society with our efforts and through our suppliers.

Sustainable Raw Material Procurement Standards were established in 2010. The procurement of earth and stone raw materials and wood materials, from which our staple products are made, is regarded as an critical issue to consider. In addition to human rights, labor and compliance, we take into consideration the effects on the environment and ecosystem in the places where our raw materials are produced, as we pursue the appropriate balance between the sustainable use of resources and stable procurement and push forward with CSR procurement in cooperation with suppliers.

Earth and Stone Raw Materials

For earth and stone raw materials used for plants in Japan, we confirm the legality and sustainability at all mines through assessment or the results of informational interviews via trading companies, including whether TOTO-designated standards concerning reforestation or restoration of areas where mining has ended and measures to prevent pollution of rivers and lakes from mining or tailings are being met.
We visit mines or resource production sites as needed to confirm conditions and confirmed that all mines met our standards.
Evaluation index FY2015 FY2016 FY2017 Target FY2017 Actual
Survey coverage rate* 100% 100% 100% 100%
Achievement rate of compliance items 100% 100% 100% 100%

*Survey coverage rate: Percentage of mines surveyed against all mines that the ceramic sanitary ware plants purchase stone materials from
*Mines targeted: (until 2016) ceramic sanitary ware plants in Japan
         (2017) all ceramic sanitary ware plants in and outside Japan

Assessment items for Mines

  • 0. Mining certificate
    • (1) Mining rights
    • (2) Safety production permit
  • 1. Human rights/labor
    • (1) Prohibition of inhumane work and discrimination
    • (2) Wages and working hours
    • (3) Building good relationship between management and labor
  • 2. Health and safety
    • (1) Health and safety measures at workplaces and facilities
    • (2) Measures to prevent mine collapses and cave-ins
    • (3) Explosives/chemical management etc.
  • 3. Environment
    • (1) Reforestation plans
    • (2) Pollution-control measures for rivers and lakes
    • (3) Administrative guidance, etc.
  • 4. Fair trade and ethics
    • (1) Compliance, preventing misconduct and early detection
    • (2) Preventing abuse of superior bargaining position
  • 5. Quality
    • (1) Quality management
    • (2) Quality complaints
  • 6. Social contribution
    • (1) Contributing to the community and society

Initiatives for keeping rivers clean

Wood Materials
A settling reservoir
As an initiative for keeping rivers clean, TOTO also monitors
sedimentation reservoirs to ensure that the clear water
above the sediment is discharged into the river.

Build a reservoir and release the clear water sitting above the sediment into the river

Reforestation after mining activity has ceased

Reforestation after mining activity has ceased
Mining site
We conduct tree-planting activities in completed mine areas to regenerate forests.

Wood Materials

Illegal logging and excessive logging of forests is a major cause of loss of forests, leading to loss of biodiversity. The TOTO Group has set a target for the percentage of legal and recycled materials used against wood-based materials used in plants in Japan and verifies its results.

FY2017
Target : Composition of Legal materials + recycled materials 100% (Japan)

The results of legality of wood-based materials used in FY 2017 showed that 98% were legal wood-based materials and 2% were recycled materials. Of the legal wood-based materials, 97% had forest certification, and 1% were certified through an accrediting agency system. We also confirmed that the rate of use of legal wood-based materials in overseas plants were 100%.Going forward, we will continue endeavoring to improve the ratio of legal wood-based materials and recycled resources.

Conservation of biodiversity

Use ratio of legal wood-based materials and recycled materials in products

Type of wood used FY2015 FY2016 FY2017
Legal wood-based materials Forest certified materials 52% 89% 97%
Materials certified through an accrediting agency system 17% 1% 1%
Recycled materials 30% 9% 2%
Others 1% 1% 0%