Procurement

Basic Approach and Policy

The Olympus Group aims to strengthen supply chain management (SCM) within the context of business continuity and sustainable value creation. In June 2021, we replaced our procurement policy with a supply chain policy in line with our ESG (the environment, society and governance) initiatives to contribute to sound and fair transactions and the sustainable development of society. In addition, we formulated the Olympus Group Green Procurement Standards, which set out our basic environmentally conscious approach to procurement. Since then, the Olympus Group has disclosed its basic stance on supply chain both internally and externally through its website and training sessions, while strengthening compliance with laws, regulations and social norms. We have also established the "Request to Suppliers" as a concrete guideline for complying with laws, regulations and social norms, including respect for human rights and the elimination of antisocial forces, prohibiting corruption and bribes, promoting fair and lawful transactions, and taking the environment into consideration. In selecting new suppliers, we review their current response to compliance with social norms and environmental issues as one of our screening criteria.
Based on these principles for procurement activities, The Olympus Group strives to create and strengthen good relationships with its suppliers through fair, just and transparent transactions.

Procurement

System, Mechanisms and Initiatives

Sharing Business Strategies and Supply Chain Policy

Olympus is sharing the business strategies and procurement policy of the Olympus Group with our suppliers. Once a year, we hold the Supply Chain Policy Meeting with key suppliers extracted from our business condition, etc. among approximately 1,000 suppliers for each business in Japan.
In FY2021, we canceled onsite meetings with suppliers due to the circumstances around COVID-19 and are planning to hold online meetings in future.

Supplier Survey and Improvement Activities

Once a year, Olympus conducts a web-based survey of its major suppliers around the world with whom we have ongoing business in Japan. The survey covers 121 questions, of which 24 are related to CSR, related to management information, CSR initiatives, and BCPs.
In FY2021, survey was conducted on 826 companies, including overseas suppliers. Responses were received from about 87% of companies. If the survey results show that a supplier does not satisfactorily comply with legal and social norms and environmental protection and needs to improve, on-site audit is conducted, and they must implement corrective actions in order to meet the points listed in our Request to Suppliers. At the same time, wherever possible, we recommend self-improvement actions to prevent the risk of incidents. We conduct studies for risk assessment in collaboration with concerned divisions within the Group.
The Olympus Group designates its important suppliers by region. In Japan, we designate as important suppliers those companies who provide components and services that directly affect the quality of our products.

Key Evaluation Items in Supplier Survey for Initiatives with Suppliers

Evaluation Criteria Details
Management information Corporate information, Financial condition
CSR Compliance with laws, regulations and social norms
Protection of human rights (child labor, forced labor, inappropriate low-wage labor)
Protection of worker rights (labor standards, occupational safety and health)
Protection of the environment (CO2 emissions, waste discharged, water usage, environment-related chemical substances)
Personal and confidential information protection, Intellectual property protection
BCP Business continuity strategy, Manufacturing site information,
Contact information during emergencies and disasters,
Confirmation of supply chain, Confirmation of employee safety
Environment and quality Acquisition of ISO 14001, ISO9001 and ISO 13485
Procurement and process management (5Ms (materials, methods, measurement, machinery, manpower), change information, noncompliant treatments)
Delivery/Cost Production plans, Progress and distribution management, cost reduction activities
System Computer security

Response to Conflict Minerals

One of the effects of the continuing civil war in the Democratic Republic of the Congo (DRC) has been the use of minerals, including tantalum, tin, tungsten and gold, mined in the DRC and neighboring countries to raise funds for armed groups. For many years, this practice has resulted in human rights violations, including child labor, sexual violence and environmental damage. In July 2010 the United States sought to cut off this supply of funds to armed groups by introducing an amendment to its financial regulation law defining these four substances as conflict minerals. Companies listed in the United States that use conflict minerals are now required to submit reports to the U.S. Securities and Exchange Commission (SEC). Other moves by international organizations, governments, NGOs and industry organizations to solve this problem include the publication of the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas by the Organization for Economic Cooperation and Development (OECD).
The Olympus Group upholds international efforts to resolve the problem of conflict minerals. On behalf of the Olympus Group, Olympus participates in a committee established by the Responsible Minerals Trade Working Group of the Japan Electronics and Information Technology Industries Association (JEITA). Working together with suppliers, such as by discussing the conflict minerals at procurement policy meetings, we ensure transparency in our supply chains and continue the procurement of parts and materials that does not cause human rights violations.

Education for Adhering to the Subcontract Act

The Subcontract Act is regarded as one of the important applicable laws by Olympus, and Olympus engages in a wide range of activities to ensure compliance. The participation rate for the Subcontract Act e-learning programs for all employees of Olympus and its Japan subsidiaries has reached 99.5%.
Following the establishment of the Subcontractor Act Promotion Committee in FY2020, we are reinforcing the Olympus Group's compliance with the act and are providing internal workshops as a part of such efforts. Due to the COVID-19 pandemic, we moved from the conventional group workshops for manufacturing divisions to an online program in FY2021. A total of 504 employees participated in the program to deepen their understanding of the Subcontractor Act.
We will continue to confirm group-wide compliance and organize training programs to enhance our observation of the Subcontract Act.