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Growing with Society

Support for CSR Initiatives of Business Partners

Our business partners, who are suppliers of materials, parts, and components, are important partners that support Komatsu's manufacturing. Komatsu believes that engaging in CSR procurement will contribute to our business partners' expansion and therefore endeavors to do so in cooperation with our partners.

Approach and Policy

Komatsu's Procurement Policy

Komatsu's basic policy is to produce a product in the area where there is demand for it. Out of the 39 plants that manufacture construction and mining machinery, 27 are located outside of Japan. In following with the manufacturing of machinery at an overseas plant, we are actively working on procuring parts and materials from the same area. Aside from engines and main components that are shipped everywhere in the world from Japan, and a few specific parts that are only supplied by specialized manufacturers, the overseas plants are on their own in terms of procurement, to promote local and optimal procurement for parts such as sheet metal.

CSR Procurement Guidelines

In 2011 we formulated the CSR Procurement Guidelines, which lay out key compliance and CSR information for all our business partners. We have posted the guidelines on our Japanese and English websites and are now making sure that our partners are aware of this information.

Coverage of the CSR Procurement Guidelines

Coverage of the CSR Procurement Guidelines

The Guidelines are available at:

Midori-kai and the State of Our Support of the Organization in FY2014

Komatsu Midori-kai

Komatsu Midori-kai is an organization made up of our business partners, with 164 member companies in Japan, out of which the procurement amount is approximately 75% of domestic purchasing goods. At the regular meetings, where the management members of each company are present, such as the general assembly, general meetings and New Years' special meetings, Komatsu's top executives explain our policies, emphasize the importance of CSR management and request that awareness be raised in regard to CSR management.
In North America, Europe and China, there are Midori-kai organizations made up of Komatsu's major business partners. We hope that these chapters will take advantage of the characteristics of each region to further expand their business activities.

Support to Member Companies

Komatsu supports Midori-Kai member companies in a variety of ways.
Support activities during FY2014 are described below.

Environment

We are making certain certifications, such as ISO14001 and Eco Stage, mandatory, and directing and supporting efforts to obtain these certifications. In our efforts to reduce electricity consumption, we set a target for reducing electricity consumption by at least 15% from 2010 levels. We are also working to reduce energy consumption among business partners, focusing on implementing Komatsu's initiative (as part of our production system reforms) to reduce electricity consumption by 50% across our business partners.

Safety

We have implemented the Japan Industrial Safety and Health Association's Small and Medium-sized Enterprises Occupational Health and Safety Assessment for 97 companies, with Komatsu bearing the cost of the assessment fees, to request that each company increase the level of safety on their sites. In addition, we opened safety training centers in each Komatsu plant that our business partners can use so that their employees can experience simulated workplace hazards and be trained to anticipate dangerous situations.

Personnel Development

To develop young top management at our business partners, we hold “Management Salons” as occasions for Komatsu management and young top management to exchange views. With this approach we intend to develop “win-win” relationships with our business partners while aligning our respective management policies and implementing PDCA cycles.
Furthermore, we select model companies as part of our efforts to support our business partners in overall improvement and advance their technological resources by capitalizing on Komatsu expertise toward strengthening their organizational capabilities.

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    Management Salon
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    Activity promoting improvements in technologies

Sharing Best Practices

We categorized Komatsu Midori-kai member companies by product item into five groups. Each company selects themes, such as safety, the environment, and advanced element technology, and then takes part in kaizen (improvement) activities in collaboration with Komatsu. Information on best practices is shared by all members in the group.
In the area of safety, business partners emulate the strong points of other companies and keep an eye on each other to identify and respond to any problems that may arise.

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Management System

Checking System for New Business Transactions and Agreements

Komatsu uses a check sheet before it starts doing business with a new supplier, not only to confirm basic conditions related to quality, cost and delivery, but also to verify their efforts in environmental protection and employee education.
To conduct a business transaction in accordance with the CSR Procurement Policy, our basic agreement includes clauses pertaining to environmental protection and compliance.

Risk Management Prepared for Occurrence of Natural Disasters

Komatsu is strengthening its risk management system for procurement. Since FY2012, we have conducted assessments in Japan so that we can quickly determine the status of partner companies in the event of a disaster such as an earthquake or tsunami, and be able to continue procurement activities without delay, to minimize the effect on production. We input the location and production content for each of the over 20,000 sites of all our partner companies to create a database for “visualization,” and assessed the degree of risk. In addition to considering prevention measures for each partner company that have higher levels of risk, the procurement staff will be able to consider risks from this aspect when considering new agreements, so that we can heighten the accuracy of the information.
In the event of an emergency, we will dispatch security personnel from our plant to our partner companies—as we did following the Great East Japan Earthquake—to help support speedy production recovery.

Conducting Audits

Komatsu is striving to raise awareness of CSR among its business partners through safety, environmental and compliance audits.

Policy and Actions Regarding Conflict Minerals

Komatsu has adopted a policy of not using conflict minerals produced by the Democratic Republic of Congo (DRC) or its neighbors (Angola, Central African Republic, Republic of the Congo, Rwanda, Southern Sudan, Tanzania, Uganda and Zambia) from our corporate social responsibility perspective.
During the regular meetings we hold with our suppliers at each Komatsu plant in Japan, we explained this policy as well as Komatsu's response to the conflict minerals issue and related requests to our suppliers. With the cooperation of suppliers, we conducted a country-of-origin survey to determine the location of origin of the conflict minerals we use.
Looking ahead, we will continue taking steps to prevent the use of conflict minerals from the DRC and its neighbors and thereby restrict funding for military groups. We will immediately discontinue any use of conflict materials that we discover.

Other Initiatives

Awareness Campaign for CSR Procurement

As an ongoing effort to raise awareness of CSR, Komatsu has been introducing CSR case studies since May 2011 through its bimonthly CSR newsletter on its website, which is available for all suppliers for the Komatsu Group in Japan.

Procurement Education in Human Resource Development

Komatsu conducts employee training at every level, from new employees to managers, in the forms of group learning and e-learning, with a strong emphasis on safety, the environment and compliance.

DATA

Business Partner Association Midori-Kai

 Number of CompaniesProcurement Coverage
Japan16475%
North America3950%
Europe4735%
China6190%