Global Procurement

Panasonic aims to contribute to a sustainable society by ordering most of its parts and other inputs from excellent suppliers. Development of the global supplier network is based on a three-stage process, involving (1) a preliminary review, (2) the signing of a Basic Purchase Agreement, and (3) scheduled audit and evaluation. In fiscal 2007, the proportion of orders given to major suppliers was just over 70% in Japan. We are currently actively promoting our Basic Purchase Agreement as the basis for supply contracts with business partners around the world. We concluded this process with all China-based suppliers in fiscal 2007. We aim to finish the process with all of our suppliers worldwide by September 2007.

In the past, our selection and management framework for parts and materials suppliers was based on QCDS (Quality, Cost, Delivery and Service) criteria plus an evaluation of the firm's management capabilities and financial strength. Today, we operate a CSR-conscious Procurement Evaluation System, which takes into account environmental management, human rights policies, occupational safety and health (OSH), and information security.

As part of our ongoing efforts to conduct CSR-conscious procurement worldwide, in March 2007 we held conferences in China aimed at 2,300 local companies to explain our thinking on this key topic. Panasonic sees open discussions with suppliers as the way forward, and plans to hold conferences targeting a total of 3,300 companies in Asia, Europe and the Americas by June 2007.