Supply Chains

Basic Approach

We procure raw materials and manufacture products with an emphasis on safety and reliability, and consistently provide high-quality products.

In each stage of the supply chain through product development, raw material procurement, production, distribution and sale, the Morinaga Milk Group always considers how best to deliver high-quality products that are safe and reliable to consumers. The basis for this approach is the Quality Policy of the Morinaga Milk Group.
The Quality Policy sets out the Morinaga Milk Group approach to quality throughout the supply chain, not only at production sites.
Moreover, in procuring raw materials, the Morinaga Milk Group implements procurement focused on consideration for the environment and human rights across the supply chain based on the approach in the Procurement Policy of the Morinaga Milk Group.

Morinaga Milk Group Quality Policy

As a food company that produces and sells milk, dairy products, ice cream, beverages and other foodstuffs, the Morinaga Milk Group aims to contribute to healthy and enjoyable lifestyles through offering unique products derived from advanced milk technology. We listen carefully to customer opinions, work tirelessly to ensure food safety and quality, and deliver safe, high-quality products and services.

Quality Policy
  1. We thoroughly control quality management in every process of product development, raw material procurement, production, distribution, and sales to ensure food safety and quality of our products.
    In doing so, we take all of the following steps.
    • 1) In the planning and R&D phases, we design a product with a close focus on food safety and high quality.
    • 2) In the phases of selecting equipment, technology, and raw materials, we consider potential risks and examine the impacts on food safety and quality.
    • 3) We clarify the person responsible for quality control in every business section and take measures to ensure the food safety and quality of our products.
  2. We contribute to society through our activities based on compliance with laws, regulations and standards.
  3. We provide accurate, easy-to-understand information from the customers’ viewpoint.
  4. Each of us individually strives to refine our knowledge and skills and maintain and improve quality levels.

Est. September 2017

Morinaga Milk Group Procurement Policy

To deliver high-quality, delicious, safe, and reliable products to the customers, the Morinaga Milk Group procures materials in compliance with the laws and social standards while also considering human rights, environment, and other social responsibilities in cooperation with its business partners. We also engage in fair, just, and transparent relationship with all our business partners.

Procurement Policy
  1. We comply with laws and social norms and strive for fair transactions focused on considerations for human rights, the environment, biodiversity, occupational health and safety, etc.
  2. To improve the quality and value of the products the Morinaga Milk Group offers to the customers, we place emphasis on cooperative relationships with our business partners in the areas of raw material quality, safety, technological capability, price, and delivery date.
  3. In conducting procurement activities, we provide fair, equitable and transparent opportunities to all of our business partners and implement transactions accordingly.

“Procurement” in this policy covers not only the procurement of raw materials and packaging materials used for products, but also various transactions involved in the procurement of management resources such as facilities and equipment, and the various services to maintain and manage the same.

<To Our Business Partners>
  1. We hope that our business partners understand the concepts of the Morinaga Milk Group Procurement Policy and support it as members of the supply chain.
  2. Considering the importance of social responsibility, compliance, and corporate ethics, we hope our business partners also consider 1) compliance with laws and social standards, 2) environment, and 3) human rights and occupational health and safety.
  3. We would like our business partners to promise the following in raw material procurement to improve the quality and value of Morinaga Milk Group’s products.
    • 1) To comply with relevant laws and ensure that the raw materials comply with the Morinaga Milk Group Quality Policy.
    • 2) To continue improving technical capabilities and offer proposals based on them to enable our new products to meet the needs of the customers.
    • 3) To offer competitive prices and engage in continued rationalization.
    • 4) To build a stable and flexible supply system for raw materials to ensure that products can be delivered to the customers continuously and in timely manner.
    • 5) To cooperate with each other in business continuity during unexpected disasters through exchanging and sharing information about the supply chain as well as engaging in risk management activities in time of peace.

Est. September 2017

System

Morinaga Milk Sustainability Committee meetings, which are chaired by the president, are held twice a year for monitoring and reporting on the progress of KPIs. In addition, Morinaga Milk implements PDCA cycles, with the general managers of the relevant divisions responsible for “Priority Issue:Supply Chains” and the general managers of the relevant departments responsible for promoting KPIs.
Based on the Quality Policy, Morinaga Milk has stipulated Quality Rules* for each stage of the supply chain: product development, raw material procurement, production, distribution, and sales. In order to systematically control quality based on these Quality Rules, Morinaga Milk has established a quality assurance system to ensure the quality and reliability of all the products by implementing this system.
* The Quality Rules not only comply with laws and regulations and voluntary industry standards, etc., but also set internal standards that exceed industry levels.

Quality Assurance System of the Morinaga Milk Group

KPIs

Direction of activities KPIs
Efficient supplier management corresponding to material risk Strengthen mechanism for evaluating supplier management level depending on each material’s risk (1)
Create a system for providing safe and high-quality products Acquire FSSC 22000 certification at all of the Group’s 29 plants by FY 2020 (2)*
* The number of applicable plants has changed to 23 due to reasons such as manufacturing stoppages.
Respond to supply chain risks for main raw materials Purchase main raw materials from multiple companies and geographically diverse purchasing
Expand use of RSPO-certified palm oil

Progress on main KPIs (corresponding to number on the table):

  • (1) Classification and evaluation of raw materials
    Class-based supplier audits conducted at 23 factories in FY 2019
  • (2) Number of factories certified: 10 (Japan)
    Certification achieved at four plants in FY 2019 (Japan)

Procurement Focused on Consideration for the Environment and Human Rights

The Morinaga Milk Group has formulated the Procurement Policy and is implementing procurement focused on consideration for the environment and human rights. Based on this policy, efforts are being made to procure raw materials with a focus on giving consideration to the environment and human rights. This includes raw materials with RSPO certification, Rainforest Alliance certification, and FSC® certification.

Morinaga Milk joined RSPO*1 in March 2018. As large-scale deforestation is carried out when producing palm oil, it has been pointed out that deforestation impacts the natural environment through the loss of biodiversity and the erosion of human rights in terms of the labor on farms. Morinaga Milk has been promoting the purchase of Book and Claim*2 palm oil since 2018, and has purchased 100 % of the needed palm oil this way in FY 2019. Going forward, we will work toward switching to Mass Balance*3 supply with FY 2028 as the target for achievement.
With regards to beverages, such as coffee and tea, Morinaga Milk currently uses Rainforest Alliance-certified*4 raw materials for some products, including Mt. RAINIER Deep Espresso.
In addition, with regards to paper, Morinaga Milk uses FSC®-certified*5 paper for the paper sleeves for MOW and for the packing boxes used with Pino and PARM. The goal for ice cream products is to transition to FSC®-certified paper for paper materials that are replaceable by 2020.

Mt. RAINIER Deep Espresso / MOW

(left) Mt. RAINIER Deep Espresso, which uses Rainforest Alliancecertified coffee beans
(Right) MOW, which uses an FSC®-certified paper sleeve

The use of raw materials with a focus on giving consideration to the environment and human rights also affects product prices, quality, and transportation efficiency. Therefore, information is shared across departments and efforts are made to collaborate and cooperate with business partners and suppliers.
Morinaga Milk conducts regular surveys, including the Sustainability (CSR) Procurement Questionnaires, of the working environment for sites that produce and process raw materials. The questions cover 47 items, including human rights, corporate governance, labor, environment, fair corporate activities, quality/safety, information security, supply chains and coexistence with the local community. Suppliers are requested to give detailed and accurate answers.

*1: RSPO
The Roundtable on Sustainable Palm Oil certifies palm oil produced on farms that meet certain standards to prevent palm oil production having a profoundly negative impact on the preservation of tropical forests, the biodiversity within them, and the lives of the people who depend on the forests.

*2: Book and Claim
Book and Claim is a model for issuing certification credits (certificates) based on the volume of certified palm oil produced by palm oil producers. It provides a mechanism by which end users support the producers of certified palm oil through the purchase of certification credits.

*3 Mass Balance
A certification model in which certified palm oil from certified palm oil plantations is mixed with other non-certified palm oil during the distribution process. Although it contains non-certified palm oil, certified plantations and their purchased volumes are guaranteed.

*4: Rainforest Alliance certification
Rainforest Alliance certification is a certification by the Rainforest Alliance, an NPO. The certification is only granted to plantations that meet strict standards in such areas as protecting forests and ecosystems, preserving soil and water resources, improving the labor environment, and providing livelihood security, thereby protecting the global environment and ensuring sustainable living.

*5: FSC® certification
FSC® certification is an international certification program for protecting forests. Products and packaging only receive this certification after being examined by a group of third-party certification bodies based on FSC® (Forest Stewardship Council®) criteria to confirm that the forest resources used have been produced appropriately from the perspective of environmental preservation and under socially meaningful and economically sustainable forest management, or use materials that lead to appropriate use of forest resources.

Sustainability Data Book 2020

See “Sustainability Data Book 2020” for details.

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