Supply Chain Management

Advantest effectively combines three different production methods: all-in-house production, EMS production by a company that handles the entire supply chain, and outsourcing to partners that handle only the manufacturing of products. With the slogan Design for Supply Chain (DfSC) in mind, we aim to build a manufacturing system that is resilient to supply-demand fluctuations and BCP, while exploring ways to maximize the benefits of each method.

The Gunma Factory, our in-house production facility, is evolving into a “mother factory” that operates the entire manufacturing process in collaboration with our outsourcing partners. Now, we have expanded the ratio of outsourced production to more than 80%.

A cooperative relationship with our business partners is essential for developing the best supply system based on three different production methods. Advantest upholds fair business relations in accordance with relevant laws and regulations while maintaining close communication with our business partners.

Manufacturing Capital ー Design for Supply Chain

In-house Initiatives for Supply Chain Management

Advantest upholds collaboration and cooperation with our suppliers in our ESG Initiatives Basic Policy. We place value on open communication with our business partners, which will ultimately lead to building trusting relationships and mutual development.

In order to maintain fair business relationships in accordance with relevant laws and regulations, we have established a Basic Procurement Policy, to which we have shared and sought cooperation from our suppliers. We have also prescribed the Supply Chain CSR Promotion Guidebook and Green Procurement Guidelines, and endeavor to build a supply chain with the need to respect human rights, occupationaIn order to maintain fair business relationships in accordance with relevant laws and regulations, we have established a Basic Procurement Policy, to which we have shared and sought cooperation from our suppliers.

Supply Chain Management System

Advantest's Supply Chain Division and the Global SCM Division are responsible for formulating and implementing procurement, outsourcing, logistics strategies, and other additional services. Moreover, we procure parts, which have been certified by each global base, in a timely and appropriate manner based on globally standardized evaluation criteria for parts selection.

ESG Action Plan 2021-2023

Advantest's Supply Chain Division and the Global SCM Center are responsible for formulating and implementing procurement, outsourcing, logistics strategies, and other additional services. Moreover, we procure parts, which have been certified by each global base, in a timely and appropriate manner based on globally standardized evaluation criteria for parts selection.

Education for Implementing Fair Trade

Advantest offered education on the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors for all employees of group companies in Japan, along with company-wide compliance education. As a result, we saw an upliftment of the levels of consciousness among all employees in Japan, irrespective of the department they belong to.
Going forward, we will continue to maintain fair trade through ongoing employee education and individual support.

Efforts to Address Our Supply Chain

Supply Chain CSR Questionnaire

Based on our ESG Action Plan 2021-2023, we conducted a CSR Questionnaire for business partners who account for 85% of the transaction value of all Advantest Group companies (Supply chain due diligence). The contents of the FY2022 questionnaire mainly referred to the "Supply Chain CSR Promotion Guidebook" in line with international norm and initiatives such as the RBA Code of Conduct* while asking to submit reports on the introduction of renewable energy and limitation of greenhouse gas emissions with the goal of mitigating climate change as in the previous fiscal year.

Having in mind that the entire supply chain should address social issues, we aim to enhance supplier engagement not only by providing materials summarizing the results of the questionnaire for each business partner, but also supplying feedback on points that were highly evaluated as well as requests for improvement, and by holding seminars for business partners who mentioned difficulties of reporting their greenhouse gas emissions.

The 2022 questionnaire was conducted in March 2023, to which we were able to obtain responses from all of the companies that received the questionnaire. We will continue to work with business partners who find it difficult to report their greenhouse gas emissions or whose measures to mitigate climate change remained undecided.
In Japan, we also evaluate the QCD* of our business partners every quarter aimed to ensure the stable supply of products while maintaining and improving quality.

FY2022 Implementation of CSR questionnaire (Global)

Survey period March 2023
Implementation of seminars March 2023
Feedback to business partners July 2023 (planned)

FY2022 Business Partner QCD Evaluation (Japan)

Evaluation period Quarterly (July/October 2022, January/April 2023)
Feedback to business partners
who require improvement
Quarterly (August/November 2022, February/May 2023)

* RBA Code of Conduct: A code of conduct pertaining to social responsibility advocated by the Responsible Business Alliance.

* QCD: An acronym of Quality, Cost, and Delivery.

Establishment of a Contact/Reporting Window

We ask for reports to be made through the contact window on our webpage if there is any action by an Advantest employee, etc. that violates the code of conduct, business contracts, or laws and regulations, or any other action deemed to be suspicious. There were no complaints filed (no cases) in FY2022.
Note that Advantest will not subject the whistleblower, nor the whistleblower’s company, to any disadvantage. If an investigation finds any issues, the relevant action shall be stopped and measures shall be taken to prevent recurrence.

Announcement of the Declaration of Partnership Building

Advantest and Advanfacilities Co., Ltd. have agreed to and endorsed the Declaration of Partnership Building and announced our framework on Declaration of Partnership Building* in the fall of 2021.
The Declaration of Partnership Building declares, in the name of the representative of the company, that it will build new partnerships by promoting further collaboration and prosperous coexistence with business partners in the supply chain and encourage businesses that create value. The following are few examples of matters to observe for the promotion of partnership building.

  • Leveraging information technology to promote operational efficiency throughout the supply chain
  • Working together with suppliers and vendors to improve quality and productivity, aiming for mutual development
  • Working together towards the realization of a decarbonized society throughout the entire supply chain, including Advantest.

* The Declaration of Partnership Building was founded by the Council on Promoting Partnership Building for Cultivating the Future, which consists of representatives from business circles and labor organizations including the Chairman of Keidanren, the Chairman of the Japan Chamber of Commerce and Industry, and the Chairman of the Japanese Electrical Electronic & Information Union as well as related ministers (Cabinet Office, Ministry of Economy, Trade and Industry, Ministry of Health, Labor and Welfare, Ministry of Agriculture, Forestry and Fisheries, and Ministry of Land, Infrastructure, Transport and Tourism).

Examples of ESG promotion with our business partners

Advantest supports the philosophy of the Declaration of Partnership Building and promotes various ESG activities together with our business partners.

Introduction of environmentally friendly palettes

The Gunma Factory introduced environmentally friendly pallets for parts storage in 2022 in response to a proposal from Alps Logistics Co., Ltd., to whom we outsource parts warehousing. These palettes are made from a blend of marine plastic waste, with logos of "Plastics Smart" printed on the sides, an initiative to reduce marine plastic waste lead by the Ministry of the Environment. Using these pallets represent our commitment towards our contribution in combating marine plastic debris from a logistics perspective.

Awarded from the Tokyo Metropolitan Government for eco-driving

Musashiseki Unyu Co., Ltd., our freight forwarder who transports our products via eco-drive technology, was awarded the highest rating of "three stars" for the second consecutive year in the 2022 "Tokyo Freight Transportation Evaluation System" (evaluation of efforts, such as eco-driving, of freight forwarders based on actual driving fuel efficiency and consumption), and was also selected as one of the top five highest rated forwarders. Advantest has set the reduction of greenhouse gas emissions throughout the value chain as one of its key themes. We believe that the fact that our business partner won such an outstanding award shall be a further driving force for ESG promotion, as we continue to promote efforts to reduce supply chain emissions.

Implementation of activities and educational campaigns to promote the Pink Ribbon Movement

Advantest Japan supports the Pink Ribbon Campaign, an international campaign to raise awareness about breast cancer and promote early detection, diagnosis, and treatment of the disease. During the Pink Ribbon Month in autumn, 2022, we conducted educational and promotional activities ((1)on-demand streaming of a seminar on breast cancer awareness, (2) two walking events, and (3) fundraising) in collaboration with one of our business partners.

During the walking event, pink towels (original towels with ADVANTEST and business partner's logos), symbolizing the Pink Ribbon Movement, were created and distributed to all participants. Fundraising activities made a total of ¥93,752 which we donated to J.POSH, an authorized NPO. In addition, we created original pin badges for the Pink Ribbon Campaign, made from eco-friendly biomass resin, and gave them to those who donated over a certain amount as souvenirs.

Examples of consultations on business continuity and SDGs activities

In November 2021, Meisei Corporation, a partner company of Advantest, consulted Advantest about their business continuity plans and SDGs initiatives. We shared our initiatives and opinions regarding the global trends, with a particular emphasis on the promotion of initiatives that match the company's collective goal. After thorough discussion within Meisei Corporation, which stimulated their willingness to engage in contributions for the world, they drew out the following initiatives.

  • Participate in the CoCoLo Project* to promote decarbonization and contribute to society by introducing solar power generation on factory roofs
  • Disclose SDGs Declaration
  • Promote female leader development education to for better tapping the high ratio of women

* CoCoLo Project: A project initiated by the West Group, which converts the environmental value created by companies into credits through the J-credit system* and utilizing them for various donation activities as efforts to promote the reduction of CO2 emissions and regional revitalization.

* J-credit system: A system in which the government certifies the amount of CO2 emissions reduced through the introduction of energy-saving equipment and the use of renewable energy, and the amount of CO2 absorbed through appropriate forest management as credits.

Efforts for Procurement

Measures against procurement risks

In addition to the stagnation and confusion of logistics due to Russia's invasion of Ukraine and the prolonged lockdown in China, climate change and natural disasters are causing supply chain disruptions that has never been experienced before. On top of the ongoing visualization of the factory (visualization of processes and information from parts procurement to production and shipping), we have established a system to predict requirements in real time to enable prompt and appropriate response. Furthermore, at our global bases, executives are spearheading partnership agreements with our suppliers, exchanging information at the top level, and boosting cooperation with EMS.

Advantest promotes procurement from multiple companies in principle as a contingency for the procurement of components from the perspective of BCP.
We created a BCP map of our suppliers and manufacturing bases to speed up information collection and countermeasure examination in case of a disaster.

Responsible mineral procurement

Although Advantest is not subject to Section 1502 of the US Dodd-Frank Wall Street Reform & Consumer Protection Act (Conflict Minerals Clause), we are voluntarily addressing the issue of conflict minerals. Since 2013, Advantest has been implementing an annual mineral procurement survey of our business partners using the Conflict Minerals Reporting Template (CMRT) tool developed by the Responsible Minerals Initiative (RMI)*. In FY2022, we conducted a survey of our business partners and verified the smelters/refiners listed on the CMRT with the information disclosed by the RMI. The results are as follows.

Survey (CMRT) collection rate 99%
・Total number of refineries/smelters 351
・Number of conformant certified refiners/smelters 229
・Number of refineries/smelters without conformant certification
 (including pending refineries/smelters)

In total, the ratio of conformant smelters was 65.2%.
We will continue to seek cooperation from our business partners who we are yet to confirm.

In FY2023, we will enhance our system so as to aim for 100% of our suppliers who are conflict-mineral-free.

* RMI:Responsible Minerals Initiative