Supply Chain Management

• Basic Approach
• Management
• Initiatives
• Targets and Results

The H.U. Group carries out purchasing activities based on its Procurement Policy. This policy incorporates the requirement for fair, stable, and sustainable procurement transactions. In addition, in order to fulfill the social responsibility of the supply chain in purchasing activities, we have compiled and thoroughly disseminated the Basic Policy on Business Partner Selection, a policy describing the efforts we would like our business partners to take alongside the Group.

The H.U. Group recognizes the challenges and responsibilities involved in ensuring animal welfare, and is working to resolve societal issues while requiring its business partners to comply with local laws in each country and the Group's own regulations on issues including animal welfare.

The Supply Chain Management Subcommittee, managed by the division head of Group Procurement at H.U. Group Holdings and with Procurement as its main driver, formulates and executes plans related to sustainable procurement. This subcommittee regularly monitors the progress of these activity plans and their results, and strives to act and take corrective action going forward.

The H.U. Group conducts business partner surveys in a two-year cycle targeting primary suppliers of domestic and overseas group companies, and suppliers that account for the top 80% of annual procurement purchase amounts once during the cycle.
Through the use of the survey and meetings for exchanging views (direct dialogue), the Group recognizes issues, shares problem-solving cases, and takes other steps as part of its ongoing commitment to improvement activities and relationship enhancement, and ultimately to raising the ratio of business partners who are awarded an A-Class rating or above (percentage mark of 60% or above). In addition, the Group evaluates suppliers' sustainability initiatives and, to improve assessment accuracy and enhance its understanding of issues, refined the rating system in FY2025 from the previous three-tier rating structure (A-C) to a five-tier rating structure (S-D).

The first survey was conducted from FY2019 to FY2021, targeting (1) domestic subsidiaries, (2) overseas subsidiaries, and (3) other consolidated subsidiaries, etc. ("Others" in the table below) for each fiscal year.
The second survey was conducted from FY2022 to FY2024.

＜Two-Year Targets （FY2023-2024）＞

For the two years from FY2023 until FY2024, specific targets derived from the cumulative results of the second survey were set, and efforts were made to achieve the targets of each fiscal year. 

Distribution of Assessment Scores of Suppliers (Number of Companies by Assessment Item and by Class)

(Companies)

Class	Corporate Governance	Human Rights	Labor	Environment	Fair Business Practices	Quality and Safety	Information Security	Supply Chain	Coexistence with local communities
S	42	32	40	38	38	50	46	26	28
A	8	11	9	8	11	4	6	11	12
B	3	5	4	4	4	0	2	4	5
C	0	5	1	3	1	0	0	8	5
D	1	1	0	1	0	0	0	5	4
合計	54	54	54	54	54	54	54	54	54

* Supplier assessments are conducted on a two-year cycle starting from FY2025.

• FY2025: H.U. Group Holdings, SRL, Japan Clinical Laboratories, Fujirebio, and NIHON STERY
• FY2026: All other companies subject to the assessment

Based on the business partner survey conducted in the most recent fiscal year, we have analyzed human rights-related items, including labor aspects, and the results are as follows.