supplier selection standards, the Mitsubishi Electric Group regularly evaluates its business partners in terms of quality, price, delivery, customer service, environmental issues, regulatory compliance systems and other attributes.
We make purchases from business partners placing a strong overall evaluation on a priority basis in an effort to build good business relationships from a long-term perspective. The Group gives the designation of "key supplier" to business partners especially important in the promotion of our business activities.
A "key supplier" is defined as a business partner that provides key parts related to product performance or that has high-level technology or other critical attributes.
Our partnerships with these business partners are more involved than with regular ones, as they engage in joint development of parts and materials from the initial development stage, adopt cutting-edge products, and promote value engineering*. We also work with key suppliers to develop activities aimed at the joint creation of costs.
Through such initiatives, we seek to minimize our impact on the environment by making products more compact and lightweight, thereby requiring less material. At the same time, we endeavor to maintain win-win relationships with our business partners that result in mutual sales increases and technical advances.
Since fiscal 2004, the Company has worked with its suppliers to promote a shared cost consciousness from the early stages of development. We will continue to aggressively pursue these efforts, which have been greatly successful.
As in Japan, we are working with business partners in Europe and the Americas, China and throughout Asia on enhancing the price/quality competiveness of the overall procurement capabilities of the Mitsubishi Electric Group.
*
Value engineering is a method in which the costs required to obtain the essential functions of a product are minimized beginning from the design stage of product components.
Ensuring Product Quality and Safety
Considering that our business involves a wide range of products such as satellites, power generation equipment, electric transmission and distribution equipment, home appliances and numerous others, each of our customers expect differing standards of quality.
The Mitsubishi Electric Group establishes quality standards for each product and requests that business partners achieve required levels of quality based on them.