Material Transaction Flowchart

Here is a description of JR Central's process for transactions involving materials

First, for transactions with JR Central, it is necessary to register as a material supplier. After registration is completed, a contract will be concluded for the necessary materials through placement and receipt of an order. Further, after delivery of the materials, the supplier will provide quality assurance and after-sale care, such as maintenance and repair.Please submit the relevant documents and each type of communication in Japanese. With regard to a contract, it will be governed by and construct in accordance with Japanese law.

I.Material supplier registration procedure

Prospective suppliers wishing to do business with JR Central will need to complete the procedures prescribed for material supplier registration.

Flowchart of Material Supplier Registration Procedures

1Application for new business

Please notify the designated contact (procurement@jr-central.co.jp) of your desire to do business with JR Central, which is to be forwarded along with the following required information:
[Required information]

• 1.Company name (trade name)
• 2.Location of head office (address and postal code)
• 3.Materials you desire to supply (specific description of material, specifications of products, estimated price, records of previous deliveries and production base)
• 4.Name of person in charge (department, position, name, address, postal code, telephone number and email address)
• 5.Other information (your website, if available)

• The information submitted will be used only for review of new business transactions.
• Please forward your business application in Japanese.
• A satisfactory description of the required information is necessary for supplier registration.

2Receipt and initial review

We will conduct a material supplier review of the information based on the application received for new business.
In the review, we will make a determination after reviewing your company’s financial condition and JR Central’s demand for the materials you wish to supply on the basis of business data, such as financial statements, and product information, such as the specifications of products which the supplier provide as application for new business. Except for a situation where there is no possibility of introducing the goods, every application will move forward to a review of quality and technology.
In addition, we may have inquiries about your company and product information if necessary, for example, if there are unclear points.

3Review of quality and technology

If it is determined that a review is needed of the quality or technology of the material that your company wishes to supply, such testing will be conducted. Because the type of testing differs according to the material, we will provide the necessary information, including technical requirements and testing methods during individual discussions on applications.
In addition, we may request that delivery of sample items, preliminary discussions or other such additional arrangements be made as required for the review.

4Secondary review

JR Central will forward the forms necessary for the secondary review and registration as a new material supplier. Accordingly, we ask that you provide official certified documentation, such as the corporate certification along with your company's business directory profile, stating specific information concerning management and internal structure.
Based on the documentation submitted for review, we will conduct a comprehensive examination of the soundness and stability of your company's management, its capability to ensure a stable supply of the material, and other elements as well as the items listed in "What is Required of Our Suppliers". We will then make a determination on whether or not your company may be registered as a supplier.

5Conclusion of basic business contract

A basic business contract will be concluded.
In addition, we will also provide an explanation of our on-line procurement system, which we recommend be used in dealings with JR Central.

6Supplier registration and notification

After you have submitted the new material supplier registration documentation as specified by JR Central, we will undertake the procedures for registration.

These are the standard procedures.
When JR Central engages in material supplier registration which significantly departs from our standard contractual procedure, this other procedure will be outlined on our website.
Please direct any questions or inquiries about material supplier registration procedures to procurement@jr-central.co.jp.

II.Material Transaction Procedures

Here is an explanation of the procedures for a standard material transaction.

Flowchart of Material Transaction Procedures

1Demand for material arises

Based upon the demand that has arisen for a material, JR Central determines the specifications, quantity, required timing and other specifics for the material needed.

2Preparation of estimate request

From the registered material suppliers, JR Central will select suppliers to whom the request for estimate will be forwarded by assessing the registered material suppliers that are suitable for the demand for a material mentioned above comprehensively with focusing mainly on the "Basic Philosophy of Material Procurement" and "What is Required of Our Suppliers", in a fair and equitable manner.

3Request for estimate

The selected suppliers are requested to submit an estimate.
When we require a technical proposal from a supplier, we will notify the supplier when the estimate is requested.

4Preparation and submission of estimate

Please submit your estimate no later than the deadline specified by JR Central.
Please note that, when transactions are conducted for materials important for railway operation and maintenance, your company will need to submit ISO9001 certification,manuals stipulating quality control methods or other such documentation by the time the estimate is submitted.

5Negotiation & conclusion of contract

In principle, negotiations on contract prices and other terms are conducted with the supplier who submitted the estimate satisfying estimate conditions, such as specifications and delivery deadlines, and having the lowest price, and then an order is placed for materials that describes the terms mutually agreed upon.

6Production and delivery

After an order is received, the selected supplier produces the material based upon the contract description, and delivers the materials to the designated location no later than the contractual delivery date.

7Inspection upon receipt

At the time the materials are received, the necessary inspection will be conducted of the materials. Delivery will be considered complete when the inspection has been successfully passed.

8Payment

After the materials have passed inspection at delivery, we will undertake the procedures for payment as stipulated in the contract.

These are the standard procedures.
When JR Central engages in procurement which significantly departs from our standard contractual procedure, this other procedure will be outlined on our website.
Please direct any questions or inquiries about procurement procedures to procurement@jr-central.co.jp.

III.After-Sale Care and Quality Assurance

In our railway business to which top priority is given to maintaining safe and reliable operation and which requires us to continue to stably and satisfactorily fulfill that social mission over the long-term, the maintenance of long-term quality is also required of the materials used, so a quality assurance system is agreed to contractually on an individual basis in transactions for materials.
Accordingly, it is very important that suppliers guarantee the quality of their materials after delivery as in "II. Material Transaction Procedures" and that they provide after-sales care, including maintenance and repairs.
In addition, in the event an abnormality arises in connection with a material, JR Central needs the supplier to respond rapidly including providing support information on technical aspects, conducting inspections, determining the cause of an abnormality, and cooperating with JR Central's investigation.
A description of the specific after-sales care and quality assurance required by JR Central is given in the "What is Required of Our Suppliers".