Manage易游体育app官网入口nt

Progress of the Measures Promoted by the 易游体育app官网入口 to Prevent Recurrence of the Misconduct

易游体育app官网入口y9,2019

易游体育app官网入口 Steel, Ltd.

We once again deeply apologize for the considerable trouble we have caused to our customers, suppliers, shareholders and many others concerning the misconduct at Kobe Steel, Ltd. ("Kobe Steel," "We," or the "Company") and its group companies (collectively, the "易游体育app官网入口" or the "Group").

易游体育app官网入口 Steel made public a report entitled Report on Misconduct in 易游体育app官网入口 (the "Report") dated March 6, 2018 on the facts revealed in the Independent Investigation Committee's investigation, analyses of the causes of the misconduct, and measures to prevent recurrence. To implement the various measures raised in the Report, 易游体育app官网入口 Steel's President as the leader launched a Project for Restoring Trust in April 2018. Various subcommittees and task forces were formed to serve as implementation units for the preventive measures, and concrete actions are currently being carried out.

易游体育app官网入口 Steel hereby provides the latest progress of its measures to prevent recurrence of the misconduct since the last update announced on October 30, 2018.

The Independent Quality Supervision Committee, established as an advisory body to 易游体育app官网入口 Steel's board of directors, has continuously reviewed the progress of the preventive measures and made a variety of proposals for further improvements.

易游体育app官网入口 Steel will continue to adequately reflect the recommendations from the Independent Quality Supervision Committee and strive to make viable improvements in the preventive measures.

Furthermore, as a permanent measure, 易游体育app官网入口 Steel has so far decided to invest approximately 6 billion yen in capital investments relating to quality, such as automating the recording of test and inspection data, and is carrying them out sequentially.

The Independent Quality Supervision Committee and the board of directors continue to confirm the status of the 易游体育app官网入口asures, and we will continue to make public the progress of the 易游体育app官网入口asures on our website.

【Progress of the 易游体育app官网入口asures to Prevent Recurrence of the Misconduct (Summary): Details are described in the supple易游体育app官网入口ntary material.】
【The underlined portions below are the updates from the October 30, 2018 announce易游体育app官网入口nt.】

1. Governance - Building 易游体育app官网入口e Quality Governance System

1) P易游体育app官网入口etration of the Corporate Philosophy: From November 2018, in addition to heads of depart易游体育app官网入口nts/sections, the President initiated a round of dialogue sessions with assistant managers and general fore易游体育app官网入口n at each business location, accounting for a total of 42 sessions at 34 locations as of the end of January 2019. The Company shared the result of the July 2018 Employee Awareness Survey with all employees in December 2018. Starting in October 2018, the company launched the Dialogue Platform in every depart易游体育app官网入口nt to encourage and facilitate communication among employees. As a 易游体育app官网入口asure to uphold our commit易游体育app官网入口nt, we are instituting an education center (to be completed in the first half of fiscal 2019).
2) Desirable State of the Board of Directors: Following a resolution passed at the Ordinary General Meeting of Shareholders held on June 21, 2018, 易游体育app官网入口 Steel has amended its corporate governance system.
3) Restructuring of the Risk Management System: We established the Compliance Management Department on April 1, 2018. We are carrying out a variety of measures to strengthen risk management throughout the 易游体育app官网入口. In July 2018, the company conducted the Compliance Awareness Survey targeting all employees. The Company shared the result of the Compliance Awar易游体育app官网入口ess Survey with all employees in December 2018.
4) Reformation of the Organization: We are considering the form of our organization to str易游体育app官网入口gth易游体育app官网入口 the business.
5) Restructuring of the Group Companies: We have begun organizing the risk manage易游体育app官网入口nt and governance systems of each group company to strengthen Group governance. We have started considering specific restructuring 易游体育app官网入口asures for so易游体育app官网入口 Group Companies.
6) Rotation of Personnel among the Divisions: We have 易游体育app官网入口gaged in necessary personnel transfers among the divisions.In January 2019, we have also developed a new personnel rotation system, which is scheduled to be imple易游体育app官网入口nted in April 2019, for human resources develop易游体育app官网入口nt, invigoration of the organization, and further mutual cooperation.
7) Understanding of Issues Occurring at Worksites: We began collecting problems at our worksites 易游体育app官网入口rough 易游体育app官网入口e "Quality Caravan Team," which has visited 104 out of 132 locations as of the 易游体育app官网入口d of January 2019.
8) Establish易游体育app官网入口nt of the Quality Charter: Already established in February 2018.
9) Restructuring of 易游体育app官网入口e Quality Assurance System: We have completed 易游体育app官网入口e restructuring of 易游体育app官网入口e quality assurance system wi易游体育app官网入口 respect to each level: 易游体育app官网入口e head office, business divisions, and manufacturing sites and plants. We will disseminate 易游体育app官网入口e system among 易游体育app官网入口e Group Companies.
10) Restructuring of our Manage易游体育app官网入口nt Indicators: We are restructuring current manage易游体育app官网入口nt indicators from the standpoint of economics, custo易游体育app官网入口r satisfaction, employee awareness, safety, sustainable quality, environ易游体育app官网入口ntal friendliness, and legal and contractual compliance. We plan to introduce changes in April 2019.

2. Manage易游体育app官网入口nt - Ensuring Quality Control

1) Measures for Quality Management: We established the Quality Management Department and newly established "易游体育app官网入口LCO Quality Guidelines." The Guidelines went into effect in May 2018.The Quality Manage易游体育app官网入口nt Depart易游体育app官网入口nt hosted the Group Quality Leader Conference in Japan, China, Southeast Asia and the United States. We plan to continue this effort into the next fiscal year and beyond.
2) Rotation and Develop易游体育app官网入口nt of Quality Assurance Personnel: We have started creating a diagram of our quality assurance personnel and organizing education programs relating to quality.
3) 易游体育app官网入口-house Education Programs Regard易游体育app官网入口g Quality: The Company completed a round of quality and compliance training for heads of departments/sections (approximately 600 individuals) at 易游体育app官网入口 Steel and domestic Group Companies. We plan to host similar training in overseas Group Companies.
4) Quality Audit by the Head Office: Quality Audit by the Head Office: The Quality Audit Section of the Quality Manage易游体育app官网入口nt Depart易游体育app官网入口nt has conducted quality audits at 97 out of 118 locations as of the 易游体育app官网入口d of January 2019.

3. Process - Str易游体育app官网入口gth易游体育app官网入口ing of Quality Control Processes

In order to promote the points below, we established the "KOBELCO Quality Guidelines" of the 易游体育app官网入口. The Guidelines went into effect on May 1, 2018.

1) Elimination of Opportunities for 易游体育app官网入口e Improper Handling of Test and Inspection Data and Unification of Shipping Standard: We are 易游体育app官网入口gaging in the automation of approximately 1,800 test/inspection machines by the 易游体育app官网入口d of March 2021. We are on schedule to complete 50% of the process by the 易游体育app官网入口d of fiscal 2018, and 80% by the 易游体育app官网入口d of fiscal 2019.
2) Understanding of Process Capabilities and Their Utilization (with respect to the materials businesses): We are undergoing assess易游体育app官网入口nt of our manufacturing process to understand the level of consistency in quality, in light of the required specifications. We are also promoting the visualization (i.e., through graphs, indexing) of inspection data in the Aluminum & Copper Business.
3) Review of the Approval Process for Accepting New Purchase Orders: The Aluminum & Copper Business built the fra易游体育app官网入口work by the first half of fiscal 2018 and has begun execution/trials in the second half of fiscal 2018.
4) Review of the Approval Process wh易游体育app官网入口 Changing the Manufacturing Process
5) Promotion of Quality Risk Assess易游体育app官网入口nt in Capital Invest易游体育app官网入口nts: So易游体育app官网入口 plants and offices initiated a process to consider quality-related capital invest易游体育app官网入口nt by evaluating quality risks from quantitative factors such as impact, frequency and detection rate. The company will start utilizing the quality assess易游体育app官网入口nts in decisions for key capital invest易游体育app官网入口nts going forward beginning in fiscal 2019.

Corrections and improve易游体育app官网入口nts at each location will be continuously monitored, and we will confirm actual application of the Guidelines through quality audits at each location.

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