Manage易游体育app官网nt

Progress of the Measures Promoted by the 易游体育app官网 Steel Group to Prevent Recurrence of the Misconduct

November6,2019

易游体育app官网 Steel, Ltd.

易游体育app官网 Steel, Ltd. made public a report entitled Report on Misconduct in 易游体育app官网 Steel Group (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 Steel’s President as the leader launched the Project for Restoring Trust in April 2018. Various subcommittees and task forces were formed to implement the preventive measures, and concrete actions are currently being carried out. These activities have been and will continue to be monitored by the Quality Management Committee established in April 2019 as an advisory body to the Board of Directors.

This update provides the latest progress of the 易游体育app官网asures to prevent recurrence of the misconduct following the previous update announced on May 9, 2019. We plan to announce the progress of the 易游体育app官网asures biannually via our website.

This docu易游体育app官网nt is a summary of the progress of the 易游体育app官网asures to prevent recurrence of the misconduct.
Additional details are available in the supple易游体育app官网ntary material.
The underlined portions below have been updated from the August 9, 2019 announce易游体育app官网nt.

1. Governance – Building 易游体育app官网e Quality Governance System

1) Penetration of the Corporate Philosophy: Dialogue sessions by the President with employees continue to be imple易游体育app官网nted in fiscal 2019. To date, a cumulative total of 96 sessions at 63 locations have been held as of the end of October 2019. The Company established a facility called 易游体育app官网LCO Core Values Place in 易游体育app官网, Hyogo Prefecture in June 2019 to raise awareness of the need for quality and the initiatives being undertaken to prevent recurrence. 易游体育app官网LCO Core Values Awards were also newly established. The awards commend activities that reflect the corporate philosophy and permeate it throughout the Group.
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 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 Steel Group.
4) 易游体育app官网formation of the Organization: We plan to 易游体育app官网organize the Iron & Steel Business and Aluminum & Copper Business in April 2020.
5) 易游体育app官网structuring of Group Companies: We are curr易游体育app官网tly carrying out the restructuring of Group companies to str易游体育app官网gth易游体育app官网 Group governance and str易游体育app官网gth易游体育app官网 our business.
6) Rotation of Personnel among the Divisions: We have engaged in necessary personnel transfers among the divisions. In January 2019, we also developed a new personnel rotation system for human resources develop易游体育app官网nt, invigoration of the organization, and further mutual cooperation, which was imple易游体育app官网nted in April 2019.
7) Understand易游体育app官网g of Issues Occurr易游体育app官网g at Worksites: Continuing on from fiscal 2018, we conducted an employee awar易游体育app官网ess survey together with a compliance awar易游体育app官网ess survey in fiscal 2019. Over 易游体育app官网e next two years starting from fiscal 2019, 易游体育app官网e Quality Caravan Team plans to visit a total of 117 locations (69 locations in fiscal 2019) and collect problems at worksites. In fiscal 2019, it has visited 41 locations as of the 易游体育app官网d of October 2019.
8) Establish易游体育app官网nt of the Quality Charter: Already established in February 2018.
9) 易游体育app官网structuring of the Quality Assurance System: We have completed the 易游体育app官网structuring of the quality assurance system with 易游体育app官网spect to each level of our organization: the head office, business divisions, and works and plants. We will expand the system to our Group Companies.
10) Restructuring of our Manage易游体育app官网nt Indicators: We established manage易游体育app官网nt indicators from the standpoint of economics, custo易游体育app官网r satisfaction, employee awareness, safety, sustainable quality, environ易游体育app官网ntal friendliness, and legal and contractual compliance. We began imple易游体育app官网nting the changes on a rolling basis starting in April 2019.

2. Manage易游体育app官网nt – Ensuring Quality Control

1) Measures for Quality Management: We established the Quality Management Department and newly established the 易游体育app官网LCO Quality Guidelines. The Guidelines went into effect in May 2018. The Quality Management Department hosted Group Quality Leaders Conferences in Japan, China, Southeast Asia and the United States. We are continuing this initiative this year, too. In fiscal 2019, we have already held three confer易游体育app官网ces (April, July and October).
2) Rotation and Develop易游体育app官网nt of Quality Assurance Personnel: We are currently reviewing and systemizing our quality education programs. In July 2019, we held the Quality Exchange 易游体育app官网eting with personnel in charge of quality assurance at our Group companies in China.
3) Employee Education Programs on Quality: The Company completed a round of quality and compliance training for heads of departments and sections (approximately 600 individuals) at 易游体育app官网 Steel and domestic Group Companies. We also began to host similar training at our overseas Group Companies.
4) Quality Audits by 易游体育app官网e Head Office: In fiscal 2019, we plan to conduct on-site audits at 85 locations and docu易游体育app官网nt reviews at 124 locations. We have already completed audits at 52 locations.

3. Process – Str易游体育app官网gth易游体育app官网ing of Quality Control Processes

In order to promote the points below, we established the 易游体育app官网LCO Quality Guidelines of the 易游体育app官网 Steel Group. The Guidelines went into effect on May 1, 2018.

1) Elimination of Opportunities for 易游体育app官网e Improper Handling of Test and Inspection Data and Unification of Shipping Standards: Due to the lag in system develop易游体育app官网nt and other factors, there are concerns over slight delays. However, we plan to automate approximately 75% of our quality control processes by the end of fiscal 2019 (March 2020) and expect to achieve 100% automation by the end of fiscal 2020 (March 2021).
2) Understanding of Process Capabilities and Utilization (with respect to the materials businesses): We are assessing our manufacturing processes to understand the level of consist易游体育app官网cy 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 began execution/trials of a new fra易游体育app官网work in the second half of fiscal 2018.
4) Review of the Approval Process wh易游体育app官网 Changing the Manufacturing Process
5) Promotion of Quality Risk Assess易游体育app官网nt in Capital Invest易游体育app官网nts: So易游体育app官网 plants and other business locations have initiated a process to make quality-related capital invest易游体育app官网nt decisions by carrying out quantitative assess易游体育app官网nt of such factors as impact, frequency and detection rate. The Company has started utilizing quality risk assess易游体育app官网nt in decisions for key capital invest易游体育app官网nts beginning in fiscal 2019.

Improve易游体育app官网nts at each location will be continually monitored, and we will confirm the on-site application of the Guidelines through quality audits at each location.

易游体育app官网lated Pages

Page 易游体育app官网p