35

HDS REPORT 2023

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Message From Person in Charge of Sustainability Promotion
Management philosophy is at the basis of formulating materiality, and key issues thatneed to be prioritized toward realizing the management philosophy are identified.

Executive Ofﬁcer, In Charge of Corporate Planningand Investor Relations(In Charge of the Sustainability Committee Secretariat)

Makiko Ono

Our management philosophy is the basis ofsustainability promotion
As stated in our basic policy of sustainability, the HDSGroup’s sustainability promotion is based on our management
philosophy. In formulating materiality, we have assessed impact
on our group business as well as on social sustainability andidentified key issues that need to be addressed with priority.
We are focused on ensuring consistency of materiality with ourmanagement philosophy.
Our management philosophy consists of four pillars, outlined inorder of importance. The first pillar is “Respect for the Individual.”
It is stipulated that HDSI aspires to be a company where the rightsof every employee are respected, and where a cultural life andmeaningful work can be pursued. HDSI will support employees’
independent activities, create an environment where they can
maximize their abilities, and be a company where competence
and performance are rewarded. Though drafted half a century
ago, the management philosophy already emphasized at thetime the importance of human capital management. The otherthree pillars, “A Meaningful Company,” “Coexistence andCo-prosperity,” and “Contribution to Society,” also align withthe concept of sustainability management that values multiple
stakeholders. Based on this management philosophy, HDSI has
grown through sharing Coexistence and Co-prosperity with various
stakeholders since its founding. Materiality is positioned for as torealize our management philosophy.

Basic Policy of Sustainability
As a technologies and skills-based organization in pursuit of Total Motion
Control, the HDS Group aims to enhance corporate value and realize asustainable society by contributing to technological innovation for the bettermentof society. We intend to achieve these goals based on our management
philosophy comprising four pillars: Respect for the Individual, A MeaningfulCompany, Coexistence and Co-prosperity, and Contribution to Society.

Internal sharing and spreading of the management
philosophy and basic policy of sustainability
Individuals joining HDSI are given an explanation of the
management philosophy at the outset. So that they can be rereadat any time, the management philosophy, charter of corporate
behavior, and code of conduct are distributed as a booklet toall employed at HDSI. All sustainability study sessions conductedinternally begin with a review of the management philosophy
and an explanation of the basic policy of sustainability basedon the management philosophy. We also strive to share theseconcepts with the suppliers who make up our supply chain. Given
the growing interest among customers in recent years regarding
the HDS Group’s response to climate change, human rights, andhuman capital, study sessions are being routinely held for thesales and development divisions. Two young employees from theSustainability Committee Secretariat have also taken the lead since
December 2020 in contributing articles as sustainability lectures inthe “HD.Times,” the internal newsletter issued every two months.
Beginning with ESG and SDGs, they have explained climatechange, biodiversity, human capital, human rights, etc., in relation
to topics relevant at the time such as the Olympics or shareholders’meeting. They also communicate concepts surrounding the HDSGroup’s sustainability and specific relevant initiatives.

A company is as good as its people - the material issue
with the greatest impact on future financial information
is “Create a rewarding work environment.”
As mentioned at the beginning, HDSI places particular emphasison people, with “creating a rewarding work environment”
positioned first among the five current material issues. The
management strategy for realizing the management philosophy
and mission is, after all, being carried out by people, or theemployees. Creating an appealing work environment where
employees can feel rewarded is a priority issue for management.
Upskilling and career development are a given, to which
initiatives linked with management strategy are needed as
human resource strategy going beyond personnel affairs, suchas reskilling, optimal positioning, evaluation system, etc. Also, an
environment in which employees of the manufacturing division,as successors to skills in the manufacturing industry, can play anactive role for a long time is essential.

HDS Group’s
Values and Aspirations

With half a century having passed since our founding,opportunities to learn directly from our predecessors who
embody the history of the HDS Group are diminishing. As such,human resources are needed who possess business development
capability without losing their ability to keep thinking, in order tobe able to meet the diverse needs of our customers. Growth anddevelopment of the HDS Group have been a result of employees
boldly taking on challenges, without fear of failure. As we create
an environment where human resources who inherit such spirit
and are able to forge a new era can play an active role, we
believe it is essential for sustainable enhancement of the HDSGroup’s corporate value to focus on initiatives that maximize thevalue of human capital.

Discussions surrounding management strategy
taking materiality into account
The latest status of initiatives for sustainability including
materiality is reported at executive officer meetings, where
directors and corporate auditors are also in attendance.
Robust discussions are held in which questions and feedback
from various perspectives arise. Being in charge of Corporate
Planning and Investor Relations, I am in receipt of questions,advice, and suggestions from domestic and international
institutional investors regarding the HDS Group’s initiatives on
governance, materiality, climate change, human capital, andsupply chain management including human rights, and I try
to ensure that our discussions take account of the perspectives
mentioned above, and also the perspective of the capital
market.

The monitoring of sustainability management by the
Board of Directors and activity of the Sustainability
Committee
The HDS Group’s sustainability management is being
carried out by the Sustainability Committee, consisting of fiveexecutive directors and chaired by the President and CEO.
Corporate Planning and Investor Relations, as the secretariatof the committee, makes recommendations to he committee
for addressing key issues, risks, and opportunities related tosustainability. The committee holds discussions accordingly,

Sustainability
Supporting Action
Strategies

Materiality to Achieve
Aspirations

Sustainability
Management

mainly focused on integration and consistency of sustainability
with management strategy. Matters discussed are routinely
reported at Board of Directors’ meetings, and there is a system
in place for matters such as basic policies to be proposed to
the Board of Directors as an agenda item and deliberated on
before being approved. Most recently, the current materiality
has started to undergo review in line with formulation of the
new medium-term management plan set to begin on April
1, 2024. I believe that the opinions received from audit& supervisory members who attend the Board of Directors’
meetings, and various matters pointed out by outside directors
and outside audit & supervisory board members with expertiseon sustainability management, along with discussions held, fully
satisfy the monitoring function of the Board of Directors andAudit & Supervisory Board.

Data and Company
Information

HDS REPORT 2023
Message From Person in Charge of
Sustainability Promotion

Initiatives on climate change
Climate change initiatives have become an urgent issue forcompanies, and the HDS Group is aiming for a long-term goalof achieving Net Zero by 2050. We are already making
efforts to reduce GHG emissions, and are currently in theprocess of formulating new measures, including a transition
plan, and KPIs. As many customers are declaring net-zeroemissions and carbon neutrality, response to climate changeby the HDS Group, as a provider of parts, is becoming an
extremely important matter from a sales strategy perspective
as well. In addition to reducing GHG emissions, we will focus
on efforts that are even more effective going forward, suchas reinforcing product development so that less environmental
burden shouldered by customers can be achieved.

In closing
Sustainability Governance

Board of Directors
Monitoring (Supervision)

Report / Proposal

Sustainability Committee
Chair: President & CEO
Members: Executive Directors
Sustainability Committee Secretariat

Executive Officer in Charge ofCorporate Planning and Investor Relations
Instructions

Corporate Planningand Investor Relations

ReportingExecutive Officers / Group Company Presidents
Cooperation

ActionEach Department / Group Company

Having experience engaging with institutional investors throughbeing in charge of Corporate Planning and Investor Relations, I
came to be concurrently responsible for sustainability promotion
at HDSI from 2021. Serving concurrently all started witha customer request for response to an external evaluation
body. While addressing the request, I came to realize thatsustainability is in itself a long-term management strategy.
Currently, demands on companies to address biodiversity and a
growing obligation for disclosure both in Japan and overseas,such as by dealing with customers regarding these issues, areincreasing and accelerating globally. In viewing sustainability
as a long-term management strategy, putting laws andregulations aside, I believe the right path is integrating it with
the HDS Group’s medium- to long-term management strategy,
rather than merely responding passively or in response to
extraneous pressures. At present, we are undertaking a review
of materiality and formulating specific measures and KPIs. We
will promote sustainability from the perspective of enhancing
corporate value in a sustainable manner, after determining
consistency between social demand regarding sustainability
and the HDS Group’s management strategy.

36

37

HDS REPORT 2023

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Efforts on Global Environment
Basic Policy on Global Environmental Initiatives
Deeply aware of our corporate social responsibility regarding the global environment, the HDSGroup is committed to implementing global environmental protection policies. Through our businessobjective of pursuing total motion control, we provide society with superior technologies andservices that will slow the pace of the destruction of nature.

Environmental Management Organization chart
Management plan

Environmental officer

Environmental policy and targets

Environmental WG(Deliberation and decisions)

Environmental Policy
1. By assessing the environmental impact of all production processes
from development to recovery and disposal, and by working to develop
technologies that will act as a brake on environmental destruction, we
create and provide products in harmony with the environment.
2. By observing laws and ordinances related to the environment, setting ourown voluntary management targets, and reviewing our environmental actionplans, we continue to raise our level of environmental management.
3. We aim to reduce the environmental impact of our products and activities
through more efficient use of resources and energy and by reducing andrecycling wastes and discharges.
4. We make sure our environmental policy is known to employees as well as toour affiliates and partners.

Promotion office
Division implementation plan
(Responsibility for implementing)Management review

ISO 14001 Certification Status
We have established ISO 14001 certification for environmental management systems, in orderto fulfill our corporate social responsibility regarding the environment. Recognizing protection of
the global environment to be an important part of our business management, we are working toachieve further improvements.

ISO 14001 Certification Status (as of March 31, 2023)
Name

5. We take part in the environmental protection efforts of local communities
and endeavor to coexist with them.

Environmental Management Organization
Based on our environmental policy, every fiscal year we set areas of focus and targets to beachieved by each division and develop a management program, thereby encouraging eachorganization to carry out its own environmental actions and making operation of the environmental
management system more efficient.

Business headquarters plans
Implement of environmental policy

Harmonic Drive Systems Inc.

Harmonic Precision Inc.
Harmonic AD, Inc.
Harmonic Winbel Inc.

Location
Head Office

Shinagawa-ku, Tokyo, Japan

Hotaka Factory

Azumino-shi, Nagano, Japan

Ariake Factory

Azumino-shi, Nagano, JapanTokyo Office

Shinagawa-ku, Tokyo, Japan

Kohshin Office

Azumino-shi, Nagano, Japan

Chubu Office

Nagoya-shi, Aichi, Japan

Kansai OfficeOsaka-shi, Osaka, Japan

Kyushu Office

Fukuoka-shi, Fukuoka, Japan

Head Office Factory

Matsumoto-shi, Nagano, Japan

Kanbayashi Factory

Matsumoto-shi, Nagano, Japan
Azumino-shi, Nagano, Japan
Komagane-shi, Nagano, Japan

Note: Changed the company name from Winbell Co., Ltd. to Harmonic Winbell Inc. as of April 1, 2023.

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Measures to Address Water Security
In recent years, with droughts and large-scaled flooding stemming from global climate change,a growing population, changes in consumption patterns, prospective increase in demand for
freshwater in line with economic growth, etc., the impact of water security has on the HDS Group’sbusiness activities cannot be ignored. In Japan, impact on both procurement and sales of materials
in particular is growing, such as with breaks in the supply chain due to typhoons, heavy rains, andflooding, decreased production capacity resulting from damage to production facilities, and effects ofconfusion within the value chain on delivery and sales. Water security is thus being seen as a serious
environmental issue that companies need to address along with climate change.
Since FY2022, the HDS Group has been making efforts to reduce water withdrawal andwastewater amounts by setting specific targets. Water risk analysis is also being conducted at eachsite using water risk assessment tools AQUEDUCT, provided by the World Resources Institute, andFlood Navi from the Ministry of Land, Infrastructure, Transport and Tourism, and steps taken when
there are risks.

Sustainability
Supporting Action
Strategies

Sustainability
Management

Items

Water withdrawal /wastewater location

Water supply
Total water
Groundwater, etc.
withdrawal
Total
Total water
discharge

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

23

31

0

0

23

31

Sewage23

31Rivers, etc.

0

0

Total

23

31

Unit

Scope coveredML(megaliters)

Consolidated

Recycling(kg)
30,00025,00099.8 %(FY2022)

Total amount of waste (intensity)

20,00015,00010,000
5,000
0

(kg)

Break
down

20,000Efforts on Global Environment

Note: Scope covered in fiscal year ended March 31, 2022 is on a non-consolidated basis

The total amount of waste (intensity) in FY2022 was 21,699 kg, a 13.2% reduction compared tothe previous year. The recycling rate improved by 0.5 points from the previous fiscal year to 99.8%,
achieving the annual target of a recycling rate of 99% or higher.
(Coverage: Hotaka Factory, Harmonic Drive Systems)

25,000HDS REPORT 2023

Water withdrawal and water discharge

Reduction of Industrial Waste and Promotion of Recycling

30,000

Data and Company
Information2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)

Waste
(kg)
1,000

15,000800

10,000

0.2 %

5,000
0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)

Note: Recyclable materials = scrap metal and chips, discarded motor parts, electrical wire scraps,
electronic parts, office machines, development prototypes, etc.
Waste = wood chips, plastic waste, magnetic powder, etc.

(FY2022)

600
400
200
0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (FY)

38

39

HDS REPORT 2023

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Measures to Address Climate Change
Information Disclosure Based on the TCFD Framework
The HDS Group recognizes the impact climate change has on society, and Net Zero by 2050 has
been set as a long-term goal that must be addressed as a serious social issue for management.

1. Governance
The HDS Group’s governance on climate change is incorporated into the governance for sustainability
overall. Please refer to the message from the person in charge of sustainability promotion (pages 35 to
36).

4. Metrics and Targets
The HDS Group has set Net Zero by 2050 as a long-term goal in relation to climate change.
Specific short- to medium-term targets for reducing GHG emissions are currently being set taking into
consideration the HDS Group’s management strategy, business expansion, etc.

GHG emissions

Country/region

3. Risk Management
HDSI has established a system to be able to identify, assess, and respond to risks and opportunities
related to climate change in accordance with the “Crisis and Risk Management Regulations.”
Risks are categorized into company-wide risks and risks by business process, with risk assessment
conducted once a year.
The Executive Office in Charge of Corporate Planning and the corporate planning division
grasp, analyze, and assess company-wide risks, while each of the divisions extracts and identifies
risks by business process. The Internal Control and Audit Office conducts risk assessment with ashort-, medium-, and long-term timeline from the perspective of frequency and scale of damage, andformulates policies from the perspective of law and of human life. In addition, comprehensive risk
assessment is conducted putting all of the above together, and the Executive Officer in Charge of
Human Resources and Administration, who is in charge of risk management, prioritizes them basedon assessment results, for the President and CEO to approve. Risk mitigation activity is conductedbased on policies formulated from the perspectives of legal compliance and prioritizing human life,
with division leaders setting management targets for each of the risks and determining the responsesuch as avoid, accept, mitigate, and transfer, according to the risk. Progress of such activity being
conducted is reviewed by the Executive Officer in Charge of Human Resources and Administration
annually. Based on such review, the President and CEO decides on policy for the following fiscal
year, which is deployed to the divisions.

Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Scope1

Scope2

Scope1

Scope2

Japan

80

13,39481

15,418

16

416

14

264

Europe

197

2,349

47

2,494

783

145

474

16,942286

18,6502. Strategy
Risks and opportunities related to climate change that could potentially affect the HDS Group’sbusiness were identified, then a scenario analysis was conducted to analyze the degree of impact
and timeframe for conceivable emergence of each risk and opportunity on a medium- to long-term
timeline.
Based on the results of this scenario analysis, we will promote efforts for opportunity creation andrisk mitigation.

（t-CO2）

Scope 1 and 2 emissions

Asia
US

205

498
Total
Note: Scope 2 is location-based emissions（t-CO2）

Scope 3 emissions
Category

Category nameFiscal year ended March 31, 2022 Fiscal year ended March 31, 2023

1

Purchased goods and services

198,899358,7922

Capital goods

17,054

11,2373

Fuel- and energy-related activities not included in
Scope 1 or Scope 2

4

Upstream transportation and distribution

5899

18,329

3,951

8,466

Waste generated in operations

455

1,322

6

Business travel

104

702

7

Employee commuting

212

613

8

Upstream leased assets

09

Downstream transportation and distribution

10
11
12

Processing of sold products
Use of sold products
End-of-life treatment of sold products

13

Downstream leased assets

14

Franchises

15

Investments

16

Other (upstream)

17

Other (downstream)
Total

–

0
3,837

–
–
–

0
6,190,129
1,398

–

0

–

0

–

23

–

0

–
221,57406,594,846

Note 1: Range covered in Categories 1, 4, 5, 6, and 7 in fiscal year ended March 31, 2022 is
on a non-consolidated basis
Note 2: Categories 9, 11, 12, and 13 are newly calculated for data in fiscal year ended March 31, 2023

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information

HDS REPORT 2023
Measures to Address Climate Change

Main activity and results for reducing GHG emissions in FY2022❶ Switched power source to 100% renewable energy at HDSI Ariake Factory and German subsidiary❷ Introduction of renewable energy at a rate of 28.2% (as of the end of FY2022)❸ Renewable energy utilized in FY2022 was 12,412,718 kWh, achieving an annual CO2 reduction of 5,299.8 tons
❹ Switched company cars at domestic group companies to EVs❺ Reduced electricity consumption with air leak inspections at production facilities, use of low pressure in compressors, operating air
conditioning at energy-saving settings, and switching to energy-efficient production facilities❻ Discontinued use of aging compressors, improved operating efficiency of air conditioning by performing maintenance

Scenario analysis
Value chain Scenario

Risk

Upstream

DirectOpportunity

4.0°C

Downstream

Relevant business activity
Procurement/Transportationand distribution
Procurement/Transportationand distribution

Risk / opportunity factor

業
要

所

場
在

名

株式会社ハーモニック・ドライブ・システムズ

所

株式会社ハーモニック・ドライブ・システムズ有明⼯場

地⻑野県安曇野市穂⾼有明橋⽖５１０３−１

購 ⼊ 予 定 期 間

２０２２年４⽉〜２０２５年３⽉

購⼊予定電⼒量「適⽤を希望する電気需給契約」の電気使⽤量の全量

本書は中部電⼒ミライズ株式会社の販売する、安曇野産※1ＣＯ２フリー電気※2 の購⼊契約を締結いただいていることを証明するものです。
2022年4⽉1⽇
中部電⼒ミライズ株式会社
⻑野営業本部 法⼈営業部
販売統括部⻑ 南澤 宏幸※1 「安曇野産」とは、中部電⼒ミライズが供給する電⼒量のうち、安曇野市内の⽔⼒発電で発電された電気が含まれることおよび当該電気が、2022〜2024年度電源構成（計画値）上、100%割り当てられる予定であることをもって、安曇野市由来であることをいいます。
※2 「CO2フリー電気」とは、「電気事業者ごとの基礎排出係数及び調整後排出係数の算出及び公表について（20210520産局第1号・20210528資庁第2号・
環地温発第2106013号，改正された場合は改正に従う。）」に従いメニュー別排出係数を算定した場合、
当該排出係数がゼロとなる電気をいいます。
なお、当該ＣＯ２フリー電⼒は、中部電⼒ミライズが相対取引によって、電気とあわせて調達した⾮化⽯証書を活⽤しており、経済産業省および環境省が定める「国際的な気候変動イニシアティブへの対応に関するガイダンス（2020年3⽉最終改定）」において、
ＲＥ１００報告に活⽤可能とされております。

Timeline definitions: short-term 0-3 years, medium-term 3-10 years, long-term 10-30 years
Details

Timeframe in which Probability of Magnitude of
it may emerge
occurrence
impactSupply chain disruptions due to more intense and frequent natural disasters (typhoons, heavy rains, etc.) cause delays and halt in procurement of raw materials

Short-term

MediumMediumReputation

Gain greater trust from customers with transport and distribution more resilient to natural disasters by diversifying suppliers

Short-term

Low

High

Changes in precipitation patterns cause a decline in available water. Restricted water withdrawal, etc. cause halt in operations
Increase in production costs due to surge in water prices

Medium- to long-term

Low

MediumFlooding, heavy rains, etc.

Technology / Production

Water shortage

Risk

Technology / Production

Flooding, heavy rains, etc.

Increase in flooding damage at coastal operation sites due to elevation in sea level

Extremely long-term

Low

Low

Risk

Technology / Production

Flooding, heavy rains, etc.

Damage to operating sites, halt in operations, and lower production amounts occur due to more intense and frequent natural disasters

Short-term

MediumMediumRisk

Technology / Production

Rising temperatures

Labor productivity falls due to rising temperatures

Medium-term

Low

Low

Risk

Technology / Production

Rising temperatures

Costs increase to add / replace air conditioning equipment at operating sites and their running costs increase due to rising temperatures

Medium-term

MediumHigh

Procurement/Transportationand distribution
Procurement/Transportationand distribution
Procurement/Transportationand distribution

Reputation

Gain greater trust from customers with transport and distribution more resilient to natural disasters by dispersing manufacturing sites

Short-term

Low

High

Surge in energy prices

Surge in energy prices due to introduction of renewable energy

Short-term

Low

MediumSurge in raw material prices for electrification and decarbonization (steel materials, aluminum, steel, rare earth elements, etc.)

Medium-term

Low

High

If the competition to develop low-carbon products intensifies and the response is delayed, the competitiveness of products will be reduced

Medium-term

Low

High

Increase in burden to respond to broadening and stricter regulations related to sustainability, and possibility of failure to comply resulting in restriction on transactions
and penalties

Short-term

MediumHigh

Increase in burden of capital investment to reduce emissions and of energy-saving measures

Short-term

Medium

High

Risk
Risk

1.5°C

Referenced scenarios: IEA NZE2050 (1.5°C scenario), RCP 8.5 (4.0°C scenario)

企
需

Risk

Opportunity

Upstream

DirectRisk /
opportunity

安曇野産CO2フリー電気
購入契約証明書Surge in raw material prices

Risk

Technology / Production

Development of low-carbon technology

Risk

Technology / Production

Tightening regulations

Risk

Technology / Production

Spread of energy-saving technology

Risk

Technology / Production

Tightening regulations

Risk

Technology / Production

Development of low-carbon technology

Opportunity

Technology / Production

Spread of energy-saving technology

Opportunity

Technology / Production

Spread of low-carbon technology

Opportunity

Technology / Production

Development of low-carbon technology

Risk

Technology / Production

Decrease in demand forexisting technologies

Risk / Opportunity

Sales/ Reputation

Reputation

Increase in expenditure with carbon pricing for emissions (tax)Medium-term

High

High

Short- to medium-term

Low

High

Reduced energy costs and lower burden of carbon taxes as a result of switch to low emission facilities

Medium-term

MediumHigh

Increase in sales related to low-carbon products (EVs, etc.) due to promotion of low-carbon trend in society

Medium-term

High

High

Increase in demand for low-carbon materials

Medium-term

High

High

Decline in sales of products for applications related to petroleum, natural gas, and paper due to decrease in demand for such material

Medium-term

Low

Low

Reputational risk of response to climate change being deemed inadequate (society, consumers, employees)

Medium-term

MediumHigh

Increase in costs for technology development to switch to low-carbon materials (green materials, recycled materials)

40

41

HDS REPORT 2023

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Provision of Products and Services That Meet Customer Expectations
A shift in the source of power for industrial machinery, fromhydraulics to electrification, has triggered a rapid expansionof applications for HarmonicDrive® into new fields, such asmachine tools, industrial robots, semiconductor manufacturing
equipment, and surgical assistance robots. We believe such
expansion for new applications is a major result of the HDSGroup’s rapid adaptability to the dynamic business environmentand our continued provision of products and services that meetcustomer expectations.

Five strengths of the HDS Group that serve in meetingcustomer expectations(1) Accumulated technologies and skills related to HamonicDrive®
Prompted by our fateful encounter with HamonicDrive®, wehave been pursuing the endlessly expanding potential of
speed reducers for more than 50 years, since our company
was founded. Development technologies, production
technologies, processing and assembly technologies and skills,
and production systems that we have built up over time are
irreplaceable assets of the HDS Group, and we believe they
are also our greatest strength.

(2) A product lineup providing compact size, light weight, and high accuracy
The mechatronics products and speed reducers we manufactureand sell are being chosen by customers who seek advanced
levels of motion control and more compact, lightweightequipment. Among these products, the HarmonicDrive®, with its
compact size, light weight, and high precision, has won a highworldwide market share as a speed reducer built into the joints
of industrial robots, which are used in manufacturing processesof automobiles, digital equipment, semiconductor wafers, andflat panel displays. Moreover, in wide-ranging applications
such as machine tools, measuring and test equipment, spacesatellites, advanced medical equipment, and in vehicles, it isproviding differentiated added value that would be difficult toachieve with any other mechanism.

(3) Core technology enabling the provision of total motion control
The HDS Group has built up total motion control technologies
and skills through R&D and production of mechatronics
products that integrate speed reducers, motors, sensors,
drivers, controllers, and other system elements. The resulting
tangible and intangible technologies and skills related to coretechnology are essential for providing the advanced motion
control our customers demand, and are the source of thecompetitive advantage of the HDS Group.

(4) Business operations integrating sales, manufacturing, and development
In order to reflect customer needs in our product development
and manufacturing, in the HDS Group’s business operations thesales, manufacturing, engineering, and development divisions
work closely together. For example, these main functions are

Customer testimonials
Naka Manufacturing Division, Hitachi High-Tech
Corporation
Certificate of Appreciation (2022)
We were presented with a certificate of appreciation for working to ensure a stable supply of products amidst
difficulties in procuring raw materials and parts, and helping to keep effects on production to a minimum.

ULVAC, Inc.

Certificate of Appreciation (2022)
We were presented with a certificate of appreciation for working to ensure a stable supply of products amidst
difficulties in procuring semiconductor-related parts.

Semiconductor Lithography Systems, Nikon Corporation

Award of Excellence - Outstanding Supplier (2023)
We were recognized for our high level of technology in addition to continued delivery of products during
supply chain disruptions that began around 2020.

Nissan Motor Corporation
Certificate of Appreciation Outstanding Quality (2021)

We were presented with the certificate inappreciation for reaching all quality target scores(Japan Region) for engine component products
set in the Supplier Scorecard (SSC) for Japan in
FY2021.

concentrated in Azumino City, Nagano Prefecture; and a
speedy and efficient workflow operates from the initial contacts
with customers to technical reviews, prototyping, order-taking,manufacturing, and shipment. A strength of the HDS Group is
the system in place to quickly reflect customer needs and ideasof engineers in production and to provide products that meetcustomer expectations.

(5) Global business expansion
The HDS Group has operation sites in Japan, Germany, theUS, South Korea, China, and Taiwan. Business strategies that
conform to characteristics of each region are promoted andeach site mutually cooperates to provide optimal products andservices to customers around the world.

Providing QCDS+S with an awareness of the HDSGroup’s role in the industry
We provide QCDS+S as part of our business policy to improvecustomer satisfaction. Q stands for quality, and we strive toachieve quality reform for zero non-conformances and “Sigma
Zero.” D is for delivery. We are working to maintain stableproduction capacity, while improving accuracy of delivery
timelines by monitoring the manufacturing progress status in realtime.

Providing QCDS+S with an awareness of the HDS Group’s role in the industry

Q●

Improvement in product reliabilityC●

Comprehensive price strategy

D●● Strategic inventory control
Stable production capacity
Improvement in delivery date management based on monitoring
the manufacturing progress status in real time

S

●

●

●

Quality reform (Sigma Zero)

Speed

Initiatives that place customers first
Recognize challenges customers face in a timely manner, and provide
solutions quickly (ER response)HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information

HDS REPORT 2023

■ Message From Officer in Charge of Supply Chains
Establishing a system for stable procurement is the important first step in seizing business
opportunities. We will develop procurement activities to always be one step ahead so as
not to overlook emerging risks.
Sustainable Procurement Policy

Managing Executive Ofﬁcer
General Manager of Supply Chain

Minoru Asano

1. Fair and Equitable Transactions
2. Compliance with Laws and Social Norms
3. Respect for Human Rights and Work Environment
4. Consideration for the Global Environment
5. Coexistence and Co-prosperity with Suppliers
HDSI website / Sustainable Procurement Policy

Specific initiatives toward Creation of Stable Systems
for Procurement and Supply
A sustainable procurement policy was formulated in FY2022 for us
to work together with our suppliers in realizing a sustainable society
and enhancing corporate value. Based on this policy, we as the
supply chain headquarters are working on three priority measures.
The first measure is building and strengthening a system for stablesupply, the second is comprehensively enhancing the capabilityof the supply chain overall, and the third is human resource
development.
For building and strengthening a system for stablesupply, we believe it important to maintain a close relationshipwith the HDS Cooperative Association which is made up of tier
1 suppliers. We are also focused on finding new suppliers,
and are working to build and strengthen a system for stablesupply while striving for Coexsistence andCo-prosperity with suppliers. To achieve responsible
procurement, we have revised the supplier assessment criteria
based on the sustainable procurement policy. Suppliers arerequested to agree to the sustainable procurement guidelines
we provide and respond to a self-assessment survey, whichallows us to confirm their implementation of the guidelines.
We have also created a supply chain chart to strengthen
resilience against geopolitical risks of procuring regions, andare preparing a structure allowing us to take prompt measuresin times of emergency.
As initiatives to strengthen comprehensive capabilityof the supply chain as a whole, we ask for theunderstanding of our suppliers for improvement to QCDS,
which is our business policy, and request enhancement of
their ability to issues of quality and delivery deadlines. We
are also focused on supply chain DX, and have switched fromanalog methods such as paper and PDF formats to a uniform
electronic system for the quotation process. This has made leadtimes significantly shorter for the process from quotation request
to receipt and enabled detailed cost analysis, contributing
largely to efficiency in operations. By becoming paperless withrequests and responses for over 34,000 quotations annually,
we have achieved a reduction in environmental burden as asupply chain overall.
For human resource development, OJT is fundamental.
We believe the foundation of developing personnel is throughdirect visits to sites of not only tier 1 suppliers, but also tier 2
and tier 3 suppliers, to fully understand the overall picture of the
production process for the parts we procure. We encourage our
employees with experience to acquire knowledge regarding
finance and labor through eLearning and correspondence
courses to be able to fully address management issues facedby our suppliers. We believe that attempting to resolve issues
through the same perspective as the management team ofour suppliers will lead to practicing the HDSI management

philosophy of Coexsistence andCo-prosperity.

Risks and opportunities in supply chain management
We believe the heightened geopolitical risks will become
normalized, and we need to anticipate a situation in whichmaterial procurement rapidly becomes difficult due to a chain
reaction of country risks. To address such risks in procurement,
we have accurately understood the situation of tier 2 and tier 3
suppliers using the supply chain chart, and established a system
to constantly monitor potential risks. When risk management isweak, supply may suddenly be disrupted and negatively affectproduction activities, resulting in major inconvenience caused
to customers.
In handling overseas procurement risks, we place emphasison coordination with our group companies in Germany, theUS, and China. By strengthening our global network, we areable to identify causes of bottlenecks in procurement at an earlystage, allowing us to respond quickly. Centralized purchasing
may help reduce costs in normal times, but when considering
geopolitical risks, it can be said to increase vulnerabilities.
Therefore, strategic measures are needed such as decentralizedpurchasing and advance stocking of inventory.
With a decline in the workforce globally, application of the
HDS Group’s products is expanding from robots for automation
to humanoid robots, etc. Stable procurement of materials
and parts is essential in definitively capturing new business
opportunities. Establishing a system for stable procurement
is the important first step in seizing business opportunities,
as procurement is positioned first among the processes of
production. We will look ahead with a broad perspective andundertake procurement activities that are one step ahead so as
not to overlook emerging risks.

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HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Interview With Officer in Charge of Human Resources
I believe individuals willing to take on challenges who are interested in a wide range ofmatters, not just their specialized fields or work to which they are assigned, can play anactive role.

Executive Ofﬁcer
General Manager of Human Resources and Administration

Osamu Asakura
Please talk about the kind of personnel needed inrealizing our mission of contributing to the missionof the technological innovation of society with motion
control technology, and the measures to obtain such
personnel.
With the commercialization of Clarence Walton Musser’s
invention, the HarmonicDrive®, HDSI has been meeting theneeds of various fields and applications that require precision
positioning. Thus far, we have paid close attention to theopinions and needs of customers, refined our technologies,
and provided new value, and will continue to do so moving
forward. To continue realizing HDSI’s mission, we will needto ceaselessly pursue and propose ideal motion control thatwill expand over time, without being confined by fixed ideas.
Roughly 160 engineers currently make up our team, mainly
consisting of those in the R&D and production engineering
divisions, which is hardly a large number for a company
providing products globally. To continue working on reducing
the size and weight of HarmonicDrive® while enhancing areas
related to controllers, sensors, etc., I believe individuals willingto take on challenges who are interested in a wide range ofmatters, not just their specialized fields thus far or work to which
they are assigned, can play an active role.

Type of individuals the HDS Group seeks
1. People who think for themselves and act with theambition to take on new challenges
2. People who act with the spirit of cooperation neededin an organization
3. People who are richly individual and draw on theircreativity
4. People who correctly see the direction of changes inthe environment and can adapt to them
5. People who possess cultural and human breadth
In recent years, we employ roughly 30 or so new graduatesand mid-career hires annually, with most being engineeringrelated employees. We recruit with a good balance between
those who have just graduated, to whom we teach HDSI’stechnology from scratch, and those who can upgrade ourtechnologies utilizing skills from their previous employment.
We aim to increase the number of personnel who can improve
technologies and skills for not only the technological fieldof machinery but also for related fields such as electrical,
communications, lubricants, materials, etc. and are able toadvance product development systematically.

Please tell us about specific measures and initiatives
to realize the material issue of “creating a rewarding
work environment.”
The HDSI management philosophy begins with “Respect for
the Individual.” It is clearly stated that HDSI aspires to be acompany where the rights of every individual employee arerespected and where individuals can pursue a meaningful,culturally rich and purposeful life. Further, it also states that wewill make HDSI a company that believes in each employee’s
aspirations, supports autonomous activities, and creates anenvironment where employees can achieve their potential
through work, and where skills and performance are rewarded.
The management philosophy is an unchanging goal thateach of us as employees wishes to achieve, and I believethat goal cannot be achieved unless each of us is respected
and at the same time respects others. I feel that if a corporate
culture instilling respect for each other is fostered, it will lead tocreating a safe, secure, and rewarding work environment.
To promote development of skills, we provide
various learning opportunities for employees who are
motivated to grow. These include open-call training programs
for language training overseas, training dispatch to overseas
group companies, and acquisition of PhD, MBA (Masterof Business Administration), and MOT (Management ofTechnology). Employees can also use self-declaration forms to

HDS Group’s
Values and Aspirations

ask the personnel division directly for a transfer for the purposeof upgrading skills. Systems are also available for self-learning
through eLearning and correspondence courses. Through such
systems, we provide opportunities for active skills development.
As an initiative to create a safe and secure
work environment, the Well-Being Center was set up in
FY2020 to work toward promoting the mental and physicalhealth of employees. A dedicated occupational health nurse
is employed full-time at the Hotaka Factory, and employees
can freely request consultations on health matters. Yoga classes
and the like are also held for maintaining health. There is alsoa system in place for employees, when they feel unwell, to beable to receive online medical support from a contract industrial
physician. Ensuring psychological safety in the workplace isalso a focus, and those in managerial positions are required or
encouraged to attend group training or take e-Learning courses
on harassment prevention as well as developing and dealing
with subordinates and juniors.
For improvement of occupational health in production
locations, the Safety and Health Committees of each factory
coordinate activities aiming to reduce occupational accidents
to zero. Activities surrounding the improvement suggestion
system and improvement circles are also robust. More than
1,000 suggestions for improvements are submitted each year,
not only for improvements in operations, but also ideas oncontributing to SDGs and to occupational health and safety

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Managementin the workplace. Outstanding suggestions are chosen andfulfilled as company-wide initiatives. There are also over 50
active improvement circles that collect wisdom of their members
to make even greater improvements to operations. Outstanding
suggestions and actual cases are shared quarterly throughthe intranet and morning meetings, with presentation of a top
award for excellence annually.
Flexible working is being promoted so that women will
want to continue working after marriage and childbirth, withinitiatives being carried out such as the implementation of aremote work system and encouraging male employees to takechildcare leave. With regard to gender balance, the proportionof new employees hired for engineering-related jobs is high,but we receive few applications from women for these roles. It
is therefore a matter that cannot be resolved in a short periodof time; however, we hope to first garner more interest in HDSI
among female students of science by providing visiting lecturesat high schools and technical colleges. It may take some time,
but we believe such efforts will lead to an increase in the ratioof female employees, and also an increase in women playing
an active role in management and as officers. We also believe
participation by the elderly group is important, and haveraised the retirement age to 70. We hope those with physicalfitness and vitality will play a role, utilizing the experience andknowledge they have accumulated.

Data and Company
Information

HDS REPORT 2023
Interview With Officer in Charge of Human Resources

how a solution can be reached even when conditions aretechnologically difficult. I hope such a perspective can beused to develop human resources over the next 50 years.
Specifically, to focus on developing human resources wewill address fostering personnel who possess high levels of
sensibility and strong passion and who are in constant contact
with the outside world, by promoting mechanisms to further
increase contact between engineers and customers, rotate
personnel internally, and undergo personnel exchanges amonggroup companies including those overseas.

Promoting the health of each and every employee is thefirst step in creating a safe and secure work environment.
We offer various forms of support so that all employees canengage in work in a healthy mental and physical state. Followups for regular health checkups, complete medical exams,
and stress checks are encouraged, along with educational
activities to promote health, mental health consultations on-site
at factories, consultations to check the health of employees
working long hours, and online consultations. We also
recommend exercising 10 minutes longer than the current
target for health promotion, with the theme “Let’s start now!
Quick exercise.” We are putting into practice the idea that
promoting the health of each and every employee is the firststep in creating a safe and secure work environment.

Establishing an environment to create new standards
that define the next 50 years through outside-the-box
thinking
HDSI marked its 50th anniversary in 2020, and has juststarted its new voyage toward the next 50 years. To makeeven greater strides over the next 50 years, we believe it
is important to continue development and research for our
proprietary technologies, while also not confining ourselves toan ivory tower, and instead listen to the needs and voices ofour customers, respond accordingly, and bring to the forefronta “greedness” inherent in HDSI. To do so, we need humanresources who can take issues and needs that customers
want addressed, and use their creativity to think deeply about

Well-Being Center

Manager

Public health nurse and nurse

To s h i a k i S h i m i z u

Masae Hotaka

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HDS Group’s
Values and Aspirations

HDS REPORT 2023

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information■ Employee Roundtable Discussion

Working style at HDSI as
perceived by young employees
The HDS Group advocates “ Create a rewarding work
environment” as one of its materiality issues. Seven young
employees, consisting of both male and female employees
from different departments, gathered to discuss topics
such as whether a comfortable working environment isprovided, whether the Company’s organization operates
in a rewarding manner, whether opportunities forchallenges are offered, and any issues or requests they
may have.
(Venue: TRIAD IIDA-KAN, Date: Nov. 22, 2023)

Attendees (from top left)

Ryohei Takeuchi (Procurement Dept., Supply Chain Div.)Taishi Chikada (Head Office Sales Dept., Domestic Sales Div.)
Shunsuke Mimura (MT Production Dept., First Production Div.)
Ryuho Nakanishi (Designing Dept., Development & Engineering Div.)(from bottom left)

Hua Jin (Overseas Sales Dept., Overseas Sales Div.)
Marina Yamaya (Quality Assurance Dept., Quality Assurance Div.)
Aoi Ando (Corporate Planning & Investor Relations Office, Corporate Planning Div.)

Ando: I am Ando, acting as moderator. This year marks
my fifth year with the Company. I primarily handle tasks
related to financial reporting, such as analyzing IR data andupdating the IR website, in the Corporate Planning & Investor
Relations Office, Corporate Planning Division. I have also been
concurrently responsible for duties associated with sustainability
since 2022.
Mimura: I am Mimura from the Mechatronics Production
Department. I am in my seventh year with the Company.
Currently, I am engaged in the business transfer of mechatronics
products to our group company, Harmonic Winbel.
Yamaya: I am Yamaya from the Quality Assurance Division.
I joined the Company in 2020 and, currently, I am working
in the Quality Assurance Group, where I am responsible
for ensuring product quality, creating meeting minutes, andmanaging the progress of various projects, among other duties.

Takeuchi: I am Takeuchi from the Supply Chain Division.
After completing my initial training upon joining the Company,
I was assigned to the Procurement Department. This year marks
my fifth year with the Company. In addition to the procurementof materials and procurement cost reduction, I am alsocollaborating with our partner companies to improve quality.

Jin: I am Jin. I entered the Company as a mid-career hire in
February 2018. I am responsible for clients in South Korea
and parts of China within the Overseas Sales Department.
My previous position involved sales at a trading company
specializing in machine tools. I decided to join this Company
due to my interest in the future prospects of automation androbotics.

Nakanishi: I am Nakanishi, in charge of design role in theDevelopment & Engineering Division. I joined the Company in thesame year as Chikada-san, Ando-san and Takeuchi-san. So, I am
also in my fifth year. I am responsible for tasks such as registering
new product part numbers and making revisions to drawings.

Ando: Do you think that a comfortable work environment isprovided and that the organizational management fosters “asense of fulfillment” in your day to day work?

Chikada: I am Chikada from the Domestic Sales Division.
I joined the Company as a new graduate in 2019 and was
assigned to the Domestic Sales Division in 2020. It is myfifth year with the Company. I am primarily engaged in sales
proposals and technical support, mainly for customers in
Nagano Prefecture.

Mimura: In my department, we are promoting multi-skilling,where one worker handles multiple tasks. By eliminating thesystem where work depends on a specific individual, it becomeseasier to provide backup for employees taking vacations,thus promoting an environment where taking time off is easier.
Additionally, when there were delays in product delivery due toHDS Group’s
Values and Aspirations

the business transfer, we were able to achieve early resolution
with support from other departments. Networking with otherdepartments has provided a great opportunity to gain new
knowledge and experience, different from what we've had
before, and it has also been helpful in resolving workplace
challenges.
Yamaya: I work in a department
with a small team of seven members.
Working closely with my supervisor
allows me to promptly seek advice on
any uncertainties, enabling me to focus
on my duties with peace of mind. I feelthat my workplace environment permits
excellent communication and openness.
YamayaTakeuchi: The Procurement
Department requires close coordination with partner companies
and also communication with various departments within the
Company. When I exchange opinions with my superiors,
senior colleagues, and colleagues from other departments, I
find everyone to be approachable and supportive, making thework environment comfortable. Additionally, during regular work
performance appraisals, I do such things as conducting progress
checks, confirming challenges, and setting goals, all together
with my supervisor. Having my performance evaluated fairly
motivates me.
Nakanishi: In an environment where I feel comfortableasking questions to my superiors and senior colleagues, I am
feeling that I am moving forwards in personal growth in steadysteps. The design section has seen an increase in young
employees, creating a fresh work environment. Lately, I've
also been providing guidance to younger colleagues. As I’ve
gained experience, I've come to share more work with otherdepartments. I feel comfortable and motivated to work because
everyone is willing to listen in a supportive manner.
Chikada: The sales section is seeing an increase in employees
hired through mid-career recruitment. The Company has aunique culture where we share our previous job experiences
and insights, absorbing each other's experiences. (lol) While thesales team at machinery manufacturers may have traditionallybeen seen as a “male-dominated workplace,” our Company has
many female employees who choose to work as sales persons,showcasing a trend toward diversification. Furthermore, oursupervisors respect individual opinions such as by asking “howdo you want to proceed with our work?” which minimizes theMateriality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

feeling of workload burden and creates a comfortable working
environment.
Jin: After taking a year and a half off for marriage andchildbirth, I returned to work in April last year. I am now
handling the same responsibilities as
before taking maternity and childcare
leave. Due to having a young child, I
also utilize telecommuting, and when
my child isn't feeling well, I can takean hour off from work and return
later, allowing for a flexible work
arrangement. Previously, I used to go
on overseas business trips, but now
Jinsomeone else goes in my place. This
allows me to work at my own pace,and I feel that it's a very comfortable working environment.
Ando: Do you think that opportunities for self-realization areprovided, and that fair evaluations (such as remunerations andpromotions) are conducted?
Jin: My boss respects my need for a manageable work pacethat gives priority to my childcare responsibilities. I have nocomplaints about my current evaluation. Young motivatedemployees around me are getting promoted, and I also feel that
I am being fairly evaluated. It seems like the company is paying
attention to the employees' “motivation.”
Chikada: I attend around fivecorrespondence courses or seminars
every year. I don't have experience or
knowledge in development and design,and honestly, I feel that the solutionbased selling business is a high hurdle
for me. However, by studying various
devices and logistics related to my workthrough correspondence courses, I feelthat I am broadening and deepening
my understanding of my job.

ChikadaNakanishi: In our Company, we create goal management
sheets and have twice-yearly interviews with our superior.
Discussing such topics as performance evaluations and the settingof goals for the next half-year, and receiving feedback from mysuperior allow me to resolve challenges and improve my abilities
or skills. I also believe that my contributions are fairly evaluated inthis process. Moreover, by undertaking correspondence courses

Data and Company
Information

HDS REPORT 2023
Employee Roundtable Discussion

outside my area of expertise, I am acquiring a broad range
of knowledge, which in turn contributes to my confidence andpersonal growth.
Takeuchi: I have opportunities granted to participate in bothon-the-job training (OJT) and off-the-job training (Off-JT). In OffJT, my peers have the opportunity to participate in overseas
training, and I also have the chance to join training sessions.
This demonstrates that opportunities for talent development areproactively provided. The personnel
appraisal process involves thedepartment-wide implementation of amanagement program that incorporates
various pieces of advice aimed at
improving work performance levels
specified by superiors. This systemallows for evaluation of the entire
department's performance. The process
is transparent, ensuring fair evaluations.
Takeuchi
Yamaya: In my department, we have the opportunity towork with our supervisors in establishing goals and receive
various pieces of advice. I feel that I am receiving thoughtful
guidance and being fairly evaluated. In the Quality Assurance
Department, we hold department head-led study sessions oncea week, covering various fields, as part of our capacity building
initiatives. Studying subjects like mechanical engineering, which
I didn't specialize in, during these study sessions enables me toapply this knowledge directly to my work, leading to a “sense offulfillment.”
Mimura: We also hold study sessions in the Mechatronics
Production Department, and I always look forward to them asopportunities for new discoveries. The Company covers thetuition fees for correspondence courses upon completion, andreceiving an award for excellence also comes with a bonus,
which motivates me to excel. Furthermore, through twice-yearlymeetings with the department head and manager, I have theopportunity to discuss my performance evaluation, set futuregoals, and receive advice on how to achieve them. Being able
to consult with them in a supportive manner boosts my motivation.

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Employee Roundtable Discussion

HDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Ando: What do you think about career advancement, including
departmental transfers?
Mimura: The manufacture of actuatorsin the Mechatronics Production
Department is closed once thebusiness transfer to Harmonic Winbel
is completed. I have been given theopportunity to discuss with my boss
my preferences for future departments.
We conduct semiannual interviews
with the department head regarding
Mimuraperformance evaluations. Additionally, I
have the opportunity to speak with the general manager, and it's
reassuring to know that they care about the career advancementof employees on the front lines.
Jin: I'm concerned about whether I'll be able to go on overseas
business trips as my child grows up. Since I handle clients inSouth Korea and parts of China, if I can't go on business trips,
I might need to consider transitioning to a regional position. I'mworried about whether I may not go on business trips while inan overseas sales position, whether there is a regional position
available, and if there is a position available when I apply
for it. I'm also concerned about the relationship with careeradvancement.
Nakanishi: I do not wish to be transferred, but I believe thatthe knowledge and experience I have gained in design work
can be utilized in other departments such as development,
contributing to my personal growth and to the Company.
Indeed, it takes courage to volunteer
for a change. So, it would be helpful
if the Company asks something like,"Are there any employees interested inproactive department transfers?" This
would make it easier for employees
to raise their hands. I believe that a
few months of job support-oriented
transfers would be beneficial as it
would contribute positively to the current
Nakanishi
initiative to foster multi-skilled workers.
Yamaya: I think a rotation-based transfer system aimed atpromoting proactive transfers would be effective, rather thanmoving due to dissatisfaction with current duties. Indeed, I thinkexperiencing various tasks and departments can lead to new
discoveries and personal growth.

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information

Takeuchi: The Company's website states that it actively
promotes job rotation, but I have never heard from anyone who
has actually been transferred for job rotation. As Nakanishi-sanalso mentioned, there may be individuals who feel hesitant toexpress their desire for a transfer.
Chikada: I believe job rotation is beneficial for both individuals
and the Company. When I joined the Company, I expresseda desire to work in the development section. However, when I
mentioned that I would like to be a technology-savvy salesperson,
I was immediately assigned to the sales headquarters! (lol)Given my history, I can't help but feel hesitant about transferringto the development or technical departments now as it mightinconvenience others. However, if a transfer were possible, I
believe it would allow for deeper absorption of knowledge andfor the ability to develop products that meet customer needs by
understanding both sides.
Ando: Please let us know if there are any issues or requests,
including those related to the workplace environment andpersonnel system, that you would like to address.
Chikada: In our sales business, we propose customized
products. So OJT is crucial. However, differences in projects
and industries handled can lead to qualitative variations in
OJT, often resulting in disparities in sales representatives’knowledge and experience levels. Currently, I am based in asales office within a factory, and so it’s feasible for me to directly
approach the design and quality assurance departments forinquiries. However, I believe it would be physically difficult todo so in local sales offices. Therefore, I would appreciate theimplementation of mechanisms within the organization aimed at
uplifting the skill levels of personnel in charge, such as providing
education through operations manuals.
Takeuchi: The Procurement Department experiences asignificant increase in overtime hours during busy periods. We
are striving to streamline our operations to minimize overtime
hours as much as possible, but there are some tasks thatcannot be rationalized. Multi-skilling in the production process
is important, but I believe that streamlining tasks through theintroduction of digital transformation (DX) and information andcommunication technology (ICT) is also necessary for reducing
work hours.
Yamaya: I would be pleased to see more options for work
arrangements in place. Employees with childcare responsibilities
or other personal circumstances are allowed the flexibility tochoose alternative working styles. I believe it would also be
valuable for individuals who do not have such commitments tohave the freedom to choose their working arrangements. Indeed,
there are various institutional frameworks and regulations in place
aimed at workstyle reform, but it seems that they are not widely
utilized. I would appreciate improvements to make them moreaccessible and user-friendly.
Nakanishi: Actually, there was a time when I conducted
remote work while hospitalized. However, in the designbusiness, there is a process where supervisors review printed
drawings on paper, and it was challenging to do so remotely,
posing a problem for me. In the case of 3D design, I sometimes
feel that the specifications of my PC are insufficient. Due to theimpact of the COVID-19 pandemic, I have recently felt a lack ofcommunication between departments. I would appreciate it if theCompany could arrange employee trips and other opportunities
for us to get to know each other better.
Jin: I currently have my working hours reduced by one hour topick up my child, which has been incredibly helpful. I've heardthat some companies offer a system where employees withchildren in the lower grades of elementary school can work
remotely for shorter hours. I would be grateful if the Company
continues to adopt work systems permitting flexible working stylesin accordance with the lifestyle of each employee.
Mimura: In our Company, there are extremely large fluctuations
in orders taken. We are happy to receive orders, but orders thatexceed our facility's capacity require human intervention, leading
to increased overtime. We hope that the ongoing automation ofequipment and implementation of planned production will leadto reductions in overtime hours and improvements in production
efficiency.
Ando: I have been impressed byeveryone's greater-than-expected senseof job satisfaction and your dedication
to daily tasks. With our Company
subject to significant fluctuations
in orders received, I think that bypromoting multi-skilling and ensuringflexibility in our personnel system, both
employees and the Company can aim
for further growth. Thank you very muchfor sharing your valuable insights today.

AndoHDS Group’s
Values and Aspirations

Materiality to Achieve
Aspirations

Sustainability
Supporting Action
Strategies

Sustainability
Management

Data and Company
Information

HDS REPORT 2023

■ Interview With Officer

in Charge of Public Relations

We aim to realize our Management Philosophy by
conveying the HDS Group’s diverse social initiatives
to both internal and external stakeholders, thereby
further enhancing the awareness of our employees.
Executive Ofﬁcer in Charge of Public Relations

Te t s u o I k u t a

What do you think about our involvement with local
communities?
Our Management Philosophy advocate “Coexistence andCo-prosperity” and “Contribution to Society.” To ensure thefurther survival and development of HDSI, it is explicitly statedthat we must make our best efforts to build relationships thatsatisfy all stakeholders, that we broadly contribute to society
through our products and services, and that we aspire to be acompany that helps to improve the environment and the qualityof communities where we are located.
Our company established the current Toyoshina Factory in
Azumino City, Nagano Prefecture, in 1970, and commenced
production of the Harmonic Drive®. Subsequently, the Hotaka
Factory, Ariake Factory, Matsumoto Factory (Harmonic Precision),and Komagane Factory (Harmonic Winbel) were added andthe HDS Group has grown and expanded based in Nagano
Prefecture. Moreover, many of our suppliers who form our supply
chain and partner companies that handle component processing
and other tasks are also engaged in business activities in thesame region, fostering close relationships. From the perspectiveof securing human resources and ensuring the procurement andsourcing of materials, these local communities are extremely
important to HDSI.
At present, the General Affairs Department of the Hotaka
Factory is taking the lead in engaging in various local contribution
activities in these communities. Our subsidiaries in Germany andthe United States are planning and executing their own uniquelocal contribution activities rooted in their communities. We aim

to communicate these activities both internally and externally,
thereby enhancing employee awareness and contributing to therealization of our Management Philosophy.

Please tell us about specific initiatives for future
generations and local communities.
The Human Resources Department and Public Relations Officecollaborate to conduct periodic outreach classes at national
technical colleges and high schools in Nagano Prefecture. These
classes involve explaining the principles of Harmonic Drive®
and providing practical examples of its applications. We also
conducted science lectures at a national technical college inTochigi Prefecture, which has once won the grand prize at the
National Technical College Robot Contest (ROBOCON). We
would like to continue collaborating with educational institutions

Outreach Classes at National Technical Colleges in Nagano

to contribute to the development of young talent supporting
Japan's manufacturing industry.
At the 9th Shinshu Azumino Half Marathon, HDSI sponsoredthe event as a Gold Partner. Our executives and employees also
participated in the race, completing it alongside participantsfrom both inside and outside the prefecture, enjoying thenature of Azumino. We hope that sports will contribute to therevitalization of local communities, and we aim to continue
the active involvement of our employees alongside sustained
sponsorship.
As part of our commitment to community contribution, we
support the annual “Harmonic Concert” and “Harmonic Lecture”
held by the Harmonic Ito Foundation in Azumino City andMatsumoto City, respectively, through sponsorship. Since it was
first held, all proceeds from the Harmonic Concert have been
donated to Azumino City for the purchase of library books forelementary and junior high schools.

How are you going to advance initiatives for society,including future generations?
We believe that the greatest social contribution we canmake is enriching society by fulfilling our responsibility tosupply our products reliably, and this belief is firmly rooted
within our organization. We believe that contributions to the
local community, centered around Azumino City, where our
production base is located, will be reflected in future corporate
value through improvements in employee satisfaction and hiringof local people.
As a new initiative, we are aligning policies regarding
contributions to society and future generations with our overseas
group companies, and considering how to develop as a global
corporation in this regard. In Europe and North America,
matured philosophy regarding the relationship between
businesses and society is deeply rooted, and companies in theseregions are engaged in their own unique contribution activities,
often involving employee participation. Currently, we are not
only communicating our Company's philosophy and initiatives toour overseas group companies but also promoting information
sharing by featuring their activities in our internal publications,and through other means.

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