Value Creation Story

Business Overview

ESG Activities

Corporate Information

Value Chain
With the aim of enhancing our corporate value and resolving social issues throughout our business activities, the KOITO
Group is strengthening initiatives in the respective value chain of R&D, procurement, production, quality management
and marketing.

R&D
The KOITO Group makes full use of optics, electronics andother cutting-edge technologies in the pursuit of safety
and reliability, and conducts research and development ofinnovative and environmentally friendly system products.
The KOITO Groupʼs R&D activities are broadly categorized into basic research and product development.

OutlineBasic researchCentered upon technical center in Japan, the KOITO
Group conducts research to commercialize a new generation of produc t s anticipating market needs throughfurther evolution of our core technologies such as optics,electronics, machinery, and structures.

Procurement
The KOITO Group procures parts by selecting material andcomponent suppliers necessary for production.
This selection of suppliers is determined based on component speciﬁcations, monthly quantities, unit prices, estimated price of molds and other factors. In addition, we audit andapprove supplier plants when engaging in new procurement.
We formulate and manage procurement plans for materials
and components according to the KOITO Groupʼs productionplans.

Product development

Our Strength(Japan, Americas, China, Europe and Asia)● Clear understanding of needs through partnerships withcustomers, suppliers, external agencies and other suchorganizations, and its implementation to the products● Provision of safe and reliable products such as Adaptive
Driving Beam (ADB) headlamps to provide better visibility at night● Contributions to prevent global warming through energy
efﬁciency as well as smaller and light-weight reductions,
including the promotion of a transition to LEDs
● Rapid response to technical challenges based on a wealthof knowledge and experience● Educational system to develop and strengthen diverse
human resources in technical ﬁelds

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Business Issues
Social Issues

Tasks Addressed to Deep Value Chain● Promotion of research and development themes adapting

to rapidly changing technical and market needs as well asa ﬁercer development race from connectivity, autonomous driving, sharing and electric vehicles (CASE) to mobility as a service (MaaS)● Development of monitoring sensors such as LiDAR andall-weather cameras that contribute to safety and security
under ADAS (Advanced Driver Assistance System) andautonomous driving● More efﬁcient product development through the use ofvarious simulations and promotion of digital transformation (DX)● Training and securing engineers to pass down and evolve technologies● Promotion of advanced technical development that helps

materialize a safe and reliable automotive society, andachieve carbon neutrality

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The KOITO Group manufactures the products it develops anddesigns using the materials and products purchased from subsidiaries and suppliers. We audit plants when starting the manufacture of new products or when changing manufacturing processes at subsidiaries.
We formulate delivery plans based on order estimates fromautomotive manufacturers and other customers as well as subsidiaries (unofﬁcial monthly, yearly, mid-term and other plans)in addition to conﬁrmed orders as well as production planstaking applicable inventory and other plans into account.

Marketing
The KOITO Group understands global customer needs, realizes
cooperation with relevant departments and conducts proposal
and marketing activities through presentations.
We make proposals of next-generation products that contribute to safety, reliability and reduction of environmental impact
based on good customer relationships founded in trust, aiming
to expand its sales channels and proﬁt.

KOITO engages in quality management operations to assure
quality throughout the entire Group and formulates quality
inspec tion criteria and quality control methods. Ever yone
involved in manufacturing engages in quality control activities
based on the criteria and quality control methods.

The KOITO Group not only proposes new technologies toautomotive manufacturers and other customers, but also
develops products accommodating development plans
and required speciﬁcations.
● Global R&D network in ﬁve major regions of the world

Production andQuality Management● Global procurement system that allows local sourcing fromsuitable procurement sites● Enhancement of local procurement to mitigate the impact
related to foreign exchange ﬂuctuations● Sustaining and strengthening of good relationships withsuppliers● Realization of high-level Quality, Cost, Delivery and Development (QCDD) through ongoing improvement activities
with the cooperation of suppliers● Establishment of a BCP system to quickly grasp the level ofdamage and problems faced by suppliers when disasters strikeand to cooperate with suppliers to take the necessary action● Promotion of CSR /ESG activities throughout the entire
supply chain to materialize a sustainable society, such as
preventing global warming● Stable procurement by securing a ﬂexible supply andstrengthening the effectiveness of Business Continuity
Plans (BCP) in the supply chain● Optimization of supplier portfolios (thorough cooperation
across industries and elements of competition)● Enhancement of CSR/ESG activities throughout the entire

supply chain● Strengthening supply chain activities to achieve carbon
neutrality● Appropriate production system established by the KOITO

Production System (KPS)● Global production and quality assurance system in all ﬁve
major regions of the world● Designation of the KOITO Shizuoka District as the motherp l a n t a n d s u p p o r t f o r l au n c hin g o v e r s e a s p r o d u c t i o nsites/products and measures to address various problems● Drills and training to pass down and improve the technicalabilities and skills of employees throughout the entire Group● Strengthening and continuation of improvement activities forproduction sites● G l o b al in f o r ma t io n g a t h e r ing an d s al e s s y s t e m in al lﬁve major regions of the world● Global top share sales capabilities● Clear under s t anding of changing and diver se cus tomer

needs as well as speciﬁc sales capabilities● Sus t aining and s treng thening of good , s trong rel ation-ships based on close communication with customers● Product proposals of light sources and lighting technol-og y cultivated in the automotive lighting equipment
business for adoption in aviation, railway and infrastructure-related products● Strengthening of competitiveness by improving global QCDD

● Strengthening of marketing systems that reﬂect customer andadvanced and complex products● Enhancement of productivity through the use of AI, IoT and othertechnologies, such as the realization of smart factories● Strengthening of BCP at production sites, such as more resistant buildings and equipment and bet ter complimentar y
supply capabilities● Higher customer satisfaction● Shift to production equipment and processes that contribute● Proposals of attractive products that help materialize a safe,● Strengthening of quality management that adapts to moreto achieve carbon neutrality, reduce environmental impact
substances and effectively use resourcesmarket needs● Education and training to foster and strengthen complianceawarenessreliable automotive society and resolve social issues

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