Quality Assurance Guidelines for Partners

Furukawa Electric Co., Ltd.
September 15, 2020

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Introduction
Purpose
These quality assurance guidelines have been established for the purpose of understanding the
stance of Furukawa Electric Co., Ltd. and its group companies (hereinafter referred to as “theCompany”) on quality management and cooperation in supplying products and services that fulfill
the Company’s quality requirements from suppliers and contractors undertaking transactions with
the Company (hereinafter referred to as “partners”).
They envision the construction, implementation and improvement of the quality management
system in accordance with ISO 9001: 2015 in the value chain consisting of the Company, its partners
and secondary and subordinate partners to ensure constant improvement in customer satisfaction.
The Company therefore requests thorough understanding of and compliance with these Guidelines.
[Scope of Application]
Those partners who deal with raw materials, the production of components, software productionand embedding, assembly, outsourcing of work (including production, inspection andconstruction/installation work) and other processes regarding products and services (hereinafterreferred to as “Products”) that the Company delivers to its customers shall be subject to these
Guidelines. These Guidelines shall apply to quality management operations in all phases ofpreparation for production, mass production prototyping, and mass production.
[Position and Treatment of the Guidelines]
When individual contracts such as purchase specifications and guidelines on quality management
specific to business domains such as automotive products (hereinafter referred to as “individual
contracts concerned”) are issued and any provision therein conflict with these Guidelines, theprovisions of such individual contracts shall prevail.
The individual contracts concerned shall, in principle, provide for tougher management standards
than these Guidelines.
For instance, individual contracts concerned shall have more detailed provisions, such as“something shall be stored for ten years,” while these Guidelines simply provide that something
shall be stored.
[Inquiry Contact]
The quality assurance representative of any partner to whom these Guidelines have been distributed
shall store and manage the latest version of the Guidelines. If there are any questions regarding the
Guidelines, partners shall inquire with the Company Monozukuri Innovation Division's Quality
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Promotion Department. fec.hinshitsu-madoguchi@furukawaelectric.com
If there are any questions regarding individual aspects of operation, partners shall contact the
Quality Assurance Section contact desk for the product in question.
When partners have transactions with multiple business divisions, partners shall contact the
Quality Assurance Section contact desk for each business division.
[Non-Disclosure]
The Company and partners shall not disclose any confidential information about each other. They
shall treat any information obtained through day-to-day operations as confidential information.
Partners shall have a responsibility to properly manage the Guidelines, drawings, data, standards,
customer information and other information supplied by the Company. Should any confidential
information be leaked to outsiders, they shall contact the Company immediately.
[Product Liability]
If a company causes any product liability (PL) issues, it may instantly lose social trust. No productliability issues should be allowed to occur, and it is necessary to establish a system that checks any
possible risk in all parts and at all levels of production activities, and to prevent issues. Partners shalldetermine check items from the perspective of product liability and take measures that eliminate
risks.
- If partners are under any obligation stipulated by any law or ordinance relating to product liability,
they shall observe it.
- If any obligation is specified in the Company’s purchase specifications and other specific contracts(contracts concerned), it shall be fulfilled.
- Even in the case of outsourcing product design, partners shall unfailingly implement productliability assessments, not only in product liability design but also in goods assessment and design
review.
- Both in the case where the Company provides drawings, specifications and the equivalent and in
the case where partners perform works and inspections in accordance with their own drawings,
specifications and the equivalent, they shall carry out the works and inspections in accordancewith the procedures and in a standardized manner without fail.
- In the event of a change in any material or operational procedure, partners shall study its impact on
product liability and implement a product liability assessment if appropriate.
- Partners shall simplify their records on product liability and store them for a stipulated period.
Where necessary, the storage period shall be determined by discussion with relevant division.
- If any product liability risk is discovered in a product inspection or examination, partners shallreport it to the Company.
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Ver.2- Judgements regarding product liability insurance coverage shall be made by the Company asnecessary.
Should any issue occur, partners shall give top priority to cooperation for resolving it and rapidly
bringing its impact to an end.

[CSR Procurement]
For the requirements concerning CSR procurement, refer to the separately provided Furukawa
Electric Group CSR Deployment Guidelines.
[Force Majeure]
Neither of the parties shall assume liability for non-fulfillment or any delay in the fulfillment of
their obligations under these Guidelines attributable to a riot, civil war, warfare, international
hostile action, government legislation, order or regulation, prohibition on trading, mandatory
treatment by a government or any of its organizations, natural disaster, storm, labor strike action,
sabotage, or any other similar event beyond their reasonable control for the period of such force
majeure; provided, however, that they shall not evade their monetary liability.

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Contents
1

Requirements with Respect to Quality Assurance

1.1

General Requirements

1.2

Requirements from Quality Management Systems

1.3

Management responsibility

1.4

Respect for Requirements

2

Securing Resources

3 Ordering Process
3.1 Checking of Purchase Orders and Specifications (Details, Quantity, Delivery Due Date andOthers in Purchase Specifications and Others)
3.2

Check of Specifications and Equivalent Materials

3.3Management of Partners’ Drawings, Specifications and Other Materials

3.4

Management of Drawings, Specifications and Other Materials Supplied by the Company

3.5

Treatment of Maintenance Parts after Delivery of Devices

4

Design, Development and Change Processes

4.1

Design Review

4.2

Maintenance of Reliability

4.3

Design Change Management

5

Purchase Process

5.1

Actions by Partners

5.2

Order Conditions

5.3

Submission of Value Chain List

5.4

Check by Audit

6

Manufacturing Process

6.1

Maintenance of Manufacturing Capabilities

6.2

Development of Working Environments

6.3

Quality Management before Mass Production

6.4

Initial Flow Management

6.5

Day-to-Day Management

6.6

Special Processes and Qualifications

6.7

Inspection Processes and Qualifications

6.8

Process Change

6.9

Changes to Organizations and Managers

6.10

The Company’s Incoming Inspection (Including Visiting Inspection and Completion

Inspection)
6.11

Dispatch of Engineers
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6.12

Guarantee for Delivered Goods

6.13

Quality Management Records (Manufacturing History and Traceability)

6.14

Management of Articles Supplied and Loaned by the Company

6.15

Management of Goods in Stock

6.16

Packaging, Packing and Handling During Transportation, etc.

6.17

Measuring Instruments and Test Devices for Inspection

7

Audits and Management of Nonconforming Products by Partners

7.1

Internal Audits and Audits of Suppliers and Contractors by Partners

7.2

Management of Nonconforming Products

7.3

Corrective Action and Recurrence Prevention

7.4

Expansion of Checks for Nonconforming Products

Appendix 1: Value chain format (example)

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1

Requirements with Respect to Quality Assurance
Businesses would not be able to survive without social recognition of their value. Collaborative

activities between partners and the Company based on high ideals and philosophy are essential for
the Company’s continuous growth as a business whose continuity is accepted.
A guarantee of the quality of every single product delivered to customers is the foundation ofquality assurance. This cannot be achieved with efforts made by the Company alone. It is necessary
to ask partners supplying products and raw materials, and those commissioned by the Company as
outsourcing partners, to guarantee the quality of items supplied and services provided. The following
prescribes the Company’s requirements for quality assurance in collaboration between partners andthe Company.
＜Corporate Philosophy＞○CORPORATE PHILOSOPHY
Drawing on more than a century of expertise in the development and fabrication of advanced
materials, we will contribute to the realization of a sustainable society through continuous
technological innovation.
○MANAGEMENT PHILOSOPHY
With an eye to the future, the Furukawa Electric Group management team pledges to:・Live up to the expectations and trust invested in us by society, with fairness and integrity.
・Apply the sum total of our expertise to satisfy our customers and grow with them.
・Continuously strive to achieve world-class technological innovation, and transform ourselves inevery area of endeavor.
・Nurture human resources at every level, so that we can become a more diverse and creative
organization.
1.1

General Requirements

Partners shall construct, document, maintain and effectively operate their respective quality
management systems in accordance with these quality management guidelines and with ISO 9001:
2015. They need to continuously improve the effectiveness of their quality management systems.
In the event of outsourcing part of their operations and the management thereof, partners shallensure that the outsourced operations are under proper control.
Those partners who have not obtained ISO 9001:2015 certification and who are not required to doso may be subject to an assessment of their level of compliance with the ISO 9001:2015 standard aspart of the Company’s audit.

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1.2
a)

Requirements from Quality Management Systems
Partners shall establish, maintain and effectively operate quality management systems for allprocesses for the appropriate provision of products and services in accordance with theCompany's purchase orders, including design, purchases, manufacturing, inspections,construction, maintenance, and software design, production, testing and maintenance, etc.

b)Partners shall ensure that their quality management systems include measures to prevent andrapidly discover any product to be delivered that is nonconforming in terms of quality, and torespond rapidly and take corrective action. The responsibility for the quality management of allprocesses shall be clearly specified in the partners’ internal organizations.

c)Partners shall, immediately upon request from the Company, submit quality assurance system
charts, procedural manuals for response and corrective action to nonconforming products,
procedural manuals for design and development work (design planning, design review, productdesign, process design, and alterations to product and process design), organization charts and
QC process charts of those suppliers that are specified in the list of partners and value chains.

d)

The Company shall carry out an audit, if necessary, on the basis of the quality assurance system
charts, procedural manuals for response and corrective action to nonconforming products,
procedural manuals for design and development work, organization charts and QC process
charts. Where any nonconformity is found during the audit, the Company shall take corrective
action.

e)

In the event of any alteration to documents submitted to the Company, partners shall report thealteration and grounds for it to the Company without delay.
*For actual alterations, refer to 4.3 and 6.8.

f)

For the purpose of maintaining the quality management systems mentioned above, partners
shall store and manage the records listed below and submit them promptly upon request fromthe Company.
① Records of product inspections (including final and interim inspections)② Records of lot numbers, serial numbers and others to which any design change applies③ Records of lot numbers, serial numbers and others to which any process change applies④ Records of design reviews, etc.
⑤ Records of nonconforming products (including details of nonconformities, extent of impact,action taken with regard to nonconforming products including other products affected,
tentative measures, causes and corrective action, prevention measures, and lot and serial
numbers to which they are applied)⑥ Records of changes to drawings, specifications and software programs, etc.
⑦ Recording of certification of workers and the certification renewal.
⑧ Documented information for management review
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Ver.2⑨ A duplicate copy of the ISO 9001:2015 certificate
1.3Management responsibility

The management of partners shall accept full responsibility for the quality of the products thatthey deliver, and shall continually assess and improve the performance and effectiveness of their
quality management systems, and operate them effectively.
The management of partners (or those to whom the management has delegated its authority) shallperform a management review at predetermined intervals of one year or less and keep records of its
results in order to ensure that their quality management systems are continuously implemented
properly and remain appropriate and effective.
1.4

Respect for Requirements

Partners must operate mechanisms for checking the Company’s requirements concerning products
delivered and the requirements pursuant to laws and regulations in order to unfailingly deliverproducts requested by the Company.
2

Securing Resources
Partners shall secure the necessary resources such as personnel, goods, facilities and environmentin accordance with the Company’s requests such that the quality of the products meets theCompany’s requirements.
3 Ordering Process3.1 Checking of Purchase Orders and Specifications (Details, Quantity, Delivery
Due Date and Others in Purchase Specifications and Others)a)Upon the receipt of a purchase order and specifications from the Company, partners shall study
their details and contact the Company before production if they have any uncertainties andquestions.
If any partner’s facility, manufacturing capabilities or other conditions may fail to meet thepurchase order and specifications from the Company, it shall contact the Company promptly for
consultation.

b)

For any product to be delivered to the Company whose purpose of use or common method ofuse is self-explanatory, although it is not necessarily specified in the purchase order or
specifications, the requirements for them shall be incorporated in design, manufacturing,
construction or other conditions. Where necessary, partners shall inquire with the Company.

3.2
a)Check of Specifications and Equivalent Materials
As soon as they receive purchase specifications, partners shall promptly submit to the Company
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the receipt of purchase specifications and, when necessary, production drawings for seeking
approval.
Upon a request from the Company, partners shall submit delivery specifications.
b)When requested to do so by the Company, partners shall submit inspection procedures to theCompany prior to the start of the inspection.

c)

In the event of doubts regarding information in the purchase specifications, production
drawings for seeking approval, delivery specifications, inspection procedures or any otherdrawings, any partner or the Company shall notify the other party to address them inaccordance with the written instructions.

3.3a)Management of Partners’ Drawings, Specifications and Other Materials
Partners shall create a system for effective document management, maintain drawings,
specifications and other materials in such a way as to enable them to be managed in their mostup to date version, and ensure that up to date versions can be shared at any time with internal
personnel who need them.

b)

In the event of any change in drawings, specifications and other materials, partners shallmanage them properly to prevent any expired drawings, specifications and other materials frombeing used.

c)Partners shall make the details of any changes in drawings, specifications and other materials
exchanged with the Company clear, and obtain approval from the Company for making suchchanges.

3.4
a)Management of Drawings, Specifications and Other Materials Supplied by the Company
Partners shall neither use any of the drawings, specifications and other materials for any
purpose other than their intended purposes nor duplicate them for any such purpose without thepermission of the Company.

b)

After the Company changes any of the drawings, specifications and other materials it has
supplied, partners shall use its latest version. In accordance with the change, partners shall also
revise their drawings, specifications and other materials related to the changed materials anduse their latest version.

c)

After the completion of delivery to the Company, partners shall, in principle, return all the
supplied drawings to the Company, and delete electronic drawings.
However, in cases where the Company is expected to continuously place orders, and where
the Company approves such outsourcing, the Company may outsource management, including
the storage of supplied drawings and replacement with revised versions, to partners. In thisevent, partners shall not be under any obligation to return the supplied drawings at the time of10

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delivery.
When engaging in any other management, partners shall hold prior discussions with theCompany.
3.5

Treatment of Maintenance Parts after Delivery of Devices

Partners shall implement quality management of maintenance parts for which they resume
production in response to a request from the Company after the discontinuation of production
following the delivery of devices and other products. The quality management shall be equivalent tothat for the products.
4
4.1
a)

Design, Development and Change Processes
Design Review
Partners shall create a design after fully understanding the Company’s requirements and thoseunder laws, ordinances and regulations and perform a design review as required separately inthe processes of design, manufacturing and evaluation testing.

b)

It is desirable that the design review be carried out together with the Company’s technology
personnel.

c)Partners shall create and keep records of design reviews or design assessment to ensure that thestate of actions for addressing remarks may be checked. The Company may request thesubmission of these records if necessary. (A list of points changed and DRBXX References 1 to
4 should be used as means of identifying and addressing risks.)d)Partners shall submit assessment test results requested by the Company in relation toassessment tests of prototypes and other items to the Company. Where necessary, partners shalldiscuss the content of assessment tests with the Company.

4.2
a)Maintenance of Reliability
Partners shall carry out necessary reliability tests based on a thorough understanding of theCompany’s requirements, or take similar actions to ensure the reliability of the products
delivered. It is desirable for partners to discuss the content and methods used in reliability tests
with the Company. Upon a request from the Company, partners shall promptly submit test
reports including standard criteria judged by the partner, and the basis for those criteria.

b)Partners shall carry out a reliability test of products delivered on a regular basis if it is requestedby the Company. In the event of any abnormality, they shall immediately submit a written
report to the Company.

c)Partners shall, as required, consider carrying out the reliability test mentioned above concerninga single component or several components incorporated into any product delivered.
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In the case of the nonconformity of any of the components or materials which the Company

d)specified should be used, partners shall work to settle the issue jointly with the Company.
4.3

Design Change Management

It is necessary to be aware that design changes may arise in various situations. Such situations
may include responses to quality nonconformity of products, etc. cost reductions, functional
improvements, change of partners, responses to changes in laws and regulations concerning
dangerous substances or other substances contained in products, responses to improvement proposals
from the production workplace, and responses to requests from customers. Personnel must not makeintuitive judgements as to whether changes are major/significant or insignificant. It is necessary tohave a process for detailed consideration of issues such as ensuring quality required by customers,
conformity with initial design quality, and details of trade-offs due to changes.
Partners must determine idea formation, design, review and approval procedures in advance,
establish, maintain and manage specific operating procedures for ensuring that nothing is overlooked
in design change management. They must also ensure mutual sharing of information to prevent
unforeseen damages as a result of silent changes.
a)Examples of design changes that require management are provided below.
① Materials and components (including composition, physical properties, compatibility,
suppliers and catalog items)② Structure, shapes and dimensions (including surface treatment specifications, compatibility,
connection and fitting characteristics)③ Characteristics (standards, judgment criteria, measuring methods and reliability) andfunctions④ Operating environment (place of use, temperature, humidity and other conditions)⑤ Purposes and methods of use (including manufacturing methods including chemical
reactions and software for operating manufacturing systems)⑥ Forms of packing and secondary materials⑦ Software (including interface specifications), software operation environment (operating
systems and firmware), and development environment (compilers, test tools and theirversions)b)

When proposing any design change, partners shall submit a design change application (*1 and*2) in writing to the Company.
The design change application shall include the reasons for the change and the results ofconducting the actions specified in paragraph c) below. The Company shall review the content
of the design change application. The Company may also request product samples forvalidation purposes, and display additional requirements for assessments at the partner. After12

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the Company grants approval, partners shall commence a design change for the products
delivered.
*1 In the case of products that require long-term assessments, the time taken for the change
may be six months or longer. Individual discussion is therefore required at the planningstage.
*2

A response shall be provided in the designated form if it is designated in a contract with

the Company.
Partners shall implement the actions specified below at the time of a design change.

c)① Check of appropriateness and examination of risks involved in design change and actions
for addressing them
(A list of the points changed and DRBXX, including the process, products and software, arerecommended as means of identifying and addressing risks see References 1 to 4 andutilization of past troubles.)② Implementation of necessary assessment tests (including the reliability test)③ Changes in the QC process chart, inspection standards, manufacturing standards and otherdocuments④ Records of lot numbers, serial numbers and others to which any design change applies⑤

Determination of methods for handling older design items (preventing contamination by
mixing of new and old designs)⑥

Notifying relevant parties of the timing of changes

Partners shall also conduct design change management with regard to design changes atd)secondary, tertiary and further suppliers and contractors, at their own responsibility, in order toprevent the occurrence of silent changes. Design change applications shall be submitted prior tochanges being made. Design change applications from secondary, tertiary and further suppliers
shall be subject to management equivalent to management regarding design changes conductedby partners. If necessary, applications shall be submitted to the Company by partners at theirdiscretion.
5

Purchase Process

5.1

Actions by Partners

Partners shall conduct appropriate management of purchased items to ensure the quality of
products delivered.
a)Partners shall clearly document and convey the required specifications, including those for
manufacturing and other processes, to suppliers, contractors and other partners from whom theypurchase and manage them.

b)Partners shall conduct audits to assess the technical capabilities, supply capacity, quality
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management systems and other capabilities of suppliers, contractors and other partners theypurchase from. Audit methods shall be in accordance with partners' own criteria. Partners shallappropriately assess suppliers, and take appropriate action in the event of the discovery of any
problems. Partners shall manage the capabilities of suppliers, contractors and other partners
using a value chain list, and conduct regular audits.
Partners shall request that suppliers, contractors and other partners from whom they purchasec)provide written inspection results, when necessary, concerning materials purchased or products
manufactured upon contract. They shall check whether they satisfy the quality requirements byperforming inspections and equivalent actions as required and keep records of their results.
5.2

Order Conditions

In connection with purchases and outsourcing, partners shall make the matters specified below
clear and implement them without fail.
a)Specifications for orders shall be communicated clearly in writing, and agreed to in writing.

b)Order conditions, quantities and delivery dates shall be agreed to.
Where necessary, order conditions shall include manufacturing processes, manufacturing
facilities, limitation of workers (and their competences) and seconded inspections of first-time
products.

5.3

Submission of Value Chain List

Partners shall prepare and maintain a value chain list to keep track of their overall value chain.
When requested to do so, partners shall submit their value chain list to the Company.
a)

In cases where, based on materials displayed by the Company, there are purchases items or
instances of outsourcing of manufacturing or construction / installation work that affect quality,
partners shall submit their value chain list to the company. The value chain list shall specify thepartner and business operated by its supplier or contractor on a product-by-product basis or at
the time of construction. It shall also contain parties to whom manufacturing and works
involving processing or construction are outsourced as well as parties from whom catalog items
and materials are purchased.

b)

Prior to changing the value chain, partners shall submit a written change application to theCompany.
When wishing to change details listed in the value chain list, partners shall obtain theconsent of the Company. (See 6.8 Process Change) In addition, partners shall, prior to thecommencement of production, expressly disclose to the Company their judgment criteria as towhether the supplier or contractor is appropriate, similarly to the occasion of selecting
contractors.
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c)

Partners shall endeavor to maintain and improve quality by responsibly providing guidance tosuppliers and contractors, and auditing them when necessary.

d)Where partners perform an audit, the Company may check the status of partners’
implementation of the audit of suppliers or contractors.

e)Partners shall not avoid their responsibility to ensure the quality of products and other items orfor construction, even if the Company approves the outsourcing of all or part of the products
and other items or construction to third parties.

5.4
a)Check by Audit
The Company may audit factories or construction sites of partners or their suppliers orcontractors as required for the purpose of checking and assessing whether partners are carryingout appropriate quality management, and partners shall cooperate with this. Audits shall be
performed under mutual agreement when partners are newly certified, when any new product islaunched, when a process change is made, when nonconformities occur frequently, when any
significant nonconformity occurs, when periodic checks of the state of quality management are
conducted, and at other such times.

b)Partners shall take immediate corrective actions to address remarks made at the time of
conducting an audit and submit a correction report.

6.

Manufacturing Process

6.1

Maintenance of Manufacturing Capabilities
Partners shall secure sufficient manufacturing capabilities (appropriate manufacturing
equipment and competent personnel) to produce products that will be delivered to theCompany.

6.2
a)Working Environments
Partners shall ensure the five S practices, namely Seiri, Seiton, Seiso, Seiketsu and Shitsuke(Sort, Set in order, Shine, Standardize and Sustain) in working environments.

b)Partners shall develop working environments that enable workers to perform their duties inhealth, safety and comfort and concentrate on their work, including aspects such astemperature, humidity, illuminance, noise, vibration and wideness of space.

6.3
a)Quality Management before Mass Production
In the design assessment and the design review process, partners shall work from requirements
to create basic and detailed designs, sufficiently validate them through prototyping andassessment, and ensure that the required quality is achieved. In process design, partners shallclarify items for management and inspection for each process paying consideration for mass15

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productivity, and ensure that products can be manufactured repetitively and consistently.
6.4

Initial Flow Management
When commencing mass production, partners shall determine quality management targetsa)(using the process capacity index or equivalent) to implement initial flow management for acertain initial period, and seek to prevent the occurrence of major quality issues and outflow ofnonconforming products. (DRBTR and DRBDP are recommended (see References 1 to 4.)
Partners shall estimate the risks from data on inspections and changes in products before andafter the start of mass production to address issues.)
Partners shall fully analyze nonconformities (changes that could possibly lead to nonconformityb)in the market even when within the range of control values) that occur during the initial flow
period to prevent the occurrence and outflow of nonconforming products. Where necessary,partners shall redesign and conduct further design reviews.
6.5

Day-to-Day Management

In day-today management, partners shall maintain and manage production processes inaccordance with standards (including production orders, work procedure manuals and inspection
standards), take corrective action upon discovery of nonconforming products, and carry out day-today quality maintenance and improvement activities in an effort to enhance quality. This shall
include monitoring the day-to-day state of attributes that require management, checking for changes
in trends that differ from the norm and deviations from preset standard management values, andmaking necessary responses.
6.6
a)Special Processes and Qualifications
The term "special processes" refers to welding, heat treatment, quenching, chemical treatment,
brazing, soldering, excavation work and other processes whose quality is impossible to validate
through monitoring or measurement after their output.

b)Partners shall define special processes and formulate and maintain appropriate management
standards. They shall keep photographs and other evidence of work results if necessary (forexample, in the case of excavation works). They shall also give consideration to checking theappropriateness of these processes through regular damage inspections.
① Partners shall manage their list of special processes, including special process types,
facilities and equipment used, lists of certified workers, and evidence of certification (suchas standards and certificates).
② In the event of a change in the information on the list mentioned in ①, partners shallmanage the list reflecting the change and its change history.
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c)

With respect to workers performing special processes, partners shall observe the provisions
specified in the items below.
① Partners shall provide education and training to such workers to maintain their skills, andreconfirm the appropriateness of this education and training on a regular basis.
② Partners shall register certified workers and manage records.
③ Partners shall assign certified workers to special process works after confirming that they
have the relevant certification.

6.7
a)Inspection Processes and Qualifications
In inspection processes, partners shall formulate inspection standards with sufficientunderstanding of the Company's required quality characteristics, use calibrated measuring
devices, and build a management system that enables appropriate judgements of pass or failure.
From the perspective of preventing fraud, it is recommended for partners to build systems
without human intervention in measurement, judgement and record-keeping processes.

b)Partners shall provide education and training for workers who are involved in inspection
processes to maintain their skills, and reconfirm the appropriateness of this education andtraining on a regular basis.
① Education content shall include quality compliance.
② Partners shall register certified workers and manage records.
③ Partners shall assign certified workers to special process works after confirming that they
have the relevant certification.

6.8
a)Process Change
Partners must determine idea formation, design, review and approval procedures in advance,
establish, maintain and manage specific operating procedures, because it is necessary to ensurethat nothing is overlooked in process change management. Examples of process changes that
require management are provided below.
① Change in production location② Changes to production facilities and inspection / measuring equipment (modifications, dies,
jigs and other equipment, etc.)③ Changes to suppliers and outsourcing partners④ Changes to production methods⑤ Changes in manufacturing conditions (such as temperature, pressure, tension, electric
current, and velocity)⑥ Changes in supplementary and secondary materials that affect product quality⑦ Changes in inspection methods (changes in inspection instruments, inspection methods,
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boundary samples and sampling methods)⑧ Changes in software in manufacturing, inspection or other facilitiesb)

When proposing any process change, partners shall submit a process change application (*1 and*2) in writing to the Company. The process change application shall include the reasons for thechange and the results of conducting the actions specified in paragraph c) below. The Company
shall review the content of the process change application. The Company may also request
product samples for validation purposes, and display additional requirements for assessments at
the partner. After the Company grants approval, partners shall commence a process change forthe products delivered.
*1 In the case of products that require long-term assessments, the time taken for the change
may be six months or longer. Individual discussion is therefore required at the planningstage.
*2

A response shall be provided in the designated form if it is designated in a contract with

the Company.
c)Partners shall implement the actions specified below at the time of a process change.
① Check of appropriateness and examination of risks involved in design change and actions
for addressing them
(A list of the points changed and DRBXX, including the process, products and software,
should be used as means of identifying and addressing risks. See References 1 to 4 andutilize information on past troubles.)② Implementation of necessary assessment tests (including the reliability test)③ Changes in the QC process chart, inspection standards, manufacturing procedure manuals
and other documents④ Records of lot numbers, serial numbers and others to which any design change applies⑤ Determination of methods for handling older items (preventing contamination by mixing of
new and old items)⑥ Notifying relevant parties of the timing of changesd)Partners shall also conduct process change management with regard to process changes atsecondary, tertiary and further suppliers and contractors, at their own responsibility, in order toprevent the occurrence of silent changes. Where necessary, partners shall notify the Company of
the changes at their own judgement.

6.9

Changes to Organizations and Managersa)In the event of a change in the organization or manager handling products delivered to theCompany, partners may be requested to report it to the Company.
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Partners shall submit a prior report and obtain approval from the Company for change tob)workers which may impact competencies or qualifications requested by the Company.
6.10

The Company’s Incoming Inspection (Including Visiting Inspection and Completion

Inspection)
Products delivered must pass the Company’s incoming inspection (including the visitinga)inspection and the completion inspection).
Visiting Inspectionb)

Based on prior discussions, the Company may send and second its employees to partners to
perform delivery inspections. Partners shall cooperate with the Company’s visiting inspection.
In the event of a visiting inspection, partners shall issue a visiting inspection record (including
meeting minutes) to seek approval from the Company.
Completion Inspectionc)In the case of construction work, cable laying, installation and other such work, a completion
inspection may be performed by the relevant partner and the Company, or by the partner, theCompany and its customer(s). Partners shall cooperate with this completion inspection. Detailsof the inspection shall be decided by discussion on a case-by-case basis.
6.11

Dispatch of Engineers

In the event of quality issues arising in delivered products, partners may order the dispatch of their
specialist engineers in order to verify the facts, take temporary emergency measures, and identify
products that may be affected, in order to quickly resolve the issue.
6.12

Guarantee for Delivered Goods

Partners shall manufacture, construct/install and inspect products in accordance with their own
manufacturing, construction/installation and inspection standards, and deliver products that conformto those standards.
If any nonconforming products are confirmed as being attributable to a deficiency on the part ofthe partner after the Company’s incoming inspection, partners shall swiftly produce new products ormodify the products free of charge in accordance with the Company’s instructions. Where there is
any quality issue and where it is deemed necessary to make a judgment on the shipment as a result ofconsultation with the Company, partners shall submit a concession application and ship products
after obtaining approval from the Company.
After commencing delivery of products, partners shall bear the responsibility to supply them until
the Company ends sales of those products. The same shall apply to the supply of maintenancesupplies for the Company's products. When there is difficulty in providing this response, partners
19

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shall contact the company in writing in advance, and discussions shall be held.
6.13
a)Quality Management Records (Manufacturing History and Traceability)
Manufacturing History Management
Partners shall assign lot numbers, serial numbers or the equivalent to products delivered to theCompany and manage them to ensure that the manufacturing history of individual products istraceable. However, if the said assignment is impossible due to the nature of the products,
partners shall enter into consultation with the Company regarding management methods.
*1 Quality records shall be kept for eleven years, unless otherwise separately arranged.
*2 Examples of information in the manufacturing history (including that of partners’
contractors): Place of manufacture, date and time of manufacture, manufacturing facilities,
inspection equipment, workers, inspectors, manufacturing conditions, quality records,
quality records of materials and components used in products, and equipment, etc.
Partners shall manage the manufacturing history of goods to be delivered and ensure thatthey are prepared for submission at the request of the Company.
*3

For instance, if nonconformity occurs, the Company may request the submission of the
manufacturing history within the scope concerned.

b)Presentation of Quality Status
Partners shall constantly monitor the state of product quality (such as the state of incoming
inspections, in-process inspections, and inspections of completed articles) and report it at therequest of the Company. As a basic rule, reports shall be requested every six months, although
this may be changed by consultation.

6.14
a)

Management of Articles Supplied and Loaned by the Company
The Company may supply or loan materials, components, intermediate products, software andother articles to partners.

b)

When articles are supplied or loaned by the Company, Partners shall submit to the Company areceipt, or temporary receipt as requested by the Company, and check their models andquantities as well as whether or not they have any deficiency in terms of appearance. If any
nonconformity or other issue is discovered, partners shall immediately notify the Company toseek instructions.

c)Partners shall properly identify and store articles supplied or loaned by the Company andimplement prevention action against damage and deterioration. They shall not use materials andcomponents supplied by the Company for any product other than those delivered to theCompany.

d)Partners shall maintain the confidentiality of intellectual properties concerning articles supplied20

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Ver.2

or loaned by the Company, including software, and shall not leak them to any third party.
6.15
Management of Goods in Stocka) Partners shall perform appropriate identification (using item names, models, lot numbers andserial numbers, etc.) and appropriate management of goods in stock, including materials,
components and products, with consideration for the effects on products. It is recommended forpartners to clarify storage locations, quantities, and make use of computer systems, etc. For
goods in stock for which there is a set storage period and storage conditions, partners shallclearly specify management methods and make them known to personnel. Goods in stock andinventory management shall be performed on a first in, first out basis.
b)

Partners shall ensure that goods in stock to be delivered have no quality abnormality or
deterioration in terms of progress by means of re-inspection or others prior to delivery to theCompany.

6.16
a)Packaging, Packing and Handling During Transportation, etc.
Partners shall use appropriate packaging and packing on products for delivery, withconsideration for product characteristics, transportation methods, conveyance devices and otheraspects of the transportation conditions. They shall also label external packaging withcautionary notices regarding handling, as necessary to prevent damage by cargo handlers.

b)

When the Company does not specify and specific regulations with regard to packing, etc.,
partners shall establish and operate standards that enable products to be maintained anddelivered in good condition.

6.17
a)

Measuring Instruments and Test Devices for Inspection
Partners shall maintain measuring instruments and test devices used in inspection processes insuch a state as to enable appropriate inspections, by performing regular calibration andinspections before use.

b)Partners shall document and keep records of these calibration and inspection procedures.

c)

Where nonconformity is found by calibration or the daily, start of work or periodic inspectionof any measuring instrument, test device, equipment or software for inspection, partners shallstudy the impact on goods (targeting those inspected with measuring instrument, etc. with
nonconformity) delivered since the previous calibration or inspection and report the findings toseek the Company’s instructions.
* Partners shall manage the version of software for inspection, check it against the products andensure its traceability.

d)

In the event of replacing any measuring instrument, test devices, equipment or modifying
software for inspection, partners shall do so in accordance with the process change procedures.
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Ver.2

7
7.1
a)

Audits and Management of Nonconforming Products by Partners
Internal Audits and Audits of Suppliers and Contractors by Partners
Partners shall conduct internal audits to check the effectiveness of their own quality
management systems.

b)

If a correction is required as a result of an audit, partners shall take corrective action without
fail.

c)

Partners shall conduct an audit when adopting a new supplier or contractor, etc., and continue to
conduct audits thereafter. Audit methods shall in accordance with partners' own standards, butmust appropriately assess the supplier. If any issue is discovered, partners must take appropriate
measures. Depending on the state of quality at the supplier or contractor, continuous audits may
be performed as document-based audits.

7.2
a)Management of Nonconforming Products
Partners must identify nonconforming products and ensure that they do not become mixed with
conforming products, such as by labeling nonconforming products and relocating them to a
separate storage location.

b)Partners shall formulate procedures for modifying and repairing nonconforming products orconstruction, shall carry our proper treatment, and conduct a re-inspection to check that the
products conform to quality standards.

c)

In the event of modifying any nonconforming product, partners shall keep records of themodification and properly manage the modified product.

7.3
a)Corrective Action and Recurrence Prevention
Nonconformity in Partner’s Processes
If any state is nonconformity of semi-finished products, components, purchased goods orconstruction in process is discovered, partners shall promptly check whether any
nonconforming product or work has been delivered to the Company, and if any such delivery is
confirmed, they shall immediately notify the Company and make arrangements for
replacements, etc. Partners shall also promptly take measures to prevent the outflow of suchitems and determine the causes of the nonconformity, then formulate provisional measures andcorrective action. When corrective measures require design changes or process changes,
partners shall make changes in accordance with the relevant procedures. Partners must alsoreliably validate the effectiveness of the corrective measures, and maintain records of this.

b)

Nonconformity after Delivery to the Company
If nonconformity is discovered in products derived from articles delivered by partners is22

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Ver.2

discovered, by either the Company or its customers, partners shall act in accordance with theCompany's instructions to deliver replacements, etc. They must also promptly conduct aninvestigation of the causes, implement corrective measures, and take steps to prevent
recurrences. Causes and corrective measures shall be included in a report to be submitted inaccordance with the requests of the Company. Reports concerning nonconformities shall
include the team addressing the nonconformity, the personnel in charge, the division of duties inthe team, descriptions of nonconformities, the scope of the negative impact, actions for dealing
with the current state including the negative impact, provisional action (*), causes of occurrence
and undesirable delivery, corrective action, the effect of these actions and recurrence prevention
measures. Reports shall be submitted in stages, in accordance with the progress ofinvestigations and measures.
c)

When identifying causes of nonconformities, partners must use FPA (see Reference 4) and
FTA, etc., and take measures to identify the true causes of nonconformities. It is necessary to
identify not only the cause of the event, but the true cause (e.g. causes relating to specific /proprietary technologies or management techniques) and implement recurrence prevention
measures including prevention action.

7.4

Expansion of Checks for Nonconforming Products
In the event of the occurrence of nonconformity in products similar to any products to bedelivered to the Company, partners shall study the possibility of the occurrence of similar
nonconformity in products for the Company. Should it be found that there is a risk of occurrence,
partners shall report it promptly to the Company and implement control measures.

References
1. Tatsuhiko Yoshimura, Toyota-style Preventive Methods & GD3 (JUSE Press, Ltd., 2002)
2. Tatsuhiko Yoshimura, Preventive Methods GD3 for Anticipating the Unanticipated (JUSE Press,
Ltd., 2011)
3. Tatsuhiko Yoshimura, Full Participation Management APAT (JUSE Press, Ltd., 2012)
4. Tatsuhiko Yoshimura, Discovery Power (JUSE Press, Ltd., 2016)23

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Ver.2

Value chain format (example)

Furukawa ElectricCo., Ltd.

Partner

Materials Company
A

Materials Company B

Materials Company aMaterials CompanybComponents
Company C
Processing Contractor
Company D

24