For improvement in value

Product manufacturing by utilizing customer comments

Evaluation and awards from our customers

Quality improvement work

INOAC has flexibly fulfilled these needs as a material process manufacturer by reforming
materials into the shapes needed by markets. In FY 2017, many customers at home andabroad continued to highly regard our work to solve customer issues.
In Japan, the chemical information division has been recognized as a Premium Partner for 7
years, and automobile-related divisions have received the Technological Development Award,Award of Excellence in Promotion of Reducing Old Type Supply Parts, Award of Excellence inCost Price Section and Award of Contribution to Tohoku Manufacturing because of the highevaluation of the interior of new models and VA/VE proposal. Vietnam IPV received the Delivery
Award because they could deliver good products without any delays. Thailand IAT was highlyevaluated due to TPS* work on the ceiling assembly process, complete achievement of service
part delivery time and safe improvement activities for the coating process. Taiwan KIC washighly evaluated due to zero faulty delivery. China IES received the Quality Achievement Awardand Award of Cooperative Cost Price; IHA received the Award of Excellence in Package
Design; DIME received the (Quality) Excellent Supplier Award and the Award of Appreciation
for Environment, Quality, Cost, and Delivery (EQCD); DIME II received the Cooperative CostPrice Reduction Award and the Cooperative Quality Award; DIP received the Appreciation
Award for the supporting role for a long time.

The quality policy of the INOAC GROUP is manufacturing trusted by customers. We implement
diverse activities for quality improvement by emphasizing work to prevent critical complaints,raising the level of our quality management system and training all employees.
We use the PDCA* cycle on a daily basis and work to provide customers with satisfactory
quality in the first place.
* PDCA: Plan, Do, Check, and Action[Cases]Work to prevent serious complaints
Our auditing and instruction at domestic and overseas production bases include important quality
commodity audits, official authentication audits and audits of the state of implementing agreements withcustomers to improve the quality capacity in order to prevent quality failure that presents great risks for thecompany such as lost social credibility and large amounts of guarantee money. For new products using
any new techniques, materials, processes and applications, we conduct DR* to prevent serious failure
before putting the products on the market.
*DR: Design Review* TPS: Toyota Production System

Quality innovation (automatization, introduction of IoT)
We are developing automatization at manufacturing sites to establish worker-friendly and highly efficient
product lines with stable quality. We are also working on appearance inspection by using image
processing and laser technology to reduce the burden for inspectors and to enhance quality assurance forcustomers. The introduction of IoT to plants is promoted to understand the state of the production
process on a real-time basis and to enable sign management showing machine failure and defective
products on the basis of the data.
Tohoku Manufacturing Contribution Award
from Toyota Motor East Japan, Inc.

EQCD Appreciation Award from
Nakayama CANON

Delivery Award from
HARADA INDUSTRIES VIETNAM

Quality Excellence Award from
Yulon Nissan Motor Co., Ltd.

VA/VE Proposal Award fromSUZUKI MOTOR CORPORATIONFor improvement in value

Supply chain management

Procurement basic policy❶ Promotion of global procurement
We enhance global procurement and partnerships with ourcustomers by utilizing our domestic and overseas bases.

❷ Compliance with laws, social codes andoffice regulations
We comply with laws, social codes and office regulations,and promote healthy and open procurement.

❸ Promotion of fair, just and sincere procurement
We provide our customers with fair and just competitive
opportunities to promote sincere procurement.

❹ Procurement considering the environment andhuman rights
We conduct procurement while considering our global
environment in accordance with INOAC's environmentalpolicies. For the raw material use that may cause humanrights issues or social problems such as conflict minerals,
we conduct procurement with much consideration.

❺ Construction of partnership on the basis ofmutual trust with business connections
We construct firm relationships of mutual trust andcooperate with our business connections to maintain andimprove mutual technological capability and quality.

Optimal procurement at global bases
We contribute to countries where our bases are located by procuring local raw materials and components, and build good
partnerships with our business connections by thinking of optimal quality and price, and long-term trade. We promote
higher strategic procurement to respond to global production.

Enhancement of partnership withbusiness connections
We organize the INOAC Cooperative Assembly consisting of our businessconnections of approximately 80 organizations to implement our work.
INOAC and our business connections try to cooperate more. For
example, we invite representatives of our business connections to ourwhole group presentation conference and ask them to give us
presentations about work to promote compliance, risk management, etc.
at lecture meetings.

Promotion of green procurement

Measures for conflict minerals

In order to advance the measures for environmental
regulation that have become stricter from year to year, we
determine the INOAC Green Procurement Criteria andpromote procurement in consideration of our globalenvironment. We also work on considering theimprovement in loading efficiency to improve procurement
logistics and even reduce the environmental burden.

Regarding the conflict mineral issue that mineralsp r o d u c e d i n e n d l e s s c o n fl i c t a r e a s s u c h a s t h e
Democratic Republic of Congo and adjacent countries
become a source of funds, we work to disclose
information in cooperation with our business connections
under the policy of not using such minerals.