Safety, Quality Control, Compliance

Among the various risks, NST focuses its attention on further strengthening company-wide efforts concerning risks related to safety, quality, and compliance. It includes cooperative efforts with the business and functional divisions to identify the critical risks that could have a serious impact on management, and to examine and implement measures to eradicate them.

Initiatives for Safety

Steel Division (Technical Support & Safety Management Department)

The Steel Division aims to eliminate the danger of serious disasters and prevent disasters and accidents causing lost worktime. It is carrying out independent safety activities focusing on the three priority measures listed at right.

Priority measures
  1. 1.Improving safety awareness and ensuring rule compliance
    • Carry out standardization for all work and improve the level of work standards.
    • Ensure rule compliance through the use of monitoring cameras.
  2. 2.Complete identification of and countermeasures to risks
    • Reliably implement equipment countermeasures and management countermeasures.
    • Make countermeasure locations and risks visible. (Thoroughly shared with operators and supervisors)
  3. 3. Redevelopment of safety awareness using training and other means
    • Reliably carry out exercises, KYT, risk simulation training, case studies of disasters at similar organizations, etc.
    • Further develop safety awareness using DVDs, VR, and the Web.

Industrial Supply & Infrastructure Division (Industrial Supply & Infrastructure Planning Department)

Priority measures
  1. 1.Follow-up by checking the progress of the voluntary safety audit
    • Support was provided to enable each manufacturing site to establish and further strengthen a system in which it can continue its own efforts to identify and resolve improvement issues based on independent safety audits.
  2. 2.Sharing of information and continuing global liaison meetings for disaster prevention among the Global Headrest System (GHS) groups
  • *Information about preventing foreign substance contamination of processed foods in the Foodstuffs Division is listed in its initiatives for quality control.

Initiatives for Quality Control

DX Promotion Department

In quality control, operations requiring manual operation cannot be zero risk. In July 2020, NST established the DX Promotion Department under the direct control of the President to address the challenge of eliminating this quality risk by digitalizing operations across all manufacturers, distributors, and customers.

Priority measures
  1. 1.“N-SCM” Integrated inventory management system
    • Automation of inventory control in repeating transaction fields in order to produce faster responses to changes in conditions, and to prevent shipping problems caused by missing materials or wrong materials
  2. 2.“SPOD” Improved order entry system
    • Standardization of order placement operations and strengthening of the check functions to improve accuracy and efficiency, and to eliminate human errors
  3. 3.“EXCS” New coil center system
    • Updating and consolidating the core business management systems at NST subsidiary coil centers
  • *N-SCM and SPOD began operation in the second half of fiscal 2021. We are continuing to expand the functions and increase the number of product categories. The EXCSTM infrastructure will be launched in fiscal 2022. We will then expand the functions and increase the number of sites as a medium- to long-term initiative.

Steel Division (Technical Support & Safety Management Department)

The Division has designated the period up to system implementation by the DX Promotion Department as the priority management period, and is reducing the numbers of check items and carrying out thorough double- and triple-checking.

Priority measures
  1. 1. Double-checking through monitoring of the sales department’s order entry operations
    • Confirm and optimize the double-checking conditions, and apply them to work standards, in order entry and processing order operations.
    • Create and maintain order data masters.
  2. 2.Support for improvement of priority management items in affiliated companies
    • Utilize bar coding, and conduct automatic transmission and judgment of measured values with the aim of reducing reliance on human resources.
  3. 3.Study of remote support measures
    • Study remote support systems such as using wearable cameras.

Industrial Supply & Infrastructure Division (Industrial Supply & Infrastructure Planning Department)

Priority measures
  1. 1.Thorough guidance and continuous monitoring of key suppliers in the Mobility Business Department and the Functional Materials Department
  2. 2.Measures against mistakes in order entry: Consider introducing a scheme to prevent mistakes in order entry, in cooperation with the Steel Division.

Foodstuffs Division (Food Quality Assurance Department)

Measures against foreign matter inclusion (including allergens) in processed foods

Photo shows overseas testing company affiliated with NST
Priority measures
  1. 1.Stringent selection of processing plants, and thorough analysis and tracing of ingredients, including sub-materials
  2. 2.Strengthening of recall training on the production side and study of recall training in cooperation with sales partners
  3. 3.Engagement of insurance to insure against damages in cases when responsibility is not clear
  4. 4.Expansion of support for human resources development (further improvement of safety measures through the use of highly skilled employees)

Initiatives for Compliance

The “Compliance Hotline System” has been established and operated to serve as an internal reporting contact and onsultation office related to risks related to business operations for use by employees of NST and its subsidiaries. Confidentiality regarding reports and other matters is maintained, and whistleblowers will be protected from retaliation. A contact point with commissioned outside experts has also been set up so that whistleblowers can report and consult with them with confidence, and NST will make efforts to enhance the system and continuously improve it. In addition, NST and its subsidiaries have no relationship with anti-social forces, and will respond with a firm attitude when receiving unreasonable requests from them.

Internal reporting system (Compliance Hotline)

In June 2022, the Whistleblower Protection Act was revised and whistleblower protections were strengthened for the purposes of protecting the confidentiality of whistleblower information and protecting whistleblowers from retaliation.

Based on this revision, the internal reporting system (Compliance Hotline) for the Nippon Steel Trading Group was reviewed so that users can be more confident when using the system. The new system began operating in April 2022.

Basic approach to internal control systems

NST has clarified its basic attitude to emphasize compliance in accordance with the Corporate Philosophy, Management Principles and Employee Code of Conduct. NST implements and operates internal control appropriately, further strengthens its corporate governance, endeavors to ensure “compliance with laws and ordinances,” “reliability of financial reporting,” and “effectiveness and efficiency of operations,” and aims to improve them continuously.

Internal control in business execution (three defenselines)

NST’s internal control system is based on three lines of defenses: the first line of defense comprised of departments engaged in sales, etc.; the second line of defense including functional departments, mainly comprised of the Corporate Planning & Administration Division and its departments as well as each sales planning department; and the third line of defense comprised of departments engaged in internal controls and auditing.

The departments engaged in sales, etc. construct and implement their internal control systems based on autonomous internal control, and each department manages the operation of internal control at its own initiative under the responsibility of each Executive Officer who supervises such department.

The functional departments identify and evaluate risks surrounding the companies, construct a framework to control risks in cooperation with the departments engaged in sales, etc. and provide them with necessary support, as well as take appropriate action including education and enlightenment.

The departments engaged in internal controls and auditing confirm and evaluate the appropriateness of the structural and operational conditions of the internal control system of the entire Group, and promote improvements to them, while ensuring independence and keeping an objective standpoint.

NST Group’s Internal Control Systems

NST and each subsidiary shall establish internal regulations to ensure the appropriateness of business in accordance with the Corporate Philosophy, Management Principles and Employee Code of Conduct, and hold business strategy in common based on the business characteristics of each division and subsidiary. Thus, NST and each subsidiary shall operate as a single group. Each Executive Director, Executive Officer and general manager in NST and the directors of each subsidiary shall have employees fully understand the Corporate Philosophy, Management Principles, Employee Code of Conduct and regulations, and perform self-checks and monitoring. The department in charge of the management of each subsidiary shall operate the subsidiary appropriately in accordance with the “Subsidiary Management Regulations,” the “Subsidiary Management Standards,” etc., under the responsibility of the Executive Officer who supervises such department. NST shall dispatch its Executive Directors, Executive Officers or employees to subsidiaries as Directors or Audit & Supervisory Board Members in case of necessity, and ensure the appropriateness of business execution. The department(s) engaged in internal controls and auditing shall cooperate with the department(s) engaged in functions, instruct and support the internal control system of NST and its subsidiaries, hold information with the subsidiary in common, and aim to fulfill the requirements of internal control.