Sustainability | Sustainability Management | TDK Group's MaterialityQuality Management

Background to Identification as Materiality

Significance for TDK

The improvement of product quality and delivery performance will raise the satisfaction of 2CX (customer experience and consumer experience) and lead to the further use of TDK products by customers for their existing products and new development projects. As a result, it will contribute to expanding usage and shares at customers and enhancing orders received, sales, and income.
At the same time, by reducing in-process defects (quality failure costs) at manufacturing sites, it will contribute to the raising of Commercial Value and Asset Value in “Value Creation 2023," the TDK Group’s Medium-Term Plan.

Significance for Society

TDK products are developed, produced, and supplied to the market with the aim of realizing our Corporate Motto of “Contribute to culture and industry through creativity” and our Sustainability Vision of “Technology for the well-being of all people.” However, the occurrence of quality defects not only makes it difficult to achieve our objectives but also could lower customer satisfaction and cause damage to society.
Quality initiatives are an important factor for the realization of our Corporate Motto and Sustainability Vision. Since this effort to realize our Corporate Motto and Sustainability Vision is also connected to the solution of issues raised in the United Nations Sustainable Development Goals (SDGs), such initiatives have an important significance in supporting TDK’s role in society.
We believe that stakeholders also expect TDK to lower risks relating to product quality and to continue the stable supply of high-quality products.

Overview (Themes, responsible department, goals, KPIs, and progress)

Themes Responsible
department		 Goals in 3 years Action items KPIs Medium-term
target*
(Fiscal 2022-2024)		 Progress of Fiscal
2022		 Progress of Fiscal
2023
Pursue zero-defect product quality Quality Assurance HQ Manufacturing in business divisions is moving towards upstream management in order to eliminate quality defects in the four areas of design, material, process, and management.
  • Strengthen the quality education in design, development, and manufacturing departments
  • Manage and maintain the certification at all applicable sites
  • Promote activities to eliminate the four quality defects (design, material, process, and management) by improving quality awareness and improvement methods and using AI
 Implementation of quality education at all applicable sectors Promote the globalization of quality education utilizing DX Started learning with digitalized educational content Created and deployed online quality education content in collaboration with the global HR function and overseas sites
Management of certification maintenance at all applicable sites (ISO9001) Certification maintenance ratio: 100% 100% 100%
Consideration of the development of systems by utilizing AI
  • Develop a system for detecting signs of equipment failure
  • Consider the development of design screening by AI search
  • Considered elemental technology for indicative detection
  • Introduced an automated monitoring tool by deep learning
  • Developed an automatic failure mode classification system as an elemental technology for indicative detection
  • Investigated introduction of AI into design review and develop prototype
Reduce quality costs Quality Assurance HQ Measures have been taken to strengthen design reviews during design phase and to improve 4M (man, machine, material, method) at manufacturing sites, and improvements are promoted autonomously in business divisions.
  • Promote 4M improvement in manufacturing aimed at reducing quality loss (improving yield)
  • Promote small-group activities
 Quality improvement activities for each cause Implement measures for each cause
  • Promoted the visualization of foreign objects through in-process activities to reduce the presence of foreign objects
  • Introduced an analytical tool to counter the fragility of software implemented in products
  • Implemented new quality diagnosis (processes, equipment) by Headquarters functions
  • Issued a manual for small-group activities and promoted them
  • Implemented improvement activities for defects caused by foreign objects
  • Established product security measures mechanism in Iot products (confirmed in design review)
  • Deployed new quality diagnostics (process, equipment) to China by Headquarters functions
  • Horizontally deployed best practices for small-group activities
Maximize customer satisfaction with product and service quality Quality Assurance HQ The speed of response to quality complaints is improved by enhancing and strengthening the semiconductor analysis functions and, in the case of especially serious complaints, a company-wide cross-functional activity is conducted to respond to the customer.
  • Accelerate measures to improve customer satisfaction through cross- functional activities
 “A rank” in degree of customer satisfaction
*Among the total of supplier evaluations obtained from customers, “A rank” means the ratio of customers expressing satisfaction. 		At least 95% 96.8% 95.0%
SCM Reengineering Group The visualization and refining of goods and information (changes in customer demand, production fluctuations, etc.) in the supply chain is undertaken to enable quick decision making in a VUCA world toward the realization of a resilient supply chain based on work rules and data-driven operations.
  • Strengthen supply chain visualization
  • Standardize manufacturing and sales rules in demand management and demand-supply adjustment
  • Improve delivery service level and efficiency by shortening business lead times and supplementing inventory management functions
 1. Visualization of supply chain management from a consolidated perspective
  • Production, sales, and inventory (PSI) information by level
  • Business lead time

2. Formation of inventory holding standards based on supply policy and strengthening of management function 		Build new work infrastructure for consolidated supply-demand management in applicable product groups and strengthen visualization of the flow of products and information
Furthermore, redefine work rules and endeavor to entrench delivery/inventory management infrastructure to enable speedy decision making 		1. Increased the accuracy of PSI information in existing infrastructure

2. Completed concept formulation toward the building of consolidated supply-demand management infrastructure 		1. Continued to increase the accuracy of PSI information in existing infrastructure

2. Completed new operation designing and PoC (Proof of Concept) for building consolidated supply-demand management infrastructure

*The targets run from fiscal 2022 through 2024 (ending March 31, 2024).

Department Head Messages

Quality Assurance HQ

Takeshi Takahashi

Responsible Themes

  • Pursue zero-defect product quality
  • Reduce quality costs
  • Maximize customer satisfaction with product and service quality

For TDK, a manufacturing company, the ultimate goal is to realize zero defects, but we have not reached that point yet. To achieve our objective, at the moment we are bolstering efforts in the four steps: identification of causes, outflow prevention activities, preventative and predictive activities, and upstream-management-type manufacturing that does not produce defects. In each step, we are improving ways and means to raise the quality awareness of employees and promoting activities to eliminate defects in design, material, process, and management through integration with digital transformation (DX). In addition, we are striving to predict and prevent the outbreak of in-process defects through DX technology, including the building of basic technologies for deep learning*1 and AOI.*2 For TDK, which designs, manufactures, and supplies products, product quality is a most important issue and a foundation of our corporate activities. The TDK Group will come together, eliminate product defects in the four areas of design, material, process, and management, and establish an organization and corporate culture of upstream-management-type manufacturing so that “Made by TDK” becomes a synonym of top quality.

  • *1 Deep learning is a type of machine learning that boosts learning ability by combining artificial neural networks imitating the neural circuits of the human brain, thereby enabling the learning of various things and response to complicated problems.
  • *2 AOI stands for automated optical inspection, which refers to the quality inspection of products by means of continuous photography using a high-resolution camera system with different light sources, such as fluorescence, ultraviolet rays, LED (light-emitting diode), and infrared rays.

SCM Reengineering Group

Tsuyoshi Morita

Responsible Theme

  • Maximize customer satisfaction with product and service quality

As a supplier, we make efforts to provide value in the form of deliveries that do not dent the customer’s business and also to enhance asset efficiency. As a result, we can maximize the satisfaction of customers and gain their trust. Furthermore, we believe that TDK’s tackling, as a supplier, of the twelfth Sustainable Development Goal of “Responsible consumption and production” will lead to the strengthening of our response to geopolitical risks, our consideration for society and the environment, and the governance needed to put related measures into practice.
To realize our goals in three years, we are currently promoting the “establishment of factory foundations based on plan-based production and on-time delivery,” and “standardization and refining of operation processes between sales companies and factories.” In addition, we will shift from the existing specific-optimal-type management of supply and demand to seamless supply chain management with a consolidated and overall-optimal perspective and realize quick decision making in a VUCA* world.
The improvement of delivery has been an important issue for many years. The TDK Group will maximize customer satisfaction by working together to transform into new operation processes and overcome this challenge.

  • * VUCA is an acronym standing for volatility, uncertainty, complexity, and ambiguity. It refers to conditions that are highly unpredictable for society and business.