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Procurement

Supply chain communication

Cooperation with suppliers

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TEL Partners Day

In addition to daily communications, TEL holds Production Update Briefings and a TEL Partners Day to enhance relationships with suppliers. At these events, we present and exchange information on the management plans, market trends, business policies, and CSR initiatives. We also ask for continued cooperation in strengthening our supply chain, and honor outstanding suppliers to express our appreciation for their constant support.

Developing strong partnerships with suppliers is essential to improve product quality. Since 2000, TEL has regularly conducted Supplier Total Quality Assessments (STQA) to clarify what is expected of suppliers in terms of maintaining and improving quality.
 
Before starting business with new suppliers, an STQA is conducted via self-assessment to evaluate their product quality, costs, and information security. The assessment also includes CSR issues, including human rights, ethics, safety, and the environment. If any risks to quality are found, our trained and certified auditors visit the supplier on-site to explain the problems, our expectations for improvement, and the level of quality we require. After the supplier understands the issues, we ask that they plan and implement improvement measures in line with our written requests. We keep track of all requests and improvement measures internally, and offer continual support to suppliers until all necessary improvements have been made. We conduct on-site audits once every three years at suppliers who manufacture important components and at suppliers where quality issues have been found.

We focus on change control with our suppliers. We aim to reduce the number of quality issues that occur as a result of changes to the design or manufacturing of equipment components and modules. We also aim to reduce the cost of quality improvements. We use change control briefings to inform suppliers of the requirement to submit a request when changes are made. We have been conducting web-based training since 2015 to get more suppliers to understand the importance of change control in respect to quality and to ensure they submit the required change requests. Approximately 900 people participated in this training during fiscal 2017.

SQIP defect prevention activities
TEL works with suppliers to implement the Supplier Quality Improvement Program (SQIP), a series of activities designed to prevent defective components. The SQIP aims to visualize the root causes of problems (defect factors) and encourage independent defect prevention activities by asking each of our suppliers to explore defects that have occurred in the past. Through this process, the program aims to reduce the number of defects by half. Our suppliers use the self-assessment of their quality control systems to analyze closely the source of previous problems in their manufacturing environments, whether in ordering, design, production, inspection, or training. This helps them to identify weak points and make improvements to systems or work methods.

QC Patrol
Component module manufacturing processes have a strict requirement for accuracy. Processes like crimping work, soldering work, and terminal block connecting work have a significant impact on the safety and service life of our equipment, yet, from the outside, it is not immediately obvious whether they have been done correctly. We treat such processes as important tasks. In our suppliers’ production facilities, our systems ensure that these tasks are performed by skilled employees who have passed tests conducted by TEL-accredited trainers. Our quality and manufacturing division personnel also visit our suppliers as part of our QC Patrol activities to check on the quality of their work. In addition to this, our technology and quality personnel join forces in a separate QC Patrol activity to inspect channel welding work and inspect for leaks and cleanliness of gas components.

TEL is also partnering with our suppliers to implement a TPM1 program. The production of any piece of equipment involves a number of supplier processes. In the TPM program, supplier shop floor improvement teams collaborate with TEL employees to enhance productivity and product quality. In one example, the program led to a 30% reduction in the number of steps required to assemble modules and systems. The program also plays a key role in educating supplier improvement team members.

1 TPM: Total Productive Maintenance or Total Productive Management
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Cooperation with industry organizations

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In June 2015, TEL joined the EICC, an electronics industry coalition on CSR. EICC participation includes adopting the EICC Code of Conduct, a set of standards to improve labor practices, health and safety, environmental impact, and ethics in the electronics supply chain. TEL adheres to the EICC Code of Conduct to maintain and strengthen its supply chain, in cooperation with other EICC member companies.
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