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Quality and Safety

Governance
Strategy
Risk Management

Governance

Quality and Safety Framework

Quality and Safety Implementation Framework and Quality and Safety Risk Management Framework

One of our most important management issues is how to ensure the quality and safety of our products, system and services and deal with related risks.

NEC’s CSCO is responsible for managing quality and safety. We are working to clarify our system of activities by defining companywide rules and standard operating procedures, and to improve quality and safety. This effort is headed by the Total Quality Management Department, the quality promotion organizations established at business units and at consolidated subsidiaries, and the quality/safety management officers appointed in each business department and at consolidated subsidiaries under the business units.

In regard to risk management related to quality and safety, we have built a companywide framework and ensure that it is thoroughly implemented. If a customer’s system or a system with significant social impact were to experience a serious issue, or a major product incident or infringement of technology laws and regulations were to occur, the matter would be promptly escalated to management. The business department in charge and specialist staff would confer and reach a swift decision on how the customer should be treated, the response to the relevant local/regional authority, and whatever other PR measures might be appropriate. Prompt consultations are made in order to determine the most appropriate companywide policy for the matter in question.

Ensuring the Soundness of Construction Work

As a Social Value Innovator, NEC garners trust and contributes to realizing a better society by ensuring the health and safety of workers through safe construction initiatives that comply with relevant laws and regulations, such as safely installing NEC-developed products and systems.

With the mindset that health and safety take priority in all work, including health management, not just for construction workers but for all NEC employees and related workers, we deliver outstanding technology and continue to enhance the safety of our installation procedures in compliance with relevant laws and regulations to ensure the soundness of construction work. In these ways, we are working to build an abundantly safe society that offers peace of mind.

System for Compliance and OH&S in Construction Work (in Japan)

System for Compliance and OH&S in Construction Work (in Japan)

Strategy

Quality and Safety Policy

To realize “Better Products, Better Services,” which is one of the Principles in our founding philosophy, we have implemented a steady stream of initiatives aimed at improving quality. These include the introduction of quality controls that broke new ground in Japan, ZD Activities,1 the quality-operation strategy,2 and Software Quality Control (SWQC).

As a Social Value Innovator, we hope that all employees will continue to improve the quality of their own work, the products they create and the services they provide, and that customers will favor NEC as the provider of trusted “NEC Quality.”

Specifically, we have set up the Quality and Safety Action Policy, and we are conducting activities such as complying with product and service quality and safety laws and regulations, improving safety and reliability technologies, standardizing key components, sharing expertise and taking steps to prevent defects and their recurrence.

  • 1.
    ZD (Zero Defects) Activities: Designed to stimulate each employee’s autonomy and passion to eliminate defects from their work through creative thinking, cost reductions, and improvements in quality and service
  • 2.
    An initiative to achieve companywide improvement in the 7 Qs denoting quality in 1) management, 2) products and services, 3) human behavior, 4) workplace environment, 5) relationships with the local community, 6) business results, and 7) corporate image

Quality and Safety Philosophy

NEC strives to continue improving quality and safety based on the Principles in the NEC Way, including the founding spirit of “Better Products, Better Services.”

Action Guidelines

  1. Quality management
    • 1.
      Think and act from the standpoint of new value for customers and society
    • 2.
      Maintain and enhance the NEC brand
    • 3.
      Ensure that each member of NEC recognizes the importance of quality and strives to deliver better quality
    • 4.
      Strive to ensure product and service quality, and comply with related laws and regulations
    • 5.
      Make sincere efforts to address product and service quality problems
  2. Safety management
    • 1.
      Ensure that each member of NEC recognizes the importance of product and service safety
    • 2.
      Strive to ensure product and service safety, and comply with related laws and regulations
    • 3.
      Make sincere efforts to address product and service safety problems

Throughout the Company, construction work is stringently managed to ensure compliance with the Construction Industry Act, the Industrial Safety and Health Act and other laws. In addition, our philosophy is to advance OH&S and ensure that we provide customers with social value by establishing a compliance and OH&S culture at construction sites. With this in mind, we have set out the following code of conduct.

Code of Conduct for Health and Safety in Construction

  1. We shall ensure that each person checks and endeavors to improve the soundness of construction work.
  2. We shall advance compliance with laws and regulations, conduct education and personnel development, implement awareness-raising activities, and ensure Companywide understanding of the importance of occupational health and safety.
  3. We shall maintain and improve the occupational health and safety management system and move forward through a plan–do–check–act (PDCA) cycle.
  4. We shall preempt legal, safety, and quality issues by conducting monitoring and correction in relation to compliance with laws and regulations and occupational health and safety activities.
  5. We shall preempt legal, safety, and quality issues by implementing risk assessments.
  6. We shall increase motivation with respect to occupational health and safety through safety conventions and other measures.
  7. We shall respond sincerely to legal, safety, and quality issues that arise.
  8. We shall collect information on potential and actual legal, safety, and quality issues and endeavor to preempt issues or prevent their recurrence.

Risk Management (Including Opportunity Generation)

Quality Management System

Today, as society’s focus shifts from manufacturing physical products to creating intangible services, quality controls are also changing. At NEC, we have created quality management systems that we implement to realize high-quality products and services that satisfy customers’ demands and expectations. In line with our basic stance that “quality is built in through processes,” we aim to make continuous improvements to make our processes even better.

Quality Audits

Based on an approach to internal controls with three lines of defense, business divisions are the first line, management divisions are the second line, and internal audit divisions are the third line. As part of the second line, the Total Quality Management Department regularly audit each business unit to ensure that it is operating its quality management system properly, and works to make improvements.

Pre-project Assessment

Before embarking upon a new project, we identify the risks involved in executing it and check that sufficient risk countermeasures are in place. The assessment is multifaceted, covering aspects such as technological risks and safety risks related to quality as well as the development scale and timeframe and the project framework.

Quality Assurance Guidelines for Machine Learning-based Artificial Intelligence

The past few years have seen the proliferation of systems and services that use artificial intelligence (AI). However, the process AI models use to create and output the results of their analysis can be difficult for humans to interpret, and conventional software quality assurance guidelines alone may not be sufficient. Accordingly, in April 2019 NEC addressed this issue by formulating Guidelines to Quality Assurance for Machine Learning-based Artificial Intelligence, designed to ensure the quality of AI systems that cannot be handled using conventional software quality assurance alone. We have applied these guidelines to the design and development of important AI systems.
We continue to make updates to the guidelines on a regular basis, and the latest version aims for increased sophistication with improvements to AI security and coordination with checklists related to AI and human rights.

Medical and Healthcare Fields

NEC Ethical Review Committee for the Life Sciences

We conduct research and development in the field of life sciences with the goal of commercialization.

When conducting proof of concept or research involving human subjects or information and data related to people, we follow guidelines issued by organizations including Japan’s Ministry of Education, Culture, Sports, Science and Technology and the NEC Ethical Review Committee for the Life Sciences, which includes external experts, deliberates on the ethical validity of the research, including the purpose of the research and consideration for the human rights and dignity of the subjects.

Initiatives to ensure transparency in relationships with medical institutions

NEC is working to ensure the transparency and soundness of its relationships with medical institutions, with a view to gaining a wider understanding of the medical device industry’s contribution to the development of life sciences as well as the high ethical standards that companies in that industry adhere to in conducting their corporate activities.

Initiatives in the medical and healthcare fields

We have been establishing a management framework and moving forward with Quality Management System activities and compliance with relevant laws and regulations, with the aim of establishing commercial businesses in the medical and healthcare fields.

  • Devices Act3 we have prepared guidelines on compliant advertisement and a checklist for determining which items are covered by the act. Moreover, we have incorporated the guidelines and checklist into the processes of related business entities.
  • We have begun establishing and managing processes pursuant to the Quality Management System Ordinance and ISO 13485:2016.
  • In tandem with these efforts, we are steadily establishing compliance with respective countries’ medical devicerelated laws, such as Japan’s Pharmaceuticals and Medical Devices Act as well as the European Union’s Medical Devices Directive and Medical Devices Regulation.
  • 3.
    Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices

Thorough Compliance for Quality and Safety

Compliance with Relevant Laws and Regulations

To visualize the technical laws and regulations with which NEC products must comply, NEC has developed a “map of technical laws and regulations” to make it easier to identify what kind of laws and regulations are applied to which departments’ products. By using this map, we strive to closely comply with laws and regulations in Japan, including the Electrical Appliances and Materials Safety Act, Radio Act and Telecommunications Business Act, and with laws and regulations in various other countries related to our products for international markets.

NEC is enforcing compliance with relevant acts and internal rules for instructions and labeling related to the quality and safety of its products and services. If violations are found or suspected, NEC will properly address the problem by following the direction of the relevant ministries and agencies.

We also keep up-to-date knowledge of technology laws and regulations in advanced technology and new business domains, and check on the status of appropriate implementation of quality management systems through quality audits.

Ensuring Product Safety

NEC complies with the international standards IEC 60950-1 (JIS C 6950-1) and IEC 62368-1 (JIS C 62368-1) as a matter of course. In addition, we have established our own Group safety standards to reinforce these standards, and we also perform risk assessments to ensure product safety.

If product safety issues arise, we provide information on the NEC website and swiftly notify our customers.

Training and Awareness Raising on Quality and Safety

We believe that developing personnel and improving their skills are extremely important measures for improving the safety and quality of our products, and are therefore implementing the following initiatives.

Developing Personnel to Ensure Safety and Security

  • NEC conducts training programs for specific jobs and fields of specialization with the aims of improving practical design and construction skills and providing basic and specialist knowledge on quality and safety management standards as well as technical standards.
  • We provide rigorous education on technology laws and regulations, such as the Radio Act and the Telecommunications Business Act, which are needed for operating telecommunications businesses, and develop engineers by fostering a correct understanding of laws and regulations and a safety-oriented mindset.
  • Web-based training on NEC’s approach to quality, safety, and technology laws and regulations is conducted once annually for employees of NEC Corporation and consolidated subsidiaries in Japan.

Project Management Award

  • NEC holds an annual presentation of outstanding cases and presents a Project Management Award to the organization or group that demonstrated the most beneficial project support, or the project team that tackled a difficult project and achieved a particularly outstanding result.
  • The intent of the Project Management Award is to raise awareness of the importance of project risk management among employees of NEC Corporation and consolidated subsidiaries in Japan, and to demonstrate the significance of challenging high-risk projects, accomplishment and recovering from setbacks.
  • NEC also recognizes that increasing awareness of award-winning cases throughout the Group helps to prevent risks from materializing in new projects through the horizontal spread of risk management best practice.

Increasing Awareness of Quality through “Quality Month” Activities

  • In November, which we have designated “Quality Month,” members of senior management and experts from inside and outside the Company conduct seminars and dialogues aimed at ensuring that employees are always highly conscious of quality and safety as they work.
  • In fiscal 2024, talks were held in each workplace using video materials on the topic of quality fraud to raise awareness of creating an open and communicative work environment.

Construction Work Project Management

We strive to prevent occupational injuries and to improve health and safety standards through our Occupational Health and Safety Management System. In particular, using our construction work project management system, we have achieved 100% implementation of risk assessments and fixed-term Industrial Accident Compensation Insurance. There were no serious occupational accidents in fiscal 2024.