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Fuji Electric is strengthening its risk management to maximize corporate value and minimize the potential impact of risks.
Basic Policies
Based on the Fuji Electric Risk Management Rules, the Company manages risks in a coordinated, systematic manner. We practice appropriate management and counter various risks that could affect Fuji Electric’s management in order to prevent risks from materializing (crisis situations), thereby minimizing the impact on management in the event that risks do materialize.
Risk Management System
The Company’s business divisions and affiliated companies are responsible for managing risks related to their business activities as a part of their business duty, developing appropriate risk management systems, and implementing risk countermeasures.
Significant risks, such as those related to business plans and large-scale investments, are reported at the Executive Committee as appropriate to facilitate the sharing of information. We also have manuals in place to ensure that risks are steadily managed. We provide training in handling each type of risk and inform the whole Company about our efforts to manage risks through company magazines and other appropriate means.
The internal auditing divisions conduct regular audits to check whether each business division and affiliated company identifies and evaluates risks based on the Fuji Electric Risk Management Rules, defines countermeasure policies, and properly builds and operates management systems.
Emergency response
If an emergency arises due to a large-scale disaster or any other serious cause, we need to act to prevent the situation from becoming any worse and resolve the situation as soon as possible. Hence, we have guidelines in place on preparations for possible emergencies, an emergency contact network, and setting up an emergency task force.
Risk management process
When annual budgets are formulated, the Company’s business divisions and affiliated companies gain an understanding of and evaluate risks related to their business activities.
Policies and countermeasures in response to risks (aversion, mitigation, relocation, retention, and so forth) are considered based on their impact on management and frequency of occurrence, and each division appoints a person in charge of policy and countermeasure execution.
We also conduct mid-year progress checks at the end of the second quarter of each fiscal year to improve and effectively implement risk countermeasures.
Responding to natural disasters and accidents(BCP efforts)
for active business
continuity efforts,
leading to the acquisition of
Resilience certification
In order to resume and continue the important businesses within the required time even when unforeseen situations such as large-scale natural disasters and accidents occur, we have formulated business continuity plans (BCPs), and are making efforts companywide for continuous improvement, based on the Fuji Electric Business Continuity Management (BCM) Rules.
We have formulated BCPs at the head office, factories, and area operations, which serve as contact points with customers, and we have also formulated Company-wide BCPs for our procurement sections and for our IT sections. Furthermore, we implement education and training based on the formulated BCPs and we are working to strengthen our business continuity capabilities by regularly evaluating the effectiveness of the BCPs and their management system in order to make improvements.
In fiscal 2022, we built a mechanism enabling us to share the BCPs of each base throughout the company, in order to ascertain the BCPs companywide in a timely manner and strengthen the management system. Based on the identified issues, we are working to further strengthen education and training.
Fuji Electric has also been positively evaluated for its active business continuity efforts, and we have therefore acquired Resilience certification.
Contributing to Business Continuity through Stable Procurement
By identifying, assessing, and addressing supply chain risks, we aim to build stable material procurement and production systems over the medium and long terms.
The Company has introduced a disaster prevention information system that makes it possible to identify domestic business partners located in regions for which emergency warnings have been issued due to earthquakes or weather conditions. In fiscal 2022, we expanded the registration of secondary business partners, resulting in approximately 9,900 bases of primary and secondary business partners registered to our disaster prevention information system. In addition, with regard to overseas business partners, we have established a system to collect information on disasters through overseas IPOs*. As a result, we were able to quickly confirm the situation when natural disasters (mainly earthquakes) occurred, thereby swiftly identifying any risks on the Company’s production activities. We will continue to strive to more effectively visualize supply chain risks and expand the number of registered business partners.
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*
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IPO: International Procurement Office
In order to avoid risks associated with single-sourcing, the Company has individually evaluated the risks associated with approximately 200,000 materials that we continuously procure and is striving to achieve multi-sourcing*1 for materials that have risk ratings of D and E. As a result, approximately 70% of its procured material items have been sourced from multiple vendors thus far. We will continue to examine items for which multi-sourcing has not yet been achieved, and further reinforce measures such as concluding long-term contracts and stocking up on non-substitutable items. In recent years, procurement risks due to country risks (including lockdown, natural disasters, and conflicts) have been increasing, and in addition to conventional multi-sourcing, we will also avoid procurement risk by increasing the number of countries from which materials can be purchased*2 in the future.
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*1
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Multi-sourcing refers to a system in which materials are procured from multiple business partners.
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*2
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To establish a system that allows procurement from multiple manufacturing countries (domestic + overseas, multiple overseas, and the like).
Efforts to improve quality
Under its Production Technology Committee—which is headed by the Corporate General Manager of the Production & Procurement Group and consists of Corporate General Managers of Business Groups—we strive to improve our production technologies and quality throughout the Company.
The High Reliability Working Group, a subordinate organization of the Production Technology Committee, aims to achieve a stable, uniform level of quality by formulating a High Reliability Activities Policy every year and then applying it to business divisions and factories to promote activities. Every year, the working group identifies all the serious complaints received and continually conducts recurrence prevention diagnosis to reassess the effectiveness of recurrence prevention measures. The working group also promptly reports any serious quality problem that has arisen to the President and COO, the Production Technology Committee members, and other stakeholders in accordance with the rules and regulations to share which risks are involved and quickly promote countermeasures.
At our factories, we are also working on further improving the accuracy, reliability, and speed of our quality control by utilizing the IoT to promote the visualization of production, quality information, and traceability, expanding the range of equipment for which we can digitize or automate tests and inspections, and phasing in statistical quality control.
Furthermore, as activities to increase the quality soundness, in addition to the internal auditing we normally conduct, we are implementing initiatives that have employees of different bases mutually diagnose the health of our quality control system. In addition to diagnoses of whether the quality data satisfies external required specifications and whether there are any problems with the quality data creation process, since fiscal 2022 they have been mutually diagnosing the systems for the selection, evaluation, and auditing of our business partners. The realizations obtained through these activities are shared throughout the company to connect to instructional activities, such as efforts to promote a mindset leading to increased quality soundness, and they are reflected in the quality management system and manuals in an effort to further reduce risk.
Information Security Measures
Efforts to maintain and strengthen information security
To properly manage as confidential information all asset value such as management, commercial and technical information and personal information held by Fuji Electric, the Company has redeveloped and rolled out policies and regulations related to information security based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework.
Furthermore, we have also established management systems at Fuji Electric as well as Group companies in Japan and overseas, and we provide regular training to all of our employees, manage access to operating sites and offices, implement Internet device and computer security measures, and conduct annual inspections regarding the status of efforts taken by each workplace.
In addition, to respond to increasingly diversified and sophisticated cyber-security threats, we endeavor to strengthen our computer security incident response team and security operation center (CSIRT/SOC), our monitoring of signs and information related to new cyber attacks, and our informationsystem defense and attack monitoring functions.
External Certification Related to Information Security
At our bases as well, we strive to improve our information security countermeasures based on the requirements of our business partners, related industry organization guidelines, market trends, and other factors, and in businesses for which public certification of information security management is required, three departments and two subsidiaries of Fuji Electric Co., Ltd. have acquired information security management system (ISMS) certification. Furthermore, concerning personal information protection, Fuji Electric Co., Ltd. and four of its subsidiaries have been granted the Privacy Mark.
Implementing Information Security Audits
Fuji Electric conducts internal audits as a part of efforts to lift the level of information security on a continuous basis. In fiscal 2022, internal audits were conducted at all of Fuji Electric's departments and divisions as well as 28 consolidated subsidiaries in Japan and 28 consolidated subsidiaries overseas.
For issues identified by the internal audits, the divisions and companies will create improvement plans and all of Fuji Electric, including its overseas sites, will work to continually improve.
Information Security Education and Training
Fuji Electric conducts regular information security trainings and works to improve information security awareness and knowledge among all employees.
Other affiliated 56 companies in Japan and overseas conduct their own respective information security education and training.
Coordination with Information Security-Related Organizations
Fuji Electric participates in or coordinates with the following information security-related organizations.
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1.
Nippon CSIRT Association
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2.
Japan Computer Emergency Response Team Coordination Center
Measures to Prevent Infringement of Intellectual Property Rights
As part of our intellectual property activities, we employ a system to monitor other companies’ patents on a daily basis to prevent any inadvertent infringement of patents held by third parties.
We also conduct compliance training for employees as part of our effort to prevent infringements.
With respect to our own technologies, we actively acquire patent rights to protect our business. Fuji Electric continues to address overseas intellectual property issues and implement measures against counterfeit products to minimize business risks related to intellectual property.