Customers

Basic Perspective

In response to the domestic engine certification issue, we continue to implement reforms in the three areas of “culture,” “mechanism,” and “organization/system.” We are committed to steadily advancing these reforms, ensuring they are never forgotten, and firmly establishing improvements through ongoing enhancement.

Building on this perspective, we regard compliance with laws, regulations, and commitments to our customers as the starting point for all activities. To deliver safe and reliable products to our customers, the TICO Group is united in our efforts to establish a higher level of quality management system (QMS).

Establishment of Quality Governance Framework

Since the appointment of the newly established Chief Quality Officer (CQO) position in January 2024, we have been advancing the development of a quality governance framework led by the Quality Management Department, with the full cooperation of the entire Company. Aiming to strengthen quality management across the organization, this initiative is centered on two pillars: the comprehensive restructuring of the Company-wide quality regulations framework and the review of the internal audit system.

Strengthening Quality Governance through the Restructuring of Company-Wide Quality Regulations Framework

We have restructured 13 Company-wide quality regulations aimed at clarifying common rules applicable throughout the entire Company. These regulations serve as the “parent regulations” to the divisional regulations operated within each business division. By reflecting and implementing the rules set forth in the parent regulations into the divisional regulations, we are working to strengthen quality governance.

In the design review (DR) process, which serves as the core of our quality assurance system, we have strengthened the framework to ensure effective checks and balances during development. This includes defining the responsibilities of the review chairperson, involving the CQO as a review member as well as revising the review criteria, and clarifying judgment standards to ensure strict compliance with laws and regulations. These enhancements have now been implemented.

Strengthening Quality Governance through the Review of the Internal Audit System

For reorganizing and reinforcing our quality governance structure, TICO has established and started operating a more robust quality governance structure consisting of three check lines.

Quality is built through the involvement of every department within each business division—from product planning and development to production. The Quality Management Department at the Head Office, acting as Line 3 and independent from the business divisions, conducts quality management audits to check and oversee these efforts.

In FY2025, these quality management audits were conducted across all seven business divisions. The audits verified not only compliance with laws, regulations, and standards but also whether the quality systems and rules each department must follow were appropriate and whether each division’s internal quality audits were functioning effectively.

Quality Governance Structure

The various functions, organizations, and employees within each business division strive to reduce quality risks by making committed efforts to improve issues identified through these audits and by promoting revisions to create more effective quality standards and operational rules.

Implementing Further Initiatives

We will continue the efforts we have been advancing to ensure they take firm root. At the same time, we will make improvements to enhance their effectiveness and enable the early detection and mitigation of quality risks in new product development and lot control processes*. In addition, we will expand these initiatives to our affiliated companies to build a higher-level quality management system.

* A system that groups a certain quantity of products as one lot, assigns sequential lot numbers, and manages production progress by these lot numbers

Preventing Occurrence and Recurrence of Defects

If a defect is found in a product after its launch, the Quality Assurance Department of the responsible business division takes the lead in making a swift response to eliminate the concerns of customers quickly and implementing measures to ensure the non-recurrence of the same defect. In particular, a defect causing considerable inconvenience to customers is recorded as a critical quality issue and reported to the president. At the same time, we have in place a system to follow through on customer response as well as measures to prevent recurrence. Accordingly, we examine and identify the cause by going back to its development process. We implement countermeasures both from the process and technological aspects and revise our new product development process as necessary. Through these measures, we strive to thoroughly avoid the recurrence of the defect in subsequent models. Additionally, we make efforts to prevent the occurrence of defects in all products we develop and manufacture in the future by taking measures throughout Toyota Industries.

Providing Support to Suppliers

Since improving the quality of our products requires concerted efforts with our suppliers in and outside Japan, we are strengthening joint quality assurance activities with major suppliers.

Quality Audit

TICO conducts annual quality audits of its suppliers through genchi genbutsu (go and see for yourself) inspections of each supplier’s quality assurance systems and production site management. By identifying weaknesses clearly, we propose concrete improvement measures and support efforts to raise quality management levels. In FY2025, we focused on key areas specific to each supplier and carried out bottom-up activities tailored to their challenges.

Nurturing and Certifying Internal Auditors at Suppliers

To foster voluntary quality improvement efforts of suppliers, we are nurturing and certifying internal auditors at suppliers who satisfy our criteria. After certification, these auditors conduct effective internal audits and use the results to maintain and enhance their quality assurance systems. We continuously support this initiative and encourage suppliers to foster a culture of working autonomously to improve their quality assurance systems.

Promoting Human Resources and Workplace Development

We regard “quality” as one of the pillars supporting our corporate activities. To ensure all employees acquire quality assurance skills and maintain a strong awareness of quality in their work, we implement systematic education and awareness programs. Grounded in legal compliance and ethics, we aim to develop human resources who think, learn, and act on their own, thereby strengthening the overall capability of the organization.

Quality Awareness Activities

We engage in various awareness-raising activities to help all employees deepen their understanding of quality and apply it in their work. Each business division’s Quality Learning Room features common exhibits that share lessons from the certification issue across the entire Company and encourage employees to relate them to their own duties. Additionally, in FY2024, we created a new e-learning course on the basics of regulatory certification, which all employees completed. From FY2025, this training has been extended to new hires and mid-career recruits. Furthermore, we have strengthened the grade-based training program to reaffirm the importance of quality and legal compliance under the concept that “quality is the lifeblood of the company.” We have designated November as Quality Month, during which the CQO delivers messages to all employees urging quality improvement. Employees who contribute to the early detection and resolution of quality abnormalities and risks are also recognized, promoting Company-wide enhancement of quality awareness.

QC Circle Activities

Since 1965, all employees at TICO have been participating in quality control (QC) circle activities. Today, these activities serve as a robust foundation for human resource development and workplace improvement. We presented the results of our activities at national conventions and have garnered many awards. In FY2025, we received an encouragement award under the QC Circle Kaoru Ishikawa Award program for four consecutive years (for the 13th time in total). The award is given to QC circles for their distinctive activities and contribution to widespread, more active, and better QC circle activities.

Our production bases outside Japan are also proactive in promoting QC circle activities. We assist them in undertaking independent activities by nurturing and certifying global QC circle trainers at each base. In FY2025, we hosted the Global QC Circle Convention, which serves as a venue for presenting activity results, in Japan, with circles from 18 overseas bases participating in person to share their accomplishments. The Regional QC Circle Conventions were also held in North America, Europe, and China to promote activities in respective regions.

Activities to Promote Creative Ideas among Employees

Since the launch of the proposal system in 1965, all employees have been engaging in creative idea proposals as part of their daily improvement efforts. In FY2025, to prevent the system from becoming a mere formality and to further strengthen human resource development, we reviewed the roles involved in utilizing the system. At all domestic plants, department heads are now taking the lead in fostering autonomous young employees.

Nurturing Human Resources Who Can Take a Scientific Approach

As part of our basic education on quality management, we teach the basics of statistical quality control (SQC) and machine learning. Furthermore, we develop core human resources through problem solving in the workplace, and these individuals lead efforts to apply machine learning in practice. We have also held the TICO SQC Convention for 41years to share internal case studies.

■Rate of eligible employees receiving training to promote quality education (non-consolidated): 94.9%

Nurturing Human Resources Who Can Perform Risk Assessment of Product Safety

In order to provide products that are safe for customers to use, each business division conducts risk assessments during a DR to identify all risks. We are also providing Company-wide specialized risk assessment education to promote the development of human resources who can assess two factors integral to risk assessment, namely, the likelihood of an occurrence of a hazard and the severity of damage caused by it.