The Nissha Group includes the efficiency and productivity improvement as a materiality. We are advancing our Digital Transformation under the philosophy that, in addition to improving company efficiency and productivity, digital technology also links to improving added value provided to the customers and resolving societal issues.

Furthermore, we are engaged in human resources development to adapt to the changing business environment, development of IT technologies such as IoT and AI and utilize them in activities of quality control, production, and sales. Also, we promote automation, labor-saving, and efficiency improvement of operations in routine tasks.

In addition to the digitization of production such as the "Smart project” that aims to make IoT and AI an integral part of production bases, improve quality and productivity through the use of IT, and automate production processes to save labor, the Nissha Group is also working on improving efficiency, sharing information, and visualizing data by systemizing internal business processes as the digitization of indirect operations.
In the fiscal year ended December 2022, the following results were achieved in the digitization of indirect operations.

• We built our own in-house automatic yield rate projection and quotation system in specific business units. As a result, the quality of our designs has improved and we have successfully streamlined business processes internally, thereby speeding up our response to requests for quotations from customers.
• One of our production subsidiaries that handles a wide variety of products in small quantities built an AI-based production planning optimization system. In the past, production plans were created by the person in charge based on past experience and intuition, but by systematizing experience and intuition, the subsidiary has been able to create a system in which the optimal production plan is automatically allocated from the system.

From the fiscal year ending December 2023 onward, we continue to engage in the systematization of the entire company, including indirect work, with the aim of improving the quality and quantity of output from the customer's perspective, and we will promote the creation of a system to improve productivity. We will make full use of data accumulated through digitization, and establish a system for visualization and analysis to improve productivity and product quality.

• In terms of the digitization of indirect work, we will shorten the lead time for calculating performance forecasts through the systematization of planning-related work, which will be achieved by simulating optimal planned values, and we will promote the creation of a system capable of maximizing sales and profits.
• In terms of data utilization, we will identify problems in our work processes by analyzing work processing times and other data using accumulated log data, and we will work to streamline and equalize operations.

Nissha Industries, Inc. Koka factory is the main factory in Japan responsible for the production of decorative films for the Industrial Materials business. In 2022, the factory systemized the management of exposure time to organic solvents with the aim of improving productivity. This was developed as a factory-specific initiative tied to one of Nissha’s materiality, “efficiency and productivity improvement”.