Supply Chain

Overview of our supply chain

All products we deliver to customers are engineering plastic products. The manufacture of these products follows one of two general patterns, (A) and (B), described below.

(A) Mechanical Solutions Business, Optical Solutions Business, LED Solutions Business, Bio-related Business
The strength of the Enplas Group lies in our ability to supply, at scale, engineering plastic products of high precision, high performance, and high quality. The design and manufacturing of key molds is conducted at our mother plant, Kanuma Plant, which pilots cutting-edge technologies before deploying them to other factories. This system helps to ensure that all products are manufactured to the same quality at all factories worldwide.
Each of these businesses—Mechanical Solutions, which makes automotive and printer parts; Optical Solutions, which makes optical communications-related parts; LED Solutions, which makes LED light diffusion lenses; and Bio-related Business, which makes microfluidic chips—designs and fabricates molds based on the customer’s product data, and performs injection molding using materials sourced from plastic material manufacturers. In some cases, we supply the materials and ask a partner company to perform the injection molding.

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(B) Semiconductor Peripherals Business
The Semiconductor Peripherals Business, which manufactures and sells IC test sockets and burn-in sockets, employs a fabless production model (it outsources production) that draws on Enplas’s expertise in molding engineering plastics. As higher-precision test devices are needed for ever higher-performance semiconductors, our forte is the ability to design, quality assure, and deliver test sockets for large, custom CPUs exceeding 1,000 pins.
The Semiconductor Peripherals Business carries out product design based on the customer’s semiconductor package. It then sources materials from plastic material manufacturers and has the metal molds fabricated, the injection molding, and the product assembled at outside partner companies.

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Procurement

Procurement as a Group

Because a major portion of the materials used by the Enplas Group—and the manufacturers that supply them—are specified by customers, the Materials Procurement Group sources these materials together by combining orders from our different business units. These materials include raw materials such as plastics and indirect materials such as packaging materials.
The Materials Procurement Group continually strives to build relationships with key suppliers by sharing information, visiting factories, and holding meetings to exchange views with them periodically. Relevant persons from the business units accompany the Group on these factory visits. The Materials Procurement Group also sends questionnaire surveys on quality and delivery deadlines to the more than 100 raw material suppliers, trading companies, and indirect material manufacturers with which we do business directly and indirectly.
In the event of a serious change in the supply chain, due to a natural disaster, major accident, or change in country of origin, the Administration Division promptly gathers information, reports the matter to the Corporate Strategy Meeting and relevant functions, and devises responsive measures.

Procurement in each business segment

(A) Mechanical Solutions Business, Optical Solutions Business, LED Solutions Business, Bio-related Business
These business segments procure materials, parts, and molded parts from suppliers and partner companies.
Kanuma Plant handles most mold manufacturing, but in some cases Kanuma Plant carries out design and finishing processes that require our unique expertise and outsources the beginning processes of mold manufacturing to a partner company. The production of molded parts is conducted at our factories in countries outside Japan and at Kanuma Plant or partner companies in Japan. When a partner company produces molded parts, they borrow molds fabricated by Kanuma Plant and use materials supplied by us.

(B) Semiconductor Peripherals Business
Our suppliers are located in Japan, China, Taiwan, Vietnam, and the Philippines. In Japan, we make an effort to distribute our suppliers across the country for BCP purposes. In recent years, large semiconductor manufacturers and other customers have increasingly asked for us to disclose information on the BCP of our supply chain, and this has led to improvements in our own supply chain management.
Our supplier audits include an on-site inspection at the start of trading and, in Japan, a questionnaire survey and visit once or twice a year. In addition to the seismic strength of buildings and preventing molds from falling or being dropped, our audits also include social and environmental items, such as employee work options, prevention of third-party intrusions, and proper management of chemicals. In cases where make a request for improvement, we later carry out an on-site check. Going forward, we plan to also conduct periodic audits of suppliers outside Japan.

■Types and numbers of affiliated suppliers
Fiscal Year 2019: Four types (products, processing, raw materials, and molds/mold parts)
Fiscal Year 2019: Headquarters: 100 suppliers, Kanuma Plant: 142 suppliers, Semiconductor Peripherals Business: 94 suppliers
■Ratio of new suppliers selected based on social standards
Fiscal Year 2019: 0%
■Number of suppliers subject to social impact evaluations, number of suppliers identified as having clear negative impacts, and actions for such suppliers
Fiscal Year 2019: 0 companies (no suppliers have been identified as having a clear negative social impact)
■Ratio of new suppliers selected based on environmental standards
Fiscal Year 2019: 0%
■Number of suppliers subject to environmental impact evaluations, number of suppliers identified as having clear negative impacts, and actions for such suppliers
Fiscal Year 2019: 0 companies (no suppliers have been identified as having a clear negative environmental impact)
■Existence of suppliers with clear risks related to child labor or forced labor
Fiscal Year 2019: 0 companies (no suppliers have a clear risk related to child labor or forced labor)

Manufacturing

■Mechanical Solutions Business
The Mechanical Solutions Business has manufacturing locations in Japan, the US, Malaysia, Thailand, China (Shanghai and Guangzhou), Vietnam, and Indonesia. Because the strength of this business lies in proposing solutions to customers, manufacturing and sales operations are closely integrated and parts that meet customer needs in each region are delivered quickly.
■Optical Solutions Business, LED Solutions Business, Bio-related Business
The Optical Solutions Business, LED Solutions Business, Bio-related Business manufacture fine processed parts. Our proprietary mold manufacturing and injection molding technologies make it possible to carry out multi-process molding in a single shot.* This makes it possible to deliver large quantities in a short period and also reduce costs, leading to higher customer satisfaction.
*Shot: Enplas Group products are manufactured using injection molding machines. A shot is the series of steps in the injection molding machine from injecting hot molten plastic into the mold until extracting it after it cools and hardens.
■Semiconductor Peripherals Business
The specifications required of sockets are changing rapidly in conjunction with the increasing performance of semiconductors. For this reason, customers require fast delivery of new products. In some cases we have to look for a new supplier. Building mass-production systems with suppliers is also our role.

Distribution

The Enplas Group does not have its own distribution network, so the transportation of materials and indirect materials is outsourced to outside distributors under the direction of the Materials Procurement Group. Materials are delivered to the third-party warehouses of each business unit and to partner companies. Products are shipped to customers’ specified locations by outside distributors under the direction of each business unit.

Solution proposition and sales

■Mechanical Solutions Business
The Mechanical Solutions Business has sales locations in Japan, the US, Malaysia, Thailand, China (Shanghai and Guangzhou), Vietnam, Singapore, and Indonesia. In Japan especially, where we have a Solutions Center that conducts demonstration testing on characteristics such as gear noise and strength, sales and engineering staff work together on solution proposition. One focus of our solutions so far has been to reduce noise through changes in gear design. Because the generation of noise entails energy consumption, these solutions not only make the final product quieter, but also help improve energy efficiency.
■Semiconductor Peripherals Business
The Semiconductor Peripherals Business has located its headquarters in Singapore to be able to respond globally to the needs of major semiconductor manufacturers and other customers. With sales companies in Southeast Asia, Taiwan, China, Japan, the US, and Europe, it derives 80% of sales from countries outside Japan. Sales and engineers visit customers together to identify issues and propose solutions that will improve their business.

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Quality assurance

■Quality assurance system
The Enplas Group has a Quality Assurance Group that reports directly to the president. We have built a quality management system based on ISO 9001 and conduct our operations in accordance with our Quality Manual. The Quality Assurance Group conducts a monthly quality performance assessment that it reports to Group officers. Our organization is designed so that defects and other quality issues, when they occur, are reported to as high up as the president.
Group companies outside Japan that produce automotive parts, which entail a higher risk of recalls, reduce risks further by certifying to IATF 16949 in addition to ISO 9001. Kanuma Plant also acquired IATF 16949 certification in May 2020.
■Manufacturing sites certified to ISO 9001, ISO 13485, or IATF 16949
Fiscal Year 2019: 10 companies
Enplas Quality Policy, ISO 9001 certification
■Compliance with chemicals regulations
We perform entrance and exit screening of materials and products for the purpose of complying with RoHS, REACH, and other regulations. We also have installed X-ray fluorescence spectrometers which we use to measure the concentrations of substances in materials and products and submit to customers as a certificate.
■Safety assurance of products
We classify parts used in fuel pumps, for example, as special attention products in our Quality Assurance Procedure, and set up hurdles that they have to pass before reaching the customer. By setting up checks in each process, from design to prototype fabrication to the start of mass production, our system ensures that parts that fail to meet required standards for each process do not proceed to the next.
■Percentage of products and services for which a health and safety impact evaluation is conducted for improvement purposes
Fiscal Year 2019: 95% (sales ratio of sites certified to ISO)
■Number of cases of product or service violations of regulations or voluntary rules on health and safety
Fiscal Year 2019: 0 cases (third-party audits have not identified any issues)
■Recall of nonconforming products
When a product nonconformity occurs, our system is set up so that the information is entered in a designated format and sent to the Quality Assurance Group as a flash notification. The information is shared with the president and relevant production sites. To prevent leakage of nonconforming products into the market, the Quality Assurance Group then isolates in-house inventory, inventory in distribution, and customers’ inventory and, in consultation with customers, collects nonconforming products.