Enhancing quality compliance

Basic Concept for Quality Compliance

The CITIZEN Group has been conducting awareness campaigns for the dissemination of The CITIZEN Group Quality Code of Conduct, which was formulated based on Article 2 of The CITIZEN Group Code of Conduct through the leadership of the "Group Quality Compliance Committee," established in FY2018. These efforts aim to ensure a shared understanding of quality compliance, including at overseas bases, by considering the situation of each business.

This Committee comprises executives responsible for quality at various group companies and is dedicated to promoting the permeation of compliance with quality standards from the perspective of The CITIZEN Group as a whole, transcending individual business units. The Committee also focuses on enhancing the effectiveness of the internal reporting system and incorporates ESG/SDGs perspectives. Additionally, it drives activities to respond to requests from stakeholders in various business domains.

In FY2022, the Committee included the heads of quality assurance departments from various group companies as observers. By engaging in discussions that incorporate viewpoints from both the group perspective and the operational perspective of each business unit, we are addressing the issue of quality compliance, which is at the core of quality management. These discussions are intended to establish an organizational culture that prevents "quality scandals."

Organizational Chart of the Quality Compliance Committee

Progress on the Quality Compliance Roadmap

In FY2022, efforts to strengthen quality compliance were successful in achieving the target of "two activities to disseminate The CITIZEN Group Quality Code of Conduct." Additionally, a remarkable participation rate of 99.3% was attained in e-learning training targeting all domestic employees and Japanese expatriates overseas, utilizing the "Quality Compliance Training Materials" developed by the Group Quality Compliance Committee. Moreover, quality compliance training is also conducted using unique materials prepared by each operating company.

Furthermore, despite the challenges posed by the COVID-19 pandemic, efforts to promote awareness of the Group Quality Code of Conduct have persistently continued. This includes activities such as displaying posters featuring the Group Quality Code of Conduct at overseas sites and disseminating the information through the company intranet.

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  FY2022 FY2023 FY2024 FY2030
  • Ensuring the independence of the quality assurance department of the business controlling company and development of an effective monitoring system
  • Ensuring the independence of the quality assurance department of the business controlling company and development of an effective monitoring system
  • Effective risk identification and correcting the status of compliance with the Group Quality Code of Conduct at all sites
  • Compliance with the Group Quality Code of Conduct by all Group executives and employees
  • Two activities to disseminate the Group Quality Code of Conduct
  • E-learning participation rate: 98% (result: 99.3%)
  • Two activities to disseminate the Group Quality Code of Conduct
  • E-learning participation rate: 100%
  • Implementing multilingual e-learning programs
  • Introduction of an anti-fraud system
  • Zero violations of the Group Quality Code of Conduct
  • 90% awareness of the Compliance Hotline
  • Activities to disseminate the Group Quality Code of Conduct (+ training programs about the Group Quality Code of Conduct)
  • Expansion of the Group Quality Code of Conduct to overseas sites
  • Creation of a quality compliance audit checklist
  • Activities to disseminate the Group Quality Code of Conduct
  • Conducting audits from a quality compliance perspective
  • Activities to disseminate the Group Quality Code of Conduct
  • Introduction of a quality data tampering prevention system into the Group
  • Deployment of the Group Quality Code of Conduct to all Group sites

Initiatives to Strengthen Quality Compliance

Initiatives of the Group Quality Compliance Committee

The Group Quality Compliance Committee, whose primary role is to address compliance risks related to quality, established two opportunities a year to share information on quality fraud cases of other companies, clarify the causes of their occurrence, and discuss preventive measures, as its activities in FY2022. The Committee plays a key role in assuring the quality of the Group and promotes the strengthening and improvement of quality compliance including group audits and training, in cooperation with the quality departments and audit departments of each company.

Group Quality Compliance Committee: FY2022 Agenda

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Date Activity details
1st June 2022 Report on the results of monitoring the quality compliance of the business controlling company
2nd September 2022 Progress report on quality compliance training / Audit checklist review / Sharing information on quality fraud cases at other companies (Company A)
3rd December 2022 Progress report on quality compliance training / Audit checklist review / Sharing information on quality fraud cases at other companies (Company B)
4th March 2023 Quality compliance audit and development of implementation plan

Formulation of Audit Checklist Common to the Group from Quality Compliance Perspective

The CITIZEN Group has been actively devising quality enhancement strategies tailored to the distinct circumstances of each constituent company within the Group. In FY2022, an Audit Checklist from the standpoint of Quality Compliance was introduced as a standardized measure across the Group. This checklist, assembled by CITIZEN WATCH, encompasses audit parameters derived from the evaluation of product quality by each Group company from a compliance viewpoint. It includes both shared criteria applicable to all Group entities and criteria specific to individual companies. Subsequent to its formulation, an execution strategy has been crafted. Commencing from FY2023, quality compliance audits will be executed throughout the Group, utilizing the unified checklist, as outlined in the established plan.

Items of Audit Checklist from Quality Compliance Perspective

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Major items Audit items
1 Promoting awareness/understanding of The CITIZEN Group Quality Code of Conduct 1 item
2 Quality assurance departments 3 items
3 Quality-related data 2 items
4 Communication and information sharing with customers/suppliers/related departments 4 items
5 Handling of substandard products 3 items
6 4M change management 2 items
7 Internal reporting system 1 item
8 Triangle of quality fraud (KDS) 3 items
9 Auditing and checking functions 1 item
Total 9 items Total 20 items

Employee Training

In order to cultivate a heightened sense of quality compliance across its workforce, The CITIZEN Group administers quality compliance training. This training is overseen by the Group Quality Compliance Committee and is delivered through e-learning via video distribution. It is integrated into the training regimen for new employees and recently appointed directors, effectively bolstering quality compliance awareness across the entirety of the Group. In FY2022, a total of 6,176 employees engaged in this quality compliance training initiative.

Contents of Quality Compliance Training

  1. Review of past quality fraud cases at Group companies
  2. Third-party committee recommendations and measures
  3. Confirmation of the Group Quality Code of Conduct (importance and positioning)
  4. Overview of the relationship between quality compliance and ISO 9001 and their requirements
  5. Quality fraud: Case studies of other companies / Commonalities of fraud cases (data falsification, 4M change management)
  6. Mechanism of fraud occurrence
  7. Reconfirmation of causes based on the KDS framework
  8. Sustainability and quality compliance

Overseas Deployment of The CITIZEN Group Quality Code of Conduct

In order to raise awareness of quality compliance overseas, we have expanded the poster display of The CITIZEN Group Quality Code of Conduct, which had been implemented at our bases in China, to our manufacturing plants in Thailand, Vietnam, and the Philippines in FY2021. The CITIZEN Group Quality Code of Conduct includes not only quality maintenance initiatives, but also the ideal attitudes of a member of the Group, such as the attitude toward work. In situations where close communication has been difficult due to the COVID-19 pandemic, the poster display has been well received by our overseas employees as it makes them aware that they are also members of the Group and provides them with emotional support. We will continue to raise awareness of quality compliance by expanding the poster display to other sites.


Poster display at overseas manufacturing plants

Efforts to Prevent the Recurrence of Fraud

To strengthen quality compliance, CITIZEN ELECTRONICS is promoting initiatives such as a system for the regular personnel rotation of department heads and the pioneering introduction of a system within the Group to prevent quality fraud and data falsification. In FY2022, training was conducted at each Group company to familiarize employees with the change management of the 4Ms (Man, Machine, Method, and Material), partly for reconfirmation purposes. Moreover, no quality fraud has occurred at the company since the implementation of measures to make departments independent, such as placing in-house accredited laboratories and quality assurance departments under the direct control of the president. These initiatives are shared among the CITIZEN WATCH Board of Directors and other members of The CITIZEN Group.

Efforts to Improve Customer Satisfaction

CITIZEN MACHINERY, a leading precision machine tool manufacturer, conducts surveys targeting customers who have integrated the company's products. The aim is to gain insights into product usability and gather feedback on areas for enhancement. In instances involving issues or malfunctions, the company has established a proficient customer support manned by skilled product specialists. These specialists adeptly comprehend customer inquiries regarding product status, offer guidance on addressing the problem, and facilitate the dispatch of replacement components if needed. Should repairs be warranted, the company promptly coordinates the dispatch of repair personnel. Through these measures, the company is committed to swiftly and effectively addressing concerns, minimizing downtime, and mitigating any disruptions to the customers' business operations.

Customer inquiries are channeled internally and disseminated by the quality assurance departments, driving quality enhancements and influencing product improvements. To cater to global needs, the company offers repair and response manuals in English, ensuring comprehensive global support. Furthermore, efforts to elevate customer satisfaction are evident through the provision of an exclusive members-only online portal called the "alkartsite." Within this platform, members gain access to up-to-date product information, electronic manuals, and instructional videos showcasing operational and maintenance procedures.

Customer Service and Support

CITIZEN WATCH, a manufacturer of various products catering to the general public, has instituted a dedicated inquiry desk to promptly and genuinely address customer inquiries, consultations, and grievances. This initiative is geared towards elevating customer satisfaction. Noteworthy insights and issues communicated by customers are swiftly conveyed to top-tier management, facilitating timely action. This valuable feedback is further shared across all operational departments, paving the way for refinements in products and enhancements in services.

For situations necessitating immediate product repair or replacement due to significant incidents, notifications are promptly disseminated on the company's official website. In FY2022, the cumulative inquiries directed at CITIZEN WATCH amounted to 54,305, underscoring the company's dedication to fostering open communication and responding to customer needs.

Handling of Defects and Complaints

Both CITIZEN WATCH and CITIZEN WATCH MANUFACTURING have devised individual quality manuals and implemented Quality Management System (QMS) initiatives aligned with ISO 9001 stipulations. The primary objective of these manuals is to establish a robust framework for quality management across the watch business. They serve to uphold the quality policy, adhering to the standards set forth by The CITIZEN Group Quality Code of Conduct. Additionally, these companies engage in an annual internal audit to validate the efficacy of their QMS activities.

Customer complaints are managed in strict accordance with the Market Complaint Handling Standard and the Product Incident Response Standard. When complaints are received that carry the potential to drive product and service enhancements, the companies duly address them and integrate the insights into the Quality Standards. This integration involves additions to or revisions of the Standards. Swift action is taken when confronted with complaints relating to product quality. For significant cases, a comprehensive array of measures is deployed, including notifications to the Consumer Affairs Agency and the National Institute of Technology and Evaluation (NITE), as well as communication to senior leadership, including the president, during Management Meetings and other pertinent forums. Furthermore, pertinent information is disseminated on the company website through prominently displayed notices, signifying their importance.


Investigation and Corrective Action for Defective Products

Upon receiving a customer inquiry concerning a product defect, CITIZEN MACHINERY takes appropriate measures tailored to the situation. These measures can include dispatching replacement parts and organizing repair arrangements. In cases where the inquiry demands it, an emergency response meeting convenes, involving pertinent personnel to exchange information and probe the root cause of the issue. Following this, a recurrence prevention meeting is conducted, findings are reported to upper management, and corrective actions, encompassing product enhancements, are executed.

Furthermore, the company has established a quantitative confirmation system to tally the number of inquiries and complaints received. This system acts as a basis for making enhancements and streamlining processes.

In response to internally identified process defects, the company initiates strategies to avert future occurrences and ensure that flawed products do not reach the market. Vigilant monitoring of process defects is conducted, leading to updates of standard documents and work manuals and the execution of process enhancements. This concerted effort aims to curtail the incidence of defects. Swift dissemination of defect-related information to overseas bases ensures the swift implementation of countermeasures. Consequently, a uniform quality standard is upheld across all global sites.

Defect Investigation Flow