Product Liability Product Liability

Materiality to Respond to Product Liability

• Approach to Materiality in Customer Health and Safety
• Approach to Materiality in Product Service Compliance

Approach to Materiality in Customer Health and Safety

Modern society views product safety with even greater importance. We recognize ongoing work to more readily respond to this societal expectation as vital.

Approach to Materiality in Product Service Compliance

Adherence to laws related to products and services is a corporate social responsibility that we believe is important to a broad array of quality management.

Advantest Group Quality Policy

“Customer Satisfaction” is the fundamental basis of all our activity.

We are committed to providing customer-satisfying products in a timely manner,
by activating quality implementation from early in the design stage,
and increasing the total efficiency of our overall sales and manufacturing process.

Quality Management System

In keeping with our product quality plan, which calls for improvement in customer satisfaction, we have designed our quality management system to comply with the international quality assurance standard ISO9001 throughout the Company.

We have established an organization to promote the system within the company-wide framework, led by the Quality Assurance Manager under the supervision of executive management, which maintains and improves quality systems, with the goal of raising customer satisfaction. We have also constructed our own internal audit framework, and we maintain and improve our systems through regular internal audits.

SQE Activities

We are committed to the notion that individual components underpin overall product quality, and therefore the quality of each and every component has to be exceptional. Premised on that assertion, the Advantest Group engages in SQE (Supplier Quality Engineering) initiatives beginning at the component adoption phase, drawing on the support of our supplier network. SQE initiatives are undertaken with the aim of enlisting a team of experts to bring about improvements to component quality. Accordingly, it is critical that we engage in practices to ensure component quality, particularly given that the number of parts used in our products is roughly equivalent to the 200,000 to 3,000,000 parts that make up an aircraft.

Our SQE initiatives involve the following three practices.

• Careful selection of components: When given the choice of multiple components with similar performance specifications, we select the best item through a process involving in-house quality analysis and evaluation.
• Quality improvement through PDCA: We apply PDCA-cycle practices from the component design phase to manufacturing to achieve improvements prior to high-volume production and thereafter.
• Ensuring that tolerances are maintained in component design: We aim for component design benchmarks determined on the basis of tolerances rather than standard specifications.

In this way, by running SQE activities from the product development stage, we can reduce problems with components in the manufacturing process and the risk of component problems reaching the marketplace, which contributes to greatly reducing the risk of losses. The results of this approach can be seen in the smooth running of our end users’ processes and in the increased security that our clients enjoy in using our products.
Also, by decreasing the incidence of rejected parts we decrease the need for their exchange and disposal, and so contribute to reducing the environmental impact.

Securing Product Safety and Quality

Aiming to meet the high product safety standards increasingly seen as important by modern society, we adopted the Advantest Product Safety Charter in May 1995.

To achieve the above, we formulated our Product Safety Promotion Regulations and established a companywide committee as an organization to promote advances in product safety. From May 1995 to the present, this committee has been continually active in product safety improvements.
In fiscal 2016, we commissioned specialist outside bodies to undertake inspections of the safety and durability of 10 Advantest’s major products. The results indicated that there was no need for further revision of improvement of Advantest’s safety specifications.
It should be noted that, in fiscal 2016 there were no violations of the standards specified in Advantest’s Product Safety Promotion Regulations.

Initiatives Aimed at Improving Software Quality

Advantest continues to implement initiatives aimed at improving software quality. Software for test systems, handlers and other such systems shipped by Advantest first goes through a process that involves quality verification by the Quality Assurance Division. The specification sheet, a parallel product of development, is examined by the Quality Assurance Division in real time and feedback is given, which helps to ensure quality at upstream stages of development. The examination is implemented by the time development is complete, and after fulfillment of quality standards is confirmed, products are shipped.

Beginning in 2012, process improvement activity using the “Toyota development process”*¹ has been implemented with the cooperation of the R&D Division. This activity improves the level of the design review process, and high-quality design enables high-quality and high-throughput product development. These initiatives help to bring about the timely delivery of even better products.

*1 Source: The Toyota Product Development System, James M. Morgan, Jeffrey K. Liker, 2006.

Availability

Advantest is committed to helping its customers achieve higher levels of productivity by offering them products that guarantee high availability — meaning that they are unlikely to malfunction, and will recover immediately should failure occur. More specifically, availability refers to the ratio of time that a system is operational over a given time, and as such constitutes one of the benchmarks of product integrity. The Advantest Group delivers high availability by working hard to improve MTBF*¹ so that systems will operate without malfunction over longer duration of use, while also reducing MTTR*² so that systems will be more readily serviceable when malfunction does occur.

*1 MTBF: mean time between failure

*2 MTTR: mean time to repair

Design Review System Aimed at Improving Quality

Persistently stringent customer demands for functionality, performance and quality create demand for Advantest products equipped with increasingly large-scale and progressively more complex circuitry. Meanwhile, we are also responding to demands for shorter development lead times, a challenge we feel is best addressed by instilling quality at the upstream design phase so that we can detect potential issues early on. Accordingly, we introduced a new design review system in 2008 as a framework for achieving these goals.

• Our design review system was amended to ensure that the project leader establishes a design review plan when product development begins, and so that reviews are conducted regularly.
• We changed the system so that the relevant staff and the project leader, as well as the quality assurance division, carry out monitoring to prevent follow-up omissions, by enabling visual identification of issues raised.
• We also adopted the Design Review Meister System, which involves forming groups of in-house experts for each technical area to participate in the related design reviews. This system increases the rate of problem detection in design reviews, encourages the succession of technologies, and facilitates in-house education.

Many positive results have been achieved through these activities. For instance, the rate of defect detection during the design phase has recently improved, leading to a decrease in setbacks and fewer defects finding their way into the post process, thereby minimizing development delays. The new design review system has resulted in improvements in design quality and a reduction in development lead times. However, it has also revealed some cases in which problems that should have been detected by the designer ultimately found their way into the design review or the post process.

Advantest regularly collects analysis and feedback on issues that have gone undetected and makes improvements to the review framework as necessary. Moreover, going forward we will implement further improvements to the design process involving thorough checking prior to design reviews to achieve better design quality.

Basic Policy for Improving Customer Satisfaction

Customer satisfaction is the most fundamental of principles underpinning Advantest’s business. Our product quality policy, which is shared throughout the Group — “Elaborate for quality from the design stage, promote to optimize the whole process of manufacturing, and offer the timely and high-quality products our customers expect” — characterizes our portfolio of products that offer not only superior performance, but also superior environmental friendliness and safety. We are committed to keeping our customers satisfied at every stage, from design and manufacturing to sales and service, via guaranteed quality, top-notch service, and support on a global scale.

Sales and Marketing Practices that Support Customer Satisfaction Gains

Markets related to semiconductors in recent years have more dramatic market fluctuations than ever before such as rapid investment into equipment in a backdrop of circumstances that include a higher functionality of smartphones and a growth in the number of units sold, evolution of electric vehicles, and an increase in investments related to data centers. We clearly understand the market situation with a response to the dramatic fluctuations in demand. In line with this, we integrated marketing of our business divisions into the sales headquarters in December 2016.

This integration of marketing fully grasps the market and requirements of customers in a timely manner and feeds these requirements back to the business division to allow for more efficient product development and provision to our customers.
We are aiming to further improve customer satisfaction through this measure.

Sales and Marketing Activities to Improve Customer Satisfaction

The semiconductor industry, which Advantest supports through its products, is an industry characterized by intense competition to develop next-generation technologies. Besides providing our customers with test solutions, Advantest also holds the annual VOICE Advantest Developer Conference, at which we share the latest technology and product information with our partner companies. The 10th VOICE Developer Conference held as a turning point in fiscal 2016 spanned the pacific ocean in May at a venue in San Diego, California and another in Hsinchu, Taiwan for the first time. This year was the largest VOICE ever held with 7 new sponsors and 44 newly participating companies with growth to more than 50% of the number of participants from the previous year. The renewed mobile app was also introduced at both venues with more than 74,000 people accessing the app.
The event is scheduled to be held in America and China in fiscal 2017, and we will work so that the event can provide even more complete content.

Scene of presentation

Advantest has also continued to hold technical seminars at locations throughout the world, with the aim of presenting the latest information about our products and enhancing communication with customers. In 2016, technical seminars were held in Tel Aviv, Israel in June, Hsinchu, Taiwan in October, Manila, Manila, Philippines in November, and Tokyo as well as China (Shanghai, Beijing, Xi’an, and Shenzhen) in November and December. We were delighted to see so many Advantest customers attending these events.

In the future, Advantest will continue to hold events worldwide aimed at helping us to better understand customer needs and strengthen communication with customers, which in turn can help us to enhance our customer service provision.

Promoting Customer Support

The Advantest Group has established its basic policy for customer support with the aim of realizing the globally-oriented restructuring of the Group’s service businesses.
Our basic policy is outlined as follows.

< Basic policy for customer support >

• We will propose total solutions in the form of support packages designed to deliver maximum efficiency to our customers in their device measurement operations.
• We will propose unified service support matching the customer’s business model from development to the mass production environment.
• We will respond to customer demands by proposing service support packages that encompass total solutions.
• We will always take the customer’s point of view and draw on our global organization in offering solutions.
• Our premium services and customer support will not only be efficient, but will also take the environment and safety into consideration.
• We will offer high-value-added professional services.
• We will strive to maintain our zero-accident record by thoroughly observing safety standards in field service provision and elsewhere.

Better Customer Support with a Global Focus

Advantest is building a global support framework capable of responding effectively to service support requests and other inquiries from customers. While responding to everyday service support requests through contact centers in each country, as well as by telephone and e-mail, we are also implementing primary support consisting of technical service and onsite repairs by field engineers.

We station expert support teams in product development bases to carry out secondary support, allowing us to respond appropriately to the content and difficulty of service requests.

We have developed a global supply-chain network covering customer operations ranging from their development bases to mass production facilities. Moreover, we also operate a supply-chain control mechanism through which replacement equipment and parts at service centers in each country are monitored to determine inventory needs at respective locations worldwide.

We continue to run an engineer exchange program between overseas subsidiaries and our secondary support division, which helps engineers to improve their professional skills and raises the quality of our support. This two- to three-year program aims to sharpen engineers’ technical skills, develop cross-cultural competencies, and raise foreign language and communication proficiencies. In the mass production facilities of customers, we offer on-request expert consulting and solutions regarding productivity issues. Also, we offer device measurement training to our customers, and provide professional advice in that regard.

Global Support Center System

Recipient of the “10 BEST” Customer Satisfaction Award for the 29th Consecutive Year, on the Basis of the VLSI Research Survey

VLSI Research: 10 BEST

Advantest aims for a clear grasp of customer needs and strives to provide customers with high-performance, premium-quality total test solutions in a timely manner.

At Advantest, we gain a better understanding of our customers’ needs through information that we acquire from our daily business activities, and also through yearly participation in the customer satisfaction survey conducted by VLSI Research, a company renowned for its semiconductor market research. Based on this year's survey, we received the “10 BEST” award granted to the top-ten ranking companies for the 29th year in a row.