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Japan-Update

Kobe Steel doubles spending on safeguards against another scandal

Investment in automation and new equipment expected to also boost productivity

Kobe Steel will automate processes to prevent data manipulation.

TOKYO -- Kobe Steel will invest 20 billion yen ($187 million) in such technologies as automated data entry by fiscal 2020, aiming to prevent a recurrence of the quality control failures that resulted in subpar material being sent to more than 600 companies.

The Japanese steelmaker in November drew up a plan to invest 10 billion yen from 2018 but subsequently decided that more funds were needed to eliminate easy-to-manipulate steps and improve productivity, mainly in segments where the quality control lapses occurred.

Some inspection data for products is currently entered by hand, opening the door to falsification by employees. The new system will automatically record most data and prevent personnel from altering it. When information must be entered by hand, managers will double-check the work, among other potential steps.

The system will be introduced at plants such as an aluminum plate factory in Tochigi Prefecture and a facility in Mie Prefecture that turns out forged aluminum products. Subsidiaries such as Kobelco & Materials Copper Tube, which lost its Japanese Industrial Standard certification over the data falsification scandal, will also adopt it.

New equipment related to heat treat furnaces, extrusion presses and other machinery will also help raise yield rates. The company plans to review its order screening process to prevent the acceptance of too many jobs. The investments will focus on the aluminum and copper business, with other segments to be considered later.

Chairman and CEO Hiroya Kawasaki and Akira Kaneko, head of the aluminum and copper business, both announced that they will step down to take responsibility for the scandal. An independent investigation added 80 companies to the list of clients that received substandard material, bringing the total to 605.

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