Digital Transformation Initiatives

1. Rengo Group’s Fundamental Policy on Promotion of Digital Transformation

The Rengo Group formulated Vision 115, a medium-term vision that started in FY2020 and concludes in FY2024 in which we designate the promotion of digital transformation (DX) using digital technologies as one of the initiatives within our effort to become the world's number one packaging provider.

The advancing digitalization of society is enriching our lives and greatly changing consumption behavior. E-commerce (electronic commerce) became even more widespread during the COVID-19 pandemic. Rengo believes that packaging, which is essential for packing and delivering the goods ordered through e-commerce, will play ever increasingly important roles as social infrastructure that enriches lives through integration with digital technologies.

Amidst this rapid change in the business environment, the Rengo Group is undertaking DX by using digital technology in a variety of business processes including manufacturing, logistics, and sales, creating new business models, creating new customer value, achieving innovative operational efficiency, and taking other measures so that we can provide high value-added packaging tailored to diversifying needs.

To achieve this, we will build unique Cyber-Physical Systems (CPS) that achieve harmony between digital technologies (cyber) and the people that use them (physical) and foster a corporate culture that generates innovation based on CPS while using cutting-edge information and communications technologies such as 5G.

2. Rengo Group’s DX Strategies

The Rengo Group is promoting DX based on the following topics.

Topics	Specific Measures
Create new business models	Expand and enhance digitally printed packaging Conduct external sales of digital tools developed in-house Develop and sell automatic order receipt and placement systems by linking customers and data
Create new customer value	Improve quality and services with IoT utilizing sensors and AI technologies Optimize supply chains through visualization of procurement and manufacturing processes and achieve a low-carbon society Conduct proposal-based sales activities by leveraging virtual technologies
Reform existing processes	Improve logistics efficiency by introducing AI into vehicle dispatch systems Reduce proposal preparation times and improve data storage security by using digital data in graphical and technical packaging designs Develop new sales techniques and sales channels adapted to the mobile network era
Improve internal operational efficiency	Eliminate paper use and promote remote work as a part of work style reforms Use digital technologies in recruiting and internal training Improve development systems by training in-house IT engineers

[1] DX Strategy Implementation Structure

Establishment of DX Promotion Investigation Committee
We established the DX Promotion Investigation Committee, chaired by the president, in April 2020. The Committee implements the digitalization of business processes companywide and develops and recruits DX human resources.
In addition, we established the Digitalization Promotion Department within the Paperboard Production Group in August 2023 to use digital technologies in the papermaking process and to make concentrated efforts to solve the so-called “2024 logistics problem.”
Human Resource Recruiting and Hiring
By establishing work environments that enable a good work-life balance, establishing a telework system, and taking other measures, we are reforming work styles and making efforts to recruit and retain diverse human resources.
Development of Human Resources for Data Analysis
To make effective use of data analysis in product demand forecasting and production equipment failure prediction, we are recruiting participants from all business divisions and conducting data analysis human resource training. Through this training, we are developing human resources who can use data analysis tools that employ AI and can make objective decisions based on data analysis.

[2] Development of Environments for Promoting DX

Promotion of DEGI-PAKE®
The Rengo Group is deploying DEGI-PAKE®, digitally-printed packaging that has a beautiful appearance and high promotional effects. Going forward, we will actively invest in facilities and R&D so that we can expand our lineup of products that use digital technologies.
Securing DX-Related Budget
We secure budget for capital investment in each area of DX promotion in each fiscal year.
Construction of a Data Lake
We are building a data lake* in order to collect and analyze the various data that is generated internally including sensing data from production equipment. In the future, we will expand and enhance the data stored in the data lake and promote in-house data use.
* A data lake refers to storage that can retain various big data generated in business activities in the form of raw data.

3. DX Strategy Achievement Indicators

[1] Financial indicators

We consider the achievement of our DX strategy to be the achievement of our performance targets, which are the same as the following key performance indicators that we have set as targets for the Group.
・Ratio of ordinary income to net sales: At least 6%
・Ｄ/Ｅ ratio: Not more than 1.5 times

[2] Indicators relating to DX human resource development and recruiting

・Number of employees with registered information security specialist qualifications: 5
・Number of data analysis human resource training course participants: 20/year

Rengo Certified as DX Certified Business Operator
Rengo Co., Ltd. received certification as a DX certified business operator under the DX certification system operated by the Ministry of Economy, Trade and Industry. The DX certification system is a program under which the Japanese government certifies business operators as prepared to undertake business reforms using digital technology (DX-ready) pursuant to the Act on Facilitation of Information Processing.