Digital Transformation (DX) Promotion Policy

1. DX Policy and Strategies

The policy and strategies have been established, based on deliberation and resolutions by the Board of Directors—our highest decision-making body—as one of the Company's most important management strategies to be advanced across the entire organization.

[DX Policy] Business Model Transformation

We have developed a broad range of advanced manufacturing capabilities, including "Hydraulic Machinery Technology," which delivers micron-level precision for globally used construction machinery, and "Water Gate and Water Treatment Technology," which protects people's safety and supports essential infrastructure. Under our DX policy, we will combine this "outstanding real-world technical expertise" with "the latest digital technologies (cloud services, data analytics, etc.)" to transform the tacit knowledge of skilled workers into digital assets (explicit knowledge). Through this approach, we will establish a system that enables us to continue providing high-quality products consistently and swiftly, and transform our business model into a trusted "Next-Generation Smart Factory" that consistently responds to customer needs.

[DX Strategies] 4 Priority Initiatives

To realize the goals set out in our management plan, we will swiftly implement the following digital strategies.

• (1) Thorough Digitization of Work Procedures and Paperless Operations: We will thoroughly review paper-based forms and analog management processes and promote the digitization of work procedures. By advancing paperless operations and building an environment in which everyone can access the information they need at any time, we will embody in the digital realm the principle stated in our management plan: "Prepare by creating an environment that makes it easier to do our work."
• (2) Faster Information Sharing and Operations through AI: Using our company-specific generative AI system (RAG), we will build an information-sharing platform that enables employees to instantly retrieve accumulated knowledge and data from within the company. AI will support individual know-how and our principle that "the worse the news, the sooner it should be reported," accelerating searches and decision-making to the greatest extent possible.
• (3) Data-Driven Productivity Improvement and Bottleneck Elimination: We will analyze current production processes—from design and materials procurement through manufacturing, inspection, and delivery—based on digital data. By objectively identifying bottlenecks in each process and optimizing the 4M factors (Man, Machine, Material, and Method), we will achieve a 10% improvement in production efficiency.
• (4) Thorough "Environmental Improvement (Sorting and Organizing)" in the Digital Environment: In our IT systems and data management, we will rigorously apply the PDCA cycle to the practices based on our corporate culture: "Sorting (clearly distinguishing necessary from unnecessary data and discarding what is not needed)" and “Organizing (designating where data is stored, assigning names and numbers, and keeping it ready for immediate use when needed)." This will prevent IT systems from becoming overly complex or "black boxes," ensuring that the system environment remains robust and responsive at all times.

2. Policy on IT Infrastructure and Human Resource Development

• Development of a Data Utilization Environment and Enhanced Security: To enable safe and efficient company-wide use of cloud services and digital tools, we will strengthen our network environment and establish a secure information protection framework that complies with security standards such as JIS and ISMS.
• Digital Education Based on a "Human Resource Development First" Approach: Under our recruitment and development policy of "placing greater emphasis on people who share our values than on ability alone," our priority is not simply to pursue IT skills, but to develop "on-site DX professionals" capable of autonomously driving workplace improvement (PDCA) through digital technology. We will proactively study best practices in digital utilization from other companies and industries (benchmarking) and foster a culture that actively incorporates them into our own operations.

3. Key Performance Indicators (KPIs)

To objectively measure the progress of our DX strategies and the extent to which our business model transformation has been achieved, we have established the following KPIs and will regularly review our progress.

4. DX Implementation Framework (DX Organizational Chart)

Under strong commitment from management, we have established a governance structure to advance DX as one company. Rather than relying on a specific department, our structure connects the highest decision-making body directly with on-site implementation members, enabling autonomous transformation throughout the organization.

◆ Roles and Responsibilities

• Chief DX Officer (Head) [President and Representative Director]: Defines the DX vision, aligns it with management strategy, and makes final decisions on digital investments. This role also communicates strong company-wide commitment and oversees governance.
• Board of Directors [Deliberation and Approval Body]: Deliberates on the DX promotion policy and digital investment plans submitted by the Chief DX Officer and formally approves and adopts resolutions from a corporate governance perspective.
• DX Promotion Office [Head of IT and Governance and Dedicated Staff]: Develops the company-wide IT infrastructure and cloud environment and establishes and manages information security standards. It also supports digitization in each department and plans and operates company-wide DX talent development programs.
• On-Site DX Promotion Leaders [Selected Leaders from Core Business Units (Managers, etc.)]: They identify analog bottlenecks in work procedures at their respective workplaces. In coordination with the DX Promotion Office, they lead worksite-led digitization (including paperless operations and automation) and promote the adoption of digital tools within their departments.
• DX Implementation Members [All Employees]: Actively use digital tools in day-to-day business processes. They practice the Company's "Environmental Improvement in the Digital Environment (Sorting and Organizing of Data)" every day and autonomously drive continuous process improvement through the PDCA cycle.

5. Basic Information Security Policy

MURAKAMI MANUFACTURING CO., LTD. has made a “★★ (Two-Star)” declaration under the "SECURITY ACTION" program established by the Innovation Platform Agency, Japan (IPA).

As we advance DX and work toward realizing our "Next-Generation Smart Factory," we recognize that protecting important information entrusted to us by customers and business partners from cyberattacks and other threats is a fundamental corporate responsibility. Accordingly, we have established the following Basic Information Security Policy and will work company-wide to implement safe and appropriate information security measures.

• Protection of Information Assets: For confidential information on our company-wide cloud platform and systems, we will implement measures such as multi-factor authentication and least-privilege access controls to thoroughly prevent unauthorized access and information leakage.
• Compliance with Laws, Regulations, and Rules: In line with our fundamental principle of “compliance with rules and discipline,” we strictly comply with laws and regulations concerning information security, government-issued guidelines, and other applicable standards.
• Thorough Education and Training: Under our basic principle that "if we do something, we do it thoroughly—and we do it together," we will provide ongoing cybersecurity education for all employees.
• Continuous Improvement (PDCA): We apply the PDCA cycle of Environmental Improvement—one of our strengths—to information security as well, continually reviewing and improving our measures in response to the latest threat trends.