Oki 2010 Annual Report Download - page 13
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Please find page 13 of the 2010 Oki annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Profitability enhancement
14.0 billion yen
(FY2009 (ended March 2010))
18.0 billion yen
(Plan for FY2012 (ending March 2013))
Net Sales: 456.0 billion yen
Operating Income Ratio: 3.1%
Operating Income:
Solutions & Services
Telecom Systems
Social Infrastructure 12.0 billion yen
Systems
Mechatronics Systems
Printers 8.0 billion yen
EMS/Others 0.5 billion yen
Net Sales: 500.0 billion yen
Operating Income Ratio: 3.6%
Operating Income:
Solutions & Services
Telecom Systems
Social Infrastructure 15.0 billion yen
Systems
Mechatronics Systems
Printers 7.0 billion yen
EMS/Others 2.0 billion yen
Optimize
treatment
Reduce
costs
Select and
concentrate
Expand
sales
Risks,
environmental
changes, etc.
• Enhance profitability
of software
• Reorganize hardware
manufacturing sites
• Strengthen procurement
functions
• Shift to shared service
• Eliminate and consolidate
group companies
Annual Report 2010 9
How do you plan to enhance profitability?
We will reduce costs by restructuring Group companies, raising efficiency through
shared services of indirect operation processes, and strengthening Group procurement.
Under the plan, OKI will shift to a business structure enabling it to steadily increase
profits without depending on sales expansion.
Q
A
First, we will reexamine the roles of OKI and Group companies to address duplica-
tion of functions and business processes caused by the organization of group
companies along market and functional lines. In so doing, we will incorporate core
processes in the parent company in order to enhance our product development and
manufacturing capabilities. By consolidating domestic Group companies horizontally
into functional units by the year ending March 2013, we hope to reduce the number
of domestic companies by approximately 60%, bringing the total number of consoli-
dated subsidiaries to around half the current level.
Next, we will target a 20% cut in administrative costs by standardizing all indirect
operation processes across the Group. Previously, we sought to standardize busi-
ness processes for indirect operation processes (i.e., the shift to shared services),
but found that the number of companies adopting these services was limited, as
was the service content itself. This time, however, we will boost efficiency by estab-
lishing a shared service company for the OKI Group. At the same time, we will
introduce a raft of measures, including reassigning personnel as appropriate and
reducing outsourcing costs.
Meanwhile, we will enhance our procurement capabilities by replacing the practice
of purchasing by individual Group companies with a Group procurement system. By
switching to centralized purchasing and strengthening procurement activities from the
development stage, while reinforcing our overseas procurement capabilities, we are
targeting a 10% reduction in total procurement costs in the year ending March 2013.
In addition to the aforementioned strategies, we will strive to raise productivity.
To this end, we will enhance software profitability by standardizing software system
design. We will also review the roles of both domestic and overseas production sites
and reorganize our production facilities in Japan.