Omron 2015 Annual Report Download - page 19

Before After
Reduced by 2/3
24m 24m7m 7m
In February 2015, we started a new program to
spread awareness of Management by ROIC 2.0.
This program, called the
ROIC Dojo , sends ROIC
Ambassadors
to visit Omron employees where
they work, encouraging an awareness and proper
understanding of how we measure our progress
using return on invested capital as an indicator.
Through communicating with these Ambassadors
front-line workers are able to gain a deeper ap-
preciation of how their day-to-day activities affect
delivery of value to the customer.
Honestly speaking, even when we under-
stand the ROIC concept intellectually, we tend
to focus our efforts on incremental improve-
ments or the idea of reduction. That is why the
ROIC Dojo isn’t just about one-way communi-
cations. It’s about getting everyone to use this
knowledge to make leaps ahead in our busi-
ness. Moving forward, we must focus on prof-
itability if we are to make significant ROIC
gains. At the same time, we must invest man-
agement resources for greater growth. Our
employees will play a critical role in our success
by taking the initiative to adopt Management by
ROIC 2.0 into their own work, delivering higher
levels of customer and corporate value.
At the root of the Omron Principles is Our
Mission: To Improve Lives and Contribute to a
Better Society. Reading back over this mission,
I believe that the interpreted formula closely
mirrors this ideal. Management by ROIC en-
courages the potential of our employees (our
ultimate management resource), drives us to
create inspired solutions for the future (added
value for the customer), and inspires us to
pursue new challenges. We need the effort of
every individual as well as a consolidated com-
mitment as a team. ROIC is the measure that
binds us together towards a shared goal. You
can expect Omron to continue put the Omron
Principles into practice, welcoming new ideas
and practices to improve lives and contribute
to a better society.
Omron Automotive Electronics, Inc.
(St. Charles)
Silao, Mexico
North American Headquarters
Plants
Design Centers
Sales Offices
Omron Automotive Electronics, Inc. is one of
the major centers of the AEC Business, pro-
ducing and designing components for major
auto manufacturers in the U.S. and the EU.
The automobile components industry de-
mands low-cost, high-quality components
from its suppliers. Here, our use of ROIC as
a performance indicator is incredibly useful
in keeping staff and management focused on
operational efficiency. We have set key
performance indicators based on Down-Top
ROIC Tree linking our measures of
performance directly to front-line activity.
At the same time, we use portfolio manage-
ment techniques to make decisions for opti-
mal resource allocation.
Last year, we spent a great deal of time
studying whether restructuring our business
would allow us to practice ROIC management
at a higher level. As a result, we have decided
to restructure our processes for more efficient
development, production, and logistics. At the
same time, we are looking at shifting produc-
tion ratios between our Chicago plant and our
new plant in Mexico (opened in 2012) to max-
imize our ability to compete in North Amer-
ica. More specifically, we plan on assigning
production to each plant according to product
type, based on production cost structures and
the particular strengths in each location.
The automobile industry will only demand
more from its suppliers in the future. Develop-
ments in automated driving and fuel efficiency
will require high-tech, highly accurate control-
lers. This presents a unique opportunity for
Omron and our core sensing and control tech-
nologies. Working closely with our customers
in the U.S. and the EU, our AEC Business will
be in a position to create value and maximize
investment returns through ROIC-based man-
agement practices.
■ Automotive Electronic Components North America
■ 1/n Reduction in the Electronic and Mechanical Components Business (Ex. Switch manufacturing line)
Randy Wara
President
Omron Automotive Electronics, Inc.
Management by ROIC at Omron Automotive Electronics, Inc.
Special Feature 1: Management by ROIC 2.0
Special
Feature 1
3. A New Education Program: The ROIC Dojo
34 OMRON Corporation Integrated Report 2015 35
About Omron Where We’re Headed Corporate Value Initiatives Corporate Value Foundation Financial Section