JVC 2002 Annual Report Download - page 19

Lowering JVC’s breakeven point in sales, on a non-con-
solidated basis, from ¥6 0 0 billion to ¥50 0 billion, is an
integral part of our plans to build a more resilient oper-
ating structure. Only bold reorganization of the
company’s employment structure, reduction of inven-
tory and procurement costs, and realignment of our
manufacturing facilities will produce the desired results.
We have already made progress in these areas.
Our plans to streamline the workforce are one year
ahead of schedule: JVC’s domestic workforce will fall
to 8 ,2 0 0 by the end of fiscal 2 0 0 3 , down from 9 ,39 9
at the end of fiscal 2 002 . As part of our efforts to
reduce inventories, we will install an IT-based SCM
system at our U.S. operations in October 20 0 2 . This
will enhance inventory turnover from the current 4 8
days to 3 8 days by the end of fiscal 2 0 03 . We aim to
reduce inventory turnover to less than 3 0 days by
extending this SCM system to all our operations in
April 2 00 3 . Meanwhile, we are working to pare back
procurement costs by around 2 0% by focusing on
Value Engineering (VE) in design processes. During
the year, we made significant progress in realigning
our manufacturing activities. This included closing
domestic plants in Isesaki and Ebina, and withdraw-
ing from low-end television manufacturing in China
and unprofitable businesses, such as magnetic heads.
These steps to realign JVC’s manufacturing stance
are part of a global picture where we are shifting pro-
duction to optimal locations. This will see plants in
Japan positioned as “mother” manufacturing facilities,
and the development of products destined for Asia,
Russia, and the Middle and Near East transferred from
Japan to other regions in Asia. This clear separation
of manufacturing functions will help to reduce fixed
costs and lead to the development of products closely
suited to consumer needs in specific markets.
To keep abreast of shortening product cycles, we
are also restructuring production processes based on
6 -month development and manufacturing timetables
and eliminating all inventories within the same time
frame. This timetable will form the basis of operational
cycles for our entire business and significantly reduce
the time it takes to commercialize new models. Product
planning capabilities will also be enhanced through the
participation of marketing personnel in domestic product
strategy meetings.
Total Assets Inventories
REDUCING TOTAL ASSETS
(Billions of yen) (Billions of yen)
0 1 /3
586.6
0 2 /3
513.4
Based on exchange rates for 0 1 /3
Manufactured Products
Materials & Assembly
0 1 /3 0 2 /3
155.3
126.1
Total assets reduced
by ¥7 3 .3 billion
Major reductions
• Inventories
• Loan repayments though effective
use of Group funds
• Fixed assets
Yen Exchange Rate 0 1 /3 0 2/3
U S$ 1 2 4 1 3 3
EU R 1 0 9 1 1 6
ANNUAL REPORT 2 0 0 2 1 7