Omron 2010 Annual Report Download - page 22

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Interview with the President
selected and made independently, even though there
were a lot of similar internal components. At the time,
I questioned the rationale behind the obsession on
independence.
After I was appointed president in 2003, I decided
to promote CMO on a Group-wide basis. However,
when I set about it, I found, quite naturally as it hap-
pens, that our development and production operations
had sound reasons for their existing ways, such as “we
can make them more cheaply” and “it makes it possi-
ble to improve function and performance.” But from
the perspective of the best interests of the entire
Omron Group, “more cheaply” actually turns out to be
“more expensive.” For example, if you use a wide vari-
ety of materials and parts even though they’re cheap,
you won’t benefit from mass purchasing, and you’ll
need to increase the number of inspection processes.
——— How will you promote the adoption of CMO?
CMO is a concept, rather than a method. Let’s take
Lego, the best-selling children’s toy brand for many
years. Long ago, when I looked at the Lego set I
bought for my children, I thought it was interesting
how, even though the individual parts are to a certain
extent standardized, you can make a wide variety of
objects depending on how you put them together. You
can then dismantle and reuse them as you like.
At Omron too, being able to freely and quickly
rearrange resources, including personnel, enables us
to effectively address change. This is why we must
first standardize our management resources and oper-
ational bases to share, so that they can be mounted
on common platforms. In many ways, the CMO con-
cept is what today’s Omron needs.
The CMO concept can be used to raise productiv-
ity in many ways in all processes, from molds,
assembly, quality, function, and performance through
to work procedures. Since we must think of what’s
best overall, I believe that the managers of each divi-
sion must be committed to CMO from the beginning.
We must then appoint the members of the CMO task
force at the head office to each business division
where they can put it into practice.
It will be some time before each business is able to
feel that they have become stronger as a result of CMO.
Still, I think that now, when all Group employees are
focused on building a rock-solid earnings structure, is
a good opportunity to spread the CMO concept.
Medium- and Long-Term Growth Strategies
——— When “changing gears to high growth” in fis-
cal 2010, where will you make strategic investments?
In fiscal 2010, we will make aggressive investments
in the future with the aim of increasing revenue in the
medium and long terms. We will invest around ¥7.0
billion, including personnel and other expenditures, in
three strategies. The first strategy is to “bolster exist-
ing businesses in developed countries.” This will entail
investing approximately ¥2.0 billion in boosting sales
forces in Japan and other developed countries. The
Changing Gears to High Growth
* PLCs: Programmable Logic Controllers
Targeting Net Sales of ¥750 bn
Investment: Approx. ¥2 bn
Changing gears to
high growth with selection
and concentration
of businesses/areas
Bolster existing businesses
in developed countries
[1] Bolster sales force in Japan and other developed countries
• Strengthen sales channels in Japan
[2] Bolster core products
• Sensors, PLCs*, relays
Investment: Approx. ¥3 bn
Focus on
emerging markets
[1] Bolster sales force in emerging countries (IAB/HCB)
• Strengthen sales in China and India
[2] Develop new products for emerging markets
• Expand general purpose products
(sensors, power supplies, PLCs*)
• Expand healthcare products
Investment: Approx. ¥1 bn
Focus on
environmental businesses
[1]
Bolster core products for the environmental solutions business
• e.g. Power conditioners
[2] Develop next-generation environmental products
• e.g. Power conditioners, power electronic devices
[3] Participate in experimental studies related to
environmental businesses