Toshiba 2013 Annual Report Download - page 12

Achieving creative growth through New Concept Innovation
As a new area for Value Creation, in addition to our two strategic businesses in Energy and Data Storage, we will
emphasize Healthcare as our third business pillar. Going forward, I believe that to achieve new forms of growth
we need to pursue New Concept Innovation by means of which we can achieve creative growth by leveraging
Toshiba’s broad range of technologies in a wide range of application  elds with Toshiba’s imaginative powers of
Creativity and Innovation.
New Concept Innovation will involve taking up the challenges to identify new business  elds to enter and
new customer needs to satisfy that are entirely di erent from conventional ones. We will uncover such needs by
looking at the market from different perspectives, considering customers from different perspectives and
reimagining and reconstituting some of our business models. We will also re-imagine creative uses for existing
technologies, reconsidering how to best take advantage of our technological assets, particularly by using our
more than 50,000 retained patents in ways for which they were not originally developed. For these purposes, we
have established under the direct control of the president a new company-wide cross-divisional, cross-business
group organization that can cut across conventional business boundaries in Toshiba Group so as to allow us to
make maximum use of Toshiba Group’s assets and resources as we pursue new business development and
support the incubation of creative ideas. This new type of organization will play a key role in such areas as product
planning and marketing.
In addition to accelerating our e orts toward Value Innovation that are creating new products and services
with innovative new technologies that Toshiba is already working on, New Concept Innovation will combine in a
creative way already existing technologies of Toshiba Group to develop new products and services so that we can
expand applications to new markets and proactively capture the needs of new customers that have up until now
received little attention, such as companies in the food and fashion industries. For example, we are starting to use
DNA chips, which were originally developed for the medical field, for a food traceability system that will help
assure food safety. New Concept Innovation will become a powerful new driving force for growth to add to our
two other key concepts of Value Innovation and Process Innovation.
Another engine that will promote Growth Through Creativity and Innovation is the all-out pursuit of
Productivity Improvement. To achieve this goal, Process Innovation will be the key. We have been systematically
reviewing our work processes in all areas of our business operations from a zero-base perspective and rede ning
our performance targets and indicators. One example of these e orts is that Toshiba Group has been working to
optimize its business bases and to globally integrate procurement and logistics. With these measures, by FY2012,
we achieved a cost reduction of ¥50 billion by reducing the number of sales o ces and production bases to 1,410
from 1,900 in FY2009, and in FY2012 we reduced the percentages of procurement costs to sales and logistics costs
to sales and achieved a ¥110 billion improvement in margin of pro t. We will continue to aim for a ¥100 billion
cost reduction by further optimizing our business bases to fewer than 1,000 in FY2015 and beyond, and with
regard to procurement and logistics costs, we are planning to attain a margin of pro t of ¥220 billion in FY2015.
We will achieve growth by striving to strengthen Value Creation through the spheres of action of Value
Innovation and New Concept Innovation, and we will increase profitability by pursuing greater productivity
through Process Innovation.
President’s Perspective
10 TOSHIBA Annual Report 2013