YASKAWA ELECTRIC CORPORATION Message from the President
Message from
the President
The Yaskawa Group is Committed to Building a Business Model that will Contribute to the Development of a Sustainable Society while Devoting Ourselves to Being "a Company Founded on Technology."
Representative Director
President
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Summary of FY2020
Major progress toward shoring up our corporate structure
For the past year and a half, we have been at the mercy of the threat of COVID-19 (hereafter, COVID.) I would like to express my heartfelt gratitude to all those who support our lives, including those who are struggling in the harsh medical field.
This crisis caused by COVID is different in nature from the crisis that once had a huge impact on the economy. The Lehman Shock stopped the flow of money, and the trade friction between the United States and China stopped the flow of goods. In contrast, the flow of people stopped in COVID crisis. However, despite temporary stagnation in the manufacturing field, the situation quickly normalized due to large-scale monetary easing. As a result, in FY2020 we were able to maintain plant operations and fulfill our supply responsibilities, paying close attention to infection control to protect the safety of our employees. Even before the crisis caused by COVID, we worked to improve our profit structure by strengthening cost management and reforming the way we work. Learning from this crisis helped us accelerate our evolution to a company that can generate profits without relying on revenue expansion. As a result, we are confident about the fact that we were able to achieve an increase in operating profit, although revenue declined compared to FY2019.
Growth story of Yaskawa
Securing the profits necessary for the survival and development of the company
Since the 1990s, Yaskawa has been focusing on factory automation (FA,) expanding its business and gradually shifting its focus from quantity to quality. I, who took over the management baton in 2016, further strengthened our quality-oriented management stance by sending out a message throughout the company that "profits are more important than revenue." This is connected to "improving management efficiency and securing profits necessary for the survival and development of the company" in management principle.
I believe that Yaskawa's BtoB business in FA differs from BtoC in that it is a business where customers' profits are
shared. Therefore, the more profit customers make, the more profit Yaskawa will be able to make. If customers can increase their added value by using Yaskawa products and win in the market, they will be able to purchase Yaskawa products at a price commensurate with that value. As customers and Yaskawa generate profits, they invest to win further in the market, and Yaskawa returns profits to its shareholders and employees, as well as implement growth investments, creating a virtuous cycle. Accordingly, Yaskawa's profits are proof that customers value its products. This is a major reason why I focus on profit, and when I think about it, the perspective of "How can we make our customers win?" naturally comes into being, which is the origin of our activities.
Yaskawa's solution concept, "i3-Mechatronics," does not focus on a broad range of market needs, but focuses on the cells and equipment inside plants, in order to address the management issues of customers at hand. The establishment of a business model through "i3-Mechatronics," YDX (YASKAWA Digital Transformation,) which is the foundation for digital management, and YASKAWA Technology Center (YTC,) which integrates technologies, are all indispensable elements of Yaskawa Group's growth story in order to make our customers win by leveraging the strengths of the Yaskawa Group. Data is the common language required for these activities.
YASKAWA Digital Transformation (YDX)
First year of YDX saw steady progress
FY2020 is positioned as the first year of YDX, and I am taking the lead in promoting it. YDX embodies our strong desire to realize DX for the Yaskawa Group through our own originality and ingenuity, without being misled by the general definition of DX. The first step for YDX is to unify accounting and other codes for approximately 70 consolidated companies. This made it possible to transform operations into cockpits that enable real-time monitoring of consolidated business conditions, including orders, revenue, profits, expenses, production and quality. In the consolidated financial results, data can now be prepared in about one week for quarterly financial results and in about two weeks for interim and final financial results. YDX has achieved its major goals.
The next step is to standardize operations so that
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Message from the President
employees can work without taking over at the time of personnel changes. At the same time, we will create a system that allows employees to work autonomously and that enables fair evaluation of their performance. We will make Yaskawa a company that is more rewarding to work for, rather than a company that is easier to work for, and this will lead to the creation of a corporate culture that is unique to Yaskawa. Furthermore, while sharing data with suppliers and cooperating companies to improve production efficiency, we provide solutions directly linked to solving customers' management issues, such as reducing defective products and improving utilization rates, by linking customers' product lifecycles, including after-sales service, with data. This data is then fed back to the development team to improve product quality.
Strategic significance of YASKAWA
Technology Center (YTC)
Integration of technologies as a final step for "i3-Mechatronics" in the company
Since 2017, we have been promoting the "i3-Mecha- tronics" solution concept by integrating production, sales, service and data. YTC, which integrates tech- nologies, is the final step in this process. The building was completed in March 2021, and full-scale operation began in September.
Since the 1990s, Yaskawa's business has been based on the differentiation by the pursuit of superior func- tions, performance, and quality of AC servo motor, AC drive, and industrial robots and on the sales of those globally competitive components to customers. In recent years, however, competition for solutions for automation and labor-saving using IoT and AI has inten- sified, and Yaskawa needs to respond to customer demands by providing total added value by linking cells and equipment through "i3-Mechatronics." However, we cannot win the competition when the technical development departments that support it are dispersed and develop common technologies individually. Therefore, YTC was newly established for the purpose of gathering the functions of technology development in one place, not only sharing information by utilizing IT, but also creating an environment that lead to co-creation, and greatly improving technological capabilities and the
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speed of development.
In order to promote "profit-oriented" management, it is very important for us to be chosen by customers. We believe that YTC, which integrates technology development and conducts basic research, prototyping, and production line development, as well as open innovation through collaboration with our business partners, will be a place of appreciation not only for our customers but also for the advancement of industry-academia-government collaboration.
Mid-term business plan "Challenge 25 Plus"
Leveraging centralized data to improve profitability
The mid-term business plan "Challenge 25," which was positioned as a step till FY2021 toward realizing long-term business plan "Vision 2025," has produced steady results, including business model reforms centered on the YDX and "i3-Mechatronics." On the other hand, due to the major changes in the market environment such as U.S.- China trade friction and COVID crisis, it is difficult to achieve the target of 70 billion yen in operating profit for FY2021. Therefore, we extended the plan period by one year until FY2022 and revised it as "Challenge 25 Plus." We will maintain our original target of a 13% operating profit ratio and place emphasis on improving profitability. As demand, which had been restrained in FY2020, increases in momentum, we will strive to meet our targets by steadily capturing demand in growth markets such as automobiles, 5G, and semiconductors, while maintaining and strengthening the robust earnings structure established in COVID crisis. I believe that the integration of global data created by YDX will be very effective.
Toward sustainable enhancement of corporate value
Pursuing sustainability steadily
The Yaskawa Group's passion for "contributing to the development of society and the welfare of humankind through the execution of business" which is management principle, has been handed down from generation to generation since its foundation more than 100 years ago,
and we consistently strives to improve Yaskawa's corporate value by solving social problems and contributing to sustainable growth.
Since FY2021, the company has formulated policies and specified sustainability issues and targets (materiality) under the newly established Sustainability Committee. The purpose of this is also to provide stakeholders with a clearer understanding of Yaskawa's policies and activities, while global efforts to address social issues, including the United Nations' Sustainable Development Goals (SDGs) and the Paris Agreement, which is the framework for global warming countermeasures, are accelerating in recent years.
One of the most important sustainability issues is human resource development. Yaskawa's founder established the Meiji Senmon Gakko (current Kyushu Institute of Technology) in 1909 to train personnel. Since then, we have created a cycle in which we contribute to the local community through human resource development, and the human resources contribute to the development of the local community and the sustainable growth of Yaskawa. We intend to promote this virtuous cycle not only in Japan but also globally. We are also steadily fostering the next generation of executives who will succeed management principle and continue to evolve and grow.
As with YDX, Yaskawa's sustainability is not influenced by the current of the times, and our unique approach is based on whether it contributes to the sustainability of the enhancement of corporate value.
Yaskawa's corporate motto at the time of its founding was "a Company Founded on Technology." It is intended to support the advanced industries of the times with our own technologies, not with imitation. It is also my responsibility to pass on this founding spirit as a corporate culture. I am determined to meet the expectations of our shareholders, investors, and other stakeholders with the attitude to always make positive progress while keeping my passion alive as president.
I appreciate your continued support as we move forward.
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Sustainability Management
Strengthening the Sustainability Promotion System
Based on the Group Principle of Management, Yaskawa Group has formulated the Sustainability Policy to accelerate efforts to realize a sustainable society and increase corporate value. In order to achieve this, we will promote sustainability strategically by identifying materiality and developing targets for long-term and mid-term business plans. We have also established various sustainability policies. We will continue to review our materiality and policies on a regular basis, taking into account the needs of the internal/external environment.
Sustainability Promotion System
Group Principle of Management
Sustainability
Policy
Materiality
Long-term | Sustainability |
Business Plan | Policy |
Mid-term | Yaskawa Group |
Business Plan | Code of Conduct |
Sustainability Policy
We will strive to realize a sustainable society and increase corporate value through the implementation of the Yaskawa Group Principle of Management which is to leverage the pursuit of our business to contribute to the advancement of society and the well-being of humankind.
1. We will contribute to the value creation for customers and society through creating innovation by cutting-edge mecha- tronics technologies.
2. We will realize fair and transparent corporate management through communication and collaboration with stakeholders around the world.
3. We will work to resolve social issues globally with the aim of achieving SDGs as a universal goal.
Identifying Materiality
STEP 1 List of issues
We made a comprehensive list of social issues related to Yaskawa's sustainable growth from the environmental, social and economic perspectives, referring to international frameworks and guidelines such as the SDGs and GRI standards, as well as macroeconomic trends in areas related to Yaskawa.
STEP 2 Assessment and identification of issues
For the issues identified in STEP 1, we selected items of high importance centering on "importance to stakeholders " and "importance
to Yaskawa." In addition,
discussions were held at internal meetings, including the Board of Directors, and issues of particular importance were identified
as sustainability issues and targets.
STEP 3 Planning measures for issues (setting KPIs)
The high-priority issues identified in STEP 2 are divided into two axes: "Create Social Value and Solve Social Issues through Business Activities" and "Strengthen Management Foundation that Contributes to Sustainable Society/Businesses," reflecting the opinions expressed at internal meetings.
We have also clarified the direction of each focus area and strategy, and set quantitative and qualitative KPIs.
Strengthening the PDCA system through the Sustainability Committee
Yaskawa Group established the Sustainability Committee in April 2021, which is chaired by the president. As a general rule, this committee meets twice a year to promote the sustainability of the Group. In addition to the heads of divisions who promote materiality measures, the heads of headquarters divisions who are involved in the promotion of sustainability participate, as well as outside directors who serve as advisors. In addition, we promote the planning, deliberation, group- wide development, and monitoring of key measures and policies related to materiality and corporate sustainability.
The first Sustainability Committee meeting was held in May 2021. A total of 21 people, 17 from inside the
company, including the President
who chairs the committee, and 4
outside directors, participated in the meeting and actively discussed KPIs related to each materiality.
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Yaskawa Electric Corporation published this content on 08 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 September 2021 08:31:09 UTC.
