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TOP > CSR > Economic Aspects > Feature 1: Early Return to Profitability
Ensuring “the capacity for flexible response attuned to changes Eand “overwhelming competitiveness fortified against changes Eis all-important in pulling through these volatile times and advancing along a path of sustained growth. Accordingly, AISIN is striving to convert to a streamlined business structure that produces profits as early as possible and guarantees survival in the face of production cuts and to establish creative new technologies and production methods that secure future growth potential.
Capacity for flexible response attuned to changes
- Convert to a streamlined business structure that facilitates survival in the face of production cuts to 70% of peak levels.
Overwhelming competitiveness fortified against changes
- Establish world-leading creative new technologies and production methods
Conversion to a streamlined business structure by reducing fixed costs
For many years, AISIN has conducted its business based on prioritizing production increases in response to sudden demand growth. This approach places a perpetually heavy burden on all the Company’s workplaces. In these circumstances, with priority on ensuring production volumes, we have had no choice but to tolerate large increases in fixed costs. Amid the current trend toward production cuts, we have scrutinized this situation carefully, concluding that we need to speed the rationalization of fixed costs to build a structure capable of maintaining profitability even at 70% of our production volume to date. Based on this rationale, AISIN is striving to set appropriate fixed cost levels in a bid to restore profitability at the earliest possible opportunity.
As part of the emergency measures implemented from fiscal 2009, we have cut capital expenditure with the objective of making the best possible use of our existing facilities and promoted operational reform to thoroughly revise the ways in which we work. We also improved operating efficiencies by curtailing human resource expenses and launching a sweeping effort to reduce general expenses through a campaign to remove all manner of waste—one yen, one second, one step, one drop or one gram at a time.
In the future, we will carry out various initiatives attuned to the conditions of each region and workplace, such as reducing overtime by raising business efficiency, revising the employees Ebenefit package, and restricting recruitment. Through the application of such policies, we aim to reduce fixed costs, excluding depreciation, by around ¥80 billion over the next two years.
Furthermore, we are progressing with revisions to our production system. To date, the prerequisite for sustained growth has been aggressive capital investment. However, in the future we will build a production system that is responsive to fluctuations in production volume, in addition to restraining capital investment and reducing depreciation.
AISIN is taking advantage of various opportunities to carry out fundamental revisions to business processes, mechanisms and systems that feature in its diverse operational fields. By upgrading business efficiency, we are constructing a system whereby the current workload can be undertaken using 70% of the manpower, deploying the remaining 30% in key areas for future growth or diverting them to business that generates new added value.
Promotion of streamlining by leveraging the Group’s economies of scale
AISIN is evolving centered on the fields of research, development and manufacturing, based on the Group’s fundamental management stance of teamwork and team spirit across the Group. In the future, we aim to expand our fields of cooperation. We will also multiply and fortify cooperative intercompany activities, as we pursue streamlining by leveraging the Group’s economies of scale, such as through human resource development and collaborative logistics for remote offices.
For example, in our logistics activities we inaugurated the All AISIN Logistics Committee in November 2008 and instigated a system for information sharing between 11 major Group companies. Exhaustive studies into channels and quantities for transportation between remote locations—from the Mikawa district of Aichi Prefecture to Hokkaido and Kyushu—and into packaging provided data on which we based the simulation of an efficient, cooperative logistics system.
Actual cooperative logistics operations will commence from fiscal 2010 based on the results of these investigations.
Pursuit of creative new products and production technologies
From a short-term perspective, we have been required to emphasize response to market changes, but it is also vital that we maintain a medium- to long-term standpoint. Over the past few years, automotive customers Eneeds have altered. We will be unable to capitalize on the next growth wave if we fail to respond to needs of escalating importance in the future, such as calls for the development of revolutionary environmental technologies and further vehicle cost and weight reductions. In order to respond to these needs, AISIN is pressing forward with its drive to establish new products and production technologies. We are promoting fresh product design from a customer perspective to create and provide new added value to our existing products. Over and above existing customer needs, we are aggressively penetrating areas where we have previously been unable respond to demands. AISIN will thus place greater emphasis than before on development of technologies and products in areas of high customer consciousness, such as the environment, safety and compactness, and speed up the pace of its development. (See Feature 2.)
In addition, to significantly curtail expenses, we are making efforts to raise productivity and step up cost-reduction activities. As part of these measures, we developed the new Simultaneous Hot Forming and Hardening Process for manufacturing clutch parts during fiscal 2009. This innovative new method facilitates simultaneous formation and quenching and cuts out the tempering and washing processes, reducing the number of production steps and the investment stake by half and the length of production lines to one-third their previous lengths.
AISIN will remain vigilant in sowing the seeds to yield potential for growth for the future by continuing to promote the development of new products and production technologie
New Developed Simultaneous Hot Forming and Hardening Process
