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Copyright © Yokogawa Electric Corporation 2016/11/1 - 0 -
November 1, 2016
Yokogawa Electric Corporation
Yokogawa’s Solution Services
Hitoshi Nara Director of Yokogawa Electric Corporation
President of Yokogawa Solution Service Corporation
Copyright © Yokogawa Electric Corporation 2016/11/1 - 1 -
Apr. 1985 Joined the Company Oct. 2001 Deputy Managing Director of Yokogawa Engineering Asia Pte. Ltd. Oct. 2003 Managing Director of Yokogawa (Thailand) Ltd. Jan. 2007 Head of Sales Div. I, Industrial Solutions Business Headquarters Apr. 2010 Senior Vice President, Head of Industrial Solutions Business Headquarters Jun. 2011 Director and Senior Vice President, Head of Industrial Solutions Business Headquarters Apr. 2012 Director and Senior Vice President, Head of Industrial Solutions Service Business Headquarters Apr. 2013 Director of the Company, President of Yokogawa Solution Service Corporation (present)
Presenter’s Career at Yokogawa
Copyright © Yokogawa Electric Corporation 2016/11/1 - 2 -
Contents
1. Profile of Yokogawa Solution Service Corporation 2. Yokogawa’s Solution Services in the Japan IA & Control Business (Market opportunities, Two basic strategies / Japan’s manufacturing sector / IA & control business domains) 3. Yokogawa’s Strengths / Success Cases 4. Future Development (Entering new business domains by leveraging IIoT and alliances) 5. Future Direction
P. 3
P. 4
P. 8
P.16
P.18
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Profile of Yokogawa Solution Service Corporation
・Improve operational efficiency ・Speed up decision making ・Accelerate expansion of value-added solution service businesses
April 1, 2013: Launch of Yokogawa Solution Service Corporation
integrating the sales, engineering, and service functions
Transforming Yokogawa into a solutions and service company
Sales
Engineering Services
Integration of 3 functions
In Japan’s control business,
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IA & Control Business – Market opportunities –
1 2 3 Further development of resource and energy sector
Innovation of industrial structure by integration of devices (“things”) and information ⇒(IoT)
Smartization of society⇒(ICT)
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IA & Control Business – Two basic strategies –
The global No.1 company in IA
Customer base-driven expansion throughout energy supply chain Expand into new
industries
Starting in Asia, expand business
operations worldwide
Leveraging our strength in the Japan market
Top share of the market
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Japan’s Manufacturing Sector – Current considerations –
12,000
8,000
6,000
4,000
2,000
0
10,000 2,810 3,278
1,892
1,570
1,807
1,681
1,326
1,678
1,632
1,851
1,422
1,221
(year)
Population (X10k)
15-24yrs.
25-34yrs.
35-44yrs.
45-54yrs.
55-64yrs.
65yrs.over
Productive-age
1990 92 94 96 98 2000 02 04 06 08 10 12 14
Source: Compiled using data from the Labor Force Survey. (Ministry of internal affairs and communications) Innovation
• Aging/shrinking workforces • High energy costs • Intensification of global
competition
Changes that are having an impact on manufacturers
Direction of Japan’s manufacturing
• Advances in intelligent manufacturing
• Changing roles of domestic factories
“Mother factory” for manufacturing in other countries Flexible factory for high-mix low-
volume manufacturing Innovation factory for new
technologies and new products
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IA & Control Business Domains Covered by Yokogawa
Field equipment
Control systems/Engineering Control software/System integration
Production management
Management strategy Business optimization
Simulation ERP Business
management
Factory management
Production process/control
Plant site
Business strategy /plan
Design Engineering Commissioning Operations f
Lifecycle services
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Yokogawa’s Strengths
● The four GENs - Professionals who have extensive knowledge of the four GENs: genba (plant sites), genbutsu (actual things), genjitsu (current status), and genchika (localization) - 24/7 support system
● Trust - Reliable products with the same high quality, a long lifespan, and excellent environmental resistance all over the world - Ability to optimize processes for both industry and society (engineering) - Perseverance and persistence (ability to carry through projects)
● Co-creation - Co-creating value with customers and serving as a provider of holistic solutions spanning everything from management to field operations - Extensive knowledge of industries, manufacturing processes, and engineering - Good citizenship (our corporate philosophy), the pursuit of harmony, and sharing the same goals as our customers
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Success Cases
●Case 1: Expanding the Value Chain for Existing Customers (customer: a chemical company) ●Case 2: Developing New Customers through Consulting (customer: a beverage company) ●Case 3: Expanding the Information Business (customer: Riken Keiki Co., Ltd.)
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Business optimization
Management strategy
Conventional businesses
Forming a kaizen team with the customer Solving problems and improving processes
Consulting to solve problems
Value chain for increasing sales and improving profitability
Customer: a chemical company
Expanding the service business
Improvement leader development program
(ILDP)
Comparative effectiveness
analysis service
Rolling out to affiliates
Case 1: Expanding the Value Chain for Existing Customers
DCS Field equipment
- Sale of standalone products - Competing with other companies
Becoming the exclusive supplier for our customers
Plant site
Production process/control
Business management
Factory management
Business strategy /plan
Ongoing kaizen consulting
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Plant site
Production process/control
Business management
Factory management
Conventional businesses
Customer: a beverage company
By building trust, Yokogawa captured a major customer from a competitor.
Operational support order
Kaizen consulting
Roll out to 8 plants
MES order
Field equipment order
Visualizing energy costs
DCS order
Warehouse automation order
N e w c u s t o m e r s
Consulting to solve problems
Case 2: Developing New Customers through Consulting
Business strategy /plan
Business optimization
Management strategy
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■ Leveraging its extensive industry knowledge, Yokogawa provided consulting for every aspect of this company’s business operations. - Pre-sales kaizen business consulting
■ Restructuring of company operations to improve profitability of service business - Consolidation of nationwide maintenance operations - Central management of parts inventory - Reduction of inventory and shortening of delivery lead times
Paratechno Co., Ltd. Smiles Co., Ltd. Riken Keiki Co., Ltd.
Case 3: Expanding the Information Business
Entering new industries
Headquarters: Ope ra t i ons :
C a p i t a l : S a l e s : B u s i n e s s :
Riken Keiki Co., Ltd. Company profile
Itabashi-ku, Tokyo Headquarters, 2 plants, 21 offices, 32 service offices in Japan; operations in 7 other countries 2.67 billion yen 23.41 billion yen (FY2015) A major manufacturer of gas detectors and alarms (listed in first section of TSE)
Successes in supporting key business operations through the provision of after-sales services
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Data gathering
phase
Identification phase
Project proposal
phase
Feasibility study phase
Project planning
& Execution
phase
Rollout phase
Follow up phase
Maintenance, repair and
operation phase (MRO)
Solution Service Business Cycle
Continued proposal of solutions and provision of support over the entire plant lifecycle
Plants 40–50 year
lifecycle
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Results and Reasons for Steady Growth
● Improving profitability - Integration of our three primary business functions has improved profitability (particularly for the information business). - Optimization of cost structure - Optimization of strategies for areas, industries, and products has enabled us to improve our site response (improved customer focus)
● Capturing a larger share of the Japanese market※
- Even in a tough economy, winning orders for integration projects
Area strategy
Industry strategy
Product strategy
(※Based on a company survey)
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123.8 132.4 126.8 125.6 118.8 100.6 99.4 103.5 100.5 97.9 98.1 101.8
107.3 120.5
182.4 196.6
182.4 156.2 161.2 173.7
195.2 238.4
259.9 264.9 231.1
252.9
309.2 322.2 301.2
256.8 260.6 277.2
295.7
336.3 358.0 366.7
7.2%
9.9% 11.6% 12.1%
9.6% 7.7%
6.3% 7.2%
6.1% 7.2% 7.6%
10.0%
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
US dollarUSドル
(Yen) 107.46 113.09 117.00 113.80 100.66 92.61 85.13 78.82 83.33 100.67 110.58 119.99
FY04 FY13 FY10 FY09 FY12 FY11 FY08 FY07 FY06 FY05 FY15 FY14
Operating income to sales ratio
(Billion ¥) ■Outside Japan ■Japan
Trend of Global Sales in Control Segment
<Exchange rate>
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Future Development
Entering new business domains by leveraging the Industrial IoT (IIoT)
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Mitsubishi Research Institute, Inc. Cisco Systems G.K. Microsoft Japan Co., Ltd.
Future Development
Entering new business domains through alliances with other companies
Co-creating value
Partners
Customers
Yokogawa will help its customers achieve their vision by working with them and its business partners to co-create value.
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Future Direction
E x p a n d f r o m A s i a t o t h e w o r l d b y l e v e r a g i n g
s t r e n g t h s r e f i n e d i n J a p a n
Japan
Outside Japan
Improve profitability
Copyright © Yokogawa Electric Corporation 2016/11/1 - 19 -
Disclaimer
The information pertaining to our business plans and forecasts that has been provided in this presentation and at analyst meetings contains forward-looking statements that are based on our management’s current knowledge and require the making of assumptions about future events. As such, it cannot be guaranteed that these statements will not differ materially from actual results.
IR Group, Corporate Communications Department Yokogawa Electric Corporation
Email: [email protected] Phone: +81-422-52-5530
URL: http://www.yokogawa.com/pr/ir/index.htm