Management Policy

Basic Management Policies

• We have focused our efforts on developing digital technologies and providing creative devices that make it possible for our customers around the world to Transform Imagination into Reality, based on our vision. With the rapid advances of digitalization, our customers needs are growing more advanced and diverse, and it is critical to proactively and rapidly develop new technologies to support these needs. We believe that we can gain the trust of our customers, developing together, not by simply aiming to achieve greater sales volume, but by supplying high quality products and services.

  Led by this philosophy, we are working to create a unified operation system, consisting of our sales and development functions and affiliated companies, with the common mission of collecting customer information and developing new products. We are constantly launching development projects, which continually share information and generate awareness as they strive to develop products based on new research themes.

  At the same time, the results of this high value development work must be commercialized using optimal production systems. We consider improving quality and production efficiency our greatest missions as a manufacturer, and are dedicated to develop our structures and systems. Our Digital Cell (digitally-controlled cell production system), which fully leverages IT equipment, has reduced lead time and ensured reliability in quality.

  We consider the effort we put into this manufacturing to be one of the joys of creation, and will continue to engage in proactive, unified company operations in the future.

Target Management Benchmarks

• In the medium-term business plan for the five-year period from FY2016 to FY2020, we promoted activities aimed at accelerating new business developments in growing markets, transforming to a solutions provider and transforming into an innovation-focused group. However, in addition to the maturation of the sign (advertising and signboard production) market, which is our mainstay market, the entry of major manufacturers into the market has intensified the competitive environment, and this has been the main reason for the continued decline in sales of printers and ink. In August 2018, we reviewed our priority issues and performance goals, and positioned the period up to the final year (fiscal year ended December 31, 2020) of the medium-term business plan as a transitional period toward a new growth stage, placing emphasis on changing the business portfolio and enhancing operational effectiveness.

  Under the medium-term business plan for the period from FY2021 to FY2023, we have set the policy of “Return to the true RDG of ‘Creativity, BEST, Cooperative enthusiasm,’” and the performance goals for FY2023, the final year of the plan, include consolidated net sales of 48,000 million yen, consolidated operating profit of 6,000 million yen (operating profit to net sales of 12.5%), ROE of 15%, and ROIC of 15%. Accordingly, we will aim to achieve a lean organization through structural reforms and change the business portfolio by entering into growth market and new market.

   

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Medium to Long Term Business Strategy and Issues to be Addressed

• Our group has continued to grow by creating high value-added markets globally based on color & 3D digital control technology. In the medium-term business plan from FY2021 to FY2023, we aim to transform our business portfolio. We will work on creating new markets in niche fields where growth is expected, while minimizing the decline in profit margins by changing technologies and pursuing greater efficiency in response to the maturing of our mainstay markets and the increasing competition. In addition, we will aim to become a truly global company by shifting our focus from business development in developed countries to capturing growth in emerging markets.

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• Business Fields to be Focused on

  We concentrate on fields in which we can bring out our strengths to develop niche and highly value-added business. Specifically, we divide our business into two areas: “DP (Digital Printing) Business” focusing on the printing market, which is expected to undergo a process of change from analog processes such as sign (advertising and signboard production) in existing markets to digital processes; and “DGSHAPE Business” which targets various manufacturing applications that use 3D digital data. DP Business will develop areas that require on-demand printing such as product personalization. DGSHAPE Business will continue expanding in the dental market where digitization of workflow is becoming a notable trend. We will allocate our corporate resource to these focus areas in order to further grow and create new markets.

• Response to Changes of Markets and Customer Needs

  Considering value creation and market creation as the core of growth, flexibility to market changes including diversification of customer needs is critical. Based on our group-wide corporate structure, which enables speedy responses to changes, we will aggressively invest in our core technology innovation and collaborate with external partners to achieve speedy commercialization in order to quickly capture the needs of each region and create new markets.

• Response to Maturing of Mainstay Markets

  The mainstay sign markets are maturing in line with the widespread use of inkjet printers. In addition to introducing products with superiority and differentiation, creating business opportunities for customers via development of various other usages and the strengthening of solution proposals, we will focus on maximizing customer value by encouraging a shift to environmentally friendly inks, while also leveraging our global sales network to maintain our strong customer base. Further, we will improve our cost competitiveness by migrating our mass production function to Thailand and reducing R&D cost through implementing platform structures with the intent of creating profitable and continuous business models.

• Strengthening organization management system

  For niche and highly value-added market creation, we are required to capture the changing needs of society or individuals rather quickly and promote flexible business activities under the direction of strong leaders with entrepreneurship. We are working to turn our organizational system into one that will enable us a speedy decision-making that accurately grasps market changes, in order to realize swift market creation.

• Fundamental review of cost structure

  In our medium-term business plan for the three-year period starting in FY2021, we are working on structural reforms aimed at strengthening our competitiveness and transforming ourselves into a company that can adapt to various changes in the business environment.
  As part of this plan, we will “consolidate our production base to Thailand” and “implement early retirement program” in FY2021. By consolidating the production functions that are currently carried out at two bases in Japan and Thailand, we will improve the efficiency of manufacturing. Further we will reduce fixed cost by streamlining headcount by implementing an early retirement program.
  Through these structural reforms, we will improve our cost competitiveness, secure profitability to survive global competition, and achieve sustainable growth by transforming ourselves into a lean corporate structure.

• Strengthening R&D and Production Structure

  In terms of the structure behind R&D and production, our company thinking is based in the “digital factory” concept, which ensures speedy and effective development and production by sharing 3D data company-wide as well as suppliers. Multiple products are realized by concurrent engineering, and assembled with cell production system which is optimized for low-volume, high-variety production work.

  Furthermore, we are currently aggressively conducting research and development investment to strengthen our technological base in order to respond to rapid changes in the market environment and the diversification of needs. Through unique technological proposals taking advantage of our core technologies, we will advance the creation of additional customer value and high value-added markets.
  In production and procurement, we aim to improve cost competitiveness and production lead times through our two bases at the domestic plant and the Thai plant, at the same time strengthen our capabilities to respond to changes in demand for the realization of further optimization.

• Improving Business Sustainability

  As part of our natural disaster preparedness, we are conducting multi-faceted review of BCP (business continuity planning) that includes supply chains, with our Disaster Management Committee engaging in activities throughout the year to enhance the effectiveness of the plan. In terms of parts procurement for production activities, we are increasing the proportion of overseas parts procurement so as to decentralize procurement risk. Through these efforts, we are striving to improve the continuity of our business activities.

• Environmental Protection

  We are taking a number of initiatives to ensure the protection of the environment. This includes considering environmental impact during product development, preparing our facilities to prevent contamination, efforts to reduce energy consumption, and company-wide education on efficient usage and recycling of materials. Going forward, we will continue to make sustainable environmental efforts that can contribute to development of a sustainable society. Furthermore, in order to support the spirit of the SDGs (Sustainable Development Goals) and contribute to the creation of a society that can develop sustainably, we have registered with the Hamamatsu SDGs Platform promoted by Hamamatsu City, where our headquarters is located, and will work on SDGs activities through our businesses.

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• Enhancing Corporate Governance and Strengthening Internal Control

  As a listed company, corporate governance is our responsibility to society, and to realize this, we must strengthen the internal control of our company. We have set “Basic Policies on the Internal Control System” as sought by the Companies Act and maintain a risk management structure. Furthermore, regarding internal control for financial reports as instituted by the Financial Instruments and Exchange Act, we are planning structural and organizational measures to ensure the appropriateness of such reports in accordance with the above basic policy.
  Furthermore, “Japan’s Corporate Governance Code” has been applied to companies listed on the Tokyo Stock Exchange. While understanding the purpose and spirit of this code fully and enhancing corporate governance, we will strive for sustainable growth and the increase of corporate value over the medium to long term through active dialogue with shareholders and investors, etc., by establishing the “Policy for Constructive Dialogue with Shareholders”.