OMRONOMRONOCB-EU

CONTINUALLY EVOLVING

Managing the “W” Effect!Managing the “W” Effect!

Mark Jones Chief Operating Officer and Managing Director

Omron Electronic Components Europe

OMRONOMRONOCB-EUPresentation contentPresentation content

CONTINUALLY EVOLVING

What is the “W” effect?Impact on ManufacturersThe Changing CustomerPost recession supply chainPost recession supply chain

relationshipsManaging the future

OMRONOMRONOCB-EUOmron’s Global Business Omron’s Global Business

CONTINUALLY EVOLVING

Healthcare business (Medical equipment and

i )

Other2,3%

Industrial Automation Business (Control equipment, FA systems)41 9%services)

10,2%

Social systems business (t t ti it )

41,9%

(transportation, security)12,7%

Automotive Electronic

Gross Sales

JPY 627.2billion

Components Business (Automotive electronic equipment)13 1%

Electronic Components Business (Electronic components)19 8%

billion

13,1% 19,8%

OMRONOMRONOCB-EUOmron Sales CompositionOmron Sales Composition

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OMRONOMRONOCB-EUOmron Group consolidated SalesOmron Group consolidated Sales

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-18%%

OMRONOMRONOCB-EU

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The “W” EffectThe “W” Effect

OMRONOMRONOCB-EUThe “W” effect!The “W” effect!

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Recession Injection Correction RecoveryGrowth

RestockingGovernment incentives Market correction

TimeFY08 FY09 FY011 FY010

OMRONOMRONOCB-EU

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Impact on ManufacturersImpact on Manufacturers

OMRONOMRONOCB-EU

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35% Global Business Downturn 35% Global Business Downturn Production Capacity reduction – how to

d t h t t d d?respond to short term demand? Economies of scale/reduced volumes

Cession of “non core” products and Cession of non core products andactivities

P d ti t f / t i l Production transfer/materialsmanagement

Technology re-think

OMRONOMRONOCB-EU

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The Changing CustomerThe Changing Customer

OMRONOMRONOCB-EU

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B i Vi ibilit d f tBusiness Visibility and forecastAsset ManagementAsset ManagementProduction locationServices OutsourcingN l h i iNew supply chain services

requirementsrequirementsTotal Cost Management

OMRONOMRONOCB-EU

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Post Recession Supply chainPost Recession Supply chainPost Recession Supply chain Post Recession Supply chain relationshipsrelationshipspp

OMRONOMRONOCB-EUConsequences of DownConsequences of Down--turnturn

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Short term Focus, especially asset Short term Focus, especially asset management

Shareholders not customers!! Shareholders not customers!!Manufacturer becomes Distributor Asset Management preferable to Customer Asset Management preferable to Customer

Management

Difficult to manage short term demand Reliance on Manufacturer Reliance on Manufacturer Planning and forecast disruption P / i t t i l t t !! Poor/non existent service = lost customer!!

OMRONOMRONOCB-EUPost recession relationshipPost recession relationship

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Manufacturer/distributor: Seamless closerManufacturer/distributor: Seamless, closer relationship! Rationalization of suppliers/interdependency Rationalization of suppliers/interdependency Time and target management Tools and added value services development

Web/brand shopsDeep linkingProject managementj g

Responsiveness to the ‘faceless customer’( id i th “W” ff t!!!!!)(considering the “W”effect!!!!!)

OMRONOMRONOCB-EUEven Global Customer Management!Even Global Customer Management!

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OMRONOMRONOCB-EU

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Benefits from the “W” effectBenefits from the “W” effect

OMRONOMRONOCB-EU

The benefits of the recessionThe benefits of the recessionManufacturerManufacturer

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R + Skill li Resource + Skills pooling product innovation product innovation new technologies Quality and cost

Redundancy – pruning the tree!! Redundancy – pruning the tree!! Seamless supply chain y

development!

OMRONOMRONOCB-EUSome examples!Some examples!

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OMRONOMRONOCB-EUResource and skills poolingResource and skills pooling

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OMRONOMRONOCB-EUManaging the future Managing the future -- togethertogether

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OCB Factory OCB

Purchasing

OCB Factory

POA Sales

Customer

•POS Sales growth

•POS budgeting / market identification

Support to distribution SALES Customer

Distributor

•Support to distribution SALES

•Contacts with the end customer

•Window of Services

•Market Knowledge

OMRONOMRONOCB-EU

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““Th f t i iti i ll f thTh f t i iti i ll f th““The future is exciting, especially for those The future is exciting, especially for those who can change!!who can change!!

Thank you for your attentiony y

Mark Jones