1

Ｔｈｅ ２ｎｄ Ｓｔａｇｅ ｏｆ ＩＴ Ｕｔｉｌｉｚａｔｉｏｎ ｆｏｒ ＳＭＥ（Japan)

１５ Ｊｕｌｙ ２００４

Ｎｏｒｉｙｕｋｉ Ｙｏｎｅｍｕｒａ

Ｍｅｍｂｅｒ ｏｆ ＡＢＡＣ Ｊａｐａｎ

Ｃｏｕｎｓｅｌｏｒ, Ｆｕｊｉ Ｘｅｒｏｘ Ｃｏ．，Ｌｔｄ

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[1] IT Promotion Plan I for Small and Medium Enterprises (SMEs)

• e-Japan Plan have been established (March 2001).

• The findings from the survey(1) SMEs still not aggressive enough in IT-related investment(2) Few interested in moving further to use the Internet

as an important business tool. (3) Many share misgivings about IT.

• Security

• Lack of administrator

• Lack of IT literate person

• Investment too expensive

3

<Targeted goal>

<Main measures>1) Support the application of IT among the SMEs

① To improve the awareness about IT utilization and train more IT-literate personnel② To provide support in terms of giving advice and/or consulting on IT issues③ To provide support for introduction of IT systems

2) Improve the infrastructure for IT application by the SMEs① To develop business software and share software programs that are suitable for

common use among the SMEs② To provide information that help & encourage IT promotion efforts③ To develop and enhance the functions for promoting electronic commerce

3) Promote cooperation in support of IT application by the SMEs

• Total budget(3years) \15billion• After the mid-term assessment, the goal has been proved to be accomplished.

To enable roughly 50% of the SMEs in Japan (= 5.8 million companies) to engage in electronic commerce using the Internet (by the end of FY 2003)

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< Survey> -Lack of specialists who can support and improve the IT application -Need to enforce effective information security measures-Lack of effect that measures amount invested in IT development

(Field Survey Report on IT Utilization by SMEs: Mitsubishi Research Institute,Inc.,Dec．2003)< Current situation>

[Infrastructure development]•80 to 90% of the SMEs already computerized their systems

due to the rapid spread of the Internet, price down of PCs and other devices.• SMEs introducing IT to their systems is steadily increasing.

- use of the Internet and the e-mail system[ Effect and assessment of IT introduction]

• 90% of the SMEs recognize the importance of IT for their management activities.• 70% find positive differences when they compare with their performances before.

however, large gap between the expectations and reality exist.• Meeting their initial expectations limited to improvement in the productivity of

stationary jobs- routine desk work, daily office duties.

• Clear improvements needed in areas such as- faster and accurate grasp of the customer needs- improvement of customer satisfaction by upgrading the products and services- closer ties with the clients and business partners

[2] IT Promotion Plan II for SMEs (Small and Medium Enterprise Agency)

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<Targeted goal>

<Main measures> Emphasis on implementing measures to support advanced IT utilization

1) Supporting the application of IT among the SMEs ① To improve the awareness about IT utilization and train more IT-literate personnel② To provide support in terms of giving advice and/or consulting on IT issues

2) Improving the infrastructure for IT application by the SMEs ① To develop business software and shareware programs that are suitable for common

use among the SMEs②To provide information that help and encourage IT promotion efforts

• Total budget \4.3billion for 2004

From “IT application for business improvement” to “IT utilization for management innovation”

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[3] Contents of IT Promotion Plan II for SMEs

(1) To strengthen competitiveness and attain management innovationA. Utilizing IT based management strategiesB. Strengthening competitiveness by utilizing ITC. Exploring / capturing new markets and promoting creation of new businesses

(2) Three steps :Phase 1 : Infrastructural developmentPhase 2 : Business improvementPhase 3 : Management innovation

＜3-phased IT utilization model＞

IT introduction phase IT utilization phases

Management innovation

Business improvement

Infrastructural development

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(3) Directions to utilize IT in corporate activities

･Direction 1 『 Design and Manufacturing』

“Differentiation by digital manufacturing” approach for quality improvement in development of new high-value added products, production control and quality control

･ Direction 2 『Retail and Distribution』

“Information sharing and information disclosure” for inter-business partnership based on the relationship of mutual trust

･ Direction 3 『Customer relations and Services』Creation of new values at “Customer relations and Services” through the improvement of customer satisfaction and service quality.

･ Direction 4 『 Contracts and Settlement』Adoption of “electronic contracts and electronic bills” to reform accounting system.

･ Direction 5 『 In-house information management』“Speedy management” by full control of all types of information Capability of responding promptly to the customer needs.

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(4)Successful examples for Benchmark

･1 Design and Manufacturing : Differentiation by digital manufacturing--- Inheritance of the seasoned skills and digitalization realized by becoming the member

of a CAD/CAM network ---

<Sakamoto Giken Incorporated> Nangoku, Kochi PrefectureType of industry: Metal processingNumber of employees: 18

<Issues>- Aging of trained technicians, lack of young workers,decrease in production population- Low diffusion rate of CAD/CAM among the local companies in the prefecture

<Main features of this case> - Gaining access to CAD/CAM education by joining “Digital Factory Consortium ”- Adopted as “IT utilization type management innovation model project”

by Shikoku Bureau of Economy, Trade and Industry- Optimal division of labor among participating companies

New method of processing by 3D CAD/CAM system +multiple spindle machining center

-Timely and appropriate advice and proposal to the clients

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<Effects and strengths>• Zero distance• Establishment of advanced

processing technological foundation

• Inheritance of skills andknow-how

• Diffusion of an efficient production system (3D CAM/CAD, rapid prototyping system, etc)

• Creation of a new industry and employment opportunity

Sales growth

Prototypes manufactured by the 3D CAD/CAM system that become available through the support project

0

5,000

10,000

15,000

20,000

25,000Sa

les

figur

e (u

nit:

10,0

00 y

en)

2002 2003 2004 ( prospect)

Fiscal year

Conventional business ＣＡＤ/ＣＡＭnetwork

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･2 Retail and Distribution : Information sharing and information disclosure--- Building of a new form of inter-business partnership based on the relationship of mutual

trust that transcends the conventional inter-business framework ---

<Somersault Co., Ltd.> Kasugai, Aichi PrefectureType of industry: Sales companies of liquor and food for professional use (restaurant-chains)Number of employees: 9

<Issues>- Need of responding to diversification of their clients’ needs - Need of devising effective method to counter the advancement of new entrants from other

business sectors (propelled by deregulation)

<Main features of this case>- Inter-business cooperation by establishing a joint company (Somersault) for business alliance,

Collaborative development of products, Sharing information, Building optimal distribution network, Configuration of an industrial standard system

- 365days delivery system that can promptly deliver products on the same day of order- Community-based follow-up system, product proposals

that are not affected by the manufacturers’ brand image

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<Main systems > ① Function to register order entries

and shipping data ② Function to register data on

containers and receiving equipment

③ Electronic Ordering System function

④ Function to link with member companies’ systems

⑤ Function to retrieve order entries and shipping data

⑥ Various master control functions

<Predicted effects>Number of stores expected to increase

0

500

1000

1500

2000

2500

3000

2002 2003 2004 2005 2006

Number of Stores

Number of Stores

Wholesaler

Wholesaler

Del

iver

y

Delive

ry

Delivery

store

store

store

store

Order

Order

Order Headquarter

Delivery

Wholesaler

Sorting

Sorting

Order

Orde

r

Bill

ing/

paym

ent

Sorting

store

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･3 Customer relations and Services : Developing new contact points--- Reconsidered the business by going back to the basics and reflecting the

company’s original intention and management strategies ---

<Umeda Washi Co., Ltd.> Imadate, Fukui PrefectureType of industry: Manufacturing of “washi”(Japanese paper)Number of employees: 17

< Issues>- Difficulty to describe distinctive features (good complexion, nice texture,

elastic nature) of the “washi” to customers- How to cope with diverse customer preferences (artists and craftspeople)

<Main features of this case>- Received an advice “ not to start out with an ad hoc solution, but to go back

to the basics and reflect company’s strategy“- Applied and accepted as the IT utilization type management innovation

model project.- Developed “Umeda Information Strategic Solution – Goyokiki (UISS-G)”

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<Main features of UISS-G>

①. Use past customer data to examinecycle of delivery and quantity and simulate expected date of next delivery.

②. Calculate number of days necessary tomanufacture the products.

③. Calculate expected date of order acceptance by tracking back the numberof days necessary to manufacture products from expected date of nextdelivery.

④. Simulate the production schedule usingthe production control system.

⑤. Make contact to the customer and/orwholesaler a few days before expecteddate of order acceptance

<Effect> Growth of sales in comparison

with others

FY19

99

Fy20

00

Fy20

01

FY20

02FY

2003

FY20

04

Umeda WashiAverage of union members

Comparison with the data from Fukui WashiIndustry Cooperative Union source material

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･4 Hypothesis Verification Management: --- Speedy management by unique POS(MAPS) information system---

<Mary chocolate Co., Ltd.> Ohta-ku, TokyoType of industry: Chocolate, jelly Manufacturing & SalesNumber of employees: 693 , Revenue : \ 16.8Billion(2003)Established : 1950

< Issues>-Limit encountered by the old style management 【sixth sense by experience】-Suffered by miss-match between supply and demand

(too much supply and poor sale, and vice-versa)

<Main features of this case>-Detailed real-time information from factory, inventory and point of sails for analysis

(When, Who, What, Purpose and meteorological-data like weather forecast)-Verifying Hypothesis of Product mix for higher profitability by the actual sales data

and continue to verify it weekly-Elimination of waste, fluctuation and unreasonableness-Mary’s original POS(MAPS) System to support speedy management

<IT Investment> - \ 145Million (2003)

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<History of Informatization>-1971 : Introduction of Computer for sales management-1982 : Sales shop information system-1984 : Integrated departmental information system-1991 : Sales shops network completed-1996 : MAPS(Mary’s Pos System) started-2000 : Information sharing started to major suppliers-2001 : Integrated departmental information system upgraded

<Effects>Unit:\100M

135140145150155160165170

1999

2000

2001

2002

2003

024681012141618

Rev.PBT

No.of Emp.

660670680690700710720730740750760

1999

2000

2001

2002

2003

No.of Emp.

1000 in 1986

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･5 In-house information : Speedy management--- Developing a system to hear the murmur of the customers ---

<Showa Denki Co., Ltd.> Daito, Osaka PrefectureType of industry: Manufacturing of air blowers Number of employees: 150

< Issues>-Suffered by confusion occurred when attempting to develop a system that integrates

the accounting system, production system and parts procurement logistics system that have been operating separately.

<Main features of this case>- Consulted “IT Juku(school)”, a project run by Osaka Industrial Creation Center and

received guidance from the IT coordinator. - Formulated a grand design of the vision on how the company to grow

- Developed an action plan for information integration to realize this vision - Developed a “System to hear the murmur of the customers” and

“Technical library (information) provision system”- Created “Iroiro Sodan Kobo” (Information Sharing Workshop)

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<Concept of IS Workshop>

<Effect> Sales growth

[unit: 100 M yen]

お

客

様

営業担当者

設計担当者

営推担当者

生産担当者

C担Order entry team member当者

Iga Factory team member工場担当者

Q&A database

Input Q&A data into the databaseRetrieval

•••••••

お

客

様

Custom

er

営業担当者

Sales representative

設計担当者Design team member

営推担当者Sales promotion team member

生産担当者Production team member

48.645.7

50.5

40.0

45.0

50.0

55.0

２００１年 ２００２年 ２００３年

Sales

Written messages and statementsTechnical communication logInformation on the competitorsOther informationConverted into electronic data

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[4] Cooperation with large enterprise - For SME, it is key to possess IT literacy to become a business partner with

large enterprise-

Outline of Fuji Xerox< Main product >

Color copier, Multi-function machine (copy, fax, printer), and network products. < Number of parts required for one copier >

About 4000 parts (medium size machine)< Type of industry and number of supplier >

･Metallic press and machining : 54 companies･Plastic molding : 30 companies･Electric and electronic parts : 75 companies ･Rubber and other material : 22 companies･Sub-assembled parts : 24 companies

Total(as of 2004.2) : 205 (SMEs : about 40% )< Expansion of X-Session >

X-session-Ⅰ2001.1 ～

(information exchange)

X-session-Ⅱ2003.2 ～

(e-procure)Major suppliers

X-session-Ⅲ2004.2 ～

(e-procure)Shanghai and Shenzen

X-session-Ⅳ2005. ～

(e-procure)All of the world

～2000..12

(Phone,Fax Hard copies)

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1 X-Session (Xerox-Supplier essential interaction)

1 X-Session (Xerox-Supplier

essential interaction)

• X-Session is to change Fuji Xerox(FX) and supplier work process by implementing following activities via Internet;

- Strengthen FX / Supplier Partner Relationship- Materialize most cost-effective purchasing- Mutual productivity improvement by e-procurement

• ‘Production Purchasing Process Innovation’.

• X-Session is to change Fuji Xerox(FX) and supplier work process by implementing following activities via Internet;

-- Strengthen FX / Supplier Partner RelationshipStrengthen FX / Supplier Partner Relationship-- Materialize most costMaterialize most cost--effective purchasingeffective purchasing-- Mutual productivity improvement by Mutual productivity improvement by ee--procurement procurement

• ‘Production Purchasing Process Innovation’.

EnvironmentalProtection

EnvironmentalProtection

PrototypingPrototyping

Design & DevelopmentDesign & Development

SuppliersSuppliers

E&EE&E、、DrwgsDrwgs、、CAD,etcCAD,etc

prototype parts orderprototype parts order（（PO,PO,DrwgsDrwgs））,etc,etc

environmentenvironment--info,etcinfo,etc data obtained, quotes inputdata obtained, quotes input, etc, etc

•X-Session•Info Sharing

Server•（Entrance of FX X-

session server）

Extent of X-Session

•XnetCA•（Registration site of external certificate）

ProductionProductionRFQ, PO, Cost managementRFQ, PO, Cost management

SuppliersSuppliersSuppliersSuppliersSuppliersSuppliersSupplierSupplier

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2. Effect of X-Session

１）All the process lead time between the suppliers and Fuji Xeroxhas been reduced to half. （Productivity doubled）

Fuji

• Reduction of processing paper work by half

40 ⇒20 days

• Save parts cost by 50%2 weeks⇒1week• 3)Design change cut-in

１）１）All the process lead time between the suppliers andAll the process lead time between the suppliers and XeroxFuji Xeroxhas been reduced to half.has been reduced to half. （（Productivity doubledProductivity doubled））

• Work contents • Lead time • Effect (to FX&Supplier)

• 2)New parts quotation

3weeks⇒1week• 1)Mass production parts • Stock/Inventory reduction

２)Work force for paper work at suppliers has been drastically reduced.

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In Conclusion

• SME can benefit most from IT

• Decision of top management is keyfor successful IT application

Thank you very much