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Annual Report 2006Management’s Discussion and Analysis of
Business Results and Financial Position (4) Management’s Views on Key Issues and Future Policies
Under the prior mid-term plan that was completed in the year ended March 31, 2006, the NSK Group focused on a growth strategy and improvement of profitability. While targeting profit-focusedgrowth, we also sought to enhance management soundness and transparency. We adopted the “company with committees system” in 2004, and we have worked under that system to strengthen internal control and risk management systems. We recently formulated a new mid-term plan covering the period to the year ending March 2009, and continue the growth strategy implemented in the prior mid-term plan as well as the improvement of cost efficiencies. We will avoid excessive emphasis on quantitative expansion and focus instead on the development of a robust corporate structure through continuing structural improvement. Our mid-term vision is expressed as, “to become No.1 in total quality.” Our concept of “total quality” encompasses not only product quality, which is the most basic consideration for a manufacturer, but also the quality of all of our services. Our efforts to turn this vision into reality will be based on four management priorities: “reinforcement of manufacturing capability,” “reinforcement of product development capability,” “reinforcement of global management capability,” and “reinforcement of overseas profitability.”
Our goals in working to strengthen the NSK Group’s manufacturing capability are in-depth improvements in adaptability and quality. The entire NSK Group, including its production, sales, technology and administrative organizations, will be mobilized in a uniquely NSK approach to production innovation. In addition to improvements in production efficiency and investment efficiency, we also aim to streamline information systems, standardize operations, and increase the pace of business. We will also work to improve our cost competitiveness and ensure stable access to supplies through procurement innovation designed to strengthen relationships with suppliers and accelerate global procurement activities.
Our aim in strengthening the NSK Group’s product development capability is to provide both quantitative and qualitative support for our growth strategies by focusing on the development of new high value-added products that match market needs. We will increase the percentage contribution of new products to sales, and we will raise our comprehensive technology by improving our capabilities in four key areas: basic research, development, design engineering and production engineering.
To strengthen our global management capability, we will build the organizations and structure needed to support our global business operations. We will also focus on the training of human resources with global perceptions and advanced manufacturing knowledge, while at the same improving the efficiency of our business operations and accelerating our decision-making processes. Efforts in these areas will be accompanied by measures to develop and strengthen our corporate governance and internal control systems.
We will work to enhance overseas profitability through measures focusing on the further improvement of marketing organizations in the Americas, Europe and Asia, and on the improvement of the manufacturing capabilities of our plants in these regions.
We also recognize that our corporate social responsibilities include an obligation to contribute to protection of the global environment through the reduction of energy losses in our global business operations.
The entire NSK Group will work through these policies to maximize our corporate value by turning our mid-term vision into reality and by fulfilling our social responsibilities.
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