Excellence in Science!
Achieving a “Society Brimming with Empathy” by Overlaying Shimadzu and Customer Dreams and Investing Hard Work
Reflecting on the First Year as President
To be honest, the year has flown by. The China lockdown severely affected FY 2022 Q1 results. Subsequently, challenges in parts and materials procurement disrupted manufacturing activities. Furthermore, compliance issues at our subsidiaries in September 2022 significantly inconvenienced many stakeholders.
Amid these circumstances, we successfully acquired Nissui Pharmaceutical as a wholly-owned subsidiary (currently renamed Shimadzu Diagnostics Corporation) to take a major step forward toward generating synergies in healthcare areas. We also set a new medium-term management plan that includes measures to increase corporate value.
Happy memories from the past year include visiting respective subsidiaries outside Japan after my appointment as President. I was invigorated to see local employees energetically working, having returned to pre-COVID routines earlier than our Japan team.
Accomplishments and Open Issues from the Previous Medium-Term Management Plan
Our previous medium-term management plan witnessed consecutive years of sales and income growth, partly due to favorable exchange rate effects. During the last year of the plan in particular, Shimadzu achieved the officially published performance values despite facing severe headwinds from difficulty procuring parts/materials and the rapid increase in raw material prices, in addition to the resources allocated as investments for future growth. We were also able to establish a foothold in clinical fields by welcoming the reagent manufacturer and sales company Nissui Pharmaceutical into the Shimadzu Group last year. For the past two medium-term management plans, under the banner “Advanced Healthcare,” Shimadzu has been promoting the use of analytical instruments for clinical applications and the integration of analytical instrument technologies with medical systems, but struggled to achieve tangible results. However, I believe that the recent acquisition represents a major step forward toward deploying businesses in the Advanced Healthcare field.
On the other hand, due to the COVID-19 pandemic and other factors, development delays have remained a challenge. Though development of infectious disease-related products proceeded more quickly than expected, redesigning products due to supply difficulties delayed work for existing product lines and new product development work for new application fields. Also, as we continue to expand globally, economic security and geopolitical risks have a greater impact. Market diversification due to varying regional objectives and the need to respond quickly to customer needs amid rapid changes have brought significant shifts in our business environments. To achieve further growth, we must significantly strengthen activities outside Japan. Our new medium-term management plan focuses on globalizing development, sales, and service operations. Needless to say, we will also strengthen measures for improving Group governance capabilities in order to prevent any compliance incidents from occurring again at Group companies and measures for addressing the major challenge of implementing Digital Transformation measures.
Three Missions and Four Domains in the New Medium-Term Management Plan
The new medium-term management plan specifies three missions: “Contributing to Human Life & Well-being,” “Contributing to Well-being of the Earth,” and “Contributing to Industrial Development and a Safe & Secure Society.” These are not new ideas, but rather the measures determined from thinking about which measures we should pursue after I was appointed President. The COVID-19 pandemic particularly underscored the significance of “human life and health.” Therefore, I think one major mission of the Shimadzu Group should be making contributions to human life and health. Moreover, not only human health but also the health of the Earth where people reside must be preserved amid climate change. The concept of "Planetary Health" lies at the core of these missions. It is a global concept that recognizes the inseparable connection between human health and the health of the Earth, and pursues the well-being of both. "Planetary Health" aligns perfectly with Shimadzu’s management principle established in 1992, which is “Realizing Our Wishes for the Well-being of Mankind and the Earth.” Pursuing "Planetary Health” also requires “industrial development and a safe & secure society,” including our sustainable living environment. These concepts are expressed as “missions” in the new medium-term management plan.
Within the context of the three missions, the four domains define the business fields where the Shimadzu Group should deploy those missions. The healthcare domain comprises life sciences (pharmaceuticals and foods) and Med-Tech (clinical and medical care) sub-domains, whereas businesses for contributing to the well-being of the Earth will be deployed in “green” domain. The businesses important for achieving industrial development and a safe & secure society are businesses in the material and industry domains. The industry domain includes a broad range of business areas, but for the Shimadzu Group it will mainly involve deploying semiconductor-related businesses.
“Excellence in Science” and “Best for Our Customers” Serve as the Foundation for the New Medium-Term Management Plan
“Excellence in Science” and “Best for Our Customers” serve as the foundation for the new medium-term management plan. “Excellence in Science” was established as the brand statement in 2012. As another way to state our corporate philosophy “Contributing to Society through Science and Technology,” the brand statement expresses our will to achieve an exceptional presence of “excellence” in scientific fields and our willingness to take on all sorts of new challenges in order to achieve that excellence in our pursuit of creating number-one and truly unique products.
“Best for Our Customers” has been a part of our internal slogans since 2007, always reminding us to consider what is best for our customers when we are implementing the new medium-term management plan. It is evident that simply developing and providing good products is not enough. Furthermore, even if we offer instruments, it is not sufficient to provide the data that our customers require; other elements are also necessary. Even if the Shimadzu Group is able to supply the best products, it cannot deliver data to customers. In other words, we cannot become "Best for Our Customers" with instruments alone. To truly become a company that is "Best for Our Customers," our group must provide all the instruments and technologies used in every stage of analysis or measurement by customers, from the preparation stage to the data utilization stage. Therefore, we must become a company that can deliver end-to-end solutions that include instruments, consumables, software, and services. To achieve this, we will enhance our unique technological development capabilities and collaborate with partner companies to strengthen our ability to develop products, pre-processing, automation technologies, instruments, consumables, and analysis software (defined as "social implementation capability"). We aspire to provide number one and unique products and services to make this vision a reality.
I want to prioritize strengthening governance as management capabilities above all else. It is crucial for enhancing corporate value, employee engagement, and international competitiveness by strengthening relationships with Group companies.
We have already established the corporate principle and the corporate governance system at the Head Office required for governance enhancement. Now, as part of organizational reinforcement, we will focus on strengthening organizational systems throughout the entire Shimadzu Group by strengthening governance capabilities, implementing cultural reforms, and building three risk management lines of defense (business divisions, administrative departments, and auditing departments).
Last year, Group management regulations were established to strengthen governance capabilities throughout the entire Shimadzu Group. This year, we will establish corresponding regulations at Group companies, deploy activities to prepare related detailed rules, and ensure all personnel are properly notified. In terms of company culture reforms as well, starting in the second half of last year we established 240 managers responsible for implementing risk management practices and reassessing business processes at respective organizations. Every week we discuss topics such as the purpose of specific business processes, the status of compliance with laws, regulations, and rules that require compliance, the possibility of implementing better business processes, and so on.
Any rules, practices, or administrative procedures that seem inappropriate will be changed. In some cases, the managers can escalate issues to their company management as part of activities for implementing improvements throughout the entire Group. Through these ongoing efforts, we aim to foster an environment where employees understand the significance of their work, comprehend and adhere to the correct procedures and rules, and collaborate to make improvements.
Though the three lines of defense should have been strengthened throughout the entire Shimadzu Group and have already been strengthened at Shimadzu Corporation, unfortunately, preparations are still inadequate at some subsidiaries. Therefore, we will seek assistance from external experts to create systems for ensuring the defense lines are functioning properly throughout the Group. Simultaneously, we also want to strengthen our monitoring capabilities.
In terms of risk countermeasures, creating a risk-sensitive culture is crucial. Shimadzu Group employees strive to perform their jobs each day while keeping in mind compliance requirements. Nevertheless, humans are weak animals. When a weakness accidentally appears, unexpected things can occur. Therefore, it is important to have systems that can provide support if a weakness appears. I want to create a culture where employees can openly report any concerns to their supervisors or reporting channels without hesitation. Our group employees tend to show respect for others and may be somewhat hesitant, so I hope to increase the number of outspoken employees at Shimadzu so we develop strong support capabilities.
Becoming a Company that can Help Achieve Dreams
As an individual, I had a dream of achieving nuclear fusion as a way to solve energy supply problems during my student years. After joining Shimadzu, when my job immersed me in the world of materials testing, I dreamed of creating a machine capable of determining all material properties by simply pressing a button. In my position today, I can only fulfill my various dreams by asking employees for help. Therefore, I will work hard to ensure Shimadzu employees can freely share, sympathize with, and achieve each other’s dreams without embarrassment. We will support these dreams by investing the financial and organizational resources necessary to achieve the dreams. I hope we can become that type of company. If we can get customers to feel confident that Shimadzu will listen to them and help them achieve their dreams, then customers would surely also share their dreams. I want Shimadzu to become a company that customers around the world are happy exists.
People live life moving toward the future. No one lives their life moving toward the past. That future includes the hopes and dreams of each person. As Shimadzu, we aim to be a company that sympathizes with people’s dreams, works to achieve those dreams, and helps others achieve their dreams.
I ask that all of you involved will continue to offer your understanding and support.
Biography of Yasunori Yamamoto, Representative Director, President & CEO
|Apr. 1983||Joined Shimadzu Corporation|
|Oct. 2003||Coordination Manager, Testing Machines Business Unit,
Analytical & Measuring Instruments Division
|Jun. 2013||President, Shimadzu Europa GmbH (Germany)|
|Jun. 2014||Corporate Officer|
|Jun. 2017||Managing Executive Officer|
|Jun. 2017||In Charge of Manufacturing, Information System, and CS Management|
|Jun. 2017||Deputy Director in Charge of Technology Research|
|Apr. 2020||In Charge of Corporate Strategy Planning and Corporate Communications|
|Jun. 2020||Director, Member of the Board|
Senior Managing Executive Officer
|Apr. 2022||President and Representative Director (current)|
|Apr. 2022||CEO (current)|