Matsushita Electric Aims to Raise Profitability by Boosting Design Efficiency

Matsushita Electric Aims to Raise Profitability by Boosting Design Efficiency
Matsushita Electric Industrial Co, which has rebounded by closing factories and cutting jobs, now aims to raise profitability by improving product design efficiency, the Wall Street Journal reported, quoting the Japanese company's new president Fumio Ohtsubo.

"I want to strengthen our cost competitiveness at the design level," Ohtsubo told the paper.

He said his first step will be to head a new task force to break down the barriers between the company's design teams.

This will aim to get teams to share more information and to design products that use fewer parts, and, in turn, are more easily assembled.

Sharing information "is an obvious thing, but by putting the spotlight on it, it's going to make it possible to raise our operating profit margin from 5 pct to 6 pct and from 6 pct to 7 pct," Ohtsubo said.

Design is a critical stage in product development, because 70-80 pct of total cost is determined at this point, he said.

This is when a product's specifications and functions are fixed, and these determine the number of parts required and how it is assembled.

The president's move represents a shift in direction for Matsushita, where products have historically been developed independently by separate product teams.