2018_4q_omron_e

28/45 OMRON’s Unique Technology Management

First, to frame the discussion, I am sure you are familiar with the terms forecasting and backcasting. Forecasting is a process for developing strategies which posits an outlook for the future based on where we are today. In other words, the starting point is the product or business portfolio of today and the process is one of extrapolation, trying to think about how these might change in one-, two- or three-years’ time. The vast majority of our businesses are operated under the forecasting model. On the other hand, backcasting starts by defining what we want to be at a given point in the future, including aspirational elements. We then work back to identify the strategies necessary to achieve the objectives. With regard to investing in technologies for the future, backcasting is the core methodology for OMRON. Having said this, it is very challenging to backcast successfully. The biggest challenge is to formulate an accurate picture of the projected future. If you are not careful, you run the risk of finding yourself in the realms of science fiction, where your projected future is nothing more than invention. This diagram includes a reference to Near Future Designs. We attach great significance to having designs for the near future. We define the near future as a range between 3 to 7 years. Additionally, under our model, we require a super-specific architecture for this time frame. In other words, we task ourselves with ensuring that we formulate a highly specific design for our businesses. Based on this, we also formulate specific plans for technology, intellectual property and business models. This is the framework we have in place when we look at what we should be doing now. As we state at the top of the slide, our objective is to solve the social issues of our customers with our innovation-based Near Future Design, applying the clear strategies we develop under this framework. This is the concept that underlies technology-oriented management, in which we link technology to our businesses.