OMRON Shanghai Begins Operation in China

OMRON Corporation (TSE: 6645, US: OMRNY), a global leader in automation, sensing and control technologies, announced that it is held a ceremony to celebrate the completion of OMRON (Shanghai) Co., Ltd. (‘OMS’), a new subsidiary in Shanghai, China. OMS will serve as the global design and production center for OMRON’s control components and systems equipment.

OMS was first established in July 2005 by merging three OMRON Group companies in Shanghai: Shanghai OMRON Automation System Co., Ltd. (OMP), established in 1993; OMRON (Shanghai) Co., Ltd. (OMC), established in 1994; and OMRON (Shanghai) Control System Engineering Co., Ltd. (OMH), established in 2003.

OMRON Corporation’s Industrial Automation Company (IAB) has promoted business operations that are firmly rooted in the Chinese market over the past years, contributing to the growth of industrial automation in China. The chief aims of OMS are to supply reliable, high-performance control components and systems equipment from Shanghai to manufacturing sites around the world, while also contributing to the development of the manufacturing industry in China.

A global business center fully equipped with essential manufacturing capabilities.

OMS provides all essential functions for manufacturing, and will serve as a global design/production center for IAB. The company is equipped to handle anything from product design, development and production to logistics and customer support services. As a result, OMS will strengthen IAB’s business operations in China and enhance its presence as a competitive manufacturer in the global marketplace. By integrating and making full use of the production technology, production control technology, design and development capabilities, and expertise in customer support that IAB has accumulated over the years, OMS strives to meet the high standards of QCDS (quality, cost, delivery and service) for product supply targeting the global marketplace. OMS will be engaged in design, development, production and supply of basic control components and systems equipment designed for versatile uses. Products to be handled include sensors, programmable logic controllers (PLCs), temperature controllers and various other controllers.

OMS is the most important base for IAB’s strategy to promote globally competitive manufacturing.

IAB is currently in the process of a large-scale restructuring of its global development and production centers towards the goal of strengthening its position as an internationally competitive manufacturer. IAB’s restructuring strategy takes a two-sided approach: first, increasing core technological strengths in Japan, and second, strengthening OMS, the design and production center in China. IAB considers OMS to be one of its most important bases for strengthening its position as an internationally competitive manufacturer. Accordingly, IAB plans to invest a total of 5 billion yen in OMS over the three years leading up to fiscal 2007. (As part of the strategy, an additional investment of 5 billion yen will be made in Japan for a total investment of 10 billion yen combining Japan and China.) By implementing these reorganization measures for development and production centers, IAB aims to achieve globally competitive manufacturing and realize an operating margin of 20% by fiscal 2007.

OMS’s manufacturing strives to meet QCDS standards for global product supply.

(1) High quality and reliability that satisfies global customers
Based on core manufacturing technologies accumulated at OMRON’s production facilities in Japan over many years, OMS aims to build a production line designed to use common processes and equipment/machinery to produce multiple products. This “production platform” ensures high-quality production that can satisfy global customers. For example, OMS employs OMRON’s cutting-edge printed circuit board inspection systems and high-reliability component mounting/packaging technology, which allow product quality data to be gathered and analyzed in real-time in order to eliminate defective products.

(2) Greater cost effectiveness through collaboration with Chinese suppliers and the deployment of mixed-model production line
At OMS, products are designed and developed to use materials and parts from local sources in China so as to produce highly cost-effective products. Line operation efficiency is maximized through use of mixed-model assembly lines divided according to production process, rather than model-specific dedicated lines. The deployment of a wireless LAN system ensures the freedom for the production line layout to effectively accommodate fluctuations in workload. This results in flexible and reliable varied-quantity production of various models.

(3) Next-day shipment capability through a global supply chain management (SCM) system
Products produced at OMS are first supplied to inventory centers in the five main regions throughout the world in which IAB operations are based (China, Japan, Europe, North America and Asia). OMRON’s unique SCM system means that OMS is able to implement centralized control over the inventory levels of these five inventory centers, enabling products to be delivered from these centers to customers wherever they may be on the day following order placement.

(4) One-stop shopping for any services customers may require
Along with production, OMS is equipped with six facilities geared towards further strengthening customer support: the Call Center, SE Center, Mechatronics Service Center, Training Center, Repair Center and Solution Plaza Shanghai. Integrating these service functions allows OMS to serve as a “one-stop shop” for greater customer convenience, by offering comprehensive customer support that covers the entire process from pre- to post-purchase.

The Solution Plaza Shanghai showroom is among the largest of its kind for the control devices industry in China, with approximately 60 working prototypes on display for the latest OMRON products. To reflect and realize the various manufacturing ideas put forward by customers, a solutions laboratory is available to help customers stimulate creativity through collaboration with OMRON salespeople and engineers. This is just one example of measures incorporated into every corner of the facility to promote collaborative innovation with customers.

OMS Staff & Output
According to current plans, OMS will have a 2,200-strong staff and production volume of approximately 36 billion yen in FY2007.

Headquartered in Kyoto, Japan, OMRON Corporation is a global leader in the field of automation. Established in 1933 and headed by President and CEO Hisao Sakuta, OMRON has more than 26,000 employees in over 35 countries working to provide products and services to customers in a variety of fields including industrial automation, electronic components, social systems (ticket gate machines, ticket vending machines, and traffic control), and healthcare. The company is divided into five regions and head offices are in Japan (Kyoto), Asia Pacific (Singapore), China (Shanghai), Europe (Amsterdam) and US (Chicago).