office-doi

● "Nikkei MJ Newspaper" <Published on August 27, 2010>
"Ask the president of the new company established by J. Front. Despite the fact that JFR Consulting Co., Ltd.'s new company was just launched, we were interviewed by reporter Daisuke Harashima under the heading "Cost reduction, specific instructions", and he was featured on the 5th page of the special feature frame in half 7 steps. I received a very excessive comment in the "eyes" column.

● "Weekly Diamond" <Posted on October 8, 2010>
Under the heading "Teaching the mystery of low-cost management," Ayako Suga, a reporter, gave a brief and brief introduction.

● "Sales Innovation" <Published in the November 2010 issue>
The two-page special feature was organized under the title of "Cost reduction points taught by President Kazuo Doi-changing fixed costs into variable costs by changing rules, processes, and authorities", but reporter Tatsuichi Nishikawa He summarized my way of thinking very well using charts and introduced it.

● "Turnaround Manager" <Published in the November 2010 issue>
Satoshi Nakayama, Editor-in-Chief, entitled "Cost Reduction is Value Change-Turnaround by Reduction Professionals" in "Turnaround Manager", a monthly specialized magazine for management support published by "Bank Training Company". Thanks to the special kindness of Mr. Sato, we have created a special feature of 5 pages.
* Below is an excerpt from the article​ Published

 

Specialized magazine for management support practice

Published in the November 2010 issue of "Turn Around Manager"

Cost reduction is a change in values

　　~ Turnaround by reduction professionals ~

The first thing to focus on in management reform and business revitalization is cost reduction, and every company is thoroughly working on it.

It seems, but in reality, the cost analysis is lax, and even if a reduction plan is made, it is not being implemented.

There seems to be an aspect. In other words, there is still room for cost reduction, and proper efforts can be made.

If so, many companies will lead to further improvement in business performance.

JFR Consulting Co., Ltd. is a company specializing in cost reduction support established by J. Front Retailing Co., Ltd.

be. Mr. Kazuo Doi, who became the company's president, has been working on the costs at Daimaru Matsuzakaya Department Store.

It is said that the reduction know-how will be instructed by entering the target company. About specific efforts for him

I will ask you in detail. (Interviewer: Satoshi Nakayama, Editor-in-Chief, Bank Publishing)

" Cost reduction remains an important theme"

Editor-in-chief Nakayama  Cost reduction is the first area to start in management improvement and business revitalization, but it is important as the environment changes.

Is there any change in sex?

Doi Certainly, the business environment has changed drastically in recent years.

Taking the department store industry, which was my field originally, as an example, sales have fallen below the previous year's level for 12 consecutive years.

It is in a declining situation, and it is said that in 2009 it will fall below 7 trillion yen for the first time in 24 years since 1985, and will shrink to the 5 trillion yen level in the future.

There are even business owners.

What this means is, "I can't stand the business structure I've used so far."

In other words, from now on, unless the business structure itself is changed, it will not lead to new growth.

Measures that are in line with the conventional business structure of "reduction" alone will not lead to essential revitalization.

We basically have that perception.

However, the reason why we established a company to support "cost reduction" this time is to reduce operating profit by reducing costs.

This is because it seems that there are many companies that can secure it.

Especially for companies that have to pay close attention to their daily performance in the market and achieve their promised operating profit.

We believe that there is still a strong need for cost reductions that directly lead to an increase in operating income.

While recognizing the importance of the theme of changes in the business structure itself, it is difficult to tackle due to time constraints.

That is the reality.

That's why I started working on cost reductions at Daimaru and Daimaru Matsuzakaya department stores in the first place.

was.

Editor-in-chief Nakayama  Please tell me the details.

Doi I first got involved in this field in 1999.

Daimaru implemented an early retirement of 700 people in 1998, the year before, assuming that the labor cost per person is 10 million yen.

For example, the annual cost reduction was 7 billion yen.

At that time, I was the general manager of the sales planning department at Daimaru, and I thought that the effect would improve business performance.

However, in the first quarter (March-May), the monthly sales fell by 2 to 3 billion yen against the target, and the situation continued.

It turned out that if nothing is done, all the "savings" of 7 billion yen will be wiped out, and profits will decrease rather than increase.

In that case, the only thing you can do is "whether to increase sales or reduce expenses", but even if you say that you will increase sales, that is the way to go.

At that point, we can't come up with a big plan.

So I thought, "Let's put a scalpel in the expense once."

In fact, until then, everyone knew that expenses had to be lowered in general, but

There was no specific effort at the level of reducing which costs and how much.

It was just left to the store managers and officers at the site.

What I did at that time was that the business performance in March-May deteriorated considerably, and the outlook for June-August was also bad.

I explained that operating profit will drop so much that expenses must be reduced considerably.

Only.

Even with the details of the reduction, the part-time job calculated for the personal computer the day before the meeting where the report was made was reduced to zero.

Or, it was at the level of lowering the cost of advertising in newspapers.

Even so, it was about 1.5 billion yen, but the president decided to carry out the contents anyway, so

Since then, I have been involved in cost reduction.

The key point when we initially worked on it was to expand the role of the sales planning department and manage the operating profit of the entire company.

I think that it was entered with the stance of.

In other words, until then, the management of operating expenses was left to each job system, so to speak, the organization was divided vertically.

Therefore, in response to the cost reduction target, each department / store is "doing it properly" and "impossible in the first place".

I start talking about that.

That would not lead to cost reductions, so the Sales Planning Department decided to manage company-wide operating expenses collectively.

is.

By repeating this all the time, I was told that I couldn't get in from the budgeting stage.

So to speak, it is "business sorting".

Being able to manage the expenses of each department means, "I used this much in the previous year, but this year it's a little more.

It will be possible to point out that it will go down. "

As a result of repeating these measures quarterly, the Daimaru Matsuzakaya Department Store finally has a job to reduce costs.

Has come to be recognized within the company.

Introducing the latest achievements, since the integration of Daimaru and Matsuzakaya in September 2007, the total amount was 26.4 billion yen by FY2009, which is 12%.

The cost reduction of reduction is realized.

And this time, it was decided to establish a company to provide such a sense to the outside.

"Structural reform directly leads to cost reduction"

Editor-in-chief Nakayama Please tell us a little more specific points about the cost reduction method.

Doi : I understand that even if you say "do your best" many times, expenses will not go down easily.

I think you can.

Our conclusion is how to change the structure.

And there are three points to change the structure.

-One is "changing the rules", the other is "changing the process", and the last is "changing the authority".

  -To change the second rule, for example, simply say "reduce overtime",

That is.

Overtime must be prohibited by the rules.

In other words, it is necessary to clarify the rules such as early return day, no overtime day, or turn off the entire building at 7 o'clock.

be.

It doesn't make sense to say that it's an "implicit rule" or that some people know or don't know it.

Thing.

Next, change the situation where the rules differ depending on the department.

For example, in a department store, the store is like a department, but because the store is far from the head office and has a long history of its own, that is exactly what it is.

Like the Iemoto of tea and ikebana, all the "styles" are different.

That is, the rules were different.

These situations create inefficiencies in many situations and must be resolved by unifying the rules.

not.

Changing the second process means changing the ordering process, even in a simple example.

If you give a new company an opportunity to enter and compete with an existing company, the price and quality will be "cheaper and better".

It will be.

Taking the example of Daimaru, the copy machine at the head office is outsourced to Company A, and the cost was 5.5 yen per copy in 2003.

Even if he points out to the person in charge that it is "very expensive," he says, "Company A's technology is special, so it can't be helped."

However, there was an update of the copy machine at the training center of Daimaru, and when I asked company B for a quote, it was 3.7 yen per sheet.

found.

In that case, "Let's change all the head office to company B", but this time, company A said that it would be 1 to 3,5 yen per sheet.

In short, the person in charge hasn't taken any approach so far.

In another example, the ordering department was centralized.

Rather than placing an order at each store, the person with the best ordering work will place the order in one place.

Similarly, the expense budget was made separately by each store, but the budget was made by my department and it was made by each store.

I decided to have it implemented.

It was decided that this would eliminate the wasteful work of budgeting at the store level.

In this way, it is the role of the head office to centrally control costs, and so on.

I changed it.

In other words, the headquarters is a department that collects all the strategic functions, ordering functions, and other operations that can be centralized, and the stores are on-site.

Clarify that it is a department that focuses on how to do business and daily work efficiently.

It was.

There will be various business processes, but if you work with the consciousness of "changing" them,

Of course, it will lead to structural reform itself and will be highly effective in reducing costs.

Changing the third authority means, as I said, that the authority is distributed among various departments.

Prices and specifications may differ, which leads to waste.

It is said that the decentralization of authority should be resolved by collecting all the things that can be collected in one place or creating specialized functions.

That's what it means.

"Evaluation of the person in charge is important"

Editor-in-chief Nakayama Is there any other point?

Doi : In many cases, the person in charge of expenses does not get the "sunlight", and I think it is better to correct this point.

Sales and planning personnel are often highlighted, but other departments such as administration, accounting, etc.

Logistics and even the departments that handle supplies are not so evaluated, no matter how hard you try.

mosquito.

However, if a mistake occurs, he will be reprimanded violently.

For example, if a water leak occurs, it will be a big problem, but if there is no water leak for 10 years, that is the case.

It's not as appreciated.

Isn't this the same for the department in charge of expenses?

Therefore, the department in charge of expenses contributes to operating profit by how to use expenses efficiently, while on the other hand.

We need a mechanism to evaluate it properly.

It's true that sales and operating profit are important factors for the company, but it is also possible to reduce expenses.

It can contribute to operating profit.

Management must make this evaluation clearly.

This changes the motivation of the person in charge.

If the company gets a good reputation, when the company's sales decrease, the expense manager will say, "Sales have decreased.

You will be seriously thinking about where to cut expenses to secure operating profit.

Otherwise, the expense officer will continue to tolerate high expenses because "quality cannot be reduced", and even more.

You will think that the budget is exactly what you use like a government office.

To avoid this, the person in charge of expenses who steadily repeats efforts such as high quality and lowering the price

It means that the hidden achievements must be evaluated correctly.

Although sales decreased by 3% and 5%, "decrease in sales and increase in profit" such as achieving operating income by reducing costs is

I would like you to reconfirm that it will not be possible without a highly motivated expense manager.

Editor-in-chief Nakayama As I mentioned at the beginning, if there is a trend that sales are declining, cost reduction

The side will have to increase the amount of reduction in order to achieve the target. What about these points?

Will it correspond?

Doi When sales fall, usually sales strengthening measures come out, but "sales worsen and strengthening measures are valid.

If you want to do it, you should do it from the beginning. "

It's good, but as an expense manager, I don't really trust it. It ’s an experience in a department store.

However, looking at the moving average of sales over the three months, I feel that we can roughly grasp future sales trends.

So, for example, if a three-month moving average had a 5% drop in sales, it would continue to be at the 5% level.

We must implement cost reductions in consideration of the decrease in sales.

If it is better than that, it is okay to increase the profit by that amount, but even if it is bad according to the trend, the operating profit is proper.

You have to think about securing it.

Since we are going to reduce costs based on pessimistic assumptions, we will receive the necessary resistance, but if sales decrease, we will pay for it.

We must be prepared to reduce it.

"There is no limit"

Editor-in-chief Nakayama Some say, "We are doing a lot of cost reduction, and it's about to reach its limit."

mosquito.

Doi What is the limit?

It cannot be judged without actually seeing it.

As a result, there may be cases where it is the limit, but on the contrary, there is still room for it.

If you look at cost reduction efforts in chronological order, it may be "the limit because we continue to do it every year".

No, but it's a different perspective.

In short, we have to confirm whether the cost is reasonable from the viewpoint of the market.

Then a benchmark is needed.

However, it is difficult to obtain information on expense benchmarks, so the person in charge who knows the most in detail

If you say "it's the limit", it tends to be correct.

That's why you should be careful about what kind of consciousness the person in charge is saying "the limit".

From this point of view, the point will be whether or not the organization is evaluated for cost reduction.

The idea of changing the specifications of the costly part is also important.

After all, it's good if the end user doesn't have any problems and can achieve the purpose.

It's good.

For example, we used to process toilets using paper, but with the advent of shower toilets, it is more comfortable.

It turned out that it can be processed.

At this time, I decided to use water (= shower toilet) because water is more comfortable and cheaper than paper.

However, in reality, the restrictions that I have used so far, such as "It must be paper," are unconscious.

Often lying at home.

In other words, the stance of removing these stereotypes and restrictions and changing shipping is the idea of "limits".

It will be necessary to get over it.

"Pursuing goals at monthly plenary meetings"

Editor-in-chief Nakayama It will be very important to manage the achievement status of the cost reduction target, but how about this point?

Are you thinking

Doi : We can honestly repeat progress management, including the monthly "Cost Reduction Progress Meeting".

I see it as the number one point.

At the "progress meeting", the person in charge of personnel expenses, management, logistics, usage, etc. will also attend.

What is important is not a vertically-divided meeting body that requires only the store manager or the person in charge of expenses to attend, but each person in charge also attends.

It should be a forum for vertical and horizontal discussions.

Gather them and have them report on their achievement of goals every month.

If the goal is not reached, the cause is confirmed, the cause is discussed, and the vertical and horizontal managers solve it on the spot.

go.

Also, since the person in charge from each store is present, know-how can be obtained from the person in charge of the store that is doing well, and of course

It will be shared by all stores.

Then, make them promise to put the conclusions drawn there into practice.

I promise in front of everyone in the meeting, so I can't repeat the same thing next month.

By repeating these meetings every month, we will be obsessed with operating profit and will lead to the achievement of our goals.

​

* The following is an abbreviation for an article introducing "JFR Consulting Co., Ltd."