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Editorial Policy
Since the Guidance for Collaborative Value Creation was released by the Ministry of Economy, Trade and Industry
(METI) in May 2017, the Guidance has been one of the frameworks to which OMRON has referred in the editing of
its integrated reports. Since last fiscal year (fiscal 2021), having extended the application of the Guidance to
statutory disclosures, such as the Annual Securities Report, we have been strengthening communication of
OMRON’s value creation story in an integrated manner encompassing all corporate reporting while also
endeavoring to enhance the quality of dialogues.
In fiscal 2022, the first year of the new long-term vision “Shaping the Future 2030” and the medium-term
management plan “SF 1st Stage,” in light of the progress of deliberations on the Guidance for Collaborative Value
Creation 2.0, whose revision had been underway since 2021, we referred to the draft and other documentation
released by METI and worked to enhance the information disclosure in this year’s Annual Securities Report and
Integrated Report. In editing the Integrated Report 2022, we paid particular attention to the following three points.
Firstly, we restructured the chapters to align with the framework presented in the Guidance for Collaborative Value
Creation 2.0. Specifically, in line with the flow recommended by the Guidance for Collaborative Value Creation 2.0,
we presented a flow from “values (OMRON Principles, SINIC Theory, etc.)” to “long-term strategy (long-term
vision, key sustainability issues, etc.)” as a story of “sustainability transformation (SX),” which seeks to
synchronize social sustainability with corporate sustainability, at the beginning of the Integrated Report, together
with the vision discussed by the CEO at the beginning of the Integrated Report. Next, by linking each initiative of
the “execution strategy (SF 1st Stage)” for realizing the vision to the “five key sustainability issues,” we aimed to
describe specific “results and KPIs” and “risks and opportunities.” In the last section on “governance,” we
endeavored to present an in-depth multifaceted analysis of the activities of the Board of Directors, which monitors
and oversees the initiatives of the execution strategy, from the viewpoint of effectiveness.
Secondly, we emphasized the description of “human capital,” which is also emphasized in the Guidance for
Collaborative Value Creation 2.0. In addition to enriching the section on “People,” OMRON’s belief that its
employees are the human capital is at the heart of the narrative throughout this report from the interview with the
CEO at the beginning to the discussion between Outside Audit & Supervisory Board Members at the end. In
particular, regarding “non-financial information that is unique to OMRON and can only be conveyed in the
Integrated Report,” OMRON employees and external partners are featured in the report again this year to share
their stories of collaborative value creation. In addition, both quantitative and qualitative results and KPIs related to
human capital were set, and are also presented in this report.
Thirdly, regarding what was learned from “substantial dialogues and engagement” with stakeholders using the
Integrated Report for the previous fiscal year, we reflected requests and feedback from stakeholders in this year’s
report in various ways, to a lesser or greater extent depending on their nature. We placed particular emphasis on
delivering the real voices of Outside Directors and Audit & Supervisory Board Members, including their
expectations of OMRON, their views on the issues, and recommendations for OMRON. Also, as per our request,
they describe in their own words the discussions at Board of Directors meetings and the background.
This is the 10th year since OMRON’s publication of its first Integrated Report in 2012. We are grateful for the
valuable feedback and encouragement we have received from our stakeholders, which have enabled our
Integrated Report to evolve and improve over the decade. We will continue to place great value on dialogue with
our stakeholders via the Integrated Report. We look forward to hearing your frank opinions about this report.
Editorial Team for Integrated Report 2022
Covered Organizations: As a general rule, this report covers 133 companies in the OMRON Group, consisting of
OMRON Corporation, 126 consolidated subsidiaries, and 6 nonconsolidated subsidiaries and affiliates accounted for
under the equity method (as of March 31, 2022).
Covered Period: Fiscal 2021 (April 1, 2021 through March 31, 2022). However, this report includes some disclosure
items and business activities that were initiated after April 2022.
References: This integrated report conforms to the integrated reporting frameworks recommended by the International
Integrated Reporting Council and the World Intellectual Capital Initiative and refers to Guidance for Collaborative Value
Creation issued by Ministry of Economy, Trade and Industry. Sustainability-related disclosures have been written with
reference to the GRI Standards.
Caution Concerning Performance Forecasts Statements: Performance forecasts and other forward-looking
statements are based on information available at the time, as well as on certain assumptions deemed reasonable by
OMRON Group management. Actual results may vary materially depending on a variety of factors. See “Outlook for
Fiscal 2022” when using the projection of results and conditions of assumptions for the results.
1
OMRON Corporation Integrated Report 2022 Integrated Report 2022 Contents
Vision
3 The OMRON Principles
4 SINIC Theory: Predicting the Future
Through the Interrelationships of
Science, Technology, and Society
5 History of Innovation
7 CEO Interview
13 Long-term Vision
“Shaping the Future 2030”
15 Material Sustainability Issues
Strategy & Business
Resolving Social Issues through Our Business
17 CFO Interview
22 Medium-term Management Plan
“SF 1st Stage”
27 Value Creation Model
29 OMRON’s Business and Fiscal 2021
Results
36 Outlook for Fiscal 2022
37 Industrial Automation Business (IAB)
43 Healthcare Business (HCB)
49 Social Systems, Solutions and Service
Business (SSB)
53 Device & Module Solutions Business
(DMB)
Innovation & Technology
Maximizing Capability to Innovate Driven
by Social Needs
57 CTO Interview
61 Innovation Exploring Initiative HQ (IXI)
65 Technology and Intellectual Property HQ
67 Global Corporate Venturing Office (CVC)
People
Generating Diverse Talent Taking on the
Challenge of Value Creation / Respecting Human
Rights in the Value Chain
69 Generating diverse talent taking on
the challenge of value creation
75 Respecting Human Rights in the Value
Chain
Environment
Achieving De-Carbonization and
Lower Environmental Impact
77 Environment
Risk Management
82 Risk Management
Governance
87 Roundtable Discussion on Corporate
Governance
91 Interview with Outside Director
94 Message from New Outside Director
95 Roundtable Discussion between
Outside Audit & Supervisory Board
Members (Independent)
99 Corporate Governance
111 Directors, Audit & Supervisory Board
Members, and Executive Officers
Financial Information
113 Financial and Non-Financial
Information
Corporate Information
119 Responsible Engagement with Our
Stakeholders
120 External Evaluation
121 Corporate Information and More
About the Cover
OMRON practices the OMRON Principles, working to solve social issues through our businesses. Each
and every one of our employees is a principal driver of this mission. OMRON has been holding The
OMRON Global Awards (TOGA) since 2012, encouraging our employees to set their own goals for
solving social issues with the aim of fostering a culture of ongoing aspiration toward putting the OMRON
Principles into practice. The cover of this issue features 19 employees who were selected, from the
6,461 entries submitted to the 9th TOGA (FY2020), as representatives and leaders in the practice of the
OMRON Principles.
Global Investor & Brand Communications HQ
https://www.omron.com/global/en/
OMRON Corporation
Contact
Shiokoji Horikawa,Shimogyo-ku, Kyoto 600-8530, Japan
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Please access the Inquiry Form from the QR Code on the right.
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OMRON Corporation Integrated Report 2022
The OMRON Principles
Since its founding in 1933, OMRON has striven to create solutions to social issues through its business and
to contribute to the development of society. We established the Corporate Motto, “to improve lives and
contribute to a better society,” in 1959 and the OMRON Principles in 1990, incorporating the spirit of the
Corporate Motto as Our Mission. Ever since, the OMRON Principles have been at the heart of OMRON’s
management.
We want to make it crystal clear that our adherence to the values underpinning OMRON’s management is
unwavering. Thus, we will continue to put our corporate principles into practice, always striving to contribute
to the development of society while enhancing corporate value. Indeed, practice of the corporate principles
has been included in the articles of incorporation since fiscal 2022. (Resolved at the 85th Ordinary General
Meeting of Shareholders held in fiscal 2022)
OMRON Principles
Management Philosophy
We believe a business should create value for society through its key practices.
We are committed to sustainably increasing our long-term value by putting Our
Mission and Values into practice.
We uphold a long-term vision and solve social issues through our business.
We operate as a truly global company through our fair and transparent management practices.
We cultivate strong relationships with all of our stakeholders through responsible engagement.
3
OMRON Corporation Integrated Report 2022Vision SINIC* Theory:
Predicting the Future Through the Interrelationships
of Science, Technology, and Society
Our founder, Kazuma Tateishi, believed that solving social issues through business to create a better society
required the ability to anticipate future social needs. He believed that a company needed a compass to help
predict the future. As our compass, Mr. Tateishi formulated the SINIC predictive theory, which projects the
future based on the cycle of interrelationships between Science, Technology, and Society. OMRON first
announced this predictive theory to the world at the International Future Research World Congress in 1970.
Since then, the SINIC Theory has been our compass for projecting into the future.
The basic philosophy behind the SINIC Theory is that the interrelationships among science, technology, and
society lead to social change. Let us use the Cybernation Society as an example. We can see how the rise of
cybernetics, computer science, and other synthetic sciences in the 1940s became the seeds of electronic
control technologies, programming, and other technology. These technologies gave rise to the PC and the
internet, leading to the advent of the Cybernation Society. Society demanded more data, along with more
accurate and rapid data analysis. These demands forced us to produce CPUs and GPUs with faster processing
power, make advancements in deep learning and other artificial intelligence technologies, and reach higher
levels of sophistication in neuroscience and cognitive science.
The current Optimization Society is going through a transition period of the paradigm shift from the Industrial
Society to the Autonomous Society. Now, in a time when society is facing drastic changes and the future is
uncertain, we are openly promoting use of the SINIC Theory as social knowledge to build the future through
discussions with a diverse array of people.
* SINIC: Seed-Innovation to Need-Impetus Cyclic Evolution
Seed
Technology
Innovation
Please visit our website
to learn more about the
SINIC Theory.
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OMRON Corporation Integrated Report 2022Vision
History of Innovation
Automation Society
[1945-74]
Cybernation Society
[1974-2005]
Optimization Society
[2005-]
1933
1970
1990
2000
2020
1933
Kazuma Tateishi
established Tateisi
Electric Manufacturing
Co. in Higashinoda,
Miyakojima-ku, Osaka City.
1948
Company name
changed to Tateisi
Electronics Co.
1960
Central R&D Laboratory completed in
Nagaoka-cho (present-day Nagaokakyo
City), Kyoto
1970
SINIC Theory
announced
1974
Tateisi Institute of
Life Science
1991
Yokohama Laboratory and
Kumamoto Laboratory established
1959
Our Mission established
based on the belief that a
business should create
value for society through its
key practices
1972
OMRON Taiyo Electronics Co.
established
1990
Company name changed to
OMRON Corporation
1973
SYSMAC
programmable
sequence controller
developed
1966
MY series of
general-purpose relays
1987
World’s first
ultra-high-speed
fuzzy logic
controller
launched
1988
Mass
production of
electric power
steering
controllers
1995
Industry’s first vision
sensor / color/grayscale
vision sensor
1995
OKAO Vision image
sensing technology
1995
Distance warning
system for motor
vehicles developed
1973
OMRON’s
first blood
pressure
monitor
1978
OMRON’s
first monitor
with digital
display
1980
Digital
thermometers
(for home use)
1934
General-purpose
electromagnetic relay
1933
Production of X-ray
timers started
1943
Japan’s first
microswitch
1960
World’s first
non-contact
switch developed
1963
Japan’s first multifunctional
meal ticket vending machine
1964
World’s first automated
traffic signal developed
1969
World’s smallest desktop
electronic calculator
“CALCULET-1200”
launched
1967
World’s first
unmanned train
station system
developed
1971
World’s first online
automated cash
dispenser
developed
1991
Fuzzy logic-based
blood pressure monitor
Healthcare Business
2002
Wrist blood
pressure monitor
with wrist
positioning guide
2004
Fully automatic
Spot Arm blood
pressure monitor
5
1994
Production of power
conditioners for
photovoltaic systems
started
1999
Division system
abolished and
internal company
system introduced
2003
2005
Global R&D hub
“Keihanna
OMRON R&D Collaborative
Innovation Center (Shanghai)
Innovation Center”
opened
established
2013
2014
established
Table-tennis-playing robot FORPHEUS
OMRON SINIC X Corporation
OMRON VENTURES CO., LTD.
Innovation Exploring Initiative HQ (IXI)
2018
established
2018
established
Industrial Automation Business
2000
Japan’s first
digital fiber
sensor
2007
World’s first
real-color
three-dimensional
vision sensor
2011
Sysmac NJ series of
machine automation
controllers launched
2016
World’s first
SCARA robot
with predictive
maintenance
functions
launched
2017
2018
2020
AI-incorporated
World’s first
World’s first
machine
automation
controller
developed
high-performance
integrated controller
launched
smart camera
with multi-color
light launched
2003
established
OMRON RELAY & DEVICES Co., Ltd.
Device & Module Solutions Business
2016
Environmental sensor
2010
established
OMRON SWITCH & DEVICES Co., Ltd.
2010
established
OMRON Automotive Electronics Co., Ltd.
2016
World’s first
on-vehicle sensor
using cutting-edge
artificial intelligence
2020
Touchless hybrid
elevator switch
launched
2019
Sold Automotive Electronic
Components Business
2003
established
OMRON HEALTHCARE Co., Ltd.
Social Systems, Solutions and Service Business
2011
established
OMRON SOCIAL SOLUTIONS Co., Ltd.
2018
2019
World’s first
wearable blood
Japan’s first blood
pressure monitor
pressure monitor
+ ECG
Connected wrist blood
pressure monitor
Mesh-type nebulizer
Upper arm
blood pressure
monitor
2019
Japan’s first Mobility
as a Service (MaaS)
application combining
private vehicle-for-hire
by residents and
public transportation
such as bus and taxi
2018
DriveKarte® driver management service
for safe driving launched
Entered the automation business for the
hotel industry. Smare® self-check-in
terminals launched
2004
Transferred the ATM
Business to Hitachi-OMRON
Terminal Solutions, Corp.
2015
Automated ticket gate system that
allows the use of both QR Code
tickets* and IC card tickets began
operation throughout Kitakyushu
Monorail
2009
established
Environmental Solutions Business HQ
2009
“ene-brain” CO2
visualization system
launched, world’s first
system capable of
automatically analyzing
areas for potential
energy conservation
2011
Industry’s first PV inverter for
photovoltaic power generation equipped
with anti-islanding control technology
(AICOT®) that prevents islanding
conditions in multiple photovoltaic
power generation systems
OMRON Corporation Integrated Report 2022Vision
History of Innovation
Automation Society
[1945-74]
Cybernation Society
[1974-2005]
Optimization Society
[2005-]
1933
1970
1990
2000
2020
1999
Division system
abolished and
internal company
system introduced
2003
Global R&D hub
“Keihanna
Innovation Center”
established
2005
OMRON R&D Collaborative
Innovation Center (Shanghai)
opened
2013
Table-tennis-playing robot FORPHEUS
2014
OMRON VENTURES CO., LTD.
established
2018
OMRON SINIC X Corporation
established
2018
Innovation Exploring Initiative HQ (IXI)
established
Industrial Automation Business
2000
Japan’s first
digital fiber
sensor
2007
World’s first
real-color
three-dimensional
vision sensor
2011
Sysmac NJ series of
machine automation
controllers launched
2016
World’s first
SCARA robot
with predictive
maintenance
functions
launched
2017
AI-incorporated
machine
automation
controller
developed
2018
World’s first
high-performance
smart camera
with multi-color
light launched
2020
World’s first
integrated controller
launched
2003
OMRON RELAY & DEVICES Co., Ltd.
established
Device & Module Solutions Business
2016
Environmental sensor
2010
OMRON SWITCH & DEVICES Co., Ltd.
established
2010
OMRON Automotive Electronics Co., Ltd.
established
2003
OMRON HEALTHCARE Co., Ltd.
established
2016
World’s first
on-vehicle sensor
using cutting-edge
artificial intelligence
2020
Touchless hybrid
elevator switch
launched
2019
Sold Automotive Electronic
Components Business
2018
World’s first
wearable blood
pressure monitor
2019
Japan’s first blood
pressure monitor
+ ECG
1991
Fuzzy logic-based
blood pressure monitor
Healthcare Business
2002
Wrist blood
pressure monitor
with wrist
positioning guide
2004
Fully automatic
Spot Arm blood
pressure monitor
Connected wrist blood
pressure monitor
Social Systems, Solutions and Service Business
2011
OMRON SOCIAL SOLUTIONS Co., Ltd.
established
2004
Transferred the ATM
Business to Hitachi-OMRON
Terminal Solutions, Corp.
2015
Automated ticket gate system that
allows the use of both QR Code
tickets* and IC card tickets began
operation throughout Kitakyushu
Monorail
2009
Environmental Solutions Business HQ
established
2009
“ene-brain” CO2
visualization system
launched, world’s first
system capable of
automatically analyzing
areas for potential
energy conservation
2011
Industry’s first PV inverter for
photovoltaic power generation equipped
with anti-islanding control technology
(AICOT®) that prevents islanding
conditions in multiple photovoltaic
power generation systems
1994
Production of power
conditioners for
photovoltaic systems
started
Mesh-type nebulizer
Upper arm
blood pressure
monitor
2019
Japan’s first Mobility
as a Service (MaaS)
application combining
private vehicle-for-hire
by residents and
public transportation
such as bus and taxi
2018
DriveKarte® driver management service
for safe driving launched
Entered the automation business for the
hotel industry. Smare® self-check-in
terminals launched
6
1933
Kazuma Tateishi
established Tateisi
Electric Manufacturing
Co. in Higashinoda,
Miyakojima-ku, Osaka City.
1948
1960
1970
1974
Company name
Central R&D Laboratory completed in
changed to Tateisi
Nagaoka-cho (present-day Nagaokakyo
SINIC Theory
Tateisi Institute of
announced
Life Science
Yokohama Laboratory and
Kumamoto Laboratory established
Electronics Co.
City), Kyoto
1991
1990
1972
OMRON Taiyo Electronics Co.
established
Company name changed to
OMRON Corporation
1959
Our Mission established
based on the belief that a
business should create
value for society through its
key practices
1973
SYSMAC
programmable
sequence controller
developed
1987
1995
World’s first
Industry’s first vision
ultra-high-speed
sensor / color/grayscale
vision sensor
fuzzy logic
controller
launched
1988
Mass
production of
electric power
steering
controllers
1995
OKAO Vision image
sensing technology
1995
Distance warning
system for motor
vehicles developed
1966
MY series of
general-purpose relays
1934
General-purpose
electromagnetic relay
1933
Production of X-ray
timers started
1943
Japan’s first
microswitch
1960
World’s first
non-contact
switch developed
1973
OMRON’s
first blood
pressure
monitor
1978
OMRON’s
1980
Digital
first monitor
thermometers
with digital
(for home use)
display
1963
Japan’s first multifunctional
meal ticket vending machine
1964
World’s first automated
traffic signal developed
1969
World’s smallest desktop
electronic calculator
“CALCULET-1200”
launched
1967
1971
World’s first
World’s first online
unmanned train
automated cash
station system
developed
dispenser
developed
OMRON Corporation Integrated Report 2022Vision
CEO Interview
Automation to Empower People to
Help Create the Future.
Innovation Driven by Social Needs
Shifting into High Gear
President and CEO Yoshihito Yamada
OMRON announced its new long-term
vision, “Shaping the Future 2030,” in March
2022, which depicts where we aim to be in
2030, and launched the first medium-term
management plan, “SF 1st Stage,” in April.
Even in the face of continuing adversity,
such as the protracted COVID-19 pandemic
and heightened geopolitical risks, OMRON
has demonstrated its ability to respond
effectively to change and steadily built a
strong corporate foundation. How will
OMRON evolve going forward?
President and CEO Yoshihito Yamada says,
“In fiscal 2022, our pursuit of innovation
driven by social needs will move into high
gear.” We asked him about his resolve to
shift decisively to the next stage in the
company’s evolution.
(Interviewer: Integrated Report Production Team)
7
OMRON Corporation Integrated Report 2022Vision Self-motivated Employees’ Ability to Respond
Effectively to Change Enabled OMRON to Get
Off to a Flying Start in Fiscal 2021
– In last year’s Integrated Report, you stated,
“In fiscal 2021 we will make a start dash toward
our next long-term vision and draw our future
with our own hands.” Fiscal 2021 was marked
by several challenges—the protracted COVID-19
pandemic, heightened geopolitical risks, and
rising energy prices. However, OMRON wasn’t
thrown off course by adversity but in fact
achieved a significant increase in sales and
record high operating income. What are your
thoughts on the past year in which OMRON got
off to a flying start?
Fiscal 2021 was tough. Supply shortages of
semiconductors and other parts and materials were
more serious than expected. Despite robust order-
taking, we couldn’t manufacture as much as we
wanted. Coupled with disruptions to distribution,
this meant we were unable to deliver sufficient
quantities of products to our customers.
Furthermore, in the fourth quarter, in addition to
commodity price increases triggered by the
worsening Russia-Ukraine situation and a sharp rise
in inflation, we faced lockdowns due to China’s
zero-COVID policy. In these difficult circumstances,
our employees around the world worked tirelessly
with utmost sincerity.
As a result, OMRON outperformed its forecasts as
of the third quarter even in the face of headwinds,
resulting in a 16% year-on-year increase in net sales
and a 43% increase in operating income. In addition
to our long-standing efforts to improve profitability,
the significant increase in sales had a multiplier
effect, resulting in a significant increase in profit.
The strong performance in fiscal 2021 can be
attributed to our efforts so far to improve our ability
to respond effectively to change, particularly by
strengthening our resilience through “selection and
decentralization.” For example, in terms of supply
chain management, we focused on selection and
decentralization of both production sites and
suppliers. As a result, we were able to gradually
increase our supply capacity from the second half of
the fiscal year onward, despite the continuing
shortages of parts and materials. Regarding human
resources, 80% of managerial positions overseas
are now filled by locally hired personnel owing to
the progress of localization. Our employees around
the world can make autonomous decisions based on
the OMRON Principles and act fast, rather than
waiting for instructions from the head office. We
have become able to respond effectively to change.
Fiscal 2021 was a year in which we felt that our
ability to respond to change and the depth of our
human capital base, which we have cultivated over
the past decade, steadily led to gratifying business
results.
FY2021 Results
FY2021 Results
Y/Y
Net Sales
762.9 billion yen
+ 16.4%
Gross Profit
346.8 billion yen
+ 16.2%
Operating Income
Net Income
89.3 billion yen
61.4 billion yen
Gross Profit Margin
45.5%
+ 43.0%
+ 41.8%
– 0.1%pt
P29 Fiscal 2021 Results
– What specific measures did you take to
achieve a flying start?
We emphasized “deepening of existing
businesses” and “creation of new businesses.”
First, for deepening of existing businesses, for
example, in the Industrial Automation Business,
System Engineers (SEs) have been assigned to
Automation Centers (ATCs) at 37 locations around
the world to solve issues at production sites
through innovative-Automation. By having SEs who
are well versed in the issues that arise in the field
work with customers to tackle challenges, many
innovative applications have been created that were
previously thought to be impossible to achieve.
More than 2,500 companies have adopted these
applications. In the Healthcare Business, demand
for our mainstay blood pressure monitors was
robust worldwide, and they were the driving force
of significant business growth, especially in
emerging countries.
Next, with regards to the creation of new
businesses, each business company took on the
challenge of advancing into new fields. In the
Industrial Automation Business, we are accelerating
diffusion of a data-based service called i-BELT. This
is a flat-fee, subscription-based business that
constantly monitors and supports production lines
to ensure they are operating properly by analyzing
equipment operating data. As a result of these
initiatives, the service business, which includes not
only product sales but also consulting and
maintenance services, has grown to annual sales
of 12.0 billion yen. In the Healthcare Business,
full-scale telemedicine services were launched in
the U.S., Europe, and Asia. This is an example of
deploying our business model based on our
strengths in devices to offer solutions using data
collected. We expect these businesses to become
major sources of OMRON’s revenue in the future.
8
OMRON Corporation Integrated Report 2022Vision Drawing Our Future with Our Own Hands.
OMRON’s Aspirations in the New Long-
term Vision
– The long-term vision “Shaping the Future
2030 (SF2030)” has been launched. The word
“shape” conveys OMRON’s aspirations to help
create the future. How are the previous long-
term vision and SF2030 connected and what
will be the next stage in OMRON’s evolution?
Under the previous long-term vision “Value
Generation 2020 (VG2020),” aspiring to offer value
unique to OMRON and resolve social issues, we
were committed to creating and communicating
value. As a result, the operating income margin has
reached double digits and corporate value has
grown approximately fourfold.
We are targeting further evolution under the new
long-term vision whose name, “Shaping the Future
2030,” expresses our aspiration to help build an
“autonomous society” as defined by the SINIC
Theory. This will involve actively giving shape to
new ideas and dreams based on our capabilities
cultivated through VG2020 and endeavoring to
create new value by drawing our future with our
own hands. We have incorporated this concept into
the new long-term vision. Among a number of
social issues, OMRON will create value in four
domains, namely, Industrial Automation, Healthcare
Solutions, Social Solutions, and Device & Module
Solutions.
P13 Long-term Vision
– Will bringing about the autonomous
society lead to employee autonomy and the
self-driven growth that you are aiming for?
Exactly. We live in an era of unprecedented change,
with new social issues emerging. OMRON will be
able to achieve self-driven growth by resolving such
issues with a strong determination through its
business. For employees, involvement in resolving
social issues is a source of pride and motivation,
especially in this era when the societal role of
business matters so much. That is why individual
employees are applying their own ideas and
personal qualities to do something useful for
society and move forward, rather than just waiting
to be told what to do by superiors. This is the
relationship between the autonomous society and
the self-driven growth I envision.
In particular, I see the future as an era in which
“individuals” will shine. This is because the
autonomous society we are heading for is one in
which individuals can realize their full potential. The
autonomous society envisioned by the SINIC
Theory is one in which the evolution of science and
technology removes various impediments to
individual self-realization, allowing everyone to
make the most of their personal qualities.
Companies will be transformed into venues where
employees with diverse personal qualities can
pursue their aspirations. One of the roles of the
management team is to present a vision of social
issues to be addressed by the company through its
business, but it is the employees who will act to
accomplish the vision. Individual employees take
on challenges by leveraging their originality and
ingenuity, and through repeated attempts, they
experience a sense of fulfillment in their work and
achieve personal growth. By evolving to a
management style that draws out the strengths of
individuals and provides them with opportunities to
play an active role, we will realize OMRON’s self-
driven growth.
P69 People
– Please elaborate on “automation to
empower people” in SF2030.
In formulating the long-term vision, we reviewed
our history and reexamined OMRON’s purpose.
Since our founding, we have grown by resolving
social issues, for example, by creating the world’s
first non-contact switch and unmanned train station
system. Based on this historical background, we
recognized afresh that OMRON’s purpose is to
create social value through business and continue
to contribute to the development of society. We
then concluded that OMRON needs a vision rooted
in innovation driven by social needs and respect for
humanity to create a future unique to OMRON and
set to work on SF2030. In the process, we
envisioned a world in which people and machines
complement one another and human creativity is
unleashed, rather than an inorganic world of dark
factories without people. To realize such a future,
OMRON is pursuing automation to empower
people.
Automation has three stages. The first stage is
“substitution” in which machines take over tasks
performed by people. The second stage is
“collaboration” in which machines work together
with people. What we are aiming for now is the
third stage, “harmony” between people and
machines in which machines assist people,
motivate them, and help them realize their full
potential. We will realize this and help people
experience fulfillment by evolving OMRON’s core
technologies, “Sensing & Control + Think.” We will
implement automation that empowers people in
society.
P57 Innovation & Technology
– For the first time in OMRON’s long-term
vision, key sustainability issues were set in
SF2030.
Under SF2030, we will maximize corporate value
by creating social value and economic value
through our business. So, in formulating SF2030,
9
OMRON Corporation Integrated Report 2022Vision we considered the business plan and key
sustainability issues in an integrated manner.
Specifically, we adopted three viewpoints: “the
OMRON Principles and purpose,” “backcasting
from a society envisioned for 2030 and beyond,”
and “calls on companies to contribute to
environmental and social sustainability.” As a result,
we identified five key issues. We will work to
resolve social issues through our business
activities, while monitoring progress toward the
targets corresponding to these key issues.
Key Sustainability Issues
1) Resolving social issues through our business
2) Maximizing capability to innovate driven by social needs
3) Generating diverse talent taking on the challenge
of value creation
4) Achieving de-carbonization and reducing
environmental impacts
5) Respecting human rights in the value chain
P15 Key Sustainability Initiatives
– A number of unexpected events, including
the COVID-19 pandemic, have made it difficult
to anticipate what lies ahead for the business
even in the next few years. In this context, what
is the point of having a long-term vision?
In order to identify social issues and create
innovation driven by social needs that meet those
issues, it is necessary to think about society and
business and the issues that need to be addressed
with a time horizon of 10 years or so. For example,
a medium-term management plan usually covers a
three-year period. You may be able to get by for the
three years through superficial measures. However,
a problem 10 years down the road cannot be solved
without taking fundamental steps. Knowing that
the current way of doing things won’t work 10
years from now may motivate you to undertake
root-and-branch reform, even if it is painful. The
formulation of a long-term vision can help prevent
procrastination of the fundamental issues. That is
why I believe it is very meaningful for us to think
carefully about our corporate purpose with a time
horizon of roughly every 10 years, and announce it
to our stakeholders.
P87 Governance
Three Transformations to be
Addressed under SF 1st Stage
– SF2030 consists of three medium-term
management plans. What are the positioning
and specific measures of the first medium-term
management plan, SF 1st Stage (FY2022-2024)?
SF2030 is a long-term vision covering nine years
because the start was delayed by one year due to
the COVID-19 pandemic. We will implement this
long-term vision with a medium-term management
plan covering every three years. SF 1st Stage is the
first medium-term management plan for SF2030.
We have positioned this first three-year period as
the “transformation acceleration phase” where we
accelerate the transformation of our capabilities to
create value that addresses social issues and
achieve sustainable growth. We will demonstrate
the competitiveness cultivated during the term of
the VG vision to capture the growth opportunities
emerging from a multitude of social issues and
promote the transformation of our organizational
capabilities to raise the sustainability of our growth.
Our strategies are threefold: “transformation of
business,” “transformation of corporate
management and organizational capabilities,” and
“strengthening of sustainability initiatives.” By
tackling these three themes, we will transform
OMRON.
Through these initiatives, in the years to fiscal
2024, we aim to achieve growth at a compound
annual rate of 7% and more than double-digit
annual growth in operating income while investing
in future growth.
P22 SF 1st Stage
SF 1st Stage Financial Targets
FY2021 Results
FY2024 Targets FY2021 FY2024
Net Sales
762.9 billion yen
930.0 billion yen
+ 7%/year
Operating Income
89.3 billion yen
120.0 billion yen
+ 10%/year
Operating Cash Flows
(Cumulative for 3 years) 232.7 billion yen
250.0 billion yen + 17.3 billion yen
ROIC
ROE
EPS
9.6%
9.7%
More than 10% More than + 0.4%pt
More than 10% More than + 0.3%pt
306 yen More than 400 yen
+ 9.3%/year
Transformation of business
As for transformation of business under SF2030,
we will promote “evolution of four core businesses
(Industrial Automation Business; Healthcare
Business; Social Systems, Solutions and Service
Business; and Device and Module Solutions
Business),” “expansion of customer asset-type
service businesses,” and “creation of new
businesses sparked by social issues.”
For “the evolution of the four core businesses,” we
reviewed growth fields in each of the four core
businesses and identified focus businesses. We
will promote creation of social value through
growth of these focus businesses.
Regarding the second point, “expansion of
customer asset-type service businesses,” we will
leverage customer assets, such as knowledge
gained and data accumulated so far, to identify
fundamental issues of customers from an essential
value perspective. Furthermore, we will continue to
connect with customers by offering new value
10
OMRON Corporation Integrated Report 2022Vision
through the combination of products and services
and continue the cycle of identifying new issues
and resolving them.
For the third point, “new businesses based on
social issues,” we will develop concepts of new
businesses in each of the four core businesses and
promote technological development to offer value
needed by society in a timely manner to achieve
commercialization.
P22 SF 1st Stage
Transformation of corporate management and
organizational capabilities
For “transformation of corporate management and
organizational capabilities,” we will accelerate three
initiatives.
The first is “promotion of diversity and inclusion” to
develop human resources. OMRON will triple
investment in human resources, such as DX
training, to a total of 6.0 billion yen for the three
years covered by SF 1st Stage.
The second is “data-driven enterprise operations
through DX.” First, we will renew and integrate our
enterprise systems into a single global system. In
doing so, we will pursue faster business operations
and higher efficiency to ultimately achieve a
reduction in selling, general and administrative
expenses. We will also emphasize recruitment and
training of DX human resources.
The third is “improvement of supply chain
resilience.” We will work to strengthen and diversify
our supply chain in preparation for unforeseen
circumstances. From the perspective of business
opportunities, in addition to the COVID-19
pandemic, the emergence of geopolitical and
natural disaster risks is an opportunity for our
Industrial Automation Business to contribute to
customers in their efforts to overcome challenges.
This is because diversification of our supply chain
associated with selection and decentralization will
necessitate the introduction of the latest production
lines incorporating AI, robots, and other cutting-
edge technologies at new production sites.
Strengthening of sustainability initiatives
With respect to the strengthening of sustainability
initiatives, we will address “decarbonization and
reduction of environmental impact” and “respect
of human rights throughout the global value chain”
to fulfill our corporate responsibility. At the same
time, we will transform this into a competitive edge
to further enhance the added value of OMRON’s
value chain.
Addressing sustainability is an urgent issue and
also a great business opportunity for OMRON. We
will support our customers’ sustainability initiatives
by offering solutions for energy conservation,
effective use of renewable energy, and packaging
technology using plastic alternatives, leveraging our
Sensing & Control +Think core technologies.
P22 SF 1st Stage
11
– Among specific initiatives for
“transformation of corporate management and
organizational capabilities,” the introduction of
stock-based performance-linked compensation
for employees is particularly noteworthy.
OMRON intends to expand the scope of this
plan to include all managers worldwide. This is
an unusual approach for a Japanese company.
Why are you doing this?
The biggest reason for introducing this plan is to
achieve OMRON’s goal of “trinity management,”
which benefits all three parties, namely,
management, employees, and shareholders.
During the 10 years of the previous long-term
vision, the share price increased approximately
fourfold and we were able to return a significant
amount to shareholders in the form of capital gains.
We also returned profit to employees in the form of
performance-linked bonuses. But bonuses can only
be increased by a modest percentage, not doubled
or tripled. I have long wanted to implement
measures that would both enhance corporate value
and help employees build assets. So, we decided
to revitalize the existing OMRON Employee
Stockholding Association and create a system in
which OMRON shares are distributed to employees
in accordance with medium-term business
performance. We expect this will help employees
take ownership of the long-term vision and become
conscious of their personal stake in the
enhancement of corporate value.
P69 People
Strategic Capital and Business Alliance
for Establishing a Data Business
– OMRON acquired a 33% stake in JMDC
Inc. and formed a capital and business alliance
in February 2022. What prompted this decision
and what is your strategy?
I was interested in JMDC’s business model from
early on. It involves anonymizing and categorizing
health insurance claims for as many as 14 million
people covered by some 2,000 health insurance
associations in Japan and providing analytic
services to data providers. JMDC also provides the
processed big data to pharmaceutical companies,
insurance companies, etc. as marketing data and
offers consulting services. The more data are
accumulated, the greater the value that can be
provided. I see great potential in this system.
For example, by matching OMRON’s vital data
taken at home, such as blood pressure readings,
weight, and electrocardiograms, with JMDC’s big
data, it will be possible to understand the patient’s
history, such as what kind of diagnosis the patient
received and which medication lowered the
patient’s blood pressure. It is also good not only in
OMRON Corporation Integrated Report 2022Vision measuring the effectiveness of treatment but also
in terms of preventive medicine. By combining
JMDC’s data with OMRON’s data, OMRON can
make significant progress toward its goal of Zero
Events to reduce the onsets of cerebrovascular and
cardiovascular disease to zero. This is the main
reason why we decided to conclude a capital and
business alliance with JMDC. As the social issue of
rising healthcare costs becomes more pressing,
health big data is becoming ever more important in
the context of the major trend from treatment to
prevention.
This capital and business alliance has an additional
purpose. It is to gain insights from JMDC on how
best to operate data-based businesses. In the
medium to long term, a stream of businesses that
utilize data to provide solution services to
individuals and companies will be launched in
various fields, not only in the Healthcare Business
but also the Industrial Automation Business and the
Social Systems, Solutions and Service Business.
By learning from JMDC how to monetize data
utilization, we will also accelerate value creation
from an essential value perspective. We are already
pursuing seven collaborative themes with JMDC,
including new service development and overseas
business development.
P57 Innovation & Technology
Joint press conference with JMDC Inc.
(February 22, 2022)
President and CEO of
OMRON Corporation
Yoshihito Yamada
President and CEO of
JMDC Inc.
Yosuke Matsushima
Advancing Hand in Hand with Employees
toward a Future where Individuals Shine
– What are your resolutions for fiscal 2022,
the first step toward accomplishing the long-
term vision?
As for the results for the first quarter of fiscal 2022,
OMRON’s sales and profit decreased year on year
due to production constraints at the main plant in
Shanghai caused by the lockdowns in that city.
However, these constraints have been resolved.
The performance for the single month of June
decisively recovered to a level exceeding that of the
same month of the previous year, and we expect to
achieve the plan we set at the beginning of the
fiscal year for increased sales and profit for the full
year. From the second quarter onward, we expect
to continue facing various challenges, including
shortages of parts and materials, heightened
geopolitical risks, and rising inflation. Nevertheless,
OMRON now has the ability to overcome such
challenges. In order to further strengthen this
ability, we will continue to make the investments
necessary for growth. Strong order-taking is
continuing and we have received numerous
inquiries from customers about needs related to
their capital investment over the next several years.
Fiscal 2022 will be a year in which we will
accelerate the creation of innovation driven by
social needs to meet short- and medium-term
customer expectations and advance vigorously
toward the goal of SF2030.
FY2022 Plan
FY2022 Plan
Y/Y
Net Sales
Gross Profit
850.0 billion yen
387.5 billion yen
Operating Income
93.0 billion yen
Net Income
63.0 billion yen
+ 11.4%
+ 11.7%
+ 4.1%
+ 2.6%
P36 Outlook for Fiscal 2022
P82 Integrated Risk Management
Under SF2030, we are ready to operate in turbulent
times. Whenever a new era begins, “change” is
unavoidable. But change is a great opportunity. That
is why we are keeping our finger on the pulse of
the world. And we will move quickly and decisively
to take on the challenge of resolving social issues
that arise from change. At OMRON, we call this
“innovation driven by social needs,” and it is among
the “Our Values” of the OMRON Principles. Putting
this into practice is at the heart of OMRON’s
mission and purpose.
The management team’s principal tasks are to
implement a virtuous cycle linking employee
satisfaction and corporate growth and to create a
system that allows all employees to fully
demonstrate their abilities. Under the banner of
“automation to empower people,” OMRON is
shifting into high gear to become an enterprise
where each and every employee shines brighter
than ever before. Advancing hand in hand with our
employees, we will continue to take on the
challenge of creating innovation driven by social
needs.
12
OMRON Corporation Integrated Report 2022Vision Long-term Vision “Shaping the Future 2030”
In light of OMRON’s fundamental purpose and the changes in society toward the year 2030, OMRON
launched a new long-term vision, “Shaping the Future 2030 (SF2030),” in fiscal 2022. SF2030 expresses
OMRON’s desire for all OMRON employees to put the OMRON Principles into practice as they work
together with stakeholders to create a sustainable society by applying OMRON’s core technologies,
“Sensing & Control + Think.”
SF2030 Vision Statement
We Will Continue to Create “Innovation Driven by Social Needs”
through Automation to Empower People.
Design the near-future, detect and uncover social needs, and create new value through automation.
We call this process “innovation driven by social needs” and have been contributing to a better society by
practicing it since our foundation.
Contributing to creation of a social and economic system capable of sustainable development is OMRON’s
fundamental purpose.
We will remain true to corporate philosophy management, continuing its practice without change.
Automation in industrial society was the replacement of human work by machines.
What is required in an “autonomous society” is automation that helps people realize their full potential
through the optimal combination of replacement, collaboration, and harmonization.
We have defined automation from now on as “automation which empowers people,” and will continue to
evolve our Sensing & Control + Think technologies to realize this automation.
In the next decade, as existing social issues become more pressing and new ones emerge, we will remain
true to our core values and contribute to achievement of carbon neutrality, realization of a digital society,
and extension of healthy life expectancies through “automation which empowers people,” with the aim of
realizing an autonomous society where individual fulfillment is compatible with the society’s affluence.
OMRON’s fundamental purpose
OMRON’s fundamental purpose is “to create social value through business and continue to contribute to
society.” This is OMRON Principles in action and we will remain true to those principles regardless of changes
in society.
Society in 2030 Envisioned by OMRON
We have attained material wealth through an “industrial society” that values and pursues efficiency and
productivity. However, people’s sense of value is shifting dramatically from material wealth to spiritual wealth.
For example, people’s awareness of environmental issues and the values shaping their attitude to work have
changed dramatically. As well as choosing sustainable products and lifestyles, people are increasingly
rethinking their work-life balance as they seek work that allows them to demonstrate their abilities.
OMRON believes that the transition to a new social and economic system over the next decade will inevitably
lead to clashes between old and new values, strain the current social and economic systems, and lead to the
emergence of new social issues. OMRON will continue to create social value by resolving these social issues
and contribute to the realization of a society where individual fulfillment is compatible with the society’s
affluence.
Social Value to be Created by OMRON
At OMRON, we view the coming decade, in which existing social issues will become more pressing and new
ones will arise, as a great opportunity to create new markets and businesses. Under SF2030, in order to seize
this opportunity certainly, we have identified three priority change factors: “the aging of population,” “climate
change,” and “increasing economic disparities among individuals.” Based on these three change factors, we
have identified three social issues that OMRON should address, namely, “achievement of carbon neutrality,”
“realization of a digital society,” and “extension of healthy life expectancies.” We selected these three issues
in view of their huge impact on society and from the perspective of leveraging OMRON’s strengths in
automation, our customer assets, and business assets.
13
OMRON Corporation Integrated Report 2022Vision For the achievement of carbon neutrality, we will contribute to the creation of energy systems that strike a
balance between safety, security, and convenience and the natural environment. For the realization of a digital
society, we will contribute to manufacturing and infrastructure that will free people from all restrictions,
regardless of age or wealth, and realize an enjoyable, creative, and sustainable society. And for the extension
of healthy life expectancy, we will tackle the problems of the aging society by building healthcare systems
that enable people to lead healthy, prosperous, and independent lives.
Achievement of Carbon Neutrality
Realization of a Digital Society
Extension of Healthy Life Expectancies
Social Issues
Addressed
by OMRON
Social Value
to be Created
Energy systems that strike a
balance between safety,
security, and convenience and
the natural environment
Manufacturing and infrastructure
that will free people from all
restrictions, regardless of age or
wealth, and realize an enjoyable,
creative, and sustainable society
Healthcare systems that
enable people to lead healthy,
prosperous, and independent
lives
Social Issues and Social Value to be Created
To address these three social issues, we revised the OMRON Group’s business domains and set four
domains, namely “Industrial Automation,” “Healthcare Solutions,” “Social Solutions,” and “Device & Module
Solutions,” defining social value corresponding to these domains.
Through Industrial Automation, we aim to contribute to the advancement of manufacturing that will support a
sustainable society. Through Healthcare Solutions, we aim to contribute to the achievement of “Zero Events”
for cardiovascular diseases. Through Social Solutions, we aim to contribute to the spread and efficient use of
renewable energy and the sustainability of the infrastructure supporting a digital society". In addition, through
Device & Module Solutions, we aim to contribute to the spread of new energy and high-speed
communications.
Domains
Social
Issues
Achievement of carbon neutrality
Realization of a digital society
Extension of healthy life expectancies
Industrial Automation
Contribute to the “advancement of manufacturing that will support a sustainable society”
Healthcare Solutions
Social Solutions
Contribute to “the spread and efficient use of renewable
energy and the sustainability of the infrastructure supporting
a digital society”
Device & Module
Solutions
Contribute to the “spread of new energy and high-speed
communications”
Contribute to the
“achievement of ‘Zero Events’
for cardiovascular diseases”
Social Value to be Created by OMRON through Its Domains
Direction of OMRON’s Evolution
OMRON is changing the way it perceives value creation, shifting its emphasis from “products” to “products
and services” in order to create social value. We pursue realization of value not only through products and
other goods but also through combinations of products and services that help solve the fundamental
problems confronting society. When intrinsic value is reconsidered at a turning point in society and markets,
implementation of value is not limited to products and can be in services, such as consulting services,
operation support services, and upgrading services of i-BELT in the Industrial Automation Business. In
addition, we will promote co-creation with partners, rather than relying exclusively on our own resources, to
enhance the speed of execution and feasibility.
To deliver value through the combination of products and services and co-creation with partners,
establishment of a data platform to serve as a base is necessary. We will develop a data platform that links
data generated by OMRON devices and services with our partners’ data and leverage the data in
development of new solutions through the combination of products and services.
Based on this concept, the OMRON Group will transform its business structure over the medium to long
term, transitioning to a revenue structure that includes a recurring service model in addition to a business
model centering on products.
14
OMRON Corporation Integrated Report 2022Vision Material Sustainability Issues
Under SF2030, our aim is to maximize corporate value by creating social value and economic value through
business. To this end, we identified material sustainability issues for the first time under the long-term vision.
OMRON’s purpose is “to create social value through business and continue to contribute to the development
of society.” It will endure, regardless of how society changes. In order to remain true to this purpose, material
sustainability issues are fully reflected in SF2030 and the medium-term management plan “SF 1st Stage.”
For OMRON, sustainability means pursuing the sustainability of both society and the company. We will
continue to strive for the sustainable development of society and the sustainable growth of OMRON.
Material Sustainability Issues under SF2030
SF2030 Goals
1
2
3
4
5
Resolving Social Issues through
Our Business
Creating social value and driving OMRON’s
sustainable growth by resolving social issues
through our business
Maximizing the Capability to
Innovate Driven by Social Needs
Evolving business models, endowing OMRON
with the competitiveness required for achieving
sustainable growth, and expanding new
business generation efforts
Generating Diverse Talent Taking
on the Challenge of Value Creation
Evolving human resources management to bring
out the capabilities and skills of OMRON’s
diverse talent, who will be the source of
OMRON’s sustainable growth
The state of contributing to the sustainable
development of society by resolving the social
issues tackled Group-wide, namely, achievement
of carbon neutrality, realization of a digital
society, and extension of healthy life expectancy
from the social change factors focused on in
SF2030: an aging population, climate change,
and economic disparity among individuals
The state of continuously generating new
businesses by demonstrating our capability to
innovate driven by social needs in both existing
and new business domains, through actions
such as evolving essential core technology
development and incorporating it into business
models
The state of bringing diverse talent together
where everyone can succeed, regardless of
nationality, gender, or work style, where
OMRON provides opportunities for its diverse
talent to grow and evolves its human resources
management to maximize their capabilities and
skills
Achieving Decarbonization and
Lower Environmental Impact
By viewing climate change from the two aspects
of opportunities and risks, practicing corporate
social responsibility and building further
competitive advantage
The state of building further competitive
advantage while solving social issues through
reducing greenhouse gas (GHG) emissions in the
value chain and establishing a resource recycling
model
• Scope 1 and 2*1: 65% cut vs. FY2016
• Scope 3, Category 11*2: 18% cut vs. FY2016
Respecting Human Rights in the
Value Chain
As part of our corporate social responsibility,
exerting our influence for the respect of human
rights for workers in the value chain and at
OMRON
In line with the UN Guiding Principles on
Business and Human Rights, the state of
exerting our influence for the respect of human
rights for workers not only at OMRON, but also
in the value chain, and establishing a culture
and system that does not permit or cause
human rights violations
*1 Scope 1 and 2: Direct and indirect GHG emissions from the company
*2 Scope 3, Category 11: Scope 3 corresponds to GHG emissions from the company’s value chain. Category 11 of Scope 3 corresponds to emissions from use of manufactured/sold products,
services, etc.
15
OMRON Corporation Integrated Report 2022Vision In identifying material sustainability issues, we adopted three viewpoints: “the OMRON Principles and
fundamental purpose,” “backcasting from a society envisioned for 2030 and beyond,” and “calls on companies
to contribute to environmental and social sustainability.” Five material issues were identified as a result of a
series of management discussions, in view of suggestions gained through internal discussion and dialogues
with external experts.
Steps for Identification of Material Sustainability Issues
Identification Steps
Exploring the Long-term Vision
Identified factors of social change that affect the sustainable development of society and OMRON and
explored the direction of OMRON’s long-term vision and the ideal configuration of society, taking into
consideration the OMRON Principles, the SINIC theory that is the compass for OMRON’s management,
and a society envisioned for 2030
Organizing three viewpoints to be focused in identifying material sustainability issues
Management Philosophy and reason for being
Backcasting from a society envisioned for 2030 and beyond
Calls on companies to contribute to environmental and social sustainability
Hypothesizing Material Sustainability Issues
Hypothesized material sustainability issues along the following two axes:
Degree of importance in practicing the long-term vision
Stakeholder expectations and demands
Discussion at Management Level
Frequent discussions at the Executive Council, chaired by the CEO and attended by Executive Officers
(April, June 2021)
Dialogues with Stakeholders
Based on hypotheses, held dialogues with institutional investors, experts, NPOs, etc. to confirm their
expectations and demands on the Group and identified material sustainability issues
Setting Long-term and Medium-term Goals
Formulated long-term and medium-term business and operational strategies and set long-term and
medium-term targets based on the identified material sustainability issues
Discussion and Approval at Management Level
Deliberation and approval by the Board of Directors after discussions at the Executive Council, chaired
by the CEO and attended by Executive Officers (February 2022)
STEP 1
STEP 2
STEP 3
STEP 4
STEP 5
STEP 6
STEP 7
Addressing Material Sustainability Issues and Maximizing Corporate Value
We will continue to maximize corporate value by integrating business and sustainability to create both social
value and economic value.
Financial capital
Manufacturing capital
Intellectual capital
Human capital
Natural capital
Five Material Sustainability Issues
1) Resolving Social Issues through Our Business
2) Maximizing the Capability to Innovate Driven
by Social Needs
3) Generating Diverse Talent Taking on the Challenge
of Value Creation
4) Achieving Decarbonization and Lower
Environmental Impact
Social capital
5) Respecting Human Rights in the Value Chain
Social
value
+
Economic
value
M
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16
OMRON Corporation Integrated Report 2022Vision
CFO Interview
Evolution of ROIC Management
Drives Maximization of
Corporate Value
Director, Senior Managing Executive Officer
CFO and Senior General Manager, Global Strategy HQ
Koji Nitto
– Under the VG2020 long-term vision (VG),
OMRON strove to enhance corporate value,
championing ROIC Management. Please wrap
up OMRON’s initiatives so far.
Under VG, with the aim of becoming a robust
enterprise with growth potential, profitability, and
ability to effectively respond to change, we pursued
portfolio management based on return on invested
capital (ROIC) and Down-Top ROIC Tree. I feel that
our efforts are bearing fruit as OMRON’s
capabilities.
During the period covered by VG, we largely
completed selection and decentralization of
businesses. Now, the OMRON Group has a more
resilient business portfolio. Termination of
unprofitable products in each business has
progressed, and the overall gross profit margin (GP
ratio) has steadily improved. Moreover, Down-Top
ROIC Tree has permeated workplaces as a result of
our efforts to raise employee awareness. It is a
great asset. I am pleased that individual workplaces
understand the importance of their roles in
achieving the Group’s targets and the targets of
individual businesses and that they are acting with
a strong commitment. We will continue to leverage
these initiatives as OMRON’s abiding strengths in
pursuit of our new long-term vision, SF2030.
Of course, we have some issues. We need to be
capable of achieving self-driven growth, in other
words, to contribute to further value creation. The
essence of ROIC Management is management of
value creation. It means optimizing resources and
investing them in growth businesses. Earnings
management is one of these processes, and it is
only completed when reinvestment leads to value
creation. Although we were able to enhance
profitability under VG, with a view to the future, we
need to be selective in regard to investment fields
and stretch our ability to shoulder calculated risk
and allocate resources appropriately in a timely
manner. Evolving a business, such as the data
business, requires developing capabilities to
evaluate markets and business models, as well as
selectively making investment decisions based on
the time horizon for the results of investment. In
addition, it is essential to invest in strengthening
the business foundation over the medium to long
term, including investment in supply chain
management and digital transformation (DX), which
we are promoting now. Along with the strategic
17
OMRON Corporation Integrated Report 2022Strategy & Business investments in business mentioned earlier, it is
becoming more difficult than ever to steer our
course and balance investment with sustainable
growth of profits.
– A goal of SF2030 is to maximize corporate
value. How will OMRON evolve ROIC
Management to achieve this goal?
To maximize corporate value, we will transform
ROIC Management from two perspectives.
First is “business portfolio management starting
from social value.” Under the SF 1st Stage medium-
term management plan, by positioning businesses
that will drive the creation of social value identified
by each of our business companies as focus
businesses, we will implement portfolio
management for each business unit. In considering
the long-term vision, we discussed thoroughly with
our business companies. What kind of social value
should be created? What are our customers’
essential issues that should be resolved? Based on
the social value we identified as a starting point,
we backcast and reevaluated the markets we
should address, the markets we should create, and
our existing competitive advantages, and then set
focus businesses.
Individual business companies will drive growth
based on their focus businesses and maximize the
value of their respective businesses. This will lead
to enhancement of corporate value. The focus
businesses will not only offer products but take
various forms, such as a combination of products
and services or a new service. So, portfolio
management based on business units rather than
products will be required. We will continue
conventional product-based portfolio management
(PPM) from the perspective of financial discipline
for profitability.
At the heart of this business portfolio management
is management of human resources. In other
words, the key is to have the right people in the
right places in line with the growth scenario of a
business. Although focus businesses all target
attractive markets with high growth potential, in
order to maximize their growth potential, it is
essential to have the best people and cultivate an
environment in which employees’ performance is
maximized. This linkage of business portfolio
management and human resources management
is one of the characteristics of the medium-term
strategy under SF2030.
Another aspect of the evolution of ROIC
Management centers on “construction of a new
management tree that systematizes enhancement
of corporate value.”
There are two main reasons for this. The first
reason is that intangible assets will become more
important as a business evolves. We aim at profit
growth not only through cost competitiveness of
products but also by creating high added value to
solve our customers’ essential issues. Many of the
components that create that added value are
related to intangible assets.
For example, in the case of -innovative-Automation
of the Industrial Automation Business, the sources
of our competitive advantage are a suite of
innovative applications co-created by OMRON and
leading companies in various industries, and our
highly skilled engineers. In the case of the
Healthcare Business, the know-how in obtaining
permits and approvals and the trust of the medical
industry we have cultivated over the years, as well
as the blood pressure data collected and
accumulated globally differentiate OMRON from its
competitors and contribute greatly to the creation
of value unique to OMRON. It is extremely
important to link these intangible assets to the
added value generated by each business, and at
the same time, to have the metrics to measure the
financial impact of investment.
The second reason is that recent changes in social
structure and values have resulted in diversification
of the elements constituting corporate value. In
addition to the intangible assets of businesses I
mentioned earlier, we need to make the necessary
investments with regard to ESG-related issues,
such as carbon neutrality and respect for human
rights, and link them to corporate value. However, a
systematized tree structure based on ROIC as the
starting point alone does not adequately cover the
elements and there is a risk of deterioration of the
accuracy of the allocation of important
management resources. So, we would like to
establish a mechanism for enhancing corporate
value by repeatedly establishing a hypothesis and
then verifying it, and adjusting the metrics
accordingly.
Currently, the OMRON Group is establishing a new
management tree with corporate value as the
starting point, and each business company is
establishing a new management tree with business
value as the starting point. We will strive to present
a more concrete picture through our initiatives from
now on.
– OMRON invested over ¥100 billion in
JMDC Inc. in fiscal 2021. What is the background
and thinking behind this investment decision
from the perspective of ROIC Management?
Regarding investment in JMDC, we thoroughly
examined medium- to long-term returns and risks.
We evaluated how to generate returns in excess of
the cost of capital in terms of both traditional
economic value and strategic value. The purpose of
this investment is to create a data business, a new
challenge for the OMRON Group. Essentially, the
evaluation of investment is similar to the evaluation
of a new business. It is not appropriate to use
18
OMRON Corporation Integrated Report 2022Strategy & Business synergy measurements and valuations, which are
used for evaluating existing businesses. We
conducted evaluation along the timeline, discussed
everything, and evaluated the short-term
investment impact and the concept of the data
business and its financial potential over the medium
to long term. On the other hand, the strategic value
is very clear.
JMDC has knowledge and expertise in the data
business that OMRON lacks. OMRON has been
building its business through trial and error. But by
collaborating with JMDC, which has knowledge
and expertise in a field with which we are
unfamiliar, we can further increase the probability
of success and the speed of transformation. This is
one of the reasons for the decision to go ahead
with the investment. Furthermore, by taking this
opportunity created by our investment in JMDC,
we would like to accelerate the data business not
only in the Healthcare Business but also in the
Industrial Automation Business and the Social
Systems, Solutions and Service Business, in order
to achieve the business transformation that the
Group is pursuing.
Through the investment in JMDC, management is
shouldering a calculated risk. In terms of risk
management, we proceeded with the utmost care.
Specifically, we conducted risk assessment of the
investment separate from OMRON’s business
strategy. The investment in JMDC is recorded as
investment securities on OMRON’s balance sheet.
We examined JMDC’s financial strengths, the value
of its data platform, barriers to entry, future growth
potential, and so on, and the project team and the
Board of Directors had many discussions. Of
course, there is a risk of possible impairment, but
with OMRON’s current financial position, such risk
can be sufficiently absorbed.
JMDC’s bottom line on a non-consolidated basis
was expected to be ¥3 billion at that time, and thus
OMRON, with a 33% stake in JMDC, was
expected to have about ¥1 billion as its share of
profit. Considering the return on investment alone,
it is 1% on investment of ¥100 billion, which is
below the hurdle rate (cost of capital). Are we to
keep this ¥100 billion in cash or invest it? When
considering the options, the essence of ROIC
Management is to look five or ten years ahead and
to select the option that will enhance future
corporate value. Through the investment in JMDC,
OMRON will create a new data business, which
will significantly increase the total return over the
medium to long term. In due course, we will report
on the progress made. You can count on us.
– What is OMRON’s policy on cash allocation
and shareholder returns under the new
medium-term management plan?
Under SF2030, in order order to maximize
corporate value, we established a new cash
allocation policy. It prioritizes investment in growth
and on this basis, we will enhance shareholder
returns. This indicates OMRON’s strong
determination to continue growing. Starting with
this new medium-term management plan, we have
set operating cash flow as one of the management
indicators.
Maximizing corporate value requires a constant
cycle of “value creation and reinvestment,” and
operating cash flow is the key to this cycle.
ROIC Management has strengthened OMRON’s
ability to generate cash year after year. We will
reinvest the cash in the Industrial Automation
Business and the Healthcare Business, which are
the drivers of the Group’s growth. In addition to the
growth investments required for existing
businesses, we will make the necessary
investments to create new business models so as
to enhance OMRON’s medium- to long-term
growth potential. To ensure growth, we will also
Investment Plan
Growth investment (including M&A)
Forecast for the most recent 3 years
FY2019-2021 (cumulative total)
¥140.4 billion
SF 1st Stage plan
FY2022-2024 (cumulative total)
¥200.0 billion
R&D investment
¥134.3 billion
¥165.0 billion
Capital investment (including DX investment)
¥91.3 billion
¥130.0 billion
Investment for carbon neutrality
Investment in human resources development
¥3.8 billion
¥2.0 billion
¥20.0 billion
¥6.0 billion
19
OMRON Corporation Integrated Report 2022Strategy & Business make investments to transform our organizational
capabilities across the Group. There are three
priority fields for investment. Firstly, investment in
human resources. For business transformation, it is
important to develop the capabilities of individual
employees who will be engaged in the
transformation and to create an environment that
attracts diverse human resources. To this end, we
will invest ¥6 billion in human resources, about
three times the amount invested during the
previous medium-term management plan,
centering on global recruitment and implementation
of human resources development programs.
Secondly, promotion of DX. Our goal of creating
new data-driven businesses requires business
infrastructure suitable for such businesses. It is
necessary to transition from the conventional
structure focused on products to one that is
optimized for offering solutions centered on
combinations of products and services. At the
same time, in the course of this transition,
enhancement of operational efficiency through
standardization of business processes is a must to
prevail over competition in the market. We will
execute this medium- to long-term investment
according to the plan.
Thirdly, supply chain management. As you are
aware, the environment surrounding the supply
chain is becoming increasingly complex, including
geopolitical risks and responses to global
environmental issues. The current challenges are
not transient and are irreversible owing to structural
changes in society as a whole, and we must
restructure our supply chain to adapt to such
changes.
In addition, with respect to business transformation
and transformation of organizational capabilities,
carbon neutrality is another key investment theme
for the OMRON Group. Climate change is a social
issue that OMRON should address as a corporate
citizen. Indeed, companies increasingly recognize
addressing the issue as a precondition for
engaging in business.
Under SF2030, we will promote initiatives with a
view to realizing a decarbonized society, not only
to fulfill our social responsibility to eliminate CO2
emissions, but also to link such initiatives to
enhancement of OMRON’s competitiveness. By
developing products that contribute to resolving
global environmental issues and by offering
energy management and other solutions through
the Industrial Automation Business and the Social
Systems, Solutions and Service Business, we aim
to achieve OMRON’s sustainable development
while contributing to that of society.
Under SF 1st Stage, we plan to invest
approximately ¥20 billion, about five times the
amount invested during the previous medium-
term management plan. Plans call for capital
investment in energy saving and energy
generation to make our 76 sites in Japan carbon
neutral.
OMRON now uses the dividends on equity (DOE)
ratio as the sole indicator for its shareholder
returns. This is to reduce the impact of short-term
performance fluctuations on shareholder returns
and ensure stable and continuous dividend
payment. Our policy of prioritizing investment in
business growth remains unchanged under SF 1st
Stage. For example, if there is a good M&A
opportunity, we will use retained cash as well as
appropriate financing methods to seize it in a
timely manner.
Our aim is to strongly implement the virtuous
cycle of value creation and reinvestment. This is
the key to maximizing corporate value and
rewarding shareholders.
Cash Allocation Policy during SF 1st Stage
1) Aiming to maximize corporate value through the realization of the long-term
vision, OMRON prioritizes the necessary investment to create new value
from a medium- and long-term perspective. During SF 1st Stage, priority
will be placed on investments in human resources and R&D to solve social
issues and innovate driven by social needs; capital investments in
production capacity increases and digital transformation (DX); investment in
growth initiatives such as M&A&A (merger, acquisition, and alliance); and
investment in sustainability initiatives such as decarbonization, reduction of
environmental impacts, and respect for human rights in the value chain. On
this basis, OMRON will return profits to shareholders in a stable and
sustainable manner.
2) Such investment for value creation and shareholder returns will be, in
principle, sourced from internal reserves and operating cash flows that are
generated continually, with appropriate financing facilities used as
necessary. We will maintain a degree of financial soundness that allows us
to seek financing regardless of the current financial situation.
Shareholder Return Policy during
SF 1st Stage
1) With priority being placed on the
investment necessary for value
creation over the medium and long
term, annual dividends will be based
on “dividends on equity (DOE) of
around 3%.” Taking past dividend
payments also into account, we
intend to ensure stable and
sustainable shareholder returns.
2) After making the above investments
and distributing profit to
shareholders, OMRON will distribute
retained earnings accumulated over
the long term to its shareholders
through strategic share buybacks
and other measures.
20
OMRON Corporation Integrated Report 2022Strategy & Business ROIC Management
ROIC management consists of Down-Top ROIC
Tree and Portfolio Management.
OMRON encompasses a number of business
divisions with varied characteristics. We believe
ROIC is an excellent measure for assessing
business performance fairly for each business.
Using operating income or operating income
margin as an indicator doesn’t account for
variances due to the nature or scope of a
business. ROIC, on the other hand, measures
return on invested capital, providing a fair
assessment.
ROIC Management
Down-Top
ROIC Tree
Portfolio
Management
Down-Top ROIC Tree
Down-Top ROIC Tree
Down-Top ROIC Tree breaks ROIC into key
performance indicators for each department,
allowing us to improve ROIC at the most basic
operating level. Using simple ROS or invested
capital turnover as ROIC indicators are
ineffective, since they do not relate directly to
front-line operations. On-site managers would
have trouble thinking of ways to improve ROIC
using these indicators. However, we can break
ROIC down into automation/head count
reduction or facilities turnover as KPIs of
manufacturing departments. With these
indicators, managers can finally see how their
goals tie directly to ROIC improvement
initiatives. At OMRON, one of our greatest
strengths is our unified approach to improving
ROIC from the ground level up.
KPI
Drivers
Focus industries/
new product sales
Gross Profit
Margin
Services/recurring sales
Online channel sales
Number of innovative apps
% std. components used
CD ratio/defects cost ratio
Units produced/employee
Automation %
(Headcount Reduction)
Man-hour productivity
Back office employees
number
IT cost / facilities cost
Production LT
Slow-moving inv.
Overdue Receivables
Capital investment
Synergistic effects from
M&A
Added-Value %
Fixed
Manufacturing
Costs %
SG&A %
R&D %
Working Capital
Turnover
Fixed Asset
Turnover
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Portfolio Management
OMRON consists of approximately 60 business units, each subject to a portfolio management system
that assesses the economic value of the unit according to (1) ROIC and (2) sales growth rate. In this
way, OMRON management can make proper and timely decisions related to new business entry,
growth acceleration, restructuring, or divestiture to drive improvements in OMRON Group value.
We consider both the economic value and the market competitiveness of a business to allocate limited
resources in an optimal manner. This assessment system allows us to identify the growth potential of
each business unit, making an optimal allocation of our resources.
Assessing Economic Value
Assessing Competitiveness
B
S
Expecting Growth
Investment
C
A
Profit Restructuring
Examining Regrowth
)
%
(
e
t
a
R
h
t
w
o
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G
s
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a
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l
)
%
(
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w
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B
C
S
A
ROIC (%)
Market Share (%)
21
OMRON Corporation Integrated Report 2022Strategy & Business
Medium-term Management Plan “SF 1st Stage”
Positioning of SF 1st Stage
The long-term vision, “Shaping the Future 2030 (SF2030),” covers nine years as we delayed its launch by one
year because of the COVID-19 pandemic. The nine-year period is divided into three stages and each stage is
covered by a medium-term management plan. The medium-term management plan for the first stage (from
fiscal 2022 to fiscal 2024) is “SF 1st Stage.” We have positioned the first stage as the “transformation
acceleration phase” where we accelerate the transformation of our capabilities to create value that addresses
emerging social issues and achieve sustainable growth.
Transition to a new social and economic system corresponding to the needs of an emerging sustainable
society is accelerating worldwide. Moves to build the elements of a sustainable society, including renewable
energy, EVs, telemedicine services, and the high-speed communications infrastructure that supports these
services, are becoming apparent. This social change is prompting structural transformation in many industries,
creating new business opportunities and the chance for OMRON to make a great leap forward. At the same
time, however, lack of clarity and uncertainty in the business environment, such as geopolitical risks, the
ongoing COVID-19 pandemic, frequent occurrence of natural disasters, and supply chain disruptions triggered
by such events, are expected to become “the norm.” At the same time, demands for a sustainable society, as
typified by carbon neutrality and respect for human rights, are increasing. In this transformative period,
achievement of the long-term vision is largely dependent on whether we can strengthen our ability to
respond effectively to change.
In the period covered by SF 1st Stage in which opportunities and risks are mixed, we will leverage our assets
and capabilities cultivated through the former long-term vision “Value Generation (VG) 2020” and proactively
promote solutions to social issues with the aim of achieving high growth. Moreover, we will use this three-
year period, in which our capabilities are to be transformed, to adapt to medium- to long-term changes in the
business environment. By connecting the achievement under SF 1st Stage to greater value under SF 2nd
Stage (from fiscal 2025 to fiscal 2027), we aim to ensure maximization of corporate value in 2030.
Positioning of SF 1st Stage
1st Stage Overall Policy
The overall policy we pursue under SF 1st Stage is “taking on the challenge of value creation by accelerating
transformation.” The three years from fiscal 2022 will be a period with plenty of growth opportunities along
with changes in social and industrial structures. To promote strong growth and enhance the sustainability of
the growth, we will implement three Group strategies.
The first is “transformation of business.” We will promote three initiatives to resolve increasingly complex and
sophisticated customer issues and to gain the ability to achieve sustainable growth. Specifically, we will
promote evolution of four core businesses, expansion of customer asset-type service businesses, and
creation of new businesses sparked by social issues.
The second is “transformation of corporate management and organizational capabilities.” In order to achieve
transformation of corporate management and organizational capabilities to keep creating value while adapting
to change in the business environment, we will promote acceleration of diversity and inclusion, data-driven
enterprise operations through digital transformation (DX), and enhancement of supply chain resilience.
The third is “strengthening of sustainability initiatives.” We will pursue reduction of greenhouse gas (GHG)
emissions for decarbonization, minimizing environmental impacts and striving to ensure thorough respect for
human rights throughout the global value chain.
22
Transformation Acceleration Phase1st StageFY2022FY20242nd Stage3rd StageFY2027FY2030OMRON positions 1st Stage as a period for accelerating the transformation of its capabilities to create value in response to social issues and to grow sustainably.Accelerate the transformation of our capabilities to create value and achieve sustainable growth in response to emerging social issuesContinue the transformation, making progress on expanding the value created in the 1st Stage2030: Maximize corporate valueOMRON Corporation Integrated Report 2022Strategy & Business 1st Stage Overall Policy
Taking on the challenge of value creation by accelerating transformation
1. Transformation of Business
2. Transformation of Corporate Management and
Organizational Capabilities
• Evolution of four core businesses
• Expansion of customer asset-type service
businesses
• Creation of new businesses sparked by social
issues
• Acceleration of diversity and inclusion
• Data-driven enterprise operations through DX
• Enhancement of supply chain resilience
3. Strengthening Sustainability Initiatives
• Reduction of GHG emissions for decarbonization and lower environmental impacts
• Thoroughly addressing human rights issues on a global basis
SF 1st Stage Overall Policy and Group Strategy
Transformation of Business
Evolution of four core businesses
In order to create social value defined by SF 2030, each of the four core businesses reappraised and
clarified their focus business fields so as to evolve the business portfolio. To seize new growth opportunities
in each focus business field, we will make full use of assets and capabilities we cultivated during the VG
period (from fiscal 2011) and the business transformation period (fiscal 2020 and fiscal 2021). Moreover, we
will create new customer value and build strong intangible assets that will enable us to prevail over
competitors in the market and achieve high sales growth.
Expansion of customer asset-type service businesses
By approaching fundamental issues of customers from a service value perspective, rather than from a
product value perspective, we aim to create and expand new service businesses by leveraging customer
assets, such as field knowledge and data, we have cultivated to date.
We will continue to connect with customers by offering new value through the combination of products and
services and implement a cycle of identifying issues of customers and resolving them.
Creation of new businesses sparked by social issues
We will set business themes sparked by social issues in fields where OMRON’s strengths can be utilized
and promote business conceptualization and business development as well as development of automation
technology in an integrated manner. We are committed to creating three new businesses by fiscal 2024, by
increasing the probability of new business creation.
Transformation of Corporate Management and Organizational Capabilities
To adapt to changes in the business environment and enhance the sustainability of value creation, we will
evolve our corporate management and organizational capabilities. To this end, we have identified three areas
to be transformed from three viewpoints: OMRON Group, society, and the business environment.
OMRON Group
Society
Business Environment
Taking on the challenge
of new value creation
Demand for OMRON
to contribute to a
sustainable society
Increased uncertainty,
such as natural disasters
and geopolitical risks
(1) Acceleration of diversity and
inclusion
(2) Data-driven enterprise
operations through DX
(3) Enhancement of supply chain
resilience
Evolve human resources measures
to attract diverse human resources
and allow each individual to fully
live up to their potential
Expand data-driven value creation
and improve operational productivity
through the adoption of digital
technologies
Establish supply chain management
capable of responding effectively to
change in order to achieve sustainable
growth even in a risky business
environment
Transformation of Corporate Management and Organizational Capabilities
23
OMRON Corporation Integrated Report 2022Strategy & Business Firstly, from the viewpoint of the OMRON Group, we will take on the challenge of new value creation. Under
SF 1st Stage, we will take on difficult challenges, such as creation of service businesses and new businesses,
in addition to strengthening of competitiveness in focus businesses.
Secondly, from the viewpoint of society, OMRON has long promoted initiatives to contribute to a sustainable
society. Meanwhile, demands from society for companies to contribute to a sustainable society are becoming
stronger and wider in scope. In the course of business activities, we need to shift to corporate management
and business operations emphasizing contribution to stakeholders.
From the viewpoint of the business environment, uncertainty, such as natural disasters and geopolitical risks,
is expected to be the norm. Based on the assumption that a business environment with a high degree of
uncertainty will continue, such as frequent extreme weather events and friction between the U.S. and China,
it is necessary to build a business foundation on which we can continue to create value even in such an
environment.
Based on these three viewpoints, we have identified three key areas to be focused: “acceleration of diversity
and inclusion,” “data-driven enterprise operations through digital transformation,” and “enhancement of
supply chain resilience.”
Acceleration of diversity and inclusion (D&I)
In accelerating D&I, we aim to ensure that the OMRON Group continues to attract diverse talented people
who aspire to resolve social issues and encourage each individual to seize the initiative and demonstrate
their abilities. To achieve this goal, we will expand measures to attract human resources and unleash the
passion and ability of each individual, such as “continuing global hiring of specialist human resources,”
“vigorous investment in individuals keen to grow,” “implementation and expansion of diverse career,
employment status and work style options,” and “introduction of a job-based HR system worldwide.”
Data-driven enterprise operations through DX
With the aim of expanding added value and improving operational efficiency, we will promote DX in four key
business operations to accelerate the shift to data-driven enterprise operations. Specifically, we will work to
“increase business speed and gain cost improvement capabilities through consolidation of information
(value chain),” “enhance corporate value through timely management of growth drivers and business risks
(business administration),” “maximize organizational capabilities by assigning the right people to the right
jobs through visualization of skills and capabilities of all employees of the OMRON Group worldwide (talent
management),” and “achieve both governance and productivity at the level of an excellent global company
(governance).” Our aim is to achieve business implementation in Europe by 2024 so as to be ready for
global implementation under SF 2nd Stage.
Enhancement of supply chain resilience
The environment surrounding the supply chain is undergoing significant changes, including heightened
geopolitical risks, the persisting high cost of logistics, and increasing demands for carbon neutrality and
respect for human rights. We will reestablish a flexible and productive supply chain that can adapt to these
changes in the business environment and provide products and services to customers in a timely manner.
Strengthening Sustainability Initiatives
The third Group strategy is to strengthen sustainability initiatives. We will place particular focus on reduction
of greenhouse gas (GHG) emissions for decarbonization and lower environmental impacts while thoroughly
addressing human rights issues on a global basis. As well as achieving sustainable business growth, society
expects OMRON to contribute to the sustainable development of society. Under SF2030, OMRON has set
“achieving decarbonization and reducing environmental impacts” and “respecting human rights in the value
chain” as key sustainability issues.
On March 1, 2022, we established the OMRON Environmental Policy and the OMRON Human Rights Policy
as important guidelines for promoting and achieving these goals under SF2030 and SF 1st Stage. Going
forward, in accordance with these policies, OMRON will strive to meet the expectations of its stakeholders,
thereby enhancing its corporate value.
24
OMRON Corporation Integrated Report 2022Strategy & Business Reduction of GHG emissions for decarbonization and lower environmental impacts
Having set OMRON Carbon Zero in July 2018 with the goal of reducing GHG emissions in Scope 1 and 2 to
zero by 2050, OMRON is promoting reduction of GHG emissions. Under SF2030, with the aim of realizing a
carbon-zero society and transitioning to a circular economy, we accord the top priority to reducing GHG
emissions throughout the value chain and building a resource recycling model.
Major initiatives under SF 1st Stage are as follows:
Reduction of GHG emissions (Scope 1 and 2: Emissions from OMRON)
Reduction of GHG emissions (Scope 3, Category 11: Emissions from use of manufactured/sold products,
services, etc.)
Transition to a circular economy
Initiatives
SF 1st Stage Targets
Reduction of GHG*1 emissions
from OMRON (Scope 1 and 2)
Reduce GHG emissions by 53% by FY2024 vs. FY2016 to achieve
Carbon Zero by 2050. For this purpose, expand energy saving and
energy generation and achieve Carbon Zero*2 at all 76 sites in Japan.
Reduction of GHG emissions
from use of products sold by
OMRON (Scope 3, Category 11)
To achieve an 18% reduction by FY2030 (vs. FY2016), implement
energy-saving designs for new products in each business in the 1st Stage.
At the same time, in the 1st Stage, formulate a scenario for achieving
FY2030 targets.*3
*1 GHG: Greenhouse gas
*2 GHG emissions from OMRON’s electricity use at 13 production sites and 63 non-production sites (headquarters, R&D, and sales)
*3 Scope 3 targets for 2050 have not yet been determined. They will be formulated after further verification and examination.
Initiatives for “Achieving Decarbonization and Reducing Environmental Impacts” under SF 1st Stage
Thoroughly addressing human rights issues on a global basis
OMRON has conducted human rights risk assessments and implemented countermeasures by using
sustainability self-assessment, etc. of its own production sites and major suppliers. In addition to these
efforts, under SF 1st Stage, we aim to establish a global human rights governance system by expanding the
scope to include the entire value chain and promoting efforts in accordance with the OMRON Human
Rights Policy and the United Nations Guiding Principles on Business and Human Rights (UNGP).
Major initiatives under SF 1st Stage are as follows:
Execution of human rights due diligence in line with the UNGP
Establishment of a human rights remedy mechanism appropriate to each country and region
OMRON believes that enabling people involved in its value chain to work and live without being exposed to
human rights risks is the foundation of sustainable business and will lead to a better society. Through these
initiatives, we will enhance OMRON’s growth potential.
Management Targets
Under SF2030, we aim to maximize corporate value by maximizing social value and economic value. To
achieve this goal, we will further pursue initiatives for business growth and for sustainability issues in an
integrated manner. As milestones, under SF 1st Stage, we set non-financial targets as management targets
for the first time, in addition to financial targets. Our financial targets are net sales of ¥930 billion, operating
income of ¥120 billion, ROIC of at least 10% and ROE of at least 10% in fiscal 2024. As well as realizing high
sales and profit growth, we intend to create value with ROIC of over 10% so as to enhance corporate value.
In terms of non-financial targets, we have set 10+1 goals that indicate the social value to be created by the
OMRON Group and secure our ability to compete in the future. Three of the ten non-financial targets were
determined by global employee vote. All employees will take action, driven by the targets they set. The +1
target is a declaration of commitment to community-based social contribution activities in each region in
accordance with OMRON’s Sustainability Policy. We will work to achieve each of the 10+1 targets.
Financial targets and non-financial targets are as follows:
25
OMRON Corporation Integrated Report 2022Strategy & Business SF 1st Stage Financial Targets
FY2021 Results
FY2024 Targets
FY2021 Results
FY2024 Targets
Net Sales
¥ 762.9 billion
¥ 930.0 billion
Operating Income
¥ 89.3 billion
¥ 120.0 billion
Operating Cash Flow
(3-year total)
¥ 232.7 billion
(Excludes impact of transfer
of the Automotive Electronics
Components Business)
¥ 250.0 billion
ROIC
ROE
EPS
9.6%
9.7%
>10%
>10%
¥ 306
>¥ 400
Industrial
Automation
Business (IAB)
Net Sales
Operating Income
[Operating Income Margin]
¥ 418.1 billion
¥ 76.3 billion
[18.2%]
¥ 515.0 billion
¥ 104.0 billion
[20.2%]
Healthcare
Business (HCB)
Net Sales
Operating Income
[Operating Income Margin]
¥ 132.9 billion
¥ 18.5 billion
[14.0%]
¥ 180.0 billion
¥ 28.0 billion
[15.6%]
Social Systems,
Solutions and
Service Business
(SSB)
Net Sales
Operating Income
[Operating Income Margin]
¥ 87.7 billion
¥ 6.5 billion
[7.4%]
¥ 100.0 billion
¥ 10.0 billion
[10.0%]
Device & Module
Solutions
Business (DMB)
Net Sales
Operating Income
[Operating Income Margin]
¥ 121.0 billion
¥ 10.1 billion
[8.3%]
¥ 125.0 billion
¥ 13.0 billion
[10.4%]
(Note) Some products in the Industrial Automation Business have been reclassified to the
Device & Module Solutions Business.
SF 1st Stage Non-financial Targets
*1 Net sales of focus domains that lead to “achievement of carbon neutrality,” “realization of a digital society,” and “extension of healthy life expectancy”
*2 Targets 8 to 10 were decided by employee vote.
In addition, we have established strategic objectives, key objectives of the OMRON Group’s initiatives,
leading to achievement of our financial and non-financial targets. The strategic objectives are as follows:
SF 1st Stage Strategic Objectives
Healthcare Business
(HCB)
Social Systems, Solutions
and Service Business (SSB)
Industrial Automation
Business (IAB)
Number of customers using
innovative-Automation
5,000 companies
(2X vs. FY2021)
Expanding Customer
Asset-type Service
Businesses
Global blood pressure monitor
sales
94 million units (3-year total)
Number of telemedicine service
users
600,000 users (cumulative total)
Creating New Businesses
Ratio of service business sales
>10%
New businesses created
3 or more
Connected energy management
devices
50,000 units
(3-year total)
Diversity & Inclusion
Human creativity
+7% (vs. FY2021)
Investment in human
resources development
¥ 6.0 billion (3-year total)
VOICE SEI
>70 points
Device & Module Solutions
Business (DMB)
Sales volume for products contributing
to the spread of new energy and
high-speed communications
Products for DC equipment
60 million units
Products for high-frequency devices
170 million units
(3-year total)
Enhancing Profit Generating
Capability
Gross Profit Margin
>47.0%
26
Increase the ratio of women in managerial roles to 18% or higher (OMRON Group worldwide)Realize employment of persons with disabilities at 28 overseas sites and maintain the ratio of employees with disabilities at 3% in JapanAchieve Carbon Zero at all 76 sites in JapanConduct human rights due diligence in line with the UNGP and build a human rights remedy mechanism into the value chainTop management of each region declares their commitment to their host community in accordance with the OMRON Sustainability PolicyIncrease sustainability-related sales*1, an indicator of contributions to the resolution of the three social issues, by 45% vs. FY2021Continue implementing sustainability initiatives steadily to maintain our listing in the Dow Jones Sustainability World Index (DJSI World)Reduce Scope 1 & 2 GHG emissions by 53% vs. FY2016100% participation by global managers in management training to effectively capitalize on the capabilities of diverse human resourcesIn all regions, introduce a training program covering the basic knowledge required for DX: statistics, data analytics, AI and othersMake full use of digital tools to reduce use of paper2356111748910OMRON Corporation Integrated Report 2022Strategy & Business Value Creation Model
Under SF 1st Stage, leveraging its intangible assets and management capital such as “human resources” and
“intellectual capital,” OMRON will continue innovation and creation of products and services through the
business creation process based on the OMRON Principles and the SINIC Theory and pursue Material
Input
Management Capital
Financial Capital
Shareholders’
equity
¥665.2 billion
(As of March 31, 2022)
Operating cash
flow
¥250.0 billion
(Plan under SF 1st Stage)
Rating
AA- (R&I)
A (S&P)
(As of March 31, 2022)
Growth Investment
¥200.0 billion
(including M&A)
(Plan under SF 1st Stage)
Manufactured Capital
Number of
production sites
worldwide
20 sites
(As of March 31, 2022)
Capital
expenditures
¥130.0 billion
(Plan under SF 1st Stage)
Intellectual Capital
Number of
patents held
12,061 patents
(As of March 31, 2022)
R&D expenses
¥165.0 billion
(Plan under SF 1st Stage)
Human Capital
Number of
employees
29,020 employees
(As of March 31, 2022)
Investment in
human resources
development
¥6.0 billion
(Plan under SF 1st Stage)
Natural Capital
Energy consumption:
281,780 MWh
(As of March 31, 2022)
Water resource intake:
1,208 km3
(As of March 31, 2022)
Resources recycled in house:
712 tons of materials
(As of March 31, 2022)
Social and Relationship Capital
Number of
Countries
Around 120
countries/regions
(As of March 31, 2022)
Brand value
(converted in
financial value)
USD1,088
million or more
(As of March 31, 2022)
Investment in startups: Invested in
21 startups (cumulative total)
(As of fiscal 2021)
27
Business Creation Process at OMRON
Innovatio
n D
riv
e
n
b
y
S
o
c
i
a
l
N
e
e
d
s
Near-
Future
Design
Core
Technology
Evolution
and
Business
Model
Design
Demographic
Trends
Limited
Resources
Technological
Innovation
Identify Social
Issues
Sensing &
Control
+ Think
Open
Innovation
Launch
and
Monetize
Businesses
C
o
m
m
Develop
Products and
Services
e
r
cialization
The OMRON Principles
12345OMRON Corporation Integrated Report 2022Strategy & Business
Sustainability Issues, thereby creating social value that contributes to establishment of an autonomous
society and leads to sustainable enhancement of corporate value. We will continue to expand and create
social value by increasing management capital to create innovation driven by social needs.
Material Sustainability Issues
Domains
Focus Businesses
Social Value
Output
Outcome
1) Resolving Social
Issues through
Our Business
Industrial
Automation
Industrial Automation
Business (IAB)
Digital,
environmental mobility (NEV),
food and daily goods,
logistics, and medical
(+ robotics and service business)
Customers adopting the
innovative-Automation
concept
5,000 companies
(2X vs. FY2021)
Healthcare
Solutions
Healthcare Business
(HCB)
Cardiovascular, respiratory,
pain management,
remote patient monitoring
services
Blood pressure monitor unit sales
94 million units (3-year total)
Users of remote patient monitoring
services
600,000 users (cumulative total)
Social Solutions
Social Systems,
Solutions and Service
Business (SSB)
(Residential / industry / mobility)
energy management and
services, network protection
Energy management
equipment connected
50,000 units
(3-year total)
Device & Module
Solutions
Device & Module
Solutions Business
(DMB)
Direct current (DC) drive
equipment, DC infrastructure
equipment, high-frequency
devices, and remote/VR
devices
Unit sales of products contributing to
the spread of new energy and high-
speed communication
Products for DC-powered equipment,
60 million units
Products for high-frequency equipment:
170 million units
(3-year total)
2) Maximizing the
Capability to Innovate
Driven by Social Needs
Innovation Exploring
Initiative HQ (IXI)
Creating new businesses
New business created:
3 or more
3) Generating diverse
talent taking on
the challenge of
value creation
• Ratio of non-Japanese in key managerial positions overseas: 80% or more
• Increase the ratio of women in managerial roles to 18% or higher
(globally)
• Realize employment of persons with disabilities at 28 overseas sites
and maintain the ratio of employees with disabilities at 3% in Japan
• VOICE SEI: 70P or higher
Human Creativity* (vs. FY2021)
+7%
*Added value per unit cost of employee
4) Achieving
de-carbonization and
lower environmental
impact
• Scope 1 and 2: 53% cut vs. FY2016
• Scope 2: Achieve Carbon Zero at all 76 sites in Japan
• Scope 3, Category 11: Implement energy-saving designs for new products
• Implementing business model transformation, environmentally
friendly design, collection and recycling, and sustainable procurement
in response to transition to a circular economy
Achieve OMRON Carbon Zero,
which aims to reduce GHG
emissions to zero by 2050
5) Respecting Human
Rights in the Value
Chain
• Conduct human rights due diligence in line with the UNGP
• Build a human rights redress mechanism into the value chain globally
28
OMRON Corporation Integrated Report 2022Strategy & Business OMRON’s Business and Fiscal 2021 Results
OMRON manufactures and sells market-leading sensing and control products in around 120 countries/regions
worldwide. Our products include control equipment, healthcare items, social systems, and electronic
components.
Consolidated Sales Composition Ratio
Healthcare Business
(HCB)
Providing a comprehensive
lineup of healthcare products
for home and hospital use
17%
¥ 132.9 billion
Other
1% ¥ 3.3 billion
Industrial Automation
Business (IAB)
OMRON’s mainstay business;
innovating global manufacturing
through factory automation
11%
¥ 87.7 billion
FY 2021
Consolidated Sales by
Business Segment*2
¥ 762.9billion
57%
¥ 418.1billion
14%
¥ 121.0 billion
Social Systems, Solutions and
Service Business (SSB)
Offering social infrastructure
systems for a safer, more
comfortable society
Device & Module Solutions
Business (DMB)
Offering the world
sophisticated components that
create seamless relationships
between people and machines
Net Sales, Operating Income, and Operating Income Margins by Business Segment
Business Segment
Net Sales*2
Operating Income*2 (Loss)
Operating Income Margin*2
(Billions of yen, %)
Industrial Automation
Business (IAB)
Healthcare Business
(HCB)
Social Systems, Solutions and
Service Business (SSB)
Device & Module Solutions
Business (DMB)
Eliminations and Corporate
Total
¥ 418.1*1
¥ 132.9
¥ 87.7
¥ 121.0 *1
¥ 3.3
¥ 762.9
¥ 76.3
¥ 18.5
¥ 6.5
¥ 10.1
¥ (22.1)
¥ 89.3
*1 Some products in the Industrial Automation Business have been reclassified to the Device & Module Solutions Business.
*2 As of March 31, 2022.
18.2%
14.0%
7.4%
8.3%
−
11.7%
29
OMRON Corporation Integrated Report 2022Strategy & Business Net Sales by Region
Ratio of
Overseas Sales
Approx.
62%
Asia Pacific
¥ 76.9 billion
Americas
¥ 78.3 billion
10%
10%
Japan
¥ 289.9 billion
FY 2021
Consolidated
Sales by Region*1*2
38%
16%
¥762.9billion
Europe
¥ 120.4 billion
26%
Greater China
¥ 196.4 billion
Number of Employees by Region
Ratio of Overseas
Employees to
Total Employees
Approx.
65%
Asia Pacific
5,720
Americas
2,000
Europe
2,329
7%
8%
20%
FY 2021
Employees
by Region*1*2
29,020
30%
Japan
10,143
35%
Greater China
8,828
*1 Regional categories are defined as follows:
Americas includes North America, Central America, and South America.
Europe includes Europe, Russia, Africa, and Middle East.
Greater China includes China, Taiwan, and Hong Kong.
Asia Pacific includes Southeast Asia, Korea, India, and Oceania.
*2 As of March 31, 2022.
30
OMRON Corporation Integrated Report 2022Strategy & Business Financial Highlights
Net Sales
Gross Profit Margin
732.3
732.6
678.0
655.5
762.9
(Billions of yen)
847.3
833.6
794.2
800.0
600.0
400.0
200.0
0
(%)
50
40
30
0
44.7
44.4
44.8
45.5
45.5
39.3
38.5
39.3
FY
14
15
16
17
18
19
20
21
FY
14
15
16
17
18
19
20
21
Consolidated net sales increased significantly from the
previous year, as the Industrial Automation Business and the
Healthcare Business captured demand amid continued
uncertainty in the business environment.
The gross profit margin on a consolidated basis remained
high, despite the impact of inflation, owing to price
optimization and ongoing cost reduction and other
measures.
Operating Income / Operating Income Margin
Operating Cash Flow
Operating income
Operating income margin
(%)
12
10.2
86.6
7.5
62.3
8.6
68.5
9
6
3
0
10.5
77.2
9.2
67.3
8.1
54.8
9.5
62.5
11.7
(Billions of yen)
120.0
(Billions of yen)
100.0
89.3
90.0
60.0
30.0
0
80.0
60.0
40.0
20.0
0
77.0
84.2
77.9
73.7
71.2
89.8
93.8
67.4
FY
14
15
16
17
18
19
20
21
FY
14
15
16
17
18
19
20
21
Consolidated operating income reached a record high thanks
to increased net sales and as a result of strengthened
initiatives to improve profitability centering on the gross
profit margin.
Cash has temporarily decreased due to an increase in
working capital resulting from a significant increase in net
sales from the previous year. However, OMRON’s ability to
generate cash is stable and at a high level.
Return on Invested Capital (ROIC)
EPS and Cash Dividends
(%)
15
10
5
0
13.4
10.3
12.7
14.1
9.7
10.6
7.8
9.6
Expected cost
of capital
5.5%
Earnings per share (EPS)
Cash dividends per share
365.3
283.9
296.9
260.8
219.0
215.1
214.7
71
68
68
76
84
84
84
305.7
92
(Yen)
400
200
0
FY
14
15
16
17
18
19
20
21
FY
14
15
16
17
18
19
20
21
OMRON’s focus on ROIC management led to enhancement
of ROIC of each business and resulted in a 9.6% ROIC on a
consolidated basis, which exceeded the weighted average
cost of capital (WACC) of 5.5%.
EPS increased due to profit growth in fiscal 2021. Stable and
continuous dividend payments were maintained in
accordance with the shareholder return policy with a target
DOE of 3%.
* The Automotive Electronics Components Business (AEC) was transferred and the AEC business was classified as a “discontinued business.” Accordingly, some financial data for fiscal 2017
and 2018 have been reclassified.
31
OMRON Corporation Integrated Report 2022Strategy & Business Non-Financial Highlights
Ratio of Non-Japanese in Key Managerial Positions
Overseas
Ratio of Women in Managerial Roles
75
80
70
62
46
49
49
42
(%)
80
60
40
20
0
FY
14
15
16
17
18
19
20
21
The ratio of non-Japanese in key managerial positions
overseas has been increasing year by year and has reached
80% in fiscal 2021.
* From fiscal 2018, concurrent positions for governance and development positions are
excluded.
OMRON Group worldwide
OMRON Group in Japan
(%)
20
16
12
8
4
0
1.9
FY
14
2.3
15
3.3
16
3.6
17
16.0
16.4
16.9
12.7
6.7
8.0
5.2
5.9
18
19
20
21
The ratio of women in managerial roles has been increasing
steadily to achieve the OMRON Group worldwide goal of
18% or more in fiscal 2024. On the other hand, securing the
number of candidates for a medium to long term is a
challenge.
* The ratio of women in managerial roles (OMRON Group worldwide) has been calculated
since fiscal 2018.
Ratio of Employees with Disabilities
(OMRON Group Worldwide and in Japan)
Employee Engagement
OMRON Group in Japan
OMRON Group worldwide
2.4
2.4
2.5
2.6
2.5
3.0
3.1
2.8
2.0
2.2
(%)
4
3
2
1
0
(%)
80
60
40
20
0
72
72
76
62
FY
14
15
16
17
18
19
20
21
FY
16
17
18
20
OMRON strove to create and expand employment opportunities
for people with disabilities. As a result, the ratio of employees
with disabilities reached 3.1% for the OMRON Group in Japan,
exceeding Japan’s legally mandated ratio of 2.3%.
* Figures represent results as of June 20. For companies subject to the Act on Employment
Promotion etc. of Persons with Disabilities. Employment rate calculation is based on the Act
on Employment Promotion etc. of Persons with Disabilities.
* For the ratio of employees with disabilities (OMRON Group worldwide), applicable sites in
countries with legally mandated employment rates are within the scope. The ratio is calculated
based on the calculation method stipulated by laws and regulations of each country.
As a result of promotion of diversity and inclusion at our
workplaces and strengthening of human resources
measures to enable employees to fully demonstrate their
capabilities, the engagement rate has been at a high level.
* The rate for fiscal 2015 is not presented because we did not conduct a survey. The figures
for fiscal 2017 onward are based on the score of Sustainable Engagement Index (SEI) in the
VOICE employee engagement survey.
* The VOICE employee engagement survey has been conducted every other year since fiscal
2018.
Greenhouse Gas Emissions
Environmental Contribution
Greenhouse gas emissions*1
Net sales to CO2 emissions*2
Environmental contribution
CO2 emissions of production sites
(Million yen / ton-CO2)
(Thousand ton- CO2)
(Thousand ton- CO2)
3.83
4.12
3.94
4.22
4.47
271
250
235
7
6
5
4
3
2
1
0
7.02
6.16
124
123
5.02
166
500
400
300
200
100
0
1,200
1,000
800
600
400
200
0
1,055
971
881
826
851
659
593
508
221
202
202
204
193
135
106
109109
FY
14
15
16
17
18
19
20
21
FY
14
15
16
17
18
19
20
21
OMRON has set greenhouse gas emissions as an indicator
to achieve the OMRON Carbon Zero target of reducing
greenhouse gas emissions to zero by 2050. In fiscal 2021,
we achieved a 50% reduction compared to fiscal 2016.
*1 Greenhouse gas emissions: Scope 1 and 2
*2 Net sales to CO2 emissions: Net sales per ton of CO2 emissions
We are expanding the environmental contribution of OMRON
products and services that reduce the impact on the environment.
We also strive to reduce CO2 emissions at our production centers
through the use of our own energy saving products.
* Environmental Contribution = Volume of CO2 emissions reduction contributed by society’s
use of the OMRON Group’s energy generation and savings products and services.
https://sustainability.omron.com/en/environ/climate_change/contribution/
Indicates assurance performed by Bureau Veritas Japan Co., Ltd.
Indicates assurance performed by KPMG AZSA Sustainability Co., Ltd.
Indicates independent verification or review performed by Bureau Veritas Japan Co., Ltd.
32
OMRON Corporation Integrated Report 2022Strategy & Business FY2021 Sustainability Targets and Results
Based on its Sustainability Policy, OMRON identified “social issues to solve through business” and “issues
to respond to stakeholder expectations” as material sustainability issues.
Viewing fiscal 2021 as a period of change in the runup to the launch of SF2030, we set single-year targets in
line with the material sustainability issues set in the previous medium-term management plan “VG2.0” and
pursued various initiatives.
Targets for Social Issues to Solve through Business
Factory Automation P37
Social Issues
Increasing sophistication and functionality of products in line with changes in industry as represented by CASE*1 and 5G, etc.
Progress in high-mix low-volume production in response to the diversification of consumer needs
Accelerating trends toward local production for local consumption in response to trade frictions
Aging demographics and shortage of skilled workers, particularly in developed countries; and soaring labor costs in
emerging economies
FY2021
Targets
Create applications that embody innovative-Automation*2, establish control technologies that make these applications
possible, and create new products based on these applications.
FY2021
Progress
Social Value
Created
Expanded software products that accelerate digital transformation at manufacturing sites and provide remote
engineering that integrates real and virtual applications.
Contributed to significant efficiency gains at manufacturing sites by achieving harmony between humans and machines
through expanded robot-related areas to achieve safety assurance and productivity.
Applications created increased by 77 in FY2021, reaching 247 on a cumulative basis
Contribute to economic development by improving social productivity.
*1 CASE: General term for connected, autonomous, shared, electric technologies
*2 innovative-Automation: The unique OMRON concept to bring innovations to production floors. This comprises three concepts: (1) Evolution in control (integrated); (2) Intelligence developed
through ICT (intelligent); and (3) New harmonization between humans and machines (interactive).
Healthcare P43
Social Issues
Increased incidence of brain and cardiovascular diseases attributable to high blood pressure
Increased worldwide prevalence of asthma and other respiratory diseases
FY2021
Targets
FY2021
Progress
Created a remote hypertension monitoring service and proposed a new way of hypertension treatment to society
Accelerated the wider use of home blood pressure measurement globally and achieved a cumulative sales volume of
300 million blood pressure monitor units
Expanded related products to create remote care and other respiratory disease service businesses
Focused on strengthening the content of hypertension remote monitoring services in North America, Europe, and Asia-
Pacific, increasing the number of registered patients and hospitals
Achieved 300 million units in cumulative sales of blood pressure monitors. Continued to communicate efforts to achieve
zero events through online and other channels
Completed validation tests for respiratory remote monitoring business model based on wheeze sensors
Social Value
Created
Contribute to healthy lives by extending healthy life expectancies and reducing medical expenses (initiatives to expand blood
pressure monitoring at home and achieve vision of zero heart attacks and strokes; early detection and treatment of asthma
via nebulizers and wheeze sensors)
Social Issues
Global warming from CO2 emissions
Social Solutions P49
FY2021
Targets
FY2021
Progress
Created electric power infrastructure of distributed electricity sources to spread renewable energy and provide stable
operations.
Cumulative shipped capacity of solar power systems: 10.7 GW
Cumulative shipped capacity of storage battery systems: 900 MWh
Expanded our lineup of storage battery systems that, in combination with solar power systems, provide efficient captive
consumption and emergency power supply in the event of a disaster
Solar power systems: 10.8 GW
Storage battery systems: 900 MWh
Social Value
Created
Contribute to a safe, secure, comfortable, and clean society for all
Contribute to build a sustainable society by prevailing renewable energy
33
OMRON Corporation Integrated Report 2022Strategy & Business Targets for Issues to Respond to Stakeholder Expectations
Human Resource Management
Talent Attraction and Development
P69
OMRON’s
Initiatives
Expand the circle of empathy and resonance by practicing the OMRON Principles
Securing and training of next-generation leaders (candidates for important positions)
Providing of a workplace environment that can attract and empower the diverse talent necessary for business growth
FY2021
Targets
FY2021
Progress
Continued evolution of TOGA* towards meeting OMRON Principles
Ratio of non-Japanese in key managerial positions overseas: 75%
Pursue resolution actions to solve issues based on engagement surveys
The 9th (FY2020) TOGA Global Meet was a hybrid of in-person and digital attendance, reaching record levels of viewership
(including on-demand viewing).
Ratio of non-Japanese in key managerial positions overseas: 80%
Developed and implemented over 230 issue resolution actions globally
Social Value
Created
OMRON is creating leaders who can drive innovation and both acquire and train diversely talented employees to solve social issues
through our businesses
* TOGA: An abbreviation for The OMRON Global Awards, a participation-type approach for employees worldwide to foster a challenge-oriented corporate culture that uses our business activities
to put into practice the OMRON Principles. Through these activities, each and every employee seeks to voluntarily take on the challenges of solving social issues, and of creating value.
OMRON’s
Initiatives
FY2021
Targets
FY2021
Progress
Promoting career advancement for women
Promoting career advancement for the disabled
Diversity and Inclusion
P69
Ratio of women in managerial roles: 8% (OMRON Group in Japan)
Ratio of employees with disabilities: Increase number of such employees to above the legally-mandated ratio (OMRON Group in Japan)
Ratio of women in managerial roles: Achieved 8%*1 (OMRON Group in Japan)
Ratio of employees with disabilities (OMRON Group in Japan): 3.1%*2 (legally mandated ratio: 2.3%)
Social Value
Created
Achieving a workplace in which diverse human resources can play an active role, regardless of the presence of limitations such as
gender or disabilities
*1 As of April 2022 *2 As of June 2021
Wellness Management
Issuing of employee health management declaration
Implementation of initiatives towards ameliorating factors that inhibit good health
Implementation of employee education
Improve health management recognition and achieve three of the Boost5*1 targets (Japan)
Health management recognition rate: 89.2% (+4.4P year on year)
Achievement of three of the Boost 5 targets: 49.4% (+4.1P year on year)
OMRON’s
Initiatives
FY2021
Targets
FY2021
Progress
Social Value
Created
Improve “human creativity”*2 by maintaining and improving the health of every employee and by providing opportunities for
employees to exercise their creativity
*1 Boost5: Five key areas (exercise, sleep, mental health, food, and stop smoking) selected as factors related directly to the ability to concentrate at work and to lead a fulfilling life; indicators
have been established for each of these key areas.
*2 Human creativity: Value added per unit of personnel expense (manufacturing + SG&A + development)
Occupational Health and Safety
Promote the acquisition of international health and safety standards at major production centers
Ensure personnel for promotion, and carry out education
Number of production centers certified to OSH international standards: Maintain achievement at sites representing 80% of production volume
Continue assignments of promotion personnel: All covered sites
Number of manufacturing sites certified to OSH international standards: Maintained achievement at sites representing 87% of production volume
Maintained assignments of occupational health and safety managers
OMRON’s
Initiatives
FY2021
Targets
FY2021
Progress
Social Value
Created
While ensuring compliance with laws and regulations concerning workplace occupational health and safety, we are creating a work
environment to ensure the wellbeing of all employees at the OMRON Group and to maximize their abilities, by striving to create
workplaces at which employees can work safely and healthfully — both physically and mentally
Respect for Human Rights and Labor Practices
P75
Establishment of management system
Human rights risk analysis and corrective actions at production sites
Perform human rights risk analysis for production centers; implement remediation measures.
Extend the scope of human rights risk management processes to cover employees of on-site contractors and temporary staffing companies
Conducted risk analysis and remediation at 19 global production centers
Extended human rights risk management processes to employees of domestic outsourcing partners; revised outsourcing
contracts to include code of conduct compliance clauses overseas
Achieving a better work environment in which the human rights of all people working in the OMRON Group are respected
OMRON’s
Initiatives
FY2021
Targets
FY2021
Progress
Social Value
Created
34
OMRON Corporation Integrated Report 2022Strategy & Business Manufacturing
Product Safety and Quality
OMRON’s
Initiatives
Conducting group-wide product quality management reform
Reducing product safety risk
FY2021 Targets
Ratio of newly developed products undergoing safety assessment: 100%
Improve product safety assessments
FY2021 Progress
Product safety assessments for newly developed products: 100%
Completed 84 applications for newly developed products and updated product safety assessment categories in conform with the
intended use of the products
Social Value Created Incorporating quality, safety, environmental, and human rights into products and services, to bring about sustainable manufacturing
Supply Chain Management
OMRON’s
Initiatives
Maintain and improve sustainability levels through sustainability self-assessment*1 for important suppliers in accordance with the RBA*2
Collaborate with suppliers for resource recycling
FY2021 Targets
Achieve a sustainability check score of 85 or higher (RBA Code of Conduct V7.0) for 50 major suppliers of commercial products
Reduce disposal of reusable plastic molding materials by 15% (compared to FY2019)
FY2021 Progress
Achieved 85 or more points for the Sustainability Self-Checks at all major suppliers of commercial products (low risk)
Plastic molding material waste: 16.7% reduction
Social Value Created By solving social issues in the supply chain in cooperation with suppliers, achieving a society capable of sustainable production and consumption
*1 Sustainability self-assessment: Supplier self-evaluation of their own initiatives into labor, safety, health, the environment, etc. using a questionnaire. 85 points or above is considered low risk,
whereas 65 points or less is considered high risk.
*2 RBA: Abbreviation of Responsible Business Alliance. Global CSR alliance centered around the electronics industry.
OMRON’s
Initiatives
Reduction in greenhouse gas emissions by improving the efficiency of power usage, and by introducing renewable energy
Provision of products and services that contribute to the spread of clean energy
Reduction of Greenhouse Gas Emissions
P77
FY2021 Targets
Reduce total GHG emissions* by 47% (vs. fiscal 2016; 1.5°C scenario)
Environmental contribution exceeds CO2 emissions from production centers
FY2021 Progress
Reduce total GHG emissions* by 50% (vs. fiscal 2016)
Environmental contribution: 881kt-CO2 > Production location CO2 emissions: 109(kt-CO2)
Social Value Created Making sustainable manufacturing a reality by reducing greenhouse gas emissions, and bringing about a decarbonized society
* Direct greenhouse gas emissions by the company itself and indirect emissions from the use of electricity, heat, and steam supplied by other companies
Appropriate Management and Reduction of Hazardous Substances
P77
OMRON’s
Initiatives
Build a framework for chemical substance management used in production processes
Stop use or reduce the use of harmful chemical substances, responding to high social demand
FY2021 Targets
Reduce mercury through prevalent usage of digital thermometers and blood pressure monitors: 65 tons/year
Determination of volatile organic compound (VOC) usage
FY2021 Progress
Mercury reduction: 66 tons/year
Completed identification of volatile organic compounds (VOCs) volume and set medium-term reduction targets
Social Value Created
Realization of a decarbonized society that is in harmony with nature, by reducing negative impacts of chemical substances on people,
organisms, and the environment
Risk Management
Fair Business Practices
P82
OMRON’s
Initiatives
Periodic reviews of OMRON Group Rules for Ethical Conduct on a regular basis in order to reflect laws and regulations, and social
demand of countries around the world
Offer continuous, periodic and necessary training and education in order to maintain awareness of compliance and instill stipulated in rules
Assess issues using the whistle-blower system and promptly take corrective actions
FY2021 Targets
Penetration of OMRON Group Rules* at global locations
FY2021 Progress
Completed penetration of OMRON Group Rules and updates
Social Value Created
Implementing appropriate anti-corruption measures taking into account the political, economic, and cultural circumstances of each
country, and contributing to the maintenance of an orderly and healthy society based upon the rule of law
Ensuring fair business practices in conformance with applicable laws of respective countries and global rules, thereby contributing to
the realization of the society that allows fair and free competition
* OMRON Group Rules (OGR): Internal rules established as a foundation for management in order to ensure transparency, fairness, and globality of management, and to ensure appropriate and
prompt decision-making. These encompass 23 separate topics, including ethical conduct, risk management, unauthorized control, information security, safety assurance business
management, IT controls, accounting and funding, labor and occupational health, environmental management, procurement, and brand logo management.
OMRON’s
Initiatives
Support for revised and newly enacted laws worldwide concerning the protection of personal information
Strengthened technical measures to counter the sharply increasing cyber attacks
Review information security education and continue education
Privacy and Data Security
P82
FY2021 Targets
Formulate and begin implementation of a medium- to long-term plan for upgrading information security in response to changes in the environment
FY2021 Progress
Selected management measures to strengthen as a priority for the OMRON Group in accordance with global standards (NIST CSF*);
completed the formulation of a medium-term plan for information security
Introduced and began operations of attack detection tools in advance of other entities (Japan)
Social Value Created Enable appropriate management of confidential data and personal information to help conduct business safely and securely in a digitized society
* NIST CSF: Cyber Security Framework developed by the National Institute of Standards and Technology (U.S.)
35
OMRON Corporation Integrated Report 2022Strategy & Business Outlook for Fiscal 2022
OMRON’s policy for fiscal 2022, the first year of SF 1st Stage, is to “move value creation into high gear.” While
accelerating growth by leveraging the assets we have accumulated so far, we will steadily invest for future growth.
Our aim is to achieve growth centering on the focus businesses by demonstrating our ability to respond effectively to
change and capturing robust global demand even in the midst of continuing product supply constraints, rising inflation,
and turmoil in the world. We will move our approach to value creation into high gear in order to make SF 1st Stage a
success.
The business environment in fiscal 2022 is expected to present continuing uncertainties, including heightening
geopolitical risks, supply chain disruptions, accelerating inflation, and the impact of lockdowns due to resurgence of
COVID-19 cases. Meanwhile, we expect the business environment in the fields addressed by the OMRON Group to
remain generally robust. Demand for capital investment in manufacturing industry, particularly in the digital sector, is
expected to remain strong. For the Industrial Automation Business, in particular, brisk order-taking is expected to
continue throughout the year. By demonstrating our long-cultivated ability to respond effectively to change, we will do
our utmost to seize business opportunities brought about by changes in society and pursue strong growth. In addition,
we will aggressively invest in growth, centering on the Industrial Automation Business and Healthcare Business, to
create new value under SF2030.
For fiscal 2022, plans call for net sales of ¥850 billion (up 11.4% year on year), operating income of ¥93 billion (up
4.1%), and a record high gross profit margin of 45.6% (up 0.1 percentage point). We expect to report increases in both
sales and profit for the second consecutive year, achieving a record high operating income. In light of the highly
uncertain business environment, we have factored a risk of performance fluctuations (¥10 billion decrease in net sales
and ¥4 billion decrease in operating income) into the full-year forecast.
(Billions of yen, except exchange rate data and percentages)
Net sales
Gross profit
(Gross profit margin)
Operating income
(Operating income margin)
Net income attributable to OMRON shareholders
Average USD exchange rate (Yen)
Average EUR exchange rate (Yen)
Average RMB exchange rate (Yen)
FY2021
¥762.9
¥346.8
(45.5%)
¥89.3
(11.7%)
¥61.4
¥112.1
¥130.5
¥17.4
FY2022
¥850.0
¥387.5
(45.6%)
¥93.0
(10.9%)
¥63.0
¥121.0
¥133.0
¥19.0
Change
+11.4%
+11.7%
[+0.1%pt]
+4.1%
[-0.8%pt]
+2.6%
+¥8.9
+¥2.5
+¥1.6
Net sales
Operating income
(Billions of yen, %)
FY2021
FY2022
Change
FY2021
FY2022
Change
Industrial Automation Business
(IAB)
¥418.1
¥483.0
+15.5%
Healthcare Business (HCB)
¥132.9
¥154.0
+15.9%
Social Systems, Solutions and
Service Business (SSB)
Device & Module Solutions
Business (DMB)
¥87.7
¥92.0
+4.9%
¥121.0
¥128.0
+5.8%
¥76.3
(18.2%)
¥18.5
(14.0%)
¥6.5
(7.4%)
¥10.1
(8.3%)
¥90.0
(18.6%)
¥20.0
(13.0%)
¥6.5
(7.1%)
¥10.5
(8.2%)
Eliminations and Corporate
¥3.3
¥3.0
-9.1%
¥(22.1)
¥(30.0)
Risk of performance fluctuations
–
¥(10.0)
–
–
Total
¥762.9
¥850.0
+11.4%
*Some products in the Industrial Automation Business have been reclassified to the Device & Module Solutions
Business.
¥89.3
(11.7%)
¥(4.0)
¥93.0
(10.9%)
+18.0%
[+0.4%pt]
+7.9%
[-1.0%pt]
+0.0%
[-0.3%pt]
+4.1%
[-0.1%pt]
–
–
+4.1%
[-0.8%pt]
36
OMRON Corporation Integrated Report 2022Strategy & Business Industrial Automation Business (IAB)
VISION
Enriching the Future for People, Industries and the Globe by
Innovative-Automation
Ideas and Insights Shaping the SF2030 Vision
Managing Executive Officer
Company President,
Industrial Automation Company
Junta Tsujinaga
The Industrial Automation Business achieved record-high sales of ¥432.6
billion and record-high operating income of ¥78.1 billion in fiscal 2021, as
we captured continued strong demand for semiconductors, digital
equipment, EVs and rechargeable batteries, and our solutions embodying our
“innovative-Automation” manufacturing concept successfully penetrated into
the market. On the other hand, owing to shortages of parts and materials,
especially semiconductors, and global logistics disruptions, product supply to
many customers was delayed. In response to this situation, we have been
implementing various measures to strengthen our product supply capabilities
and will continue to accord the highest priority to supply chain reforms to
enable us to respond quickly to customer needs.
At the start of SF2030, the Industrial Automation Business established the
business vision “Enriching the Future for People, Industries and the Globe by
Innovative-Automation” Through automation, we aim to achieve sustainable
industrial development that supports a rich medical, food, and living
infrastructure, while ensuring the happiness of workers and protecting the
global environment.
In setting the business vision, we envisioned the social changes we would
face over the next decade. We forecast an era in which changes take place at
a dizzying pace and various social issues are coming to the fore. Against this
market backdrop, we have identified two aspects of social issues that we
should address: “working people” and “advancement of industries.”
By “working people,” we mean the changing values espoused particularly by Millennials and Generation Z, the
changing mindset of workers as technology evolves, and the changing world of work. By “advancement of
industries,” we mean not only innovation in manufacturing in secondary industry through cutting-edge
technologies that are created one after another, but also major transformation that extends to primary and
tertiary industries. The social issue we must address is how best to realize the balance of high engagement of
working people and the advancement of industries, which is the strength of the Industrial Automation
Business, and to contribute to the protection of the global environment, which is also a social requirement. Our
goal is to contribute to the creation of a society with a rich medical, food, and living environment desired by
people around the world through sustainable industrial evolution. This is a challenge only possible for us as we
have supported “Monozukuri (manufacturing)” at the upstream for many years. Our ideas and insights are
shaping the business vision.
To achieve the business vision, we will evolve our unique “innovative-Automation” manufacturing concept,
which we proposed in 2016. By offering the industry’s broadest lineup of control devices and technologies and
solutions and creating a stream of innovation to resolve social issues, we will contribute to the sophistication
of manufacturing that supports a sustainable society.
Under SF 1st Stage, we aim to achieve stable business growth by resolving diversifying social issues based on
the business foundation we have built to date. Specifically, we are focusing on growth domains (Digital,
Environmental Mobility, Food/ House-hold daily goods, Medical Care, and Logistics) that are undergoing major
changes toward a sustainable society. Behind this is the growing global momentum toward achieving the SDGs
and the expanded social implementation of new innovations based on ESG-related investment. Regarding
digital and environmental mobility industries, for new products created by applying technological innovations,
such as 5G-related devices, next-generation displays, as well as EVs and advanced driver-assistance systems
(ADAS), we will provide automation that takes manufacturing to new heights based on the high-speed, high-
precision control solutions we have developed to date, while also boosting efficiency of energy use. For food
and house-hold daily goods industries, we will provide solutions that contribute to reduction of food loss and
waste and elimination of the use of plastic, which are pressing social issues, in addition to solutions for labor
shortages. For the pharmaceuticals industry, we will propose solutions that help ensure safety and security,
such as preventing counterfeit medicines, in addition to automation to address on-site labor shortages. And for
the logistics industry, we will continue to offer various innovative applications that we have cultivated in
manufacturing industry, centering on solutions to the serious shortage of on-site workers.
In order to achieve our business goals through the provision of such value, we will pursue three key initiatives
from fiscal 2022: “evolution of innovative-Automation,” “expansion of service businesses,” and “reform of the
supply chain.”
37
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business About SF 1st Stage
Targets
Sales Growth (CAGR)
¥ 418.1 billion
37%*
+7%
(Focus domains: +12%)
¥ 515.0 billion
42%*
*Composition of
focus domains
FY2021 results
FY2024 targets
Social Value KPI
Number of customers using
innovative-Automation
embodied solutions
5,000 companies
(2X vs. FY2021)
Focus Domains
Digital
Environmental
Mobility
Foods /
House-hold Goods
Medical
Care
Logistics
Major Initiatives
1. Evolution of innovative-Automation
The environment in which manufacturing industry operates is changing dramatically, and social issues related to
manufacturing are becoming increasingly grave. Labor shortages, including the aging of skilled workers and lack of
successors, which became apparent during the COVID-19 pandemic, are the most critical management issue for
manufacturing industry. In addition, companies are increasingly urged to respond to environmental issues and
human rights issues with a sense of urgency. With the aim of resolving such social issues, we announced the
evolution of “innovative-Automation” (innovative-Automation-Next) in January 2022 that effectively utilizes over
250 innovative-Automation applications we have created so far to realize manufacturing geared to near-future
needs through further integration and evolution of these accumulated assets.
With the renewed concept, we are seeking new automation that realizes coexistence with the global environment
as well as job satisfaction and wellbeing of workers, and moreover, contributes to sustainable industrial
development while driving manufacturing innovation. Under SF 1st Stage, we will accelerate resolution of social
issues through active investment in these value creation initiatives.
2. Expansion of service businesses
In addition to the pursuit of productivity and profitability of manufacturing sites, it is becoming increasingly
important for our customers to engage in SDGs initiatives and address complex management issues, such as
labor shortages and the achievement of job satisfaction. Addressing these issues requires a co-creative process to
identify latent issues, of which customers may be unaware, through close dialogue at customers’ sites. In
response to the changing market environment, it is becoming important to maintain the solutions adopted by the
customers and to provide support for improvement and evolution. In 2017, we launched the i-BELT service for
collaborative creation with our customers through their value chains. Furthermore, we will contribute to resolving
our customers’ business issues by offering the optimal services through the combination of engineering services,
maintenance services, education services, etc. corresponding to the customers’ processes. Through collaborative
creation with more customers, we aim to expand our high-value-added service business.
3. Reform of the supply chain
In fiscal 2021, we prioritized three measures to address the global shortage of parts and materials and disruptions
of logistics. Firstly, we promoted product design changes aimed at switching to parts that are easier to procure
and reducing the parts count. Through this initiative, approximately 750 product series of design changes were
completed during the year. Secondly, we invested to increase production capacity of OMRON’s control devices
factories in China and Japan, centering on installation of new production lines and other production facilities.
Thirdly, we strengthened concurrent production at multiple sites to increase the ratio of local production for local
consumption by utilizing OMRON’s global network of production sites. This will not only improve transportation
efficiency between the places of production and the places of consumption and shorten supply lead times but also
mitigate geopolitical risks and risks inherent in the geographical concentration of production sites. Already, these
measures, particularly design changes, are steadily yielding results. From fiscal 2022 onward, we will continue to
strengthen these measures to enhance our product supply capabilities. At the same time, by entering into new
strategic partnerships with electronics manufacturing service (EMS) providers outside the OMRON Group, we will
increase flexibility of production to meet rapidly changing market needs and establish a product supply system
that can respond quickly to customer demand by applying reinforced parts procurement capabilities.
38
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Economic Value and Social Value provided by Evolved “innovative-Automation”
“Autonomation beyond human abilities”
Based on the high-speed, high-precision control application technology we have
cultivated to date, we are aiming at automation that allows people to engage in
creative work, making full use of IoT, AI, and robotics technology, and leaving the
work that was previously dependent on people to machines. For example, difficult-
to-automate assembly operations and visual inspections that rely on skilled workers
and human flexibility can be automated by means of applications, such as
“intelligent assembly” and “AI sensory inspection,” that utilize robotic integrated
controllers. To resolve labor shortages in manufacturing industry and to shift on-site
personnel to high-value-added work, we will take on the challenge of completely
automating tasks that only people were able to do and that were dependent on
people. By realizing autonomation that truly “goes beyond human abilities,” we will
pursue workplace innovation so that people can engage in creative work with
peace of mind. Furthermore, by combining the energy management technologies
we have developed over the years mainly for OMRON factories, we are aiming at
automation that achieves both productivity and energy efficiency.
“Advanced collaboration between people and machines”
While promoting the replacement of people with machines, we will promote
manufacturing innovation that makes the maximum use of human sensitivity and
creativity. The Cell Line Control System (CLCS), which fully utilizes on-site data and
makes full use of autonomous mobile robots and collaborative robots, has realized
manufacturing sites where robots perform heavy labor and simple repetitive tasks
while people and robots help each other in response to day-to-day changes at the
production site. In addition, the CLCS uses information from various sensors
installed across the production line, and the machines help workers become
proficient so that inexperienced workers or workers transferred from another line
can work smoothly and become skilled quickly. Furthermore, by incorporating
cutting-edge technologies, such as 5G and AI, and utilizing on-site data including
data on workers’ performance and skills, we aim to realize manufacturing sites
where machines help people learn quickly and encourage them to gain new
manufacturing skills, where workers experience job satisfaction and enjoy
manufacturing, and productivity is enhanced.
“Digital engineering transformation”
We leverage cutting-edge digital technology to realize innovations that eliminate
geographic and physical constraints on our customers’ production activities.
Simulations and remote monitoring using virtual technology played a major role in
the development of our products and the maintenance of our manufacturing sites
when we faced restrictions on movement and access during the COVID-19
pandemic. Going forward, such on-site innovation by digital transformation (DX) will
be indispensable for the sophistication of manufacturing. The 3D simulation by
robotic integrated controllers, which many customers have already adopted,
provides verification of operation of the entire equipment including the robot with
the same accuracy as that of the actual equipment, thereby shortening the period
for commissioning and start-up. Going forward, we will expand the scope of “digital
engineering transformation” to our customers’ engineering activities. Using our
proprietary sensing and control technologies, we will reproduce manufacturing
sites and facilities in a digital space to accelerate DX at manufacturing sites and
contribute to business process innovation.
39
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Collaborative Creation with Customers to Realize Production Surpassing “Craftsmanship” using AI
At manufacturing sites, expectations are growing for the introduction of DX and the use of data to address increasingly complex
manufacturing issues, such as the growing labor shortage, the pursuit of ever higher quality, and the decentralization of production due to
the trend toward local production for local consumption. To solve these issues, OMRON has been offering i-BELT, an on-site data utilization
service that improves manufacturing productivity and quality, since 2017. Described below is an example of how OMRON is collaborating
with customers to resolve increasingly complex manufacturing issues by combining OMRON’s unique control devices, such as a wealth of
IoT-enabled sensors and controllers capable of collecting data with high precision, with its expertise gained through the introduction of AI
technology to manufacturing sites.
At a factory of Asahi Breweries, Ltd., the designated volume of beer is filled accurately and at high speed, at 25 bottles per second, using
“craftsmanship” that takes advantage of the “sleight of hand,” “sixth sense,” and experience of skilled workers. However, it took a lot of
time to adjust the machine for accurate filling. Moreover, it is expected to become more difficult to pass on craftsmanship to the next
generation because of the aging of skilled workers and lack of successors. Therefore, Asahi started collaborative creation with OMRON to
realize sustainable manufacturing. OMRON, together with Asahi, collected more than 10 billion pieces of data on factors that affect filling
volume, such as the characteristics of the 120 filling valves on a single production line, outside temperature, and differences in beer
characteristics. Based on these data, through repeated analysis and trial and error, application engineers who have both knowledge of
machine control and knowledge of AI implementation developed automation technology that optimally adjusts machine conditions. They
achieved filling with precision that surpasses the “craftsmanship” of skilled workers. OMRON will continue to develop and propose new
solutions for continuous evolution of customers’ manufacturing sites and take on the challenge of manufacturing innovation together with
its customers.
The filling machine that fills beer into containers is the equipment for this project.
Previously, our experienced employees had been adjusting the filling machine settings. We considered using
AI technology as a means of optimizing the setting values and consulted OMRON in 2017. Since then, we
have been working with OMRON. By joining forces, OMRON and Asahi overcame the numerous obstacles
we faced and introduced AI technology to our factory in 2022.
As a result, AI technology has surpassed the skills of our master craftsmen. Thanks to OMRON’s high
technological capabilities and enthusiasm, we were able to realize practical application of AI technology at our
factory.
Manager, Production Technology Center, ASAHI BREWERIES,LTD. Koji Mima
Innovation of Intralogistics and Production Processes by Mobile Robots
Serious labor scarcity is spreading not only to manufacturing sites but also to distribution warehouses. OMRON is working on automating
the logistics in warehouses using its latest automation technology that has been refined at the manufacturing sites. Here are some
examples of how we are taking on the challenge of solving social issues in a wide range of industries.
Garnet, an Italian importer and distributor, develops high-value-added business by combining a wide variety of electronic components and
providing them to customers as electronic device modules. However, due to the large variety of parts and combinations used in the work
process, workers were required to have a high level of proficiency. This has caused the problem of labor scarcity more serious. Therefore,
Garnet decided to solve the problem through co-creation with OMRON and OMRON's partner company FasThink, which supports
customers to deploy automation solutions for manufacturing industry and distribution warehouses. As a result, this partnership have
realized an automated system that accurately selects and assembles parts without mistakes and shortens the lead time from order receipt.
First, by introducing a combined solution of OMRON's mobile robot and FasThink's parts selection system, Garnet’s manufacturing site has
been able to select appropriate items from many parts without human errors and fully automate the in-house transport process.
Furthermore, by making use of the robot's controller "Fleet Manager", which can be easily integrated with higher-level systems such as
production management systems, Garnet’s manufacturing work has been synchronized with customer orders, leading to a very convincing
productivity improvement.
OMRON will continue to free workers from simple repetitive work such as transportation, creating more time for them to concentrate on
high-value-added work at various sites with its automation technology.
The reason that prompted us to renew our entire process was to resolve some discrepancies between
logistics and production which involved longer management times than expected.
Thanks to the combined use of OMRON mobile robotics technology and FasThink wireless & touchless
Pick2Light system, it has been possible to obtain a versatile and flexible application that allows us to take a
further step towards innovation in Logistics and Production processes; in fact, we have been able to
implement picking quality by eliminating management system discrepancies; in this way our operators can
spend less time doing activities related to products physical movement and focus more to qualified activities.
Through the innovation and implementation of industry 4.0, we feel more and more ready to take up
challenges that the market will reserve in the near future, and we are glad to be partner of innovative
companies that use smart manufacturing technologies and industry 4.0.
Garnet CEO Leopoldo Iurino
As part of the partnership with OMRON, FasThink has developed a truly innovative solution that integrates
the proprietary Pick to Light technology (wireless & touchless Pick2Light system) on an OMRON mobile
robotics system. The combined use of the two technologies has allowed us to create an extremely versatile,
flexible and scalable application, generating a significant improvement and reduction of production time and
logistics management.
A highly qualified and performing response within the reach of small and medium-sized enterprises, at
Manufacturing & Logistics 4.0.
General Manager FasThink srl-OMRON certified partner Marco Marella
40
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Realizing Sustainable Manufacturing that Achieves Outstanding Productivity and QCD with Reduced Energy Consumption
In recent years, amid the sharp increase in demand for manufacturing that achieves coexistence with the global environment,
the Ayabe Factory, one of the main plants of OMRON’s Industrial Automation Business, has been working for more than a
decade to achieve both outstanding quality, cost, and delivery (QCD) of manufacturing and protection of the global environment.
In recognition of its efforts, the Ayabe Factory received the Minister of Economy, Trade and Industry Award of the Energy
Conservation Grand Prize in 2013. The Ayabe Factory has been continuing its initiatives and made progress. Here are some
examples.
Firstly, the Ayabe Factory’s efforts to reduce energy consumption extend to production equipment and control methods. Many
manufacturing companies have begun implementing measures to save energy in lighting, air conditioning, and other facilities as
they endeavor to decarbonize their factories. However, measures to enhance energy efficiency of production facilities, which
account for 70% of the total energy consumption of factories, have tended to be put off due to concerns about the impact on
quality and productivity. In response to this issue, the Ayabe Factory has vigorously introduced innovative applications that
embody the innovative-Automation concept and has achieved quality and productivity improvement and energy efficiency.
Secondly, the Ayabe Factory has introduced the concept of “energy productivity,” which is an indicator with energy consumption
as the denominator and value added as the numerator. Hence, the idea is not to merely reduce energy consumption. Smart
utilization of the time generated by improved productivity, which is the numerator, and facilities, will directly lead to reduced
energy consumption.
Energy
Productivity
Improvement
Productivity Improvement
Higher speed, higher yield,
and lower operating loss
=
Energy Reduction
Optimization of the length of time
operating factory facilities and
production equipment and energy saving
The Ayabe Factory manufactures 20,000 different specifications of products in variable volumes. For example, the assembly
process for sensors, a typical product of the Ayabe Factory, was converted to a mixed-flow line and automated using
collaborative robots. This resulted in a 25% increase in productivity, leading to greater output per unit of energy consumed, as
well as a decrease in energy consumption due to more efficient use of space.
As a result of these initiatives, over the 10-year period from 2010 to 2021, power consumption on production lines of the Ayabe
Factory has been reduced by approximately 15% although shipments from the Ayabe Factory have increased by more than
35% in value terms.
At OMRON, we believe that the people who work at manufacturing sites must be the primary focus of our decarbonization
initiatives. Specifically, the energy management system developed at the Ayabe Factory, which we call “Environment-ANDON,”
provides necessary information in real time corresponding to the roles of workers at the manufacturing site. Based on daily
on-site improvement actions and their progress, OMRON considers ways to improve innovative-Automation solutions every day.
As a result, in addition to the basic patents related to energy visualization, OMRON has obtained more than 10 patents for
energy control technologies that also relate to
production facilities and control methods. We use
these technologies not only for improvement of
“energy productivity” of OMRON factories but also
have started external sales to our customers as the
i-BELT service. For manufacturing in harmony with
the global environment, OMRON will continue to set
the pace, considering it a corporate social
responsibility as we have long supported the core
field of manufacturing industry.
Message of Ayabe Factory Manager
Manufacturing workplaces are in a period of drastic change. In addition to longer time required for
procurement due to shortages of semiconductors and other parts and materials, soaring costs of
materials, and the COVID-19 pandemic, there are numerous other issues, such as a decline in the
number of workers engaged in manufacturing, including skilled workers, and labor shortages, to cite
just a few. Moreover, capital investment and technological development to achieve carbon neutrality
are becoming essential in manufacturing industry, too, in response to growing international
momentum toward carbon neutrality. In these circumstances, the Ayabe Factory will further evolve
innovative-Automation and will lead the realization of sustainable manufacturing with the aim of
achieving both outstanding QCD in manufacturing and protection of the global environment, which are
goals that we have been pursuing for more than a decade.
Ayabe Factory Manager
Tatsuya Benkan
41
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Fiscal 2021 Business Highlights
In fiscal 2021, demand for capital investment rose in manufacturing industry in all areas of the world. Demand
for secondary batteries and semiconductor-related capital investment in digital industry expanded, particularly
in Greater China, Asia, and the Americas, and demand among Japanese equipment manufacturers also
increased. At the same time, demand for capital investment related to electric vehicles continued to increase
in the automotive industry. The food and house-hold goods industry experienced firm demand, mainly for
packaging machines. We accurately captured these rising demands through solution proposal-based sales,
which we have strengthened over time, while also engaging in production increases, etc. As a result, net
sales significantly grew year on year, reaching a record high. Operating income significantly increased year on
year, reaching a record high, mainly due to the large increase in sales. As a result, net sales for fiscal 2021
totaled ¥418.1 billion, an increase of 24.6% compared with the previous fiscal year, and operating income
totaled ¥76.3 billion, an increase of 33.4%*¹ compared with the previous fiscal year.
Sales Composition by Business Domains
Solutions by innovative-Automation
33%
FY2021
Net Sales
¥418.1 billion*1
67%
Components
High-speed, high-precision
alignment
Intelligent assembly
(Robotic integrated solutions)
Cell Line Control System
Strengths of the Industrial Automation Business (IAB)
“innovative-Automation” concept for innovation in manufacturing
Unique automation technology that combines cutting-edge technologies such as AI/IoT/robotics with control
technology for factory automation
The industry’s broadest product lineup (ILOR+S), covering a wide range of manufacturing sites
More than 250 innovative applications that embody the innovative-Automation concept
Globally, 1,600 application engineers who implement applications for customers’ manufacturing sites
Automation Centers (ATC) (37 locations worldwide) to create solutions to customer issues
Wealth of knowledge to support the i-BELT on-site data utilization service
INPUT
OUTPUT
Growth investment*2: Total ¥2.5 billion
R&D cost: Total ¥22.6 billion
Capital expenditure: Total ¥7.0 billion
(Results for FY2021)
Evolution of the innovative-Automation
concept for innovation in manufacturing
(January 2022)
Increased the number of application
engineers (30 more than in the previous
fiscal year)
Reopened ATC-KUSATSU and established
5G PoC. (January 2022)
Invested in Techman Robot Inc., the
world’s second largest manufacturer of
collaborative robots (December 2021)
Net sales:¥418.1 billion (+24.6% YoY)
Operating income: ¥76.3 billion (+33.4% YoY)*1
Orders received for FY2021: +55% YoY
Sales of the solutions business as a proportion
of total sales of IAB: 33% (+5.0 percentage
points YoY)
Created innovative applications (approx. 1.5
times more from the previous year)
Strengthened product supply capability to
support business growth
OUTCOME
Contributed to economic
development by enhancing
social productivity through
innovative-Automation
SDGs 8.2.1
SDGs 9.2.1
SDGs 17.16
*1 Some products in the Industrial Automation Business have been reclassified to the Device & Module Solutions Business. *2 Including M&A
42
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Healthcare Business (HCB)
VISION
Going for ZERO, Preventive Care for the Health of Society
Ideas and Insights Shaping the SF2030 Vision
Managing Executive Officer
OMRON Healthcare Co., Ltd.
President and CEO
Isao Ogino
In the Healthcare Business, we have been promoting home blood pressure
monitoring believing that measuring blood pressure at home is beneficial to
people’s health. Nowadays, blood pressure data measured at home is being
used in the treatment of hypertension, and home blood pressure monitoring
has a positive impact on the blood pressure control of hypertensive patients.
However, as the population ages, the number of hypertensive patients is
increasing globally, and onsets of cerebral and cardiovascular diseases
attributable to hypertension are also on the rise. In addition, the number of
patients with respiratory diseases is rising, especially in emerging countries.
Chronic pain in the knees, low backs, and shoulders imposes a heavy
burden on people in their daily lives, significantly reducing the quality of life
(QOL).
Our SF2030 vision, “Going for ZERO, Preventive Care for Health of Society,”
expresses our strong determination to create a society in which people
around the world can live healthy and comfortable lives.
By leveraging the technologies and insights we have cultivated so far, we
address three business domains: Cardiovascular, Respiratory, and Pain
Management and aim to achieve 3 Zeros within these domains: “Zero
cerebrovascular and cardiovascular events,” including stroke and heart
failure; “Zero aggravation of respiratory diseases,” such as asthma and chronic obstructive pulmonary disease
(COPD); and “Zero restrictions on daily activities due to chronic pain,” regarding the knees and low back pains.
In addition, we will introduce Preventive Care to prevent disease and the development of serious illness,
thereby offering new value fulfilling the desire of people around the world to “stay healthy.”
In 2021, cumulative global sales of home blood pressure monitors exceeded 300 million units. However,
looking at the global big picture, the penetration rate of home blood pressure monitor is still low, and the
market size is expected to grow from 61 million units in 2020 to 87 million units in 2024. We will be focusing
on China and India whose markets are expected to expand further, while strengthening our core business.
In addition, issues affecting healthcare, such as the increase in the number of patients with chronic diseases
due to aging population, increasing workloads of healthcare professionals, and a shortage of doctors, are
becoming more apparent globally. By realizing social implementation of services that connect vital data
measured at home with the medical field to support treatment by physicians, we establish a set of systems
for preventive care that reduces physicians’ workloads and allows everyone to receive optimal medical care.
Furthermore, we will strive to make recording of electrocardiogram (ECG) data at home common practice to
promote early detection and treatment of atrial fibrillation (AFib), a major risk factor for stroke. “Visualization”
of the invisible risk of AFib in hypertensive patients helps prevent cardiovascular events, such as stroke. We
will also continue to develop devices that monitor and record indicators other than blood pressure that are
related to the onset of events, such as ECG.
In recent years, there have been changes in the business environment that go beyond anything we had
anticipated, such as disruptions to international logistics and semiconductor shortages during the COVID-19
pandemic and the intensifying Russia-Ukraine crisis. During fiscal year 2021, As part of our initiatives to meet
customers’ expectations without being influenced by the harsh business environment, we established the
MTA (Make to Availability) production system to deliver products to the customers who need them, when
they need them, based on global integrated management of all inventories from parts to products in the
market. In fisical year 2022, we will refine our purchasing strategy, including standardization of electronic
components and stocking of appropriate quantities of parts, and enhance our ability to procure parts and
materials for stable product supply.
We will also vigorously promote initiatives for decarbonization and environmental impact reduction, such as
the introduction of environmentally friendly paper packaging and carbon neutral manufacturing, to create a
sustainable society where everyone in the world can lead a healthy and comfortable life.
43
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business SF 1st Stage
Targets
Sales Growth (CAGR)
¥ 180.0 billion
¥ 132.9 billion
83%*
+11%
(Focus domains: +12%)
*Composition of
focus domains
88%*
FY21 results
FY24 targets
Social Value KPI
Global blood pressure monitor sales
94 million units
(3-year total)
Number of remote monitoring service users
600,000 users
(cumulative total)
Focus Domains
Cardiovascular
Respiratory
Pain management
Remote patient
monitoring service
Major Initiatives
OMRON Health Convenience Store
44
Under SF 1st Stage, we aim to expand sales of blood pressure monitors which are a pillar of our business globally aiming to achieve cumulative sales of 94 million units over the next three years. We also aim to expand the number of users of our new remote monitoring service to 600,000, thereby laying the foundation for the realization of our vision, “Going for ZERO, Preventive Care for Health of Society.”We will expand our business in China and India, which are huge markets with tremendous growth potential in the healthcare domain, thus building a strong business foundation. For the Digital Health business, we intend to create new services by building on the progress already achieved with the telemedicine services that we launched in the U.S. and the U.K. Furthermore, we will work to develop innovative devices necessary to realize the 3 Zeros (Zero Events) and utilize them in the Digital Health business.1. Cultivation of the Chinese and Indian marketsWe will focus on the Chinese and Indian markets where further market expansion is expected due to the increasing number of hypertensive patients and patients with respiratory disease in line with economic growth and population aging, in order to strengthen the revenue base.The blood pressure monitor market in China is expected to increase from approximately 21 million units in 2020 to 30 million units in 2024. Our targets are Tier 3 and Tier 4 cities in China, which are experiencing rapid economic growth. GDP of such cities is expected to surpass that of Tier 1 and Tier 2 cities by 2024. We will expand the offline/online channels that we have established in 1st and 2nd Tier cities to 3rd and 4th Tier 4 cities. By strengthening collaboration with partners, we will expand points of contact with customers through the OMRON Health Convenience Stores where customers can experience OMRON products. Regarding the respiratory business, we have strengthened the product lineup of nebulizers, which are in high demand in the market. We have launched WheezeScan, a wheeze detector, that detects wheezing sounds of asthma patients. In collaboration with medical professionals specializing in pediatric asthma, we will establish an in-hospital model that provides one-stop optimal treatment by specialized medical staff to provide better care for asthma patients.Replacement of mercury thermometers, whose withdrawal from the market by 2025 is mandatory, with digital thermometers will gain momentum. By communicating the benefits of high-speed, predictive digital thermometers to healthcare professionals, we encourage their introduction in hospitals. Capitalizing on the confidence in OMRON digital thermometers cultivated through their use in hospitals, we will promote them for temperature measurement at home.India, with an estimated 300 million hypertensive patients, is a market with huge potential, however, the penetration rate of blood pressure monitor is only about 3% at present. The need to make blood pressure monitoring at home common practice is an issue. In the area of respiratory diseases, the diffusion of nebulizers is still in its infancy.OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Therefore, we are working to expand the market by cultivating demand in the
blood pressure monitor and respiratory categories. We will roll out Experience
Centers with customer support contact points in major cities in India to provide
consumers with hands-on experience of OMRON products to raise consumer
awareness about the importance of home blood pressure monitoring and the
effectiveness of nebulizers. Moreover, we will promote the OMRON Academy,
an educational program for healthcare professionals, to raise awareness of the
importance of home blood pressure monitoring in the treatment of hypertension
and use of the nebulizers for respiratory diseases in the medial filed.
2. Creation of a “culture of ECG recording at home”
In order to achieve Zero Events, as set out in SF2030, we have been promoting
devices and services for early AFib detection at home, which is one of the
factors for the onset of cardiovascular events. Adding to this, “early detection of
ischemic heart diseases” and “prevention of aggravation of heart failure and
detection of signs” have also been on our top priority. In the 1st Stage, we will
work to establish a business model that raises awareness for both physicians
and patients about the risks of AFib and the importance of ECG recording at
home, thus promoting the creation of a “culture of ECG recording at home.”
Drugstore in India
Portable ECG, HCG-8060T
3. Expansion of the number of users of remote monitoring services
In the U.K. and the U.S., remote monitoring services are being covered by insurance and these markets are
emerging. With VitalSight*1 in the U.S. and Hypertension Plus*2 in the U.K., the effectiveness of telemedicine
services in lowering blood pressure and reducing medical costs has been verified. On the other hand, issues
such as the need for continued treatment support for patients and the increased on-site workload during new
patient registration have also become apparent. Therefore, we will strengthen internal systems such as
planning, development, and sales, and focus on reducing the frontline workload through business support
systems such as customer management and billing operations. In the U.K., we are also working with Dorset,
one of the Integrated Care Systems (ICS) that operates community health care, to collect both physician and
patient feedback on the clinical effectiveness and usefulness of Hypertension Plus. We already have attracted
inquiries from many medical institutions, by publicizing feedback from Dorset Clinical Commissioning Group,
which has great influence on the decision-making of general practitioners who are considering the
introduction of the service.
By demonstrating the benefits of telemedicine services such as clinical efficacies and reduced healthcare
costs both in the U.S. and the U.K., we will increase the number of users and establish the foundation for our
Digital Health business.
*1 VitalSight: A remote patient monitoring service launched in North America in September 2020. Sharing patients’ data measured at home with physicians realizes efficient and
effective treatment.
*2 Hypertension Plus: A remote patient monitoring service launched in the U.K. in April 2021 that features recommendation of customized medication plans to patients, for which
purpose it uses blood pressure data measured at home.
4. Initiatives for decarbonization and environmental impact reduction
By identifying the environmental impacts of our business
activities, we will accelerate various initiatives aimed at reducing
our environmental impact.
One of the initiatives is to replace the plastic blister packages for
thermometers sold in Japan with paper packages that have less
environmental impact. Going forward, we will expand the scope
of products to include electric toothbrushes, activity monitors,
and low-frequency therapy equipment (TENS), as well as prepare
to replace packaging for products worldwide with paper packaging
to achieve zero use of plastics.
Furthermore, by visualizing the energy consumed in
manufacturing processes at production sites, we will identify
energy reduction potential and use energy efficiently and without
waste with the aim of doubling energy productivity. Through these
initiatives, we aim to realize carbon neutral factories.
(Left) Former plastic package
(Right) Environmentally friendly paper package
45
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Initiatives in 2022 (Partners for Collaborative Creation)
Communicating the Significance of Recording ECG at Home with Partners to Realize the vision of Zero Events
To realize the vision of Zero Events, we focused on atrial fibrillation (AFib), which is a risk factor for stroke and
likely to occur in combination with hypertension. Early detection and treatment of AFib can reduce the risk of
events. However, AFib is easily overlooked because the patient is unaware of the condition and may not be
detected during regular health checkups or other physical examinations.
Therefore, we have developed an upper arm blood pressure monitor with built-in ECG function that can
simultaneously record an electrocardiogram when measuring blood pressure at home. The recorded ECG is
analyzed by the dedicated “OMRON connect” app and a message notifies the user of the possibility of AFib.
To facilitate detection of AFib in more hypertensive patients at an early stage, OMRON formed a partnership
with the Smart HealthCare Association this fiscal year. In Japan, we
are implementing a Pharmacists Recommendation Model, an ECG-
based medical consultation recommendation model using an upper
arm blood pressure monitor with ECG and a check sheet at
dispensing pharmacies and drugstores.
OMRON’s upper arm blood pressure monitors with ECG are
installed in stores and consumers can take their blood pressure and
record ECG. Based on the measurement results and using a check
sheet, pharmacists recommend people with the possibility of AFib
to seek medical consultation.
This is an initiative to prevent events by increasing opportunities for
early detection of AFib in daily life and encouraging treatment.
Drugstore where the Pharmacists
Recommendation Model has been introduced
Employee Comments
OMRON launched Japan’s first upper arm blood pressure monitor with ECG in March 2022. Our
challenge was how to communicate the new value we are offering to consumers, namely, that
recording ECG at home can assess the risk of AFib, which may cause stroke. During discussions
with the project team members, the idea of the collaboration with the Smart HealthCare
Association (SHCA) was suggested. SHCA is a general incorporated association that is working to
create new business models and environments for offering services at pharmacies and
drugstores. We developed a model for recommending medical examinations using dispensing
pharmacies and SHCA agreed to work with OMRON on this initiative. In collaboration with them,
we intend to apply this model to pharmacies and drugstores nationwide to achieve early detection
of AFib and Zero Events.
East Japan Sales, Healthcare
Product Sales Dept.
Takashi Iga
Comments from Our Partner
To respond to people’s desire to stay healthy, we support health promotion activities at
pharmacies and drugstores that are close to consumers. The number of patients with AFib in
Japan is expected to exceed 1.08 million by 2030, but people have little awareness of what
kind of condition AFib is and the risk it poses. We believe that it is the role of pharmacies and
drugstores to notice changes in consumers’ health conditions and contribute to disease
prevention and health promotion, encouraging them to seek medical consultation when
necessary. In collaboration with OMRON, we urged pharmacies and drugstores to introduce
the Pharmacists Recommendation Model, prepared materials for operation of the model, and
trained pharmacists and other staff. We will continue to contribute to enhancing the value that
pharmacies and drugstores offer through their support of the health of society.
Smart Health Care Association (SHCA) Ph.D., Pharmacist Mitsuhiro Okazaki
46
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Initiatives in 2022 (Partners for Collaborative Creation)
Prevalence of Home Blood Pressure Monitoring in India
Due to changes in lifestyles associated with economic growth and aging population, the number of
hypertensive patients in India continues to rise and the blood pressure monitor market is projected to reach
approximately 14 million units in fiscal 2030, making it the second largest market in the world, following
China.
However, the use of home blood pressure readings in medical treatment and the practice of patients
measuring their blood pressure at home have yet to become common practice. We are increasing our efforts
to raise awareness among doctors and patients of the importance of home blood pressure monitoring and to
instill a “culture of measuring blood pressure at
home” in India.
One of our initiatives is a business alliance with
Terrals Technologies Pvt. Ltd., an online medical
service provider in India that offers chronic
disease management services, such as for
diabetes and hypertension. Firstly, OMRON’s
blood pressure monitors will be introduced for
Terrals’ online medical services to expand
hypertension management using home blood
pressure monitoring while also raising
awareness of the OMRON brand and
OMRON’s home blood pressure monitors
among both doctors and patients.
Employee Comments
As the number of people in India who are diabetic or suffer from hypertension continues to grow,
this is becoming a social issue. Efforts to address chronic diseases are rapidly gaining momentum,
with the government strengthening telemedicine services for patients with chronic diseases. I also
feel that COVID-19 has raised public health awareness. With the aim of achieving Zero Events in
India, where monitoring blood pressure at home has yet to become common practice, we will
work with Terrals, which shares our aspirations, to heighten doctors’ and patients’ recognition of
the usefulness of home blood pressure monitoring and contribute to the health of the Indian
people.
OMRON Healthcare India
Katsuyuki Yamamoto
Comments from Our Partner
In India, low quality of medical care and poor access to healthcare are social problems. To
deliver our services to one billion Indians, we are collaborating with OMRON to develop a
platform for comprehensive services for management of chronic disease patients. OMRON’s
vision is aligned with the direction in which we are heading. Through our partnership with
OMRON, we will step up efforts to resolve social issues in India.
Terrals Technologies Pvt. Ltd. (Head office: Bangaluru, India. Founded in 2017.)
Develops and provides an online medical care platform for physicians dealing with chronic diseases, such as diabetes and
hypertension.
Co-Founder and CEO, Terrals Technologies Pvt. Ltd. Sumit Sinha
47
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Fiscal 2021 Business Highlights
In fiscal year 2021, demand for blood pressure monitors continued to grow globally in line with increased
awareness of the need to prevent the progression of serious chronic diseases due to the COVID-19
pandemic. Demand for nebulizers continued to recover as patients had more opportunities to visit hospitals.
Demand for thermometers experienced a decline in reaction to the previous-year surge in demand. Despite
factory operation restrictions in the first half of the year due to the COVID-19 pandemic and supply chain
disruptions beginning in the third quarter, we steadily captured robust demand by implementing product
design changes and switching transportation routes rapidly. As a result, net sales increased year on year.
Despite efforts to control fixed costs and increase added value, operating income declined compared to the
previous fiscal year due to soaring component and logistics costs. As a result, net sales for fiscal 2021 were
¥132.9 billion, an increase of 7.9% compared with the previous fiscal year, and operating income totaled ¥18.5
billion, a decrease of 9.9% compared with the previous fiscal year.
Sales Composition by Business Domains
Other
(including remote monitoring services)
22%
Cardiovascular
business
FY21
Net Sales
¥132.9 billion
4%
9%
65%
Pain management business
Respiratory business
Strengths of the Healthcare Business (HCB)
Ability to obtain regulatory approvals on a global scale
Medical device certifications obtained in 90 countries. Offering of devices and services that are not only easy to use but
also satisfy the safety requirements of each country and are compatible with social infrastructure and medical systems
that differ from country to country
Global sales channels/ Market share
No. 1 global market share for home blood pressure monitors with more than 600,000 sales channels worldwide
Innovative devices and services
Creation of innovative devices and services, such as the world’s first wearable blood pressure monitor and blood pressure
monitor with ECG, and remote monitoring services using vital data measured at home
Trust earned from the medical community and healthcare professionals around the world
OMRON’s blood pressure monitors have been used for 200 research papers, accounting for 65% of all research papers on
home blood pressure monitoring
*From 2000 to November 2018. Survey by OMRON
INPUT
OUTPUT
OUTCOME
Growth investment*: Total ¥200 million
R&D cost: Total ¥7.9 billion
Capital expenditure: Total ¥4.4 billion
(Results for FY2021)
Invested in Micromed Biotecnologia
Ltda. (Brazil), a provider of an ECG
analysis platform
Net sales: ¥132.9 billion (+7.9% YoY)
Operating income: ¥18.5 billion (-9.9% YoY)
Cumulative global sales of blood pressure
monitors exceeded 300 million units
Started remote monitoring service in the
UK. Also, formed a business alliance with
an online medical service provider in India
Launched a blood pressure monitor with
ECG and a portable ECG worldwide
Helped to extend healthy life
expectancy and reduce medical
expenditures to contribute to
healthier and more comfortable
lives for people around the world
Global blood pressure monitor
sales: 25 million units (FY2021)
Number of remote monitoring
service users: 10,000 users
(FY2021)
SDGs 3.4.1
*Including M&A
48
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Social Systems, Solutions and Service Business (SSB)
VISION
Design Next Social Structure – Creating “Social Good” by Organically
Linking People and Society through Social Automation
Ideas and Insights Shaping the SF2030 Vision
Managing Executive Officer,
President
OMRON SOCIAL SOLUTIONS Co., Ltd.
Toshio Hosoi
During the VG2020 period, the Social Systems, Solutions and Service
Business integrated the UPS business in 2018 and the environmental
business in 2020, aiming to establish a sustainable growth structure, and
moreover, worked to solidify the earnings base and create a new growth
trajectory based on multiple lines of business. Recognizing “labor
shortages” as a social issue in search of a solution, we aimed to secure a
firm position in the industry by cultivating the markets addressed by our
base business, such as household storage battery systems, automatic fare
collection (AFC) systems for railway stations, and payment terminals. We
strove to eliminate inconvenience in daily life by offering greater value
through solutions, such as the automation of hotel reception operations by
means of check-in terminals; cleaning, security, and guidance services by
autonomous service robots; and mobility-as-a-service (MaaS) based on
mutual aid among residents in a community for regional revitalization.
However, in fiscal 2021 we faced unprecedented headwinds, attributable to
such factors as the COVID-19 pandemic, delays in the delivery of parts and
materials, and exchange rate fluctuations, which highlighted the importance
of the ability to effectively respond to change.
As we head toward the year 2030, new social issues will emerge, posing a threat to the security, safety, and
comfort of our daily lives, such as more frequent natural disasters in view of global warming and an
insufficient labor force owing to the declining birthrate and population aging. The values of people living in
such times will continue to diversify. In addition to responding to our customers’ needs, in light of emerging
social issues we will consider how social systems should be reset and seek solutions. Together with
stakeholders who share our perspectives, we will endeavor to create “next-generation social systems.” Our
ideas and insights as well as the processes corresponding to them are expressed by the word “Design” in
our SF2030 business vision. We are committed to creating “social good” in the form of aspirational lifestyles
and a bright future full of smiles.
Under SF2030, the social issues we will address are “achievement of carbon neutrality” and “realization of a
digital society.” Social issues such as increasing CO2 emissions, accelerating climate change and lack of labor
force due to the accelerating decline in the birthrate and population aging could cause various inconveniences
and concerns in our daily life. For companies, management issues are becoming more complex in view of the
need for business continuity and decisive action on the environmental front. We need to resolve not only
on-site issues by providing existing devices and services but also to work with customers, helping them
resolve their management issues. We will contribute to the creation of a future society that is safer, securer,
and more comfortable. We will aim to realize next-generation social systems through social automation
cultivated in the Social Systems, Solutions and Service Business.
We have three goals under SF 1st Stage: firstly, “provision of control systems that stabilize power
generation,” secondly, “development of management and service systems that support efficient use of on-
site systems,” and thirdly, “enhancement of operational efficiency of the social infrastructure business.” With
a view to resolving social issues, we will continue applying our strengths in ways beneficial to society so as
to become an indispensable element of society in the runup to SF 2nd Stage (from fiscal 2025 onward).
49
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business About SF 1st Stage
Targets
Sales Growth (CAGR)
Social Value KPI
¥ 87.7 billion
61%*
+4%
(Focus domains: +7%)
¥ 100.0 billion
66%*
*Composition of
focus domains
FY2021 results
FY2024 targets
Connected energy management
devices
50,000 units
(3-year total)
Focus Domains
Renewable energy control
(residential / industrial / mobility)
Management and services
Major Initiatives
The Social Systems, Solutions and Service Business aims to contribute to “diffusion and efficient use of
renewable energy and sustainable infrastructure to support digital society.” So far, we have contributed to the
diffusion of solar power generation and storage batteries. Going forward, we will contribute to the further diffusion
of renewable energy by eliminating instability in power generation using our advanced energy control technology.
In the social infrastructure field, capitalizing on our extensive knowledge of the sites where various equipment and
facilities are in use, we have supported operation and maintenance through a nationwide service network. Going
forward, by offering management and services that support efficient operation of on-site systems, we will help
our customers innovate their maintenance and operation processes.
1. Focus domains under SF2030
Under SF2030, we will focus on two businesses: “energy solutions” and “management and services.” Regarding
energy solutions, we will eliminate instability in power generation by applying our advanced energy control
technology, expand the introduction of remotely controllable energy storage systems, and further promote
renewable energy in the residential, industrial, and mobility fields, thereby contributing to the realization of a
resilient carbon-neutral society. Regarding management and services, in order to ensure efficient operation of
on-site systems for maintaining equipment and systems and supporting operation of customers’ facilities, we will
innovate maintenance and operation processes. To create and expand recurring service businesses that leverage
customer assets, we will develop management and service systems with the aim of resolving labor shortages.
2. Initiatives for area-wide energy supply/demand control
Under SF 1st Stage, we will work on “renewable energy control” in three major fields: “residential,” “industrial,”
and “mobility.” For the residential field, we will connect energy resources through the efficient implementation of
energy storage systems in society and adding services with continuous contact points, such as obtaining carbon
offset credits under the J-credit scheme. From SF 2nd Stage onward, we aim to realize advanced energy supply/
demand control services using peak shifting and market transactions. For the industrial field, we will prepare to
secure a position at the forefront of developments in the energy field by combining business verification of the
power purchase agreement (PPA) and management and services. PPA involves ownership and management of
solar power generation facilities on land and roofs provided by facility owners. For the mobility area, under SF 1st
Stage, we will establish component
services for EVs and PHEVs in both the
residential and industrial markets. And
from SF 2nd Stage onward, we aim to
provide supply/demand control services.
Through these initiatives that transcend
conventional fields, we will realize area-
wide or regional energy supply/demand
control and promote the wider application
of renewable energy in society. We will
enhance our ability to swiftly create
solutions through concurrent activities.
Envisioned power system
Area-wide supply/
demand control
(electricity storage control)
Minimization of
Minimization of
electricity costs
electricity costs
in a building
in a building
Sale of all the
Sale of all the
electricity
electricity
generated
generated
Electricity sales (FIT)
SF2030
2nd Stage
Self-consumption
Sale of
Sale of
surplus
surplus
electricity
electricity
Area control
VG2020
Storage battery
Storage battery
3rd Stage
1st Stage
PVPV
PVPV
PVPV
50
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business From a Field Perspective to a Management Perspective to Support Social Infrastructure with Management and Services
Convenience stores, numbering some 57,000 in Japan, constitute important social infrastructure
underpinning daily life. For more than 50 years, OMRON has supported railways, roads, and various other
social infrastructure as a provider of equipment and systems as well as on-site services covering
maintenance, operation, and engineering. We will present a case study on the solution we provided for a
maintenance operations management issue of a nationwide store system, which involved application of
expertise we have long cultivated in the field.
Optimization of the customer’s operations through centralized maintenance services
Lawson with 15,000 stores nationwide was experiencing as many as 2,200 equipment failures
per month. However, because multiple manufacturers dealt with troubleshooting for different
types of equipment, insufficiencies in maintenance operation management, namely, the
inability to grasp the current status in real time, utilize accumulated knowledge, and implement
store quality control and equipment control, were an issue for Lawson.
OMRON FIELD ENGINEERING has some 140 bases nationwide and takes pride in its ability to
provide uniform services. In order to resolve this issue, the company launched a project team
to establish integrated management of all types of equipment from multiple manufacturers.
Within as little as eight months, we had swiftly established a nationwide one-stop integrated
maintenance system. Moreover, by introducing a system to centrally manage call center
operations and troubleshooting at stores, knowledge was accumulated through visualization
and analysis of data on trouble. Tablets are used for sharing information with store staff. As a
result, the failure resolution rate at stores has increased significantly, and the rate of dispatching
service personnel to stores has been reduced by approximately 30%.
POS
Change-giving
machine
Store computer
Before improvement
Contact Center
Thermal printer
DOT
SC Printer
OMRON FIELD
ENGINEERING Co., Ltd.
Life System Solutions Dept.
Takamasa Takemura
Tablet
POT
Loppi printer
Loppi
Difficulty in understanding explanations over the phone while looking at paper manuals
placed in stores, making it difficult for store staff to restore failed devices.
After improvement
Contact Center
Equipment subject to maintenance management at Lawson stores
Error-specific manuals are distributed to tablets for the devices so that store staff can
understand the troubleshooting procedures by receiving explanations over the phone.
From resolution of field issues to resolution of management issues
With our comprehensive integrated maintenance services launched in 2019, considering the labor- and manpower-saving
needs of Lawson’s management, we provide services, including receiving equipment failure reports, on-site work such as
maintenance and installation, logistics, kitting, and reporting agency services. In addition, we are now actively involved in
initiatives to reduce environmental impacts and address the SDGs through reduction of waste and losses by promoting
repair and reuse of in-store equipment, reduction of the frequency of dispatching of service personnel, and reduction of
CO2 emissions by optimizing the method of equipment transportation.
We will continue our efforts to optimize Lawson’s operations by asking ourselves “What value can we provide?” and
contribute to the realization of Lawson’s vision of a “Hub of refreshment in every community.”
We are grateful to OMRON FIELD ENGINEERING for establishing a system for visualization of
operation and maintenance of various types of equipment from multiple manufacturers by
organizing the infrastructure for it. Every aspect of store status nationwide can now be
grasped in real time, including on-site operation and maintenance work, inventory control, and
improvement of inefficient operations.
As a “change-responsive business,” Lawson has responded to the changing needs of society
and customers and continually created new products and services. As a “Hub of refreshment
in every community,” to be true to our three promises, “Superior taste,” “Human kindness,”
and “Environmental (Machi) friendliness,” we will continue to take on the challenge of serving
society and the community. We would like to promote various initiatives with our strategic
partner OMRON FIELD ENGINEERING and build a win-win relationship so as to achieve
further benefits from the perspective of the SDGs.
Project Promotion Department, IT Solutions Headquarters, Lawson, Inc. Kazuyuki Tokuhiro
51
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Fiscal 2021 Business Highlights
In fiscal 2021, our Energy Solutions Business saw significant growth in sales of storage battery systems as
we endeavored to secure components to meet the growing demand for carbon-neutral businesses and
disaster prevention and mitigation. On the other hand, the Public Transportation System Business experienced
the impact of ongoing restrained investment by major customers owing to the prolonged effects of the
COVID-19 pandemic. As a result, net sales were lower year on year. Operating income rose significantly year
on year, despite the impact of lower net sales, owing to efforts to control fixed costs and increase added
value. As a result, net sales for fiscal 2021 totaled ¥87.7 billion, a decrease of 8.3% compared with the
previous fiscal year, and operating income totaled ¥6.5 billion, an increase of 14.3% compared with the
previous fiscal year.
Sales Composition by Business Domains
Energy solutions
(solar power generation systems,
storage battery systems)
Management and services
(management of maintenance and operation,
data analysis, consulting)
39%
FY2021
Net Sales
¥87.7 billion
61%
Other
Strengths of the Social Systems, Solutions and Service Business (SSB)
A number of unique automation technologies and innovations created since the establishment of the company,
including the world’s first “electronic auto-sensitive traffic light” and “unmanned station system”
Position as an industry opinion leader with No. 1 or No. 2 market shares for a wide range of social systems,
including in the railway, mobility, and energy sectors
Provision of one-stop solutions from manufacturing to software and comprehensive services for maintenance and
operation to solve on-site issues
INPUT
OUTPUT
OUTCOME
R&D cost: Total ¥3.5 billion
Capital expenditure: Total ¥2.8 billion
(Results for FY2021)
Sales network with some 140 bases
nationwide offering comprehensive
services
Concluded two collaboration
agreements with local governments
to resolve social issues faced by
regions (FY2021)
PoC for creation of new services, such
as stabilization of new regional electric
power, utilization of EVs and PHEVs,
and linkage of robots with building
facilities
Net sales: ¥87.7 billion (-8.3% YoY)
Operating income: ¥6.5 billion (+14.3% YoY)
Cumulative shipped capacity of solar power
systems: 10.8 GW
Cumulative shipped capacity of storage battery
systems: 0.9 GWh
Started providing long-term stable operation
services for solar power generation to promote
renewable energy
Launched a service to collect and utilize private
consumption of electricity produced by solar
power generation as environmental value
through the J-Credit Scheme
Started providing a river monitoring system for
heavy rainfall and MaaS based on mutual aid
among residents of communities in the regions
Started providing a data utilization platform
service for facility management in view of
increasingly acute labor shortages
Contributed to realization of a
better society in which people
around the world can continue
to live in a safer, more secure
and comfortable society by
expanding renewable energy
and providing people-friendly
next-generation systems
SDGs
3.6.1
SDGs
11.2.1
SDGs
7.1.2
SDGs
13.2.1
52
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Device & Module Solutions Business (DMB)
VISION
With Our “Connecting” and “Switching” Technologies, Resolve Social
Issues with Customers
Ideas and Insights Shaping the SF2030 Vision
Shizuto Yukumoto
Managing Executive Officer
Company President, Device &
Module Solutions Company
The Device & Module Solutions Business will realize three transformations
under SF2030.
Firstly, we will pursue business transformation. As one of OMRON’s core
businesses, the Device & Module Solutions Business aims to address social
issues, namely, “achievement of carbon neutrality” and “realization of a
digital society.” With this intention, the name of the business company was
changed from Electronic and Mechanical Components Company to Device
& Module Solutions Company on April 1, 2022, 12 years since the business
company’s establishment. By combining our core technologies and diverse
functions, we will enhance the value of our products and provide customers
with device- and module-based solutions that give them the functions they
need while addressing societal challenges. Ever since our foundation, we
have been a source of sophisticated, high-quality devices and modules,
including relays, switches, connectors, and sensors. And our core
“connecting” and “switching” technologies are indispensable for turning
equipment on and off the flow of electricity in addition to our sensing
technology. Leveraging our expertise, we will create new social value that
contributes to the “spread of new energy* and high-speed communication.”
Secondly, we are resetting our focus domains. We will focus on four business fields where the strengths of
the Device & Module Solutions Business centering on its core technologies can be brought into full play and
where further growth opportunities are expected. Focus domains are DC(direct current) drive equipment, DC
infrastructure equipment, high-frequency devices, and remote/VR devices. Regarding DC drive equipment
and DC infrastructure equipment, the shift to DC and higher-capacity power supply and the electrification of
infrastructure will progress as measures to minimize the environmental burden. In promoting widespread use
of these products, the need for safety measures will increase to ensure electric shocks and combustion are
prevented. Regarding high-frequency devices and remote/VR devices, the rapid digital shift requires
technologies and devices that enable high-speed communication and large data capacity. With our
“connecting” and “switching” technologies, we will deliver solutions for these issues.
Thirdly, we will evolve our value proposition model. In addition to the existing value, we will offer new value
corresponding to “green, digital, and speed.” We will accelerate value proposition through the creation of
devices that contribute to the realization of a decarbonized society, provision of digital value, and concurrent
activities in which sales, development, and production work together to respond to changes in society in a
flexible and timely manner.
In fiscal 2021, in addition to enhancement of added value through modularization and completion of structural
reform, we established a system to respond to demand in a timely manner even when parts and materials
are in short supply and logistics are disrupted. In the first medium-term management plan positioned as the
phase for transformation, we will complete three transformations in order to offer added value in the form of
solutions that go beyond the provision of devices and modules. In fiscal 2022, driven by social issues, we will
create key devices necessary for society together with our customers through concurrent activities in which
sales, production, and development work together, thereby achieving further growth.
* New energy: It refers to renewable energy and innovative energy sources such as hydrogen and fuel cells.
53
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business About SF 1st Stage
Targets
Sales Growth (CAGR)
Social Value KPI
¥ 121.0 billion
23%*
¥ 125.0 billion
24%*
*Composition of
focus domains
Sales volume for products contributing to the
spread of new energy and high-speed
communication (cumulative total for 3 years)
+1%
(Focus domains: +3%)
FY2021 results
FY2024 targets
Products for DC equipment
60 million units
Products for high-frequency devices
170 million units
Focus Domains
Major Initiatives
DC equipment
High-frequency devices
Under SF 1st Stage, we aim to establish a growth trajectory through provision of devices and modules and
solutions that contribute to the “spread of new energy and high-speed communication” by capturing the growing
needs for more sophisticated and faster devices, which are driven by migration to DC to ease environmental
burdens and spur digitalization of society.
To realize this goal, we have identified four focus domains. In recent years, growing environmental awareness has
been propelling the use of new energy sources that contribute to reducing CO2 emissions. The shift to DC power
supply and higher-capacity products and infrastructure equipment is fueling needs for devices that safely shut and
control the DC current flowing through products to ensure safety. We will create these devices by leveraging our
long-cultivated “connecting” and “switching” technologies and promote wider use of OMRON products to help
achieve a carbon-neutral society. Moreover, the evolution of semiconductors and products, which will lead to
solutions alleviating social issues associated with population aging and disparities among people, will require
devices that enable stable, high-speed communication and digitization of human perception and sensibility, which
have eluded quantification until recently. OMRON will create devices and modules and solutions based on its core
technologies to contribute to the realization of a digital society where everyone can live comfortably. We will take
on the challenge of creating new social value through collaborative creation with leading companies, research
institutions, technology ventures, and other partners.
Furthermore, the Device & Module Solutions Business will have a new value proposition based on “green, digital,
and speed.” We will create further added value for our customers by providing solutions centering on devices and
modules to achieve synergy through interaction among the various aspects of the value that we offer.
The Device & Module Solutions Business will work with customers to resolve social issues and promote the
realization of a carbon-neutral society in which everyone on the Earth can ultimately live safely and securely and
that is also a digital society in which all products are connected and continue to be operated stably, making life
more convenient and comfortable. In fiscal 2022, we will focus on manufacturing that contributes to
decarbonization and further enhance our ability to create new social value in the form of devices and modules and
solutions, as well as the speed at which we accomplish this, through concurrent activities.
Three Transformations
With Our “Connecting” and “Switching” Technologies, Resolve Societal Issues with Customers
Device & Module Solutions Company
Focus Domains
Promote DC power supply
and electrification
Realize society enabled by advanced
semiconductor technology
New Value Proposition
Offer high-dimensional
data for design,
manufacturing,
and products that
customers seek
Offer value with
speed and agility that
exceed customer
expectations
Offer earth-friendly
and decarbonized
products and
processes
DC drive
equipment
DC infrastructure
equipment
High-frequency
devices
Remote/VR devices
Green
Digital
Speed
54
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business By Combining Strengths, Reducing the Risks Posed by Climate Change and Disasters,
and Contributing to Creation of a Sustainable Society
In recent years, global warming and natural disasters have wreaked havoc on society increasingly.
Since 2017, OMRON has been working with Weathernews Inc., one of the world’s largest private
weather information companies, to solve social issues. Weathernews achieves high accuracy weather
forecast not only with observation data but also weather data and feeling data of weather reports
received from Weathernews App users that are reflected in its proprietary forecast model. Based on
this highly accurate and high-resolution forecast data, Weathernews provides information services that
help businesses and individuals avert weather risks. OMRON provides weather sensors that can be
installed in various locations to collect far more accurate weather observation data than in the past
and helps Weathernews raise the bar on forecast accuracy.
Weather sensor is composed of various sensing devices, including temperature, humidity, and air
pressure, combined with proprietary algorithms and communication technologies. Concurrent
activities in which OMRON’s sales, development, and production worked together
with Weathernews realized greater efficiency and faster development. By
integrating OMRON’s hardware technology with Weathernews’ expertise in
software development and provision of software services as in the example of its
weather forecasting system and countermeasure services, we will create services
that help keep people safe and secure around the globe.
Working together, OMRON and Weathernews will continue providing solutions for
highly efficient energy operation and enhanced resilience to natural disasters and
create new value.
Product Development
Division, Business
Management Division HQ
Hideaki Kojima
Weather sensors to collect data at various
locations such as building rooftops
The ability of Weathernews to continue providing highly accurate weather information services to
electric power, retail, railway, road, and various other markets is dependent on fine-grained
observation data. In order to collect as much weather data as possible, we have been working
with OMRON, leveraging the strengths of the two companies, in the collaborative development
of WxBeacon2, a simple portable weather observation device for Weathernews App users, and
weather sensors, for which there is a great need in the construction industry and agriculture. Not
only we empathize with OMRON’s corporate philosophy emphasizing the importance of
addressing social issues through business, we have confidence in OMRON’s advanced onsite/
technological capabilities and highly regard their agility in addressing possible social and
environmental changes and their PDCA (Plan-Do-Check-Act) method for quality improvement. These are among the
reasons we are collaborating with OMRON. To address climate change and environmental and other threats facing society
today, it is necessary to create timely services that are more precise and provide definitive solutions. In resolving such
issues and creating a better society, we would like to continue unleashing synergy to leverage the strengths of the two
companies and expand the scope of our collaboration not only in Japan but worldwide.
Marketing and Sales Group, Mobile . Internet-Planning, Weathernews Inc. Ryoji Ihara
Manufacturing that Balances Environmental Protection and Economic Growth
As a consequence of economic growth, the amount of industrial waste generated by factories in the Pingshan District of
Shenzhen, China, has been rising. OMRON Electronic Components (Shenzhen) Ltd. (OMZ), which is located in this area, is
showing the way forward by pursuing various initiatives to reduce environmental impacts. One of these initiatives is to reduce
the amount of plating sludge, which accounts for 20% of OMZ’s industrial waste. OMZ began looking into ways of doing this in
2019 and developed a highly efficient sludge treatment
system that has been patented by the Chinese plating
industry. As a result, in 2020,OMZ succeeded in reducing
plating sludge by nearly 10 tons (approximately 50%
reduction from the previous year). Moreover, OMZ
proposed its technology and know-how as a solution to
other plating factories, thereby contributing to a reduction
in plating sludge of approximately 225 tons in 2021
(roughly 40% reduction from the previous year) at total
eight companies in Pingshan District. OMZ will work to
resolve social issues through its business by expanding its
sustainable manufacturing practices from Shenzhen to
Guangdong Province and, ultimately, throughout China.
Employees of OMRON Electronic Components (Shenzhen) Ltd. working to
reduce environmental impacts
55
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business Fiscal 2021 Business Highlights
In fiscal 2021, demand for components increased steadily in our focus industries, including home appliances,
housing equipment, and power tools for the consumer industry. Demand for components for the automotive
industry recovered moderately, despite the impact of the COVID-19 pandemic and production adjustments
among our customers due to the shortage of semiconductors. We accurately captured this demand and
responded quickly to secure product supplies in response to production increases and by engaging in other
measures. As a result, net sales rose significantly year on year. Despite the impact of soaring raw material
prices and logistics costs, operating income increased significantly year on year, mainly due to the significant
increase in net sales, as well as value-added initiatives and restructuring. As a result, net sales for fiscal 2021
totaled ¥121.0 billion, an increase of 24.9% compared with the previous fiscal year, and operating income
totaled ¥10.1 billion, an increase of 120.6%* compared with the previous fiscal year.
Sales Composition by Business Domains
Examples of solutions for DC euipment and High-frequency devices
23%
FY2021
Net Sales
¥121.0 billion*
77%
Base
Domain
EV charger that is safe
for people to operate
Low heat generation and
safe shutdown of energy
storage systems
Solutions for high-frequency applications
following the development of high-speed
and high-capacity semiconductor devices
Tactile input/output devices
for the entertainment
industry
Strengths of the Device & Module Solutions Business (DMB)
Core technologies for “connecting” and “switching” electricity (Arc interrupters, etc.)
Modularization of functions by using core technologies
Global-scale resilient production and supply systems and quality control systems
INPUT
R&D cost: Total ¥5.2 billion
Capital expenditure: Total ¥6.1
billion
(Results for FY2021)
Establishment of resilient
production systems to respond
to changes in demand for
products in a timely manner
Strengthening of the digital
platform
Renewal of DMS global
website (Japanese, English,
and Chinese) (December 2021)
OUTPUT
Net sales: ¥121.0 billion (+24.9% YoY)
Operating income: ¥10.1 billion (+120.6% YoY)*
Technology and product development for next-generation
devices and modules
Developed new technologies and products, such as
low-heat-generating relay that contribute to the realization
of a decarbonized society
Our low-heat-generating, high-power PCB relay “G9KA”
won an award in the category of Environment,
Resources, and Energy Related Components of CHO
MONOZUKURI Innovative Parts and Components
Awards. (November 2021)
Created modules together with customers
Enhancement of product quality control to ensure safety of
customers’ products
OMRON Electronic Components (Shenzhen) Ltd. won the
Clean Manufacturing Excellence Award. (February 2022)
OUTCOME
With our devices and
modules, we contribute to
the improvement of human
life on the planet and the
development of society
SDGs 9.4.1
*Some products in the Industrial Automation Business have been reclassified to the Device & Module Solutions Business.
56
OMRON Corporation Integrated Report 2022Strategy & BusinessResolving Social Issues through Our Business CTO Interview
Evolving Near-future Design
Representative Director, Senior Managing
Executive Officer, CTO
Kiichiro Miyata
The Powerfully Revolving
Engine of Innovation
– In the previous medium-term management
plan “VG2.0,” OMRON set out an overall policy,
“innovate through technological evolution to
achieve self-driven growth” over the next 10
years. As CTO, what are your thoughts on the
results of VG2.0 and how do you see technology
management evolving?
OMRON has grown by predicting the future and
pioneering solutions to society’s needs. However,
following my appointment as the first CTO in 2015,
when I asked engineers at the Technology &
Intellectual Property HQ “What do you think is the
purpose of this research?”, I was frequently unable
to get a clear answer. Perhaps R&D itself had
become the objective, and the key point of
addressing society’s needs had been forgotten.
That made me determined to build a platform for
OMRON-style innovation.
Following thorough discussion, to enable seamless
planning and development of business and
technology required for innovation, in 2018 we
established two organizations: Innovation Exploring
Initiative HQ (IXI) delineating an architecture from a
business perspective and OMRON SINIC X
Corporation (OSX) responsible for near-future
design. Another major achievement of VG2.0 was
the establishment of a “business creation process”
to create a state in which we can create new
businesses one after another.
As a result, new business and R&D themes are
openly discussed, and moreover, everyone, from
executives to those working on-site, is taking
ownership of the objectives and value of those
themes. I am convinced that along with the
development of this framework, there has been a
big change in the mindset of those working at the
Technology & Intellectual Property HQ and IXI. They
are rising to the challenge of new value creation.
Technology development teams, though
enthusiastic about their research, previously tended
to be somewhat inward-looking. That has changed.
Nowadays, they are extracting themes from social
issues and engaging with external parties as well.
As they accumulate achievements, they will gain
confidence and take on greater challenges. They
have begun to set new R&D themes themselves,
not only from the perspective of existing
57
OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs businesses, but also from that of near-future
customer- and technology-oriented perspectives,
and to undertake challenges at a high technical
level. The innovation-generating process is
becoming second nature to our people who are the
key players in that process.
– In SF2030, OMRON emphasizes
“empowering people through automation.”
Referring to examples, please explain why you
emphasize “empowering people” and the kind
of society you are trying to achieve.
Automation has three phases: “substitution” when
people’s work is done by machines, “collaboration”
when people and machines work together, and
“harmony” when human possibilities are elicited
and maximized by machines. There is a shift from
cooperation to harmony at cutting-edge production
sites, and OMRON is supporting this evolution with
“automation to empower people” centering on the
factory automation business.
At the same time, there are many fields and
industries where not even substitution has been
achieved. Think of nursing care. In a world where
human skills are so important, “empowering
people” is an issue of extraordinary importance. For
a start, we have to ascertain what people should
do and what should be left to machines. That’s why
at OMRON we are tackling the challenge of
preventive care so that people can avoid becoming
bedridden. Specifically, we are involved in projects
supporting elderly care business, with IXI handling
commercialization in collaboration with local
governments.
It is well understood that if the signs of functional
impairment are captured at an early stage before
nursing care is required and improvements in
exercise and lifestyle habits are encouraged, then
healthy life expectancy can be extended. For that to
happen, an “assessment” must first be performed
to pick up and analyze lifestyle issues, the prospect
of improvement, and so on, of the elderly person.
However, since this not only takes time but also
requires considerable expertise, it has been
burdensome. OMRON set out to support
assessment, subsequent formulation of a care
plan, and so on, by applying AI. Based on the plan,
caregivers explain to elderly care-receivers,
motivate them, and provide care while
communicating with them. Being told by a robot
“keep trying” or “good job” without any emotion is
unlikely to motivate anyone. To motivate people,
human engagement is essential. Ultimately, it’s
work of the heart, valuable work that can only be
done by people.
Whereas national finances are being strained by
mounting social security costs accompanying
population aging, there is also an increasingly acute
shortage of staff at the medical and care-providing
front lines. In the elderly care business, by
organically linking people and machines, support is
provided to enable people in need of care to lead
self-reliant lives, which will extend healthy life
expectancy. The elderly care business, which
compensates for staff shortages, is a focus of high
expectations from all interested parties, and
OMRON concluded a partnership agreement for
business verification with Oita Prefecture in July
2020, followed by one with Osaka Prefecture in
April 2022.
However, when it comes to scaling up this elderly
care business, staff shortages are a bottleneck.
People with professional skills are needed to
interact with the elderly, helping to keep them
motivated, but there just aren’t enough caregivers.
So, recognizing that OMRON also needs to support
human resources development, we are developing
a training system for caregivers.
Of course, what is important is where the line is to
be drawn between the role of people and the role
of machines. In SINIC Theory too, there are
concerns that “as technology evolves, the roles of
humans may be marginalized.” Hence, while we
will work to design a near-future where people are
empowered, we need to find the answers to such
questions as: How far can systemization and
automation progress before people are pushed to
the margins? What should be left for machines to
do? Which areas need to be activated by human
creativity?
At IXI, a cluster of themes based on such
perspectives are advancing to the business
verification stage. New business creation cannot
be achieved overnight. Neither can it be expected
to make a big contribution to corporate financial
performance immediately after commercialization.
Nevertheless, if there is a chance for business to
solve a social issue, we should rise to the
challenge. The spirit of our founder is expressed by
the “7:3 Principle.” In other words, “if there’s a
70% chance of success, be brave and give it your
best shot, but at the same time always think about
how to deal with the remaining 30% risk.” In that
spirit, we are innovating to create new businesses.
Creating a Practical Mechanism for
“Job-based Employment”
– Human resources development is the
driving force of innovation. What measures is
OMRON implementing in human resources
development?
In pursuit of innovation, we have positioned human
resources development at the heart of our mission,
alongside transformation of organizations and
mechanisms to innovate driven by social needs,
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs because talented people are indispensable for
OMRON’s sustainable growth. In recent years, we
have made a big effort to foster “architects”
capable of drafting comprehensive business plans
embodying their expertise concerning markets and
frontline business, technology, and intellectual
property, as well as “core technology talents” with
expertise in AI, robotics, and so on. At IXI, we have
adopted “job-based employment” where the jobs
required for project execution—those of the
architects who construct the business, the
specialists with high-level expertise, the team
leaders, etc.—are defined and staff are allocated
who possess expertise and experience
commensurate with the job requirements or who
are expected to develop the necessary expertise.
Whereas IXI is the platform from which human
resources capable of innovation flow, the
Technology and Intellectual Property HQ is the
platform from which engineers supporting that
innovation flow. Here too, we are transitioning to
job-based employment.
Although job-based employment tends to be
regarded as little more than the drafting of job
descriptions, its essence lies in “clarifying roles and
skill levels.” When applying this approach to
technical staff, an inventory must first be taken of
each employee’s skills. For example, the field of
expertise of an electrical engineer can be divided
into many different areas—analog, digital, control,
and so forth. After sorting this out, the next step is
to evaluate the skill level in each field on a five-point
scale, so that skill and job are associated. For
example, this is level 1 work, whereas that is level
2 work, and so on. The requirements for each level
are clear, so we can see at a glance what should be
mastered to upgrade from level 2 to 3. This
approach is highly beneficial in terms of employee
enthusiasm and commitment.
Clearly, the company must offer educational
opportunities so that employees can progress from
one level to the next. In other words, you cannot
create a personnel system with job-based
employment without investing heavily in skills
education. That is why SF 1st Stage, which we
announced in March, included investment of ¥6.0
billion in human resources development over a
three-year period from fiscal 2022, representing a
threefold increase from conventional figures.
Attempts to introduce job descriptions were made
in the past at OMRON, but did not gain traction. In
light of that experience, this time we have resolved
to create a practical mechanism. For example, by
arranging for a team including specialists from
outside the company to perform evaluation, we are
not only signaling our commitment to making the
necessary investment, but also investing time and
being thorough in everything we do. Although a
CTO who devotes this much attention to the
personnel system may be unusual, it is after all
people who will create the revolutionary technology
and businesses and the source of innovation will
always be human resources. Once we decided to
do this, we must create a truly practical
mechanism. That is why I have personally devoted
a considerable amount of my energy to this issue.
Carbon Neutrality at Production
Sites Anticipating Needs
– At OMRON, there’s a culture where it
plants a flag to declare its goals and expand
collaborations by inviting empathy and
resonance from within and outside the
company. What are some recent examples?
The capital and business alliance with JMDC Inc.
announced this February to create a business
through the combination of the product value
perspective and the essential value perspective in
the cause of “extension of healthy life expectancy,”
is certainly worthy of such a flag.
JMDC has a vast amount of health insurance
claims and medical check-up data, and has also
accumulated the technology and know-how for
analyzing that data so it can be put to effective use.
However, it lacks the necessary hardware. In
contrast, though OMRON has the hardware and
technology to collect individual vital data, we lack
knowledge of the data business. This partnership
will complement each other’s insufficiencies while
maximizing their respective strengths in pursuit of
“extension of healthy life expectancy.”
Moreover, this partnership will show people inside
and outside OMRON the trajectory we have in
mind for our nascent solution-based business
offering essential value. Whereas the abstract
notion of the shift from the product value
perspective to the essential value perspective is
difficult to convey, our partnership with JMDC will
make it easier for people to understand what we
are endeavoring to do. In fact, the response
following the announcement has greatly exceeded
our expectations.
– What businesses from the essential value
perspective are already up and running?
One example is “i-BELT,” a service that makes use
of data. It is a solution business in which data
harvested at manufacturing sites is utilized to solve
customers’ issues. However, the content of that
business is changing dramatically.
Whereas productivity and quality improvement
were previously the principal objectives, now, there
is a mounting interest in “making production sites
carbon neutral” amid concerns about the impact of
soaring energy prices and supply shortages on the
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs global economy. In these circumstances, visualizing
CO2 emissions at the level of a manufacturing site
or a production line is necessary but insufficient. It
will surely become normal to visualize CO2
emissions for each individual product. At our
Matsusaka Factory where we produce healthcare
products, we are experimentally measuring the
CO2 emissions generated when producing a single
blood pressure monitor.Visualization of CO2
emissions per product is almost certain to be
required in the near future in the EU, followed by
other markets worldwide. Over and above this,
there will of course be huge demand for the
reduction of CO2 emissions. This is a big business
opportunity that the entire OMRON Group can
address. Digital twin will then come into its own.
This is because the use of data from various sites
will make it easier for us to predict the near future
in cyberspace and improve our operations.
OMRON has on-site capabilities centering on the
products and knowledge accumulated in the factory
automation business; the devices and modules,
such as relays and switches, to achieve energy
saving; and the technological and idea-proposing
capabilities cultivated in the energy solutions
business. The addition of data-driven AI and
simulation technology will enable comprehensive
solutions to various energy-related problems in
production. We aim to achieve new value creation
through a business from the essential value
perspective unique to OMRON.
Bringing the “Autonomous Society”
into Sharper Focus through Open
Discussion Grounded in SINIC Theory
– And finally, according to SINIC Theory, we
will be shifting to an “autonomous society.”
What will this autonomous society be like, and
what do you think lies beyond it?
Our founder Kazuma Tateishi, while maintaining
that an individual and society, people and nature,
and people and machines would spontaneously
harmonize in the coming autonomous society, did
not offer any deeper explanation. So, mindful that
our task is to dig deeper to bring the autonomous
society into sharper focus, we are currently
engaged in animated discussion with a view to
updating the concept.
In 1970 when SINIC Theory debuted, growth meant
raising efficiency and convenience to become more
affluent. Therefore, diagrams indicating the
structure of SINIC Theory depicted how technology,
science, and society would interactively develop
with a focus on the human yearning for progress.
When reassessing this in today’s terms, I think our
orientation as human beings, the trajectory of our
ideas and values, should take center stage. The
feeling that wells up from the very bottom of the
hearts of those of us living in this contemporary
world, a symbiosis of humanity and nature, what
does it mean? That is the key point.
We’re asking external experts and young people,
including those of Generation Z, to take part in the
current discussion. In talking about the society of
the future, it would be odd not to reflect the values
of younger generations, neither are we going to get
anywhere if discussion is limited to OMRON. So
we see openness as a virtue. We want to cast our
net as wide as the world.
I am eager to share with you the results of those
discussions soon, fleshing out our vision of the
autonomous society. With this as a model, I will
strive to involve people within OMRON and beyond
in the collaborative endeavor of building a future to
which we can all aspire. I believe that in this way
we can actually put the OMRON Principles into
practice.
Collaborative Creation × Workplace Innovation
Customers
Issues to be solved
OMRON × Partners
Apps and services for solving issues
Manufacturing knowledge
Industrial automation
applications
× On-site expertise
and technology
Manufacturing process management
Quality management
Facility management
Energy management
Higher productivity
Higher yield
Lower operating loss
Higher energy efficiency
i-BELT: Example of a data-driven service that creates value from the essential value perspective
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs Innovation Exploring Initiative HQ (IXI)
Rising to the Challenge of Creating a Better Society through Innovation
Results during VG2020 Period
The Innovation Exploring Initiative HQ (IXI) is an organization established in
2018 to anticipate new rapidly emerging social issues, including the
trajectory of the ongoing technological evolution as well as social needs
likely to emerge in the near future, and to be a source of new businesses
corresponding to the opportunities and challenges inherent in these
developments. In the four years since its establishment, we have achieved
not only the visible result of an enriched and substantial portfolio of themes
with new business viability, but also a solid foundation (organization,
processes, human resources) for sustainably generating and executing high-
potential projects.
Enrichment of Portfolio of Themes Steadily Creating New Avenues
for Business Growth
Over the past four years, more than 30 exciting themes have been
conceptualized and verified. Currently, three themes, namely “agri-
automation business,” “elderly care business,” and “on-site data utilization
support business,” have already advanced to the business validation (trial
launch) phase, followed closely by several themes in the customer value
verification (proof of concept) phase.
Executive Officer
Senior General Manager,
Innovation Exploring Initiative HQ
Hidetaka Ishihara
Continually Evolving Organization Attracting Enterprising People
IXI aims to become an organization where
enterprising people from inside and outside the
company aspiring to create innovation driven by
social needs with their energy and talent inspire
one another to keep solving social issues through
business. Organizationally, “OMRON’s group-wide
innovation platform” is key to the success of this
approach. In line with the establishment of a
personnel system for IXI, including open recruiting
and voluntary application for transfer to IXI and
project-based open recruiting so that personnel
participate in projects while holding concurrent
positions at other organizations, IXI attracts many
people from both OMRON’s business divisions and head office divisions. Moreover, many people from
outside OMRON who share IXI’s vision are participating too. We have thus laid the organizational foundation
of IXI, which consists of about 100 people with diverse skills and values who are eager to demonstrate their
respective strengths and maximize results in a collaborative endeavor.
Establishing a New Business Creation Process with High Reproducibility
A major impediment to the creation of new business is the difficulty in selecting the right theme. And even
once the theme has been decided, it is unclear who is to have the responsibility and authority, and to what
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs extent, and how to judge the right time to launch the business. Thus, it is difficult to determine the criteria
for investment, or in other words to determine which themes should be pursued and which should be
canceled, leading to a much slower pace of business creation and declining investment efficiency.
It is crucially important that senior executives, managers, and frontline personnel have a shared recognition of
the actual difficulties and are able to discuss issues using a common language. Mindful of this, IXI focused on
establishing a highly reproducible new business creation process through iterative “trial and learning”
applicable to multiple business themes. The “7:3 Principle,” an approach to business creation conceived by
OMRON founder Kazuma Tateishi is the linchpin of this process. Essentially, Tateishi’s idea is that “if there is a
70% chance of success, be bold and give it your best shot, but at the same time always think about how to
deal with the remaining 30% risk.” The process emphasizes both “speedy on-site execution” and “investment
and risk-control in management.” In the phase corresponding to “7,” speed, notably the avoidance of devoting
excessive time and investment in identifying possibilities, is emphasized. IXI proposes a new business
domain it aims to create, formulates a hypothesis, and sets a theme, and carries out testing of the business
model hypothesis and verification of customer value. If the results of the verification indicate a certain degree
of probability, then in the phase corresponding to “3,” decisive investment will be made in the carefully
examined possibility to grow the business while controlling risk.
IXI’s business creation process is eminently practical. It has become the common language in which senior
executives, managers, and on-site personnel tackle the issues. It is a powerful tool.
Development of Human Resources to Drive Business Creation and Group-wide Innovation
IXI emphasizes “business creation as a team,” with the team consisting of diverse people with diverse
strengths. This is because as the business creation stage progresses from “conceptualization,” and
“hypothesis testing” to “business validation,” diverse
capabilities and skills are required. With these diverse
human resources, our focus is on developing
“architects” who repeatedly test hypotheses, identify
intrinsic value for customers, and shape a business
model. In four years, more than 60 “architects” have
refined their skills through promotion and execution
of themes and devoted themselves to new business
creation. IXI has become a pool of talented people
capable of driving innovation. Today, several people
who used to work for IXI are engaged in various
businesses of the OMRON Group where they are
leading innovation.
Further Evolution under SF2030: Maximizing Abilities to Create Innovation Driven by Social Needs
During the period of VG2.0, we have established a firm foundation (organization, processes, human resources)
for continuously creating new businesses and sustainably generating and executing exciting themes. Under
SF2030, we are committed to further strengthening this foundation as non-financial value of OMRON, and at
the same time, creating multiple profit-making businesses to contribute to the next stage of OMRON’s
growth.
IXI will tackle five new business fields under SF2030, namely, “data-driven healthcare,” “automation for food
production,” “support for achieving carbon neutrality of manufacturing industry,” “support for DX of
manufacturing sites,” and “decent work.” These all contribute to resolution of the three social issues
addressed by OMRON under SF2030: “achievement of carbon neutrality,” “realization of a digital society,” and
“extension of healthy life expectancy.” IXI refers to the overview of business opportunities of each new
business field as the “business architecture” and maps business hypotheses for each field onto it. The above-
mentioned “agri-automation business,” “elderly care business,” and “on-site data utilization support business”
currently in the businessfeasibility verification (trial launch) phase are themes corresponding to the business
architecture of “automation for food industry,” “data-driven healthcare,” and “support for DX of manufacturing
sites,” respectively. As well as aiming to develop these three business themes into profitable businesses at
an early stage, we will also verify other business opportunities mapped onto each business architecture as
alternatives and will create groups of businesses of appropriate scale in each of the five new business fields.
The nine years covered by SF2030 will be a period of rapid change towards an autonomous society that
OMRON envisages. A society in which both economic growth and harmony between the global environment
and social structure and will be propelled by cooperation and collaborative creation with many enterprises
and stakeholders. We will share what IXI has learned and the organizational ability it has cultivated so far not
only inside the OMRON Group but also with parties outside the OMRON Group to create innovation driven by
social needs.
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs How IXI Will Rise to the Challenge of Achieving a Better Society
With respect to the three social issues to be addressed by OMRON under SF2030, namely, “achievement of
carbon neutrality,” “realization of a digital society,” and “extension of healthy life expectancy,” IXI will tackle
five new business fields: “data-driven healthcare,” “automation of food production,” “support for achieving
carbon neutrality of manufacturing industry,” “support for DX of manufacturing sites,” and “decent work.”
While deepening and expanding the commercialization themes in these five fields, IXI will continue to enrich
and review its portfolio of themes.
Data-driven Healthcare
In the healthcare field, “extension of healthy life expectancy” and “realization of a sustainable healthcare
system” are two goals universally desired. As society becomes more mature, the issues they involve
become more pressing and yet the difficulty of achieving both goals simultaneously becomes starkly
apparent. In a healthcare ecosystem consisting of various medical and healthcare data, we are accumulating
vital data of consumers and patients in their everyday lives. We will combine these data with the medical
and healthcare data, such as health insurance claims and health check-up data, which OMRON does not
possess, to provide preventive solutions for chronic illness and for worsening conditions so as to achieve
value through data-driven healthcare.
(Case of Business Validation)
In collaboration with local governments, the Elderly Care Business
Department is promoting business validation of elderly care solutions
to offer new value empowering caregivers on the front line and helping
the elderly stay healthy and active, thus reducing the need for long-
term care. OMRON concluded a partnership agreement with Oita
Prefecture in 2020. The demonstration projects, which started in four
cities and towns, have expanded to cover 12 cities and towns.
Moreover, OMRON started a joint research project with Komatsu City,
Ishikawa Prefecture in October 2021, and concluded a business
partnership agreement with Osaka Prefecture in April 2022.
We aim to achieve social implementation of our solutions for
“extension of healthy life expectancy” in collaboration with local
governments that are confronting various issues.
Automation for Food Industry
As people become more affluent, greater food safety and security as well as better taste become more
important values for them. Producers of agricultural products, livestock, etc., strive daily to meet these
consumer needs for food. However, since food production depends on experience and it takes time to
become an expert, and since the price paid for high-value-added products is not adequately distributed to
the producers, people working in primary industry are leaving for other industries, resulting in labor
shortages. This is a social issue that poses a threat to the sustainability of food production.
We will provide food production with “digital solutions” utilizing automation and data. By increasing the
“production” and “management” capabilities of producers, we will transform the production of food into a
“profitable” industry creating high added value and contribute to its sustainability.
(Case of Business Validation)
First, the Agri-automation Business Division is offering agricultural cultivation
support solutions in the Chinese market. These solutions enable unskilled farmers
and farm laborers to achieve agricultural production comparable to that of skilled
farmers, focusing on fruit and vegetable crops such as mini-tomatoes and
strawberries in organic and low-agrochemical cultivation that requires agricultural
technology and is difficult for the unskilled.
Currently, many projects are in progress with several Chinese partner enterprises.
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs Support for Achieving Carbon Neutrality of Manufacturing Industry
As a principal climate change countermeasure, “achieving carbon neutrality by 2050” has become a
pressing societal goal. Given this context, it is crucially important that companies fulfill their social
responsibilities. Manufacturing industry is urged to achieve carbon neutrality by overcoming issues, such as
insufficient renewable energy, sharply rising prices, and the cost burden associated with the introduction of
a carbon tax, while continuing the pursuit of higher quality and further productivity improvement. To achieve
carbon neutrality, not only is management’s strong commitment essential, but also the establishment of an
environment where on-site workers autonomously and continuously work toward achievement of the goal.
We intend to provide comprehensive solutions to the complex set of issues faced by manufacturing
industry. This will involve supporting companies’ autonomous and ongoing efforts to achieve carbon
neutrality by leveraging our field knowledge cultivated in the Industrial Automation Business and the energy
control technology cultivated in the Energy Solutions Business. We are currently creating core themes
capable of capturing diverse needs.
Support for DX of Manufacturing Sites
Many companies are investing in DX of “management.” However, not only DX of “management,” but also
DX of “on-site” will be essential to increase organizational productivity and maximize business output. DX
of “workplaces” entails workplace innovation that identifies the powerful triggers for improvement that
exist within daily on-site activities by utilizing data and applies those triggers in value creation. On the basis
of the vast amount of on-site data, the involvement of all on-site workers in innovation will lead to DX of
“management.”
We provide solutions for DX of “workplaces” as well as a mechanism linking “workplaces” and
“management.” We support workplace innovation so that everyone at workplaces can easily utilize data,
turn data into value, and become a source of innovation.
(Case of Business Validation)
The Sensing Data Trading Market (SDTM) Business Department is carrying out business validation of on-site data
utilization support solutions focusing on customers in manufacturing industry. With a view to the future data trading
society, we are providing solutions that enable utilization of on-site data, such as data linkage between specific companies
and data distribution among numerous unspecified stakeholders. We currently provide services to customers in a broad
range of manufacturing industry, including automotive parts, machinery and electrical products, electronic components
and devices, materials and processed materials, semiconductor-related equipment, food, cosmetics, and consumer
goods. We are challenging to further expand our services.
Decent Work
Decent work refers to “dignity, equality, a fair income and safe working conditions.”
As people’s values become more diverse along with increasing affluence, they desire more high-quality
products to satisfy individual needs. At the same time, many workplaces where these products are made
continue to operate on a labor-intensive model, reliant on low-wage workers. Hence, employment-related
social issues, such as human rights issues in the supply chain and economic inequality, have come to the
fore. If workers are able to tap their own potential and act autonomously, they will be recognized as more
than labor; but they will be creators of added value.
We will empower manufacturing workplaces with new capabilities through automation, liberating business
enterprises and their workers from the labor-intensive model, thereby contributing to the creation of decent
work.
(Example of Collaborative Creation)
We are currently focused on “sewing automation.” We are targeting value creation at manufacturing sites for automotive-
related products, such as car seats, air bags, and seat belts, as well as for apparel such sports shoes. During this process,
we are carrying out technology and customer value verification. In January 2022, we started joint development of
production automation prototype with MATSUYA R&D Corporation to mitigate the effect of labor shortages. We are rising
to the challenges of resolving labor shortages and providing decent work for everyone regardless of age or gender.
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs Technology and Intellectual Property HQ
Challenge to Create Social Needs with Innovative Technologies
Strengthening Core Technologies for “Empowering People through
Automation”
In order to resolve various social issues, OMRON has been refining the
sensing technology for acquiring on-site data and the control technology for
appropriate feedback. As indicated by the addition of “Think,” signifying
human wisdom, to the combination of “Sensing & Control” in 2011, we
have been continuing to strengthen our core technologies defined as
“Sensing & Control + Think.” New technologies OMRON has created in
recent years, which will lead to new value creation, include: “3D vision
sensors” serving as the eyes of robots performing simple tasks previously
performed by humans; “visual inspection equipment” whose ability to
detect small scratches or stains on a product, and to make related
judgments, is equal to that of skilled workers; and “AI controllers” capable of
anomaly detection of production equipment.
During the VG2.0 period, amid accelerating technological development, we
enhanced our ability to draw “technological architecture,” an overview of the
technologies necessary for social implementation, by backcasting from a
near-future where the social issues have been resolved, rather than viewing
the near-future as an extension from the past. At the outset of SF2030, we
designed a near-future by “empowering people through automation,” started examining “technological
architecture” by redefining “relationships between people and machines,” and determined the technological
issues to be addressed by OMRON.
Adopting a panoramic view of the technological issues, we identified four areas of OMRON’s technological
focus and reorganized the technological development structure in April 2022. These four areas are: “Robotics”
representing the body of a machine, “Sensing” being its five senses, “Power Electronics” being its power
source, and “AI and Data Analysis” that are its intelligence.
Executive Officer, Senior General
Manager, Technology and
Intellectual Property HQ, OMRON
Corporation; President and CEO,
OMRON SINIC X Corporation
Masaki Suwa
Areas of Technological Focus
Robotics
Sensing
Power Electronics
AI and Data Analysis
Taking robotics as an example, the declining birthrate combined with population aging and a shortage of
skilled workers are fueling greater utilization of robots. However, at present, utilizing robots requires a high
level of expertise, and moreover, the tasks robots can perform are limited, and so people have to work
alongside robots. OMRON started by rethinking how robots should be used “to empower people.” Our aim is
for robots to perform exhausting and dangerous tasks that currently have to be done by people as well as
mechanical repetitive tasks. For this purpose, having overhauled the hardware and software for robots, we are
developing new robots. To tackle this new challenge, OMRON SINIC X Corporation is vigorously proceeding
with the development of innovative technology through collaborative creation and R&D with universities,
business enterprises, and other external parties from the viewpoint of medium- to long-term technological
development.
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs
Strengthening Technical Human Resources and Intellectual Property Initiatives
To refine our core technologies and create new value through technological innovation, an important element
is of course technical human resources. Amid unceasing technological evolution typified by AI and robotics, in
order to foster engineers capable of working effectively both inside and outside OMRON, we clearly defined
the technological fields required for OMRON’s growth and the types and levels of skills required, as well as
roles and responsibilities and started a new initiative for technical human resources development in fiscal
2021. We also support upskilling with respect to various technologies, such as by providing opportunities to
learn the latest technologies from the basics.
Moreover, intellectual property, which is one of our non-financial values, is becoming ever more important in
the context of our ongoing efforts to create new value. At OMRON, “using intellectual property to continue
creating new value leading to sustainable growth” is the policy informing all our IP
initiatives, which are undertaken based on a clearly defined mission and vision. In
addition to obtaining rights for our company’s unique technology and
strengthening the exercise of rights to utilize that technology, we draw up multiple
scenarios to realize our near-future design as “intellectual property architecture”
and file applications in advance for innovation driven by social needs. In doing so,
we are strengthening IP initiatives to deliver unique OMRON value.
Patent application training
OMRON Intellectual Property Center Mission
OMRON Intellectual Property Center Vision
We deliver unique value for people around the
world by leveraging our core assets of
intellectual property.
We bring the IP specialists together from diverse
fields and continue to create innovation.
We develop and deepen appealing ideas.
We deliver peace of mind and confidence to customers.
We enhance our presence to our competitors
offensively and defensively.
We defy stereotypes.
We create a new paradigm of connections.
We strive to increase the trust from the management
team.
During the VG2020 period, we provided education on patent applications to all the engineers in the OMRON
Group and strengthened our ability to create patents. As a result, the number of patents in OMRON’s
possession in fiscal 2021 was 12,061, more than double the 5,959 in fiscal 2011. OMRON has been publishing
a journal of technical papers entitled “OMRON TECHNICS” since 1961. The purpose is to contribute to a better
society by providing the public with access to the R&D outcomes of the OMRON Group engineers for
resolving social issues. OMRON has been selected by Clarivate as one of the Top 100 Global Innovators for
the sixth consecutive year. We view this as recognition of our IP initiatives in terms of the volume of patent
applications and breadth of technologies.
We got off to a great start under SF2030 by enhancing non-financial value in two key respects: strengthening
our technological development abilities to link new value to social implementation and strengthening human
resources development and IP initiatives. To create value to resolve social issues by “empowering people
through automation,” we will further strengthen and refine our core technologies of “Sensing & Control + Think.”
https://www.omron.com/global/en/technology/#
Case
Development of People-centric Flexible Robot that Adapts to People
As the working population continues to shrink due to a declining birthrate and population aging, we are
emphasizing development of robots for empowering people. OMRON SINIC X Corporation, which is in charge
of R&D based on backcasting from a near-future design, is conducting advanced research from a medium- to
long-term perspective, utilizing collaborative creation with universities.
Case: Realizing Robot Operations Instigated by Verbal Instruction
Until now, for robots to operate in various on-site settings, specialist knowledge for handling the robots is essential. As a
way to enable anyone to easily handle a robot, technology enabling operations of a robot by verbal instructions is a focus
of rising expectations. Using the technology that we are working on, people would only need to give verbal instructions to
a robot and the robot would understand the action to be taken automatically and perform the task. With a view to realizing
this technology, OMRON commenced a joint research project with Kyoto University, Tokyo Institute of Technology, and
Nara Institute of Science and Technology, in fiscal 2021. In connection with this research, our paper was accepted and
presented at “ACM* Multimedia 2021,” a major international conference in the multimedia field.
*ACM: Association for Computing Machinery
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs Global Corporate Venturing Office (CVC)
Co-creation with World’s Venture Businesses to Create New World and New Value
In pursuit of “a future designed through collaborative creation with the
world’s startups,” OMRON VENTURES CO., LTD. (OVC) has been developing
collaborative creation activities for new market creation and business
innovation, taking advantage of its network encompassing entrepreneurs
and investors worldwide. As a result, OVC has invested in 21 startups so far,
including four that it newly invested in during fiscal 2021. Under SF2030,
with a view to “maximizing the capability to create innovation driven by
social needs,” which is one of the material sustainability issues, we will
expand investment in startups that are promising for collaborative creation
with OMRON’s four core businesses and in those tackling the three social
issues addressed by OMRON under SF2030. To ensure the effectiveness of
investment, OMRON established the Global Corporate Venturing Office (CVC
Office), which supervises OVC, in April 2022, as an organization directly
reporting to OMRON’s president. With the aim of maximizing the social
impact, the CVC Office will strengthen opportunities for collaborative
creation between OMRON and startups via OVC and seek to enhance
strategic and financial returns.
Senior General Manager, Global
Corporate Venturing Office;
President and CEO, Omron
Ventures Co., Ltd.
Tomoko Inoue
Resolve Social Issues through Investment in Startups
In January 2022, OVC established OVC Ⅱ Investment Limited Partnership
(OVC Second Fund). The OVC Second Fund invests in startups that aspire to create value by addressing the
social issues targeted by OMRON.
As the first investment, the OVC Second Fund chose Visby Medical, Inc., the U.S. firm that develops and sells
the world’s first disposable, portable PCR testing devices.PCR tests have garnered attention recently in the
context of the COVID-19 pandemic. They allow high-precision test results to be obtained from extremely
small samples and thus are used in testing for many different infectious diseases. However, the number of
medical institutions that can perform accurate PCR tests is limited, and factors such as difficulties in
purchasing expensive testing devices drive most institutions to outsource their clinical testing to private
sector labs. This means they can face delays in receiving test results. Meanwhile, the COVID-19 pandemic
continues. To tackle these problems, Visby Medical has developed a portable PCR device offering accuracy of
95% or above, which is equivalent to lab-based testing. Achieving lower costs and shorter waiting time for
test results will revolutionize the infectious disease testing process and contribute to resolution of social
issues. Through its investment in startups such as Visby Medical whose innovation has the potential to be
transformative in an industry, OMRON will pursue accelerated resolution of social issues.
Maximizing Strategic Returns through Acceleration
In fiscal 2022, the CVC Office has begun a new initiative, “acceleration,” to speed up the business growth of
startups. In this initiative, OMRON gathers people with the expertise required for business growth as well as
other experts and has them directly participate in management of the startups to enhance their business
value. Moreover, in terms of human resources development, the CVC Office aims to foster innovative
individuals capable of creating new globally competitive businesses by seizing opportunities for collaborative
creation with the world’s entrepreneurs and experts.
CogSmart Co., Ltd. in which we invested in fiscal 2021 is a good example. CogSmart is a Japanese company
developing a unique solution for slowing the onset of dementia. A solution that “prevents the worsening of
dementia,” which is the focus of CogSmart’s efforts, would be in great demand in Japan where population
aging is progressing and is attracting attention worldwide, too. To help CogSmart increase its business value,
the CVC Office has assigned OMRON personnel to CogSmart who have knowledge of the medical field
gained through OMRON’s existing business in addition to external human resources with expertise of a high
caliber. At the same time, OMRON personnel will be given an opportunity to learn through collaborative
creation with the startup’s management so as to maximize strategic returns.
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs OVC’s Investment Portfolio
OVC has invested in startups tackling the three social issues addressed by OMRON under SF2030: “achievement
of carbon neutrality”; “realization of a digital society”; and “extension of healthy life expectancy.”
Achievement of
Carbon Neutrality
Realization of a Digital Society
Extension of Healthy Life Expectancy
Energy visualization
Robot control
Image processing + AI
Migraine treatment
Prevention of dementia
Medical data
Carbon offsetting
Agri-automation
AST systems
Remote medicine
Metaverse
PCR testing
Digital coaching
Contribution to Carbon Neutrality
Amid the worldwide efforts to achieve zero greenhouse gas emissions by 2050, there are various challenges
concerning social implementation of alternative energy technology. Carbon offsetting using credit trading is
one of the methods to promote CO2 reduction. However, the lack of transparency of the credit information,
such as who generated the credits and how they were generated, makes reliability an issue in credit trading.
ClimateTrade, S.L. in which OVC invested in January 2022 is a Spanish startup providing a blockchain-based
marketplace for carbon offsetting credits with high traceability and transparency of trading. Through
investment in ClimateTrade, which is helping companies achieve their decarbonization goals, OMRON is
contributing to resolution of social issues.
With “decarbonization and climate change mitigation” as its mission,
ClimateTrade is endeavoring to propose scalable innovation by grasping
market needs. OMRON VENTURES understands our mission and is
supporting us. OMRON’s support has been instrumental in helping us
achieve our goals for planning new products and expanding the global
reach of our products.
CEO Francisco Benedito
Cultivating Corporate Culture of CVC Activities
OVC invested in DIMAAG-AI, Inc., an American provider of an advanced AI platform, in March 2021. DIMAAG-
AI and OMRON’s Industrial Automation Business have launched a project for collaborative creation in
technology development. The CVC Office holds technology exchange meetings between OMRON engineers
working on new technology developments in its core businesses and the startup’s managers, in order to
spread the synergy of collaborative creation throughout the OMRON Group. We will continue to hold exchange
meetings with startups in order to nurture a corporate culture conducive to promoting new collaborative
business creation.
With a strong presence in the U.S., Japan and
India, DIMAAG-AI provides AI components,
hardware, robotics, and other solutions tailored
to customer needs. Based on our conviction
that AI technology will transcend industries and
business formats, we have developed AI
solutions in many fields. We look forward to
continuing to provide OMRON with intelligent
products and solutions as we work together on
the project.
Technology exchange meeting with the startup
Founder and CEO Satish Padmanabhan
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OMRON Corporation Integrated Report 2022Innovation & TechnologyMaximizing Capability to Innovate Driven by Social Needs Generating diverse talent taking on the challenge of
value creation
Employees are the driving force of OMRON’s creation of social value through business under SF2030.
We will implement human resources strategy so that the company and the employees choose each
other based on a natural affinity premised on a new “company-employee relationship,” in order to
achieve sustainable growth together.
SF2030 Human Resources Strategic Vision
Inspired by the corporate philosophy of “contributing to a better
society,” the company and its employees will always choose
each other and continue growing together.
Human Resources Strategy with a View to Building a New
Relationship between the Company and its Employees
In the context of changing social and economic conditions, human resources
are destined to become increasingly mobile over the next decade and the
relationship between companies and their employees will shift to one of
greater equality. Amid this shift, companies will be required to clearly set
out the opportunities for growth and empowerment and the results they
expect, since it is necessary to enhance the market value of each employee.
On the other hand, employees are expected to be motivated to enhance
their expertise, demonstrate their capabilities, and create value. At OMRON,
we will build a new relationship between the company and its employees in
which they chose each other and grow together. Based on this premise, we
aim to ensure that both OMRON and its employees are highly regarded in
society.
OMRON’s purpose is to “create social value through business and continue
to contribute to the development of society,” which is nothing less than the
OMRON Principles in action. We will globally implement human resources
strategy to ensure the OMRON Group continues to attract diverse talented
people who aspire to resolve social issues through the practice of our
corporate philosophy and encourage each individual to seize the initiative and demonstrate their abilities.
Masahiko Tomita
Managing Executive Officer
Senior General Manager of Global
Human Resources and
Administration HQ
Diversity & Inclusion Accelerate Business Transformation
Under SF 1st Stage, OMRON is tackling transformation of business through evolution in three key respects:
“the perspective on value,” “the business model,” and “automation.” The key to achieving business
transformation is Diversity and Inclusion (D&I).
We thoroughly discussed what D&I means for OMRON. As a result, our definition of diversity at OMRON is
to “attract diverse people who will take on the challenge of the creation of a better society.” Our definition of
inclusion is to “unleash the passion and ability of each individual, create innovation by bringing our diverse
personalities together and share the fruits of our labor.” The prerequisite for achieving D&I is to ensure our
people are “professionals.”
OMRON wants people who are passionate about resolving social issues and have expertise and strengths to
contribute to the team. OMRON will leverage the personal qualities and knowledge of individual employees
and their diverse ideas and opinions based on their experience to contribute to a better society. To this end,
we will accord the highest priority to human resources development measures that will accelerate D&I under
SF 1st Stage and vigorously invest in creation of a system that will enable all employees to realize their
aspirations and fulfill active roles.
69
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain Diversity
Attract diverse people who
will take on the challenge
of the creation of a better
society
&
Inclusion
Unleash the passion and
ability of each individual,
create innovation by
bringing our diverse
personalities together
and share the fruits of
our labor
Image of Required Human Resources
. Individuals passionate about solving social issues
. Individuals who continue to hone their specialties to realize their ambitions
. Individuals who care about the team as a whole and who are self-starters that demonstrate leadership
OMRON’s Concept of Diversity & Inclusion
Evolution of Human Resource Policies
Performance Indicators
FY2024 Target
Attract diverse
human resources
Global hiring of specialist human resources to lead value
creation
HR portfolio sufficiency rate
Promote localization of globally important positions
>80%
Promote career advancement for women by developing
next-generation leaders
Ratio of women in managerial roles
(OMRON Group worldwide) >18%
Implement and expand diverse career, employment
status and work style options
VOICE SEI
70 points or higher
Human
Creativity*
(vs. FY2021)
Invest in individuals keen to grow
HR development investments
¥6 billion (3-year total)
+7%
Establish job-based HR system with defined roles,
responsibilities, and specialties
Complete introduction of
job-based HR system
*Added value per unit
cost of employee
Cultivate a workplace environment that supports
personal growth and motivated individuals
Initiatives and programs to share achievements of
resolution of social issues
Scores of VOICE & 360°FB
. Evolution of TOGA
. Introduction of stock-based
performance-linked compensation for
employees in managerial positions
(OMRON Group worldwide)
Initiatives to Accelerate Diversity & Inclusion
Create innovation
by unleashing
passion and ability
Framework for
sharing co-creation
and achievements
Investment in Individuals Keen to Grow
The OMRON Group will proactively invest in human resources in order to help those who are motivated to
enhance their abilities and to help those who have been promoted acquire the abilities needed to achieve
higher performance.
During the VG2.0 period, we implemented the Global Core Position and Core Human Resource Strategy to
develop strong leaders who embody the OMRON Principles and lead the organization. As a result, 80% of
core positions overseas are now filled by non-Japanese nationals. We also expanded training programs for
selected trainees throughout the OMRON Group worldwide. In fiscal 2021, we conducted globally common
training programs for executive officer candidates, core position successors, and next-generation leaders to
keep talent flowing through the human resources pipeline. Moreover, we invested ¥650 million in fiscal 2021
in human resources development to enhance the abilities of all employees.
Furthermore, in fiscal 2021, we began recruitment for secondary or side positions, with the aim of creating
new businesses and building a foundation to support new business creation through active participation of
human resources with diverse skills and experience from both inside and outside the OMRON Group. We
hired a total of 27 professionals from 1,900 applicants over the past three recruitment rounds. Interaction
with professionals recruited from outside the OMRON Group who share our corporate philosophy is also an
opportunity for our employees to achieve growth.
70
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain In fiscal 2021, we launched Feedback Ability Enhancement Training , firstly in Japan, to create “learning
workplaces” where organizations and individuals can challenge themselves to achieve higher goals and
continue to grow based on a sense of psychological safety. Of the approximately 1,500 employees in
managerial positions in Japan, including executive officers, 80% are scheduled to complete the training by
the end of fiscal 2022. Going forward, we will conduct training globally to address workplace issues specific
to each area. Plans call for all 3,000 employees in managerial positions overseas to receive the training during
the period covered by SF 1st Stage. Through these initiatives, OMRON aims to create a corporate culture in
which employees, regardless of their position, can freely and frankly discuss their opinions and ideas with the
aim of achieving results and creating value.
Under SF 1st Stage, we will invest ¥6 billion (cumulative total for three years), three times the amount
invested in the VG2.0 period, in human resources development. In addition to human resources development
centering on training for acquiring knowledge, we will provide growth opportunities for individuals to acquire
specialties and develop them through practical experience. Specifically, we will expand the following
programs: “acquisition and strengthening of new skills, such as DX,” necessary for business transformation,
“development of leaders through study abroad and dispatch to external institutions,” and “feedback and
interactive initiatives, such as coaching and mentoring.” In addition, in order to enable diverse career and work
style options, we will expand the job posting system and accelerate project-based team building on a global
basis across countries and regions. At the same time, we will also emphasize active promotion and hiring of
female employees who aspire to leadership positions and designing of measures to retain female managers.
Through these initiatives, we will transform OMRON into an organization in which all employees can fully
demonstrate their capabilities and fulfill active roles.
Job-based Human Resources System with Defined Roles, Responsibilities, and Specialties
In Japan, the job-based human resources system applied to key managerial positions (managers, experts, and
specialists) has been extended to non-managerial positions since fiscal 2022. In order to assign the right
people to the right positions based on the ability, expertise, and motivation of each individual, we have
clarified the criteria for roles and duties. Through appropriate goal setting, evaluation, and treatment, we
intend to heighten employees’ sense of satisfaction while maximizing their motivation.
Among employees in non-managerial positions, the approximately 5,500 senior specialists or section chiefs,
who account for half our workforce in Japan, are expected to exercise the highest level of responsibilities as
their work is becoming more challenging owing to changes in the business environment. Therefore, in
addition to introducing the job-based human resources system, we will ensure “evaluation and treatment
based on roles, responsibilities and performance” that reflects the abilities required for the job, the degree of
difficulty of the tasks, and the responsibility for achievement. We will also consider treatment that is not
based on age, years of service, or personal attributes, and expedite promotion of younger employees.
Initiatives and Programs to Share Achievements of Resolution of Social Issues
As part of initiatives to share achievements of resolution of social issues, we introduced stock-based
compensation as a Medium-term Incentive Plan for employees in managerial positions at the OMRON Group
worldwide in fiscal 2022. In Japan, we also introduced the Employee Stockholding Association Revitalization
Plan, under which OMRON grants restricted shares to non-managerial employees through the Employee
Stockholding Association with the aim of raising their awareness about corporate value. These plans are
designed “to heighten employee awareness of the link between their work and corporate value” and “to help
employees build assets by sharing the benefits of enhancement of corporate value.
Investment in Human Capital to Support Realization of Vision and Ambitions
Under SF2030, “human creativity” is set as a quantitative indicator to measure how effectively OMRON utilizes
its human capital to enhance corporate value by accelerating D&I through the evolution of human resources
policies. The target is a 7% improvement in human creativity in fiscal 2024 compared with fiscal 2021.
Human creativity is the amount of value added, which is sales minus variable costs, divided by labor cost.
Value added is the amount of value created and delivered by OMRON to its customers and markets, and
labor cost is the amount of investment in human resources who create that value. Companies should obtain
appropriate value added and use it to expand and reproduce new value. This is indispensable for achieving
sustainable growth for a company and its employees. For investment in human capital to achieve growth of
value added, three factors aligned with the OMRON Group’s management goals and business strategies are
important.
71
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain The first factor is headcount (optimum allocation of human resources). We will secure sufficient human
resources to execute business strategies and allocate them according to the priorities of the business
strategies. The second factor is capability (acquisition and strengthening of capabilities). We will prepare
human resources development programs to help our employees acquire and strengthen capabilities
necessary for executing business strategies and provide them with various opportunities to gain experience
both internally and externally, in Japan and overseas. The third factor is motivation and engagement
(demonstration of full potential). OMRON will create an environment where all employees can fully leverage
their diverse personal qualities and abilities.
Concept of Human Creativity
Human Creativity ＝
Value Added
Labor Cost
The amount of value created
and delivered by OMRON to
its customers and markets
Main factors for growth of value added
Headcount
Total number of
personnel, allocation
Capability
Acquisition and
strengthening of
capabilities
Motivation and
engagement
Demonstration of full
potential
(From FY2018 to FY2021)
SF 1st Stage
Human Creativity 102%
Human Creativity 107%
Growth of value added: 102%
Growth of labor cost: 100%
Growth of value added: 122%
Growth of labor cost: 115%
Investment in HR development: ¥2.0 billion
Investment in HR development: ¥6.0 billion
(FY2019-FY2021 total)
The OMRON Global Awards(TOGA)
The OMRON Global Awards (TOGA) is a system for self-driven practice of the OMRON Principles. TOGA
initiatives are intended to share the stories of how the OMRON Principles are practiced throughout the
OMRON Group across the world to ensure that all employees understand the OMRON Principles, which are
the source of OMRON’s strength, and to expand the circle of empathy and resonance. Under SF2030, we will
continue to evolve TOGA and share collaborative creation and
achievements globally to resolve social issues through business.
TOGA is a cycle* of setting inspirational goals, taking action, and
reviewing progress to share information and encourage buy-in
throughout the entire year. OMRON Group employees engage in TOGA
in teams. Themes selected from individual organizations and regional
qualifying rounds are presented at the annual Global Meet held in
Kyoto and shared with all OMRON Group employees worldwide. The
initiatives of other teams and their evaluation by judges become topics
of conversation at workplaces. Sharing TOGA experiences with co-
workers is leading to expansion of the circle of empathy and resonance
throughout the OMRON Group worldwide.
Put
Commitment
into Practice
3
4
2
5
1
Declare
Commitment
Review
and
Share
Walk
the Talk
Plant
the Flag
Externalize
Resonate
Resonate
*Designed based on the SECI Model, a knowledge management mechanism produced by Hitotsubashi University professor Ikujiro Nonaka that focuses on knowledge creation activities.
Through a conversion process of socialization, externalization, combination, and internalization, organizations can take the tacit knowledge of an individual and create shared knowledge
throughout a group or organization. (Source: Globis University, Graduate School of Management MBA Glossary)
72
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain The 9th TOGA Global Meet
At the 9th TOGA Global Meet held on September 15, 2021, a total of 16 themes (13 Gold Awards and 3
Special Awards) selected from 6,461 entries involving 51,033 participants in fiscal 2020 were shared with
audiences both within and beyond OMRON in a hybrid format combining on-site and online platforms. From
outside the OMRON Group, the 9th TOGA Global Meet had 455 participants, including partners, investors,
media representatives, and students.
Last year, amid the disruption of the COVID-19 pandemic, OMRON Group employees took on many
challenges around the world, in many cases overcoming adversity to put the OMRON Principles into practice.
Employees identified social issues on their own initiatives and worked with internal and external partners to
create new social value.
Examples of Initiatives to Practice the OMRON Principles in the 9th TOGA Global Meet
Introduced below are award-winning themes from Spain and Japan that boldly took on the challenge of
resolving issues by overcoming various obstacles to put the OMRON Principles into practice.
Development of a Ventilator using Factory Automation Technology (The Open Ventilator)
(FY2020 Special Award, Representative of Europe Area)
In Spain, a growing number of patients were passing away unable to
obtain sufficient medical treatment, owing to a shortage of
ventilators. It was at this time that Raúl Nicolás, a control equipment
engineer for OMRON Spain, took the initiative to get involved in a
ventilator development project in the hope of saving as many lives as
possible. When he saw the first prototype developed for the project,
Raúl hit upon the idea of applying OMRON’s factory automation (FA)
technology to create a more sophisticated ventilator that could
measure patients’ respiration volume and pressure in real time, learn
from these measurements, and supply the optimal volume of
oxygen. Encouraged by support from his colleagues who told him,
“we will by all means give it a try if our technology can save people’s lives,” Raúl launched a ventilator development
project with them and sought to leverage their expertise to save people’s lives. The project gained momentum as internal
and external partners, including members of OMRON Europe, other companies, and universities, joined them in this
collaborative endeavor. The new open ventilator for emergency use was ready in just two weeks from the launch of the
project. The open ventilator developed by Raúl’s team was adopted not only in Spain but also in South American countries,
and today is helping to save people’s lives across the world.
Development of Communication Assistive Technology for
the Visually Impaired
(FY2020 SpecialGold Award, Representative of Japan Area)
With the aim of realizing a society where the inconvenience experienced by
the visually impaired is reduced to an absolute minimum by harnessing the
power of technology, OMRON’s team led by Kazuo Yamamoto, an engineer of
the Technology & Intellectual Property HQ, established a consortium with four
other like-minded companies. Led by Dr. Chieko Asakawa, now Chief
Executive Director of the National Museum of Emerging Science and
Innovation (Miraikan) who is herself visually impaired, the consortium tackled
development of an “AI suitcase” combining the latest AI and robotic
technologies of member companies to support mobility and communication of the visually impaired. OMRON’s team was
responsible for developing a function that serves as the eyes of the visually impaired to support smooth communication
with people. The face-sensing technology recognizes the people around the user and judges whether they are people
whom the user knows or whether the person the user would like to speak to is available. In the course of development,
facial recognition by the conventional technology became difficult because of the wearing of facial masks during the
COVID-19 pandemic. Despite adversity, the team members progressed through trial and error and realized the world’s
first AI that can identify individuals and recognize their status even if they are wearing a mask. In a demonstration test of
mobility and communication support at a commercial facility, the AI suitcase succeeded in helping the visually impaired
find acquaintances and call out to them. The ongoing AI suitcase project is advancing toward practical application.
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OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain ROI Analysis of TOGA
Purpose management and philosophy-based management, which have been attracting attention in recent
years, are major themes in my research. Hence, I developed a keen interest in OMRON, which has long been
committed to corporate philosophy management. How does corporate philosophy management contribute to
enhancement of corporate value? I wanted to analyze TOGA, which is a characteristic activity to promote the
practice of corporate philosophy, from the perspective of return on investment (ROI), and took up this topic as
a research theme for a seminar. The analysis process included more than 40 interviews and hearings with
former OMRON directors, TOGA participants, and secretariat members, as well as external experts. We also
analyzed a lot of quantitative data, such as labor costs for preparation and the cost of organizing the event. As a
result, we concluded that the average results for the most recent two years showed that the cost of TOGA was
¥1.08 billion, whereas the business impact of TOGA on OMRON’s subsequent performance was estimated to
be worth at least ¥1.75 billion, indicating that TOGA was sufficiently cost-effective. In the TOGA entry process,
entrants consider how their work is connected to “the better society” envisaged by the OMRON Principles.
We found that this has a significant benefit on human resources development. Furthermore, in order to
facilitate sharing of individuals’ tacit knowledge as organizational knowledge, TOGA requires entry as a team
and it is recommended to work with members across divisions, nationalities, and even company boundaries. In
the most recent 9th TOGA, 94% of the Gold Award winning themes were tackled through collaboration with
other organizations or customers. Initiatives to resolve social issues with members who have diverse
knowledge and experience have contributed to an increase in the number of OMRON innovations. The themes
of TOGA entries must involve putting the corporate philosophy of “contributing to a better society” into
practice. Therefore, themes of many entries were those leading to resolution of social issues related to
“health,” “the environment,” and “safety.” The increase in such themes is contributing to inclusion of OMRON
in the Sustainability Index. Inclusion in the Sustainability Index leads to lower beta and lower weighted average
cost of capital (WACC), which in turn leads to higher corporate value.
Thus, TOGA has proven effective in enhancing OMRON’s corporate value in many ways. At the same time,
however, issues became apparent. For example, we found that while presenters’ presentation quality has
improved over the years, the time and workload required for preparation have also increased proportionally.
Appropriate advice from supervisors and others that would help minimize rework will be important for
improving the quality of the presentations, while reducing the burden on presenters, and also promoting TOGA.
It also became clear that information on subsequent development of TOGA themes was not sufficiently shared
and not utilized as knowledge. This is a major lost opportunity for OMRON to
translate TOGA initiatives into business growth. Furthermore, consideration should be
given to creating an environment in which more employees can view TOGA live.
Sharing TOGA, an example of the corporate philosophy in practice, with as many
employees as possible is essential in order to expand the circle of empathy and
resonance for corporate philosophy management. How will OMRON evolve TOGA,
leading to further enhancement of its corporate value, going forward? I look forward
to OMRON’s initiatives.
Professor, Waseda Business School (Graduate School of Business and Finance)
Hiroshi Kanno
Examples of Initiatives to Practice the OMRON Principles
At the 9th TOGA (FY2020), 16 entries that put the OMRON
Principles into practice were selected from around the
world and presented online to all employees worldwide.
Watch videos of the stories
shared at the Global Meet
showing the OMRON
Principles in practice.
74
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain Respecting Human Rights in the Value Chain
As declared in the OMRON Principles, Our Values include Respect for All. Respect for All is more than a basic
respect for diversity, personality, and individuality. Respect for All is the core value underlying all our activities
in pursuit of living lives and performing jobs of purpose and promise. We act with integrity, creating stronger
relationships of trust with individuals and society.
This goes to the core of our existence as a company.
OMRON Human Rights Policy
We established the OMRON Human Rights Policy on March 1, 2022 to realize
“respecting human rights in the value chain,” one of our material sustainability issues.
The Guiding Principles on Business and Human Rights (UNGP) adopted by the United
Nations in 2011 make it clear that every business enterprise has a responsibility to
respect human rights. Worldwide, the body of human rights-related laws, regulations,
and rules for companies is evolving. In recent years, human rights initiatives in
accordance with the UNGP have imposed progressively greater mandatory obligations on companies, and
fulfillment of those obligations is becoming increasingly important from the perspective of business continuity.
OMRON is committed to ensuring that its management practices and actions are always in line with those of
the international community and strives to reduce human rights risks throughout its value chain.
*The OMRON Human Rights
Policy can be accessed from
the code.
Targets for 2030 and Human Rights Initiatives under SF 1st Stage
In line with the UN Guiding Principles on Business and Human Rights, OMRON will aim by 2030 for the state
of exerting our influence for the respect of human rights for workers not only at OMRON, but also in the
value chain, and establish a culture and system that does not permit or cause human rights violations.
Under SF 1st Stage, we will communicate and inculcate the newly established OMRON Human Rights Policy
to our employees worldwide and conduct human rights due diligence and a human rights redress mechanism
in accordance with the UNGP with the aim of establishing a global human rights governance system.
A. Execution of human rights due diligence in accordance with the UNGP
By conducting human rights impact assessments across the entire value chain, we will identify “salient
human rights issues” and create the conditions for implementing a cycle of human rights due diligence.
B. Establishment of a human rights redress mechanism appropriate to each country and region
We will establish a human rights redress mechanism appropriate to each country and region so that we can
implement remedies through due process if we cause or recognize factors contributing to adverse human
rights impacts.
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a
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i
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o
f
Human Rights Due Diligence
(1) Assess human rights impact
(2) Integrate into OMRON’ s management
· Identify salient human rights issues
· Investigate the entire value chain
from a global perspective
· Mechanism to prevent and mitigate
human rights issues
· Formulation and implementation of
medium-term initiatives
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a
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h
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s
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i
l
i
c
y
(4) Information disclosure
(3) Monitoring
· Disclosure of results and processes
· Post-action review based on
dialogues with stakeholders
· Grasping of the status of responses
throughout the value chain
· Oversight and supervision by the
Board of Directors
Stakeholder Engagement
Human Rights Due Diligence Cycle
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i
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OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain
Top Management Deepening Respect for Human Rights
OMRON’s management, including directors and executive officers, are taking the lead in promoting human
rights initiatives worldwide. We recognize that the attitude of top management sets the tone for everyone
else. To ensure OMRON Group employees worldwide not only recognize the importance of human rights and
that respect for human rights is essential, but also take effective action to promote human rights, we are
implementing the following initiatives.
A. Commitment of top management
OMRON has established the OMRON Human Rights Policy, a globally uniform policy applicable to all
executives and employees of the OMRON Group, in order to fulfill its corporate responsibility to respect
human rights in accordance with the OMRON Principles, and has declared that it will continually strive to
ensure that its management practices and actions are always in line with those of the international
community. This OMRON Human Rights Policy was instituted by resolution of the Board of Directors
following thorough discussions.
B. Human rights training for directors and executive officers
In order to promote effective initiatives in accordance with the UN Guiding Principles on Business and Human
Rights, it is essential for top management to have in-depth understanding of international human rights
standards and social demands regarding respect for human rights. OMRON conducted human rights training
for internal directors and executive officers in 2021 in preparation for the formulation of the medium-term
management plan. What was learned is reflected in the planning and implementation of human rights
initiatives under SF 1st Stage.
Stakeholder Engagement
In its Sustainability Policy, OMRON states: “We cultivate strong relationships with all of our stakeholders
through responsible engagement.” In our human rights initiatives, we will engage in periodic dialogues with
external human rights experts to deepen our understanding of respect for human rights in accordance with
international standards and increase the effectiveness of our initiatives.
Dialogue with a Human Rights Expert: Attorney Akiko Sato
Compared to companies in certain other countries, most Japanese companies are only just
starting full-fledged initiatives in terms of human rights awareness. In these circumstances, it is
encouraging to see that OMRON is addressing human rights issues, focusing on the centrality
of people based on its corporate philosophy. In order to strengthen OMRON’s initiatives, I
believe two things are important: One is to value the “why” aspect: why it is necessary to
address human rights issues. Another is to consciously incorporate the perspective of rights
holders into business, considering whose rights and what rights are concerned in the course of
management and business activities. Disclosure of human rights risks also leads to external evaluation that the company
has identified the risks. Appropriate disclosure of what the company is doing, what it will do, and what it needs to do,
rather than disclosure after implementation of all measures has been completed, will help build trust among stakeholders.
Kotonoha Sogo Law Office, Certified NPO Human Rights Now Akiko Sato
Lifting Women out of Poverty and Protecting the
Environment
OMRON in the Americas has launched an initiative to minimize the amount
of paper towels we use since their use involves consumption of a large
amount of natural resources, such as water and timber, thereby imposing
a burden on the environment. We are encouraging employees in the
Americas to adopt a practice that is common practice in Japan—that of
using hand towels to dry one’s hands.
OMRON has provided our employees with beautiful handmade towels
sustainably sourced to empower women in need in Latin America. OMRON collaborates with two
NPOs to empower hundreds of female artisans in Guatemala by providing technical training, materials,
and equipment so they can produce and sell beautiful handwoven fabrics like these using traditional
Mayan weaving techniques. In rural Guatemala, generally only 37% of children are able to attend
school, but 99% of the children of women participating in this initiative are able to attend school. In the
spirit of Our Mission to “contribute to a better society,” OMRON will continue to enrich people’s lives.
The video introduces
this initiative.
76
OMRON Corporation Integrated Report 2022PeopleGenerating Diverse Talent Taking on the Challenge of Value Creation / Respecting Human Rights in the Value Chain Environment
OMRON Environmental Policy
OMRON revised the OMRON Environmental Policy on March 1, 2022 as important guidelines
to promote the material sustainability issues of SF2030, which are “resolving social issues
through our business” and “achieving decarbonization and lower environmental impact,” and
to achieve the targets. Under this policy, we have defined the key environmental issues
OMRON should address and action guidelines and will promote decarbonization and lower
environmental impact.
Going forward, OMRON will address environmental issues throughout its value chain in
accordance with this policy and will meet the expectations of its stakeholders, thereby
enhancing its corporate value.
*The OMRON
Environmental Policy
can be accessed
from the code.
Achieving Decarbonization and Lower Environmental Impact
OMRON believes that creating an environmentally sustainable society corresponds to the OMRON Principle
of “contributing to a better society,” and is proactively working to address global issues such as climate
change and resource recycling. In particular, OMRON views “reducing greenhouse gas (GHG) emissions,”
“transitioning to a circular economy,” and “coexisting with nature” as important environmental issues to be
addressed. Specifically, by linking initiatives to achieve decarbonization and lower environmental impact to
business competitiveness and by establishing a system to ensure their effectiveness, we are committed to
contributing to the creation of a sustainable society and enhancing corporate value.
Scope1: 14
Scope2: 109
Scope 3, Category 11
Scope 3,
other than Category 11
1,743
10,401
(Thousand ton-CO2)
OMRON’s GHG Emissions (Fiscal 2021 Results)
OMRON’s Key Environmental Initiatives under SF2030
OMRON aims to solve social issues through the reduction of GHG emissions in its value chain and the
establishment of a resource recycling model by 2030, as well as to achieve a state in which further
competitive advantages are built.
A. Reduction of GHG emissions (Scope 1 and Scope 2: emissions from the OMRON Group)
To reduce Scope 1 and Scope 2 emissions, we will promote thorough energy conservation and use of
renewable energy to transition to clean electricity. Moreover, by utilizing the renewable electricity-derived
J-Credit Scheme*1 provided by our own energy solutions business, and self-consignment*2 , we aim to
achieve 100% renewable energy at our sites in Japan by fiscal 2024.
B. Reduction of GHG emissions (Scope 3, Category 11: Use of Sold Products)
With regard to Scope 3, we will promote power-saving design, downsizing and weight reduction of new
products, and replacement with low-power-consumption products in each business to prioritize reductions in
Scope 3, Category 11, which accounts for approximately 80% of OMRON’s GHG emissions.
*1 J-Credit Scheme: Under this scheme, the Japanese government certifies a company’s environmental value (the effect of not emitting CO2).
*2 Self-consignment: A power supply system that allows businesses that own their own power generation facilities to transmit and supply electricity generated by those facilities to their own
factories and offices in remote places via the power grids of general power transmission and distribution business operators and use the electricity.
77
OMRON Corporation Integrated Report 2022EnvironmentAchieving De-Carbonization and Lower Environmental Impact C. Transitioning to a circular economy
In order to solve the problems of resource depletion and environmental destruction, we will work to transition
to a circular economy through such initiatives as “transformation of business models,” “extension of product
life,” “expansion of collection and recycling,” “procurement of recyclable raw materials,” and “maximization of
recycling rates.” Specifically, for “procurement of recyclable raw materials,” we are reducing plastic waste in
the production process and replacing containers (outer packaging) for products with paper packaging
materials. For “expansion of collection and recycling,” we are promoting in-process recycling, collection and
recycling of OMRON products in cooperation with partners and customers and reviewing the production
process and improving the recycling rate of resin waste materials generated in the production process.
Resolving social issues
through our business in the
environmental field
Contribute to customers’
transition to a decarbonized,
circular economy
Two wheels
Social implementation and
effective use of renewable
energy
OMRON’ s initiatives in the
environmental field
A. B. Reduction of emissions
Scope 1 (fuel combustion)
Scope 2 (electricity use)
Scope 3 (upstream/downstream)
C. Transitioning to a circular economy
(environmental consideration /
efficient use of resources)
Transformation of business models
Environmentally friendly product design
Recovery & recycling
Sustainable procurement
Information Disclosure in Accordance with TCFD Recommendations
Response to Climate Change
Ever since the declaration of our endorsement of the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) in February 2019, we have been promoting information disclosure based on the
TCFD framework to strengthen our engagement with shareholders, investors, and other stakeholders about
OMRON’s actions to combat climate change.
Information disclosure in accordance with the four elements recommended by the TCFD
The TCFD recommends all organizations to make disclosures based on four elements: governance, strategy,
risk management, and metrics and targets. OMRON discloses its climate-related initiatives in accordance
with these four elements recommended by the TCFD.
Governance
Role of the Board of Directors / Monitoring System
The OMRON Corporate Governance Policy clearly stipulates that the Board of Directors shall determine and
disclose the OMRON Group’s sustainability policy, material sustainability issues, and targets, including
initiatives to address climate-related risks based on the TCFD and other frameworks.
The Executive Council and the Sustainability Committee discuss risks, business opportunities, targets, and
specific measures related to climate change, make decisions, manage progress, and conduct monitoring on a
regular basis, and consider corrective measures, as necessary. The Board of Directors receives, on a regular
basis, reports on what has been discussed and decided by the Executive Council and deliberates on and
supervises the matters.
Evaluations concerning the GHG emissions reduction target and evaluations based on sustainability indicators
(including evaluation of the response to climate change) by third parties are included among the evaluation
indicators for the medium- to long-term, performance-linked compensation for internal Directors and
Executive Officers for the period from fiscal 2021 to fiscal 2024.
78
OMRON Corporation Integrated Report 2022EnvironmentAchieving De-Carbonization and Lower Environmental Impact Strategy
Short-, Medium-, and Long-term Climate-related Risks and Opportunities and Responses
In SF2030 and SF 1st Stage, we have defined “achieving decarbonization and lower environmental impact”
as a material sustainability issue. Viewing climate change from two aspects, “opportunities” and “risks,” we
are committed to fulfilling our corporate social responsibility and further building our competitive advantage.
In order to prevent the expansion of the serious impacts of climate change on ecosystems and human
society, OMRON will work to reduce GHG emissions throughout its value chain through “Products and
services that contribute to carbon neutrality,” “Evolved business models that combine products and services,”
“Co-creation with our partners” “improved energy efficiency,” and “expanded use of renewable energy.”
Amid these initiatives, OMRON analyzed risks and opportunities based on two scenarios as announced by
the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA), and others:
one assuming a rise in global average temperature of 4°C or more, and the other assuming that the increase
in global average temperature is kept to below 2°C (1.5°C in some cases) as agreed under the Paris
Agreement. We reaffirmed that we must act to solve climate change issues. Specifically, in the field of
industrial automation, we will evolve innovative-Automation to establish manufacturing sites that support a
sustainable future in which symbiosis with the global environment is achieved and people experience job
satisfaction, and to realize automation that increases productivity and energy efficiency. In the field of social
solutions, we have contributed to the diffusion of solar power generation and storage batteries. Going
forward, we will contribute to the further diffusion of renewable energy by eliminating instability in power
generation with our advanced energy control technology. In the field of device and module solutions, we will
also accelerate development and provision of electronic and mechanical components in response to growing
interest in improving the environmental performance of products and reducing the carbon footprint. Having
various interfaces with society, OMRON will contribute to the realization of a carbon-neutral society in many
aspects. We have reflected the results of the scenario analysis in the strategies of SF2030 and SF 1st Stage
and established a specific action plan.
Assumed period: SF2030 period (until fiscal 2030)
Adopted scenarios: 4°C scenario: IPCC/RCP8.5, IEA/STEPS
: 1.5/2°C scenario: IPCC/RCP2.6, IEA/SDS (partly IEA/NZE)
Definition of time horizon: Short-term: less than 3 years; medium-term: 3 to less than 10 years; long-term: 10 to 30 years
Scenario analysis target: Existing businesses
Overview of the OMRON Group’s climate-related risks and opportunities and responses
Risk
categories
Risk
period
Risk overview
Response to risk
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Increase in business costs (introduction of carbon
tax, emissions trading, circular economy regulations,
etc.) as a result of complying with climate change
regulations
Systematically promoting energy conservation and
renewable energy (introduction of high-efficiency
air conditioning systems, expansion of in-house
renewable energy generation, procurement of
J-Credits from the social systems business, etc.)
Increased competition in areas related to
decarbonization, such as improving the environmental
performance of products and reducing the carbon
footprint of products
Developing products and services to solve
environmental issues, such as reduction of GHG
emissions and compliance with circular economy
regulations
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Changes in reputation due to inability to meet
customer needs
Changes in investor evaluation due to poor
performance attributable to inability to capture the
needs associated with the resolution of environmental
issues
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Suspension of production facilities and procurement
of parts and materials at sites and partner factories
due to increased severity of natural disasters (flooding,
torrential rain, water shortages, etc.)
Attracting ESG investment and enhancing the added
value of our products through proactive response to
climate change and the circular economy
Strengthening resilience by reestablishing business
continuity plans (BCPs) of OMRON sites
Expanding procurement sources, particularly
semiconductors, continuing the switch to materials
with low procurement risk by design changes,
formulating a supply chain strategy for greater
resilience from a medium- to long-term perspective
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OMRON Corporation Integrated Report 2022EnvironmentAchieving De-Carbonization and Lower Environmental Impact
Opportunity
categories
Risk
period
Opportunity overview
Response to opportunities
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Increased opportunities to provide factory automation
equipment in the following business fields:
[By field]
Digital devices: Increased demand for semiconductors to
support the spread of environmentally friendly vehicles and
EVs
Environmental mobility: Increased demand for EV-related
components such as rechargeable batteries and for EVs
Food and daily necessities: Increased demand for
environmentally friendly packaging materials such as
plastic-free packaging materials to realize a decarbonized
society
Growing need for decarbonization of production processes
Providing innovative-Automation solutions to
the needs associated with production method
changes, new capital expenditure, and enhanced
energy productivity at production sites
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Increased demand for environmental performance due to
the expansion of ethical consumption
Capturing consumer demand by enhancing
environmental performance (carbon reduction,
circular economy, etc.)
Expansion of renewable energy, energy storage and
energy management markets due to rapid progress
of decarbonization in energy supply and consumption
processes, leading to acceleration of the following:
i. Companies and local governments: Accelerated
adoption of renewable energy and energy storage
systems, which are distributed power sources, due to
increasing demand for decarbonization and disaster
prevention
ii. General households: Increased popularity of self-
generation, storage and consumption of electricity
Advancement in energy management that can solve
electricity supply/demand balance issues associated with
the spread of renewable energy
Increased opportunities to provide electronic and
mechanical components because of the following:
[Common]
Increased interest in enhancing the environmental
performance of products and reducing their carbon
footprint
[By field]
Home appliances: Increased demand for air conditioning
systems due to rising average temperatures and increased
demand for air conditioners with inverters due to the
need to strengthen measures to reduce GHG emissions
associated with air conditioning systems.
Power tools: Accelerated shift to electric tools due to the
need to strengthen measures to reduce GHG emissions
associated with product use, leading to increased demand
for DC current interruption
FA: Increased demand for new products (EVs, next-
generation power semiconductors, recycled plastics,
alternative foods, etc.) and increased demand for
introduction of new FA equipment and replacement in
line with the progress of decarbonization of production
processes
Establishing an energy management business
using solar power and storage batteries
Further expanding sales of PV inverters and
storage batteries, capturing the growing demand
for renewable energy and energy storage at
companies, homes, and local governments
Accelerating development and provision of
electronic components that contribute to energy
saving of customer products and reduction of
the carbon footprint of manufacturing processes,
including customer production processes
Timely monitoring of market trends to capture
opportunities associated with changes in demand
and design of products for decarbonization
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Risk Management
Processes for Assessing, Identifying, and Managing Risk
OMRON conducted scenario analysis of each of its businesses during fiscal 2021 to identify a comprehensive
set of “transition risks” and “physical risks” related to climate change. We then visualized the “risk period” and
“amount of impact on business and finances” of each of the extracted climate-related risks for each adopted
scenario, and evaluated the degree of impact on business and finances. Based on the assessment, we
identified climate-related risks that are significant to OMRON and formulated countermeasures. Important
matters related to risk identification and formulation of countermeasures are reported to the Board of Directors.
In fiscal 2022 and beyond, we will continue to regularly carry out scenario analysis, update risks and
countermeasures, and monitor the progress of implementation of the countermeasures.
Status of Integration into Group-wide Risk Management
Recognizing the importance of establishing a system to manage risks on a Group-wide basis, OMRON is
implementing integrated risk management under a common framework throughout the Group. We identify
and assess climate-related risks as significant Group risks for the Group and monitor risk management by
aligning these risks with the risks identified by scenario analysis.
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OMRON Corporation Integrated Report 2022EnvironmentAchieving De-Carbonization and Lower Environmental Impact
Indicators and Targets
Indicators for Climate-related Risks and Opportunities
Emissions in Scope 1, 2, and 3 and the amount of renewable energy as a percentage of electricity used in our
business activities are designated as indicators.
Targets and Results of GHG Emissions (Scope 1, 2, and 3)
OMRON believes that creating an environmentally sustainable society corresponds to the OMRON Principle
of “contributing to a better society,” and set the OMRON Carbon Zero target in July 2018, aiming to reduce
GHG emissions in Scope 1 and 2 to zero by 2050.
In March 2022, stepping up its initiatives to realize a carbon-neutral society, OMRON changed the scenario for
reduction of GHG emissions in Scope 1 and 2 from a 2°C scenario to a more aggressive 1.5°C scenario. For
Scope 3, Category 11, we have also set a new target of 18% reduction by 2030 (compared to fiscal 2016).
These targets are certified by the Science Based Targets initiative (SBTi)*1.
To achieve the targets, OMRON will continue to improve energy efficiency. At the same time, by utilizing the
renewable energy-derived J-Credit Scheme provided by its own energy solutions business and self-
consignment, OMRON aims to achieve carbon zero*2 in Scope 2 at its operating sites in Japan by fiscal 2024.
*1 SBTi: An international initiative that encourages companies to set science-based medium- to long-term GHG emissions reduction targets.
*2 GHG (Scope 2) emissions from OMRON’s electricity use at 13 production sites and 63 non-production sites (headquarters, R&D, and sales). Five sites (Kyoto Office, Ayabe Office, Kusatsu
Office, Katsuragawa Office, and Keihanna Technology Innovation Center) achieved carbon zero for Scope 2 by fiscal 2021. Plans call for four more sites to achieve carbon zero in fiscal 2022,
which will bring the number of sites achieving carbon zero to nine.
FY2016 Results
(Baseline)
FY2021
Results
FY2024
Targets
FY2030
Targets
Emissions
Emissions
Compared to
FY2016
Compared to
FY2016
Compared to
FY2016
(thousand ton-CO2)
FY2050 Targets
Scope 1 and 2
250
123
Scope 3
Category 11
9,102
10,401
-50%
+14%
-53%
-*
-65%
-18%
Zero
-*
* In the future, set targets as soon as the accuracy of achievement feasibility increases
Collaboration with suppliers to achieve decarbonization and lower
environmental impact
OMRON has established the Sustainable Procurement Guidelines and we are working to
realize a sustainable society together with our suppliers. In particular, as part of our upstream
supply chain efforts to achieve decarbonization and lower environmental impact, we have set
the reduction of petroleum-derived resin materials as a key theme and are making a Group-
wide effort to achieve a reduction of 840 tons over the three-year period from 2022 to 2024.
Our efforts center on two activities: saving of materials to reduce the amounts of materials
used for parts and recycling to reuse discarded materials. Although it is not easy to achieve
this goal because it requires not only cooperation from suppliers, but also design reviews and
capital investment, we are working hard every day under the banner of addressing social
issues of “decarbonization and reduction of environmental impact.”
Manager, Material
Engineering Group, Value
Engineering Procurement
Div. Global Procurement,
Quality & Logistics HQ
Guo Jie
Preserve a rich natural environment for today’s children and future generations
In fiscal 2021, we revised the OMRON Environmental Policy based on the direction of
OMRON’s environmental initiatives and set the goals of SF2030 and SF 1st Stage. In
accordance with TCFD recommendations, we conducted scenario analysis of our core
businesses in conjunction with SF2030 and SF 1st Stage and identified climate-related risks,
opportunities, and countermeasures. Then we disclosed the results for the first time in the
securities report under the oversight and supervision of the Board of Directors. Since
environmental issues are often difficult to solve on our own, we will continue to accelerate our
efforts to address environmental issues by working together with our suppliers and customers
throughout the value chain.
Sustainability Office
Hirokazu Tamura
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OMRON Corporation Integrated Report 2022EnvironmentAchieving De-Carbonization and Lower Environmental Impact Risk Management
Integrated Risk Management for Supporting Global Business Activities
OMRON is implementing integrated risk management in order to manage the risks of the Group via a common
framework. This is prompted by recognition that in order to rapidly respond to the faster pace of change in the
operating environment and rising levels of uncertainty, we need to become more attuned to risk, detecting and
addressing risks before they materialize. We are additionally considering how to equip ourselves with mechanisms
enabling efficient, effective, and prompt risk decisions while still adhering to the OMRON Principles and relevant
business rules in order to achieve our long-term vision SF2030.
Integrated Risk Management System and Structure
OMRON has established a PDCA cycle
that is conducted throughout the year
to identify changes in the business
environment, analyze risks, respond to
significant risks, and engage in crisis
management. To promote initiatives on
a global scale through a concerted
effort of management and all
employees, risk managers are
appointed for each of headquarters,
divisions, regional headquarters, and
Group companies across the world.
Activity Cycle for Integrated Risk Management
Share and report information related to
significant risks
Conduct activities based on the plan
Corporate ethics month
Report the progress of activities for the current year
Report the results of global risk analysis
Determine significant Group risks for the upcoming year
Annual activity review
Share analysis of risks
Identify significant Group risk candidates
Corporate Ethics & Risk Management
Committee
Determine risk response plan for the upcoming year
Determine budgets for the upcoming year
Board of Directors
Annual activity review
Executive Council
Corporate Ethics & Risk
Management Committee
Disclose Results of Activities
Analyze Global Risk
Execute Plan
Check
Plan
Act
Do
Headquarters, regional headquarters, divisions
Risks Surrounding Management and Businesses, and Risk Analysis
OMRON considers risks to be significant factors that must be addressed in carrying out the two transformations in
SF 1st Stage: “business transformation” and “transformation of corporate management and organizational
capabilities.” OMRON regularly, at least once a year, conducts comprehensive analyses of the appropriateness/
sufficiency of the Group’s countermeasures for major risks and actual risk cases that have occurred and ranks these
risks accordingly. OMRON classifies risks that may jeopardize the Group’s survival or bring severe social liability and
risks that impede the achievement of important Group goals as “significant Group risks.” Of these risks, risks of
utmost importance to the operation of the Group are defined as S-rank risks and other significant risks are defined as
A-rank risks. The updates of implementation of countermeasures and changes in risk status are monitored.
Business Transformation
Business Risks and Other Risks
Crises
Transition to New Social and
Economic Systems
Climate change
Natural
disasters
Cyberattacks
Social implementation
of new technologies
Prolonged supply chain
disruption
Population
aging
Change in people’ s
values and behavior
Increasing economic
disparity among
individuals
Geopolitical
risks
Intellectual property
disputes
Decrease in the
working population
Strengthening of laws
and regulations, etc.
Requirements for
internationalization
of accounting and
tax practices
Strengthening of
economic and security
policies of countries
across the globe
Wars and
conflicts
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Evolution of the
four core businesses
Collaborative creation
with partners
AI, 5G, robotics
Expansion of the service
business utilizing
customer assets
Worldwide /
emerging countries
Creation of new
businesses
Creation of
new products
Transformation of
business models
(1) Stable supply of products
(2) Business continuity
(COVID-19 and natural disasters)
(3) Geopolitical risks
(4) Sustainability issues
(climate change / human rights)
(5) IT systems & information security
(6) Quality
Transformation of Corporate
Management and Organizational Capabilities
(7) Global compliance
(antitrust, bribery, etc.)
Acceleration of mobility
of human resources
Diversity and
inclusion
Human resources
portfolio management
Investment in human
resources development
(8) Accounting / taxation
(9) Human resources / labor affairs
Data-driven corporate
management
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implementation of DX
infrastructure model
(10) M&A / investment
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resilience
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optimal supply system
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environmental
responsiveness of
our suppliers
(11) Intellectual property
(12) Business development
in emerging countries
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82
OMRON Corporation Integrated Report 2022Risk Management
Addressing Significant Group Risks
The following are the significant Group risks that the Group has designated as S-rank risks and is currently
focusing on.
(1) Stable Supply of Products (S Rank)
External Environment and Risk Scenario
The diffusion of digital transformation equipment, the increasing dispersal of production locations, and growing social demands
for conservation of the global environment have led to continued growth in consumption and investment globally.
Meanwhile, supply chain disruptions due to shortages of semiconductors and other parts and components, as well as container
shortages and customs clearance delays, have persisted. There are also concerns about the deteriorating Russia-Ukraine situation
and the impact of lockdowns due to China’s zero-COVID-19 policy. If the range of parts and materials in short supply expands and
the procurement volume does not reach the required level or if the logistics lead times for products become significantly longer,
product supply capacity may decline.
The Group’s Business and Countermeasures
The Group will respond to expanding demand for capital investment in semiconductor manufacturing, electric vehicles, plastic-
free products and packaging, and renewable energy-related industries, as well as steady demand for blood pressure monitors and
other health equipment in line with population aging and growing health consciousness, to achieve strong growth.
In fiscal 2021, despite the shortages of parts and materials, we strove to reduce the impact through flexible design changes,
procurement of alternative parts and materials, and expansion of airfreight to fulfill our responsibility for supply to customers.
Furthermore, under SF2030, we will continue to expand our procurement sources, particularly for semiconductors, and accelerate
our transition to parts and materials with low procurement risk by means of design changes. At the same time, we will formulate
a supply chain strategy for greater resilience from a medium- to long-term perspective.
(2) Business Continuity (COVID-19 and Natural Disasters) (S Rank)
External Environment and Risk Scenario
As for business continuity risks, outbreaks of mass infection due to the spread of infectious diseases such as COVID-19, their
persistence for long periods of time, and lockdowns as part of strict quarantine policies against infectious diseases in various
countries will also have a significant impact on business activities. Specifically, the supply of products to customers may stagnate
for long periods of time due to production stoppages at OMRON plants, delays in quickly ascertaining information about parts
supply stoppages from key suppliers, etc.
In addition, in the event of unforeseen disasters such as large-scale natural disasters caused by recent climate change, major
earthquakes, or major fires at our business partners, there is a possibility of partial suspension or reduction of business activities
due to large-scale suspension of social infrastructure and economic activities, long-term suspension of parts supply from key
suppliers, etc.
The Group’s Business and Countermeasures
The Group operates production sites in China, elsewhere in Asia, and in other regions around the world. We deliver products to
our clients globally through sales sites in these countries and regions. The supply chain for parts and other items used by the
Group extends globally, from materials procurement to the production assembly process.
Continuing from our efforts in fiscal 2019, the Pandemic Response Headquarters, led by the CEO, addresses the COVID-19
pandemic, according the top priority to ensuring health and safety of our employees and the prevention of the spread of infection
in regions where we operate. In addition, based on our COVID-19 Business Continuity Plan, we are continuing to take infection
control measures in consideration of various national government/regional laws, regulations, and guidance. Based on the premise
of the “new normal,” in order to co-exist with COVID-19, the Group has shifted to a work style that optimally and flexibly
combines working in the office and remote working and is promoting the practice of the most effective and efficient work style
according to business needs. Moreover, the Group has formulated a business continuity plan for not only production, but also
purchasing and procurement, logistics, and IT, and is implementing and strengthening actions to put in place necessary safety
measures, ensure business continuity, and enable rapid recovery in readiness for natural disasters. Furthermore, we operate an
employee safety confirmation system in preparation for disasters, stockpile emergency food and drinking water at sites, and
conduct simulations and training drills for emergency situations to improve the effectiveness of the business continuity plan. For
an emergency in the supply chain, we are taking measures such as building a mechanism to ascertain parts supply risk
immediately after disaster strikes and securing strategic parts inventory according to degree of importance.
83
OMRON Corporation Integrated Report 2022Risk Management (3) Geopolitical Risks (S Rank)
External Environment and Risk Scenario
As for geopolitical risks, international relations are changing more rapidly, including bilateral relations between the U.S. and China
and multilateral relations concerning the Russia-Ukraine situation. In these circumstances, various countries and regions may
strengthen economic and security policies, enforce laws and regulations to prevent the outflow of cutting-edge technology
outside the country/region, and import/export transactions and financial settlement with companies subject to sanctions or legal
restrictions may be suspended. In addition, if various countries adopt protectionist tariff policies, price competitiveness may
decline. In the event of war or conflict, the Group may face a risk of long-term business suspension or withdrawal from business
in the relevant region, or other unforeseen changes in policies or laws and regulations that may affect the Group’s business
activities. Failure to respond appropriately to these changes in circumstances and policies could lead to legal disputes,
administrative penalties, and even damage to social trust in our brands.
The Group’s Business and Countermeasures
The Group operates production sites in China, elsewhere in Asia, and in other regions around the world. We deliver products to
our clients globally through sales sites in these countries and regions. Under SF2030, we will further accelerate our global
expansion, including strengthening our presence in the Chinese and Indian markets. We are also creating new businesses based
on cutting-edge technologies, such as AI, IoT, and robotics, and promoting projects related to social infrastructure, such as public
transportation and traffic safety, in our social systems business.
With regard to geopolitical risks, we regularly monitor global political and economic conditions and trends in laws and regulations,
ascertaining changing business environments in each area and their impact on our performance. We are also exploring systems
for rapidly analyzing and generating insights concerning optimization of production, research and development, and intellectual
property management, as well as concerning the impact of changes in laws and regulations on our various businesses. Export
regulations in various countries have become more influential in recent years. Our Global Risk Management and Legal HQ
operates a company-wide export control committee, ensuring the appropriate management of security trading. In fiscal 2021, we
contracted outside experts to conduct a survey of policy trends and laws and regulations and responded to the Russia-Ukraine
situation, which were regularly discussed and reported to the Executive Council and also discussed at Board of Directors
meetings as key themes. Under SF2030, in order to respond promptly to highly uncertain geopolitical risks, we will promote
initiatives such as strengthening our analysis of the situation in each country and region.
(4)-1 Sustainability Issues (Climate Change) (S Rank)
External Environment and Risk Scenario
In view of increasing severity and frequency of extreme weather events and loss of species, tackling climate change has become a
social issue on a global level. Companies are required to work to reduce greenhouse gas (GHG) emissions in their value chains and
to make their products and services more environmentally friendly toward a decarbonized society. On the other hand, laws and
regulations and requirements concerning disclosure of initiatives regarding climate-related action and environmental policies are
being tightened in Europe, the U.S., and elsewhere, and society as a whole, including customers and suppliers, is stepping up its
demand for decarbonization initiatives. Due to the rise in energy prices as a result of the tightening of regulations in various
countries and regions, additional capital investment to address energy saving and the transition to renewable energy, and the
impact of the introduction of carbon taxes, there are risks of increasing business costs. Moreover, failure by OMRON or its suppliers
to appropriately respond to customer requirements and laws and regulations may result in suspension of customer transactions,
administrative penalties, or loss of business opportunities. Furthermore, inadequate systems to deal with climate-related information
disclosure may result in damage to social trust in our brands due to failure to meet the standards required by stakeholders.
The Group’s Business and Countermeasures
For major countermeasures to climate-related risks, please refer to P78 and P81.
(4)-2 Sustainability Issues (Human Rights) (S Rank)
External Environment and Risk Scenario
Owing to growing interest in the SDGs, consumers are increasingly choosing and purchasing products and services that are fully
respectful of human rights. Activities that take human rights into consideration, such as life safety and health considerations, also
lead to improved performance by workers. Meanwhile, companies, not only themselves but also throughout the value chain, are
required by society to fulfill certain responsibilities for issues such as forced labor, child labor, low wages and nonpayment, long
working hours, and working conditions with inadequate safety and hygiene, mainly in developing countries. The enactment of
human rights-related laws and regulations is therefore accelerating in many countries. In addition, as emerging technologies such as
AI become widespread, ethical issues related to emerging technologies have become a social issue.
Addressing these human rights issues has become a “business license” for companies that operate globally. Failure to appropriately
address human rights issues in the value chain may result in suspension of customer transactions, administrative penalties, or
damage to social trust in our brands. Moreover, inadequate response to laws and regulations in utilizing emerging technologies such
as AI may result in the suspension of development themes or reputational risk.
The Group’s Business and Countermeasures
For major countermeasures to human rights risks, please refer to P75 and P76.
84
OMRON Corporation Integrated Report 2022Risk Management (5) IT Systems & Information Security (S Rank)
External Environment and Risk Scenario
As society becomes increasingly digitalized, companies are expected to improve productivity and solve social issues through digital
transformation and data utilization. On the other hand, the threat of cyberattacks is rapidly increasing, and if countermeasures
against such attacks are weak, they may result in the leakage of personal and confidential information or business shutdowns due
to server outage, etc. Moreover, reflecting demand for privacy protection and the policies of various countries and regions,
personal information and data protection laws and regulations are enacted, revised, or their applications are tightened around the
world. Any violation in business operations may result in damage to social trust, the inability to conduct business, and the
imposition of large fines. If information management is inadequate in technological development through collaborative creation,
etc., business competitiveness may be lost due to unauthorized removal of information from the premises or information leakage.
The Group’s Business and Countermeasures
The Group has established and operates various systems worldwide. Currently, we are promoting the Corporate System Project (CSPJ),
whose objective is construction of a management system enabling transition to data-driven corporate management, as one of the most
important projects for the Group. CSPJ is an initiative not only to renew the IT infrastructure but also to standardize business processes
and utilize data in the future. Moreover, the Group possesses essential business information, as well as personal information and
confidential information of business partners obtained in the course of business. Under SF2030, for example, we will promote the
construction of a data platform as we transition to a business model that combines “products and services,” including the use of data in
the development of a global telemedicine service in the healthcare business. For IT system & information security risks, we hold integrated
cybersecurity meetings under the leadership of the CFO to assess the security level and address issues based on a global standard
cybersecurity framework. In addition, we have established Group rules on information security and personal information protection and
have established management measures for obtaining, using, and disposing of information according to the rank of importance of the
information. We have also established and are operating a system that enables smooth and prompt response to incidents.
In fiscal 2021, we made progress in transition to a zero trust model (Note 1), including strengthening of measures to monitor suspicious
behavior of PCs. In addition, in response to the revised Act on the Protection of Personal Information that came into effect on April 1, 2022,
we reviewed our privacy policy, rules and various procedures, and conducted training of all employees. We will continue to strengthen our
crisis management system against cyberattacks and rebuild our global system to promptly respond to changes in personal information and
data protection regulations in various countries and regions.
(Note 1) Zero trust model: A security model based on the concept, “never trust, always verify,” meaning that people, networks, or devices should not be trusted.
(6) Quality (S Rank)
External Environment and Risk Scenario
Expectations are growing for companies to provide highly innovative products and services as a means of solving social issues.
On the other hand, high standards are required to ensure product safety and accuracy. Regulations and standards related to
product safety, such as reporting and countermeasures for product defects, regulations on chemical substances contained in
products, such as the European RoHS Directive (Note 1) and Toxic Substances Control Act (TSCA) (Note 2) in the U.S., and
product safety-related laws and regulations and standards, such as the UL Certification (Note 3) in the U.S., are becoming more
stringent around the world. In addition, products are increasingly networked and the threat of cyberattacks is growing. In these
circumstances, in the event that we provide inadequate product design/inspection, inappropriate customer support, or
inappropriate reporting, or in the event that we are non-compliant with laws, regulations, and standards, it may result in large-
scale recalls, damage to social trust in our brands, or suspension of production and distribution of products.
The Group’s Business and Countermeasures
The Group has been engaged in business with Sensing & Control +Think as its core technologies. Under SF2030, we will
continue to evolve Sensing & Control +Think to realize new value through the combination of “products and services” rather than
just “products.” Examples include i-BELT, a service that utilizes data from manufacturing sites in the Industrial Automation
Business, and the development of a global telemedicine service in the Healthcare Business.
Regarding quality risks, in order to maximize customer satisfaction, we have established a basic quality policy based on the
principle of quality first. We have also established a quality management system based on international standard requirements. In
addition, in order to further our quality governance, the Global Procurement, Quality and Logistics HQ, which conducts top-level
oversight of quality, holds company-wide quality managers meetings. Furthermore, we have established and enforce Group rules
regarding our quality assurance system, quality assurance activities, and management in the event of a serious quality issue.
With respect to quality compliance, we are strengthening our management system by ascertaining trends worldwide in
environmental and safety-related laws, regulations, and standards related to products and other areas. With regard to product
security, we have established a response system for when we receive vulnerability information on our products and services
from external sources.
Under SF2030, in addition to the above, for technologies with high quality risk, such as lithium-ion batteries and power devices
used in each of our businesses, we aim to establish quality technologies to prevent such risks from occurring according to the
respective risks. With regard to product security, we will work to strengthen our systems throughout the product and service
lifecycle, including the supply chain, while utilizing outside consulting firms. Furthermore, we will establish a quality management
system adapted to the service business, taking into account the shift from “products” to “products and services.” We aim to
establish a mechanism to accumulate and utilize knowledge (risk management and quality initiatives in the service business) to
harmonize quality sensitivity and values.
(Note 1) RoHS Directive: Directive by the European Union (EU) on the restriction of the use of certain hazardous substances in electronic and
electrical equipment.
(Note 2) TSCA: U.S. law regulating the manufacture and import of hazardous substances
(Note 3) UL Certification: Certification for reliability and safety of raw materials and products by Underwriters Laboratories, a third-party safety
science organization in the U.S.
85
OMRON Corporation Integrated Report 2022Risk Management (7) Global Compliance (S Rank)
External Environment and Risk Scenario
With the growing influence of corporations in society, social demands for fair trade are increasing. Global laws and regulations,
such as antitrust laws and anti-bribery laws, will become stricter. At the same time, new laws and regulations and operations are
being considered in light of the evolution of IT, AI, etc. and in order to address social issues such as climate change. If relevant
authorities discover or determine that OMRON has violated these laws and regulations, OMRON may be subject to fines or other
administrative penalties, criminal punishment, or damage suits, which could have a negative impact on its reputation in society.
The Group’s Business and Countermeasures
The Group offers products and services globally, including those licensed by the governments of various countries. Under
SF2030, we will promote the development of innovative products and new business models through collaborative creation with
various business partners. We will also actively work to solve global social issues, including those in emerging countries.
As part of our socially responsible corporate management, we consider corporate ethics and compliance to be one of the most
important issues in our activities. Particular emphasis is placed on preventing the occurrence of cartels and other anti-competitive
activities, bribery, and other significant risks. Specifically, we have established the OMRON Group Management Policy. We also
have established and disseminated the OMRON Group Rules for Ethical Conduct as specific guidelines for the conduct of
executives and employees of the Group to ensure thorough compliance with laws and regulations. Furthermore, we have
appointed a person responsible for promoting corporate ethics and compliance and established a Corporate Ethics and Risk
Management Committee to promote corporate ethics and compliance. The president regularly issues instructions regarding
corporate ethics and thorough compliance and takes opportunities to raise awareness. In addition, we conduct periodic training
for executives and employees on corporate ethics and compliance, including anti-competitive behavior, such as cartels, and
bribery. In addition, we have established an internal and external whistleblower hotline. We accept reports of any conduct that
violates or may violate the OMRON Group Rules for Ethical Conduct, employment regulations, or laws and regulations. In
accordance with laws, regulations, and internal rules, the content of reports will be kept confidential, and whistleblowers will not
be treated unfairly.
Example of Information Security Measures: Email Security Awareness Training to Enhance
Information Security Strength of “People”
In recent years, cyberattacks have become increasingly sophisticated and complex, and there have been many incidents
that have had a significant impact on corporate activities, making implementation of further security measures an urgent
necessity. We are implementing various system security measures to prevent cyberattacks. However, attacks that
attempt to penetrate through “people” (employees), which have been a weak point in security, especially those via
email, are becoming increasingly sophisticated.
To this end, we are conducting email security awareness training throughout the OMRON Group, including overseas, as
part of our initiatives to increase the sensitivity of “people” to security. The purpose of this training is to have employees
experience simulated email attacks by sending simulated threat emails, thereby enhancing their ability to prevent
attacks. Training content is modified by changing the timing and the number of times such emails are sent, randomly
selecting employees who will be the recipients, and changing the text of the emails to express a variety of content. In
addition, interviews and follow-up training are conducted with employees who opened attachments or clicked on links in
simulated emails to ascertain the reasons why they did so, and the results of the training are disclosed internally to
create a sense of urgency. As a result of these initiatives, the number of inappropriate responses to threat emails in
training has steadily decreased, and individual employees’ awareness about email attacks has increased, as evidenced
by an increase in requests from employees for more challenging training and inquiries about suspicious emails.
We will continue to build a safer and more secure security system by strengthening our technical security measures as
well as the information security strength of “people.”
Fiscal 2021 Global Corporate Ethics Month: Raising Ethical Awareness of Employees Globally
Since 2016, the OMRON Group has designated October of each year as Global Corporate Ethics Month and has been
implementing initiatives to raise employees’ ethical awareness and enhance their relevant knowledge. During this
month, all employees receive training and learn about the OMRON Group Rules for Ethical Conduct, which stipulate
actions to be taken by employees in accordance with the OMRON Principles and laws and regulations.
In fiscal 2021, the CEO message for the Corporate Ethics Month was delivered in 11 languages (Japanese, English,
Chinese, Korean, Spanish, French, Portuguese, Thai, Indonesian, Vietnamese, and Malay). Also, the training, centering on
e-learning, was tailored to the actual situation in each region, reflecting the risks inherent in daily operations.
In Japan, the training programs covered cybersecurity, intellectual property protection, insider trading, and bribery. In the
U.S. and Europe, lectures were provided on how a whistle-blower system works and how to use the web platform that
protects the privacy of whistle-blowers. Quizzes and games were incorporated in the training to enhance the level of
understanding, and manuals in local languages were distributed to inculcate the whistle-blower system.
Through these activities, more than 99% of eligible employees participated in the training globally during the Global
Business Ethics Month in fiscal 2021, resulting in higher employees’ awareness of ethics.
86
OMRON Corporation Integrated Report 2022Risk Management Roundtable Discussion on Corporate Governance
Enhancing the Effectiveness of the Board of Directors to Support Increasingly
Sophisticated and Complex Management
Fumio Tateishi
Takehiro Kamigama
Chairman (Chairman of the Board of Directors)
Member of the CEO Selection Advisory Committee
Outside Director
Chairman of the Corporate Governance Committee
Chairman of the CEO Selection Advisory Committee
Chairman of the Compensation Advisory Committee
Member of the Personnel Advisory Committee
SF2030 Long-term Vision and SF 1st Stage
Medium-term Management Plan Reflect
the Results of Discussion
– Through the “initiatives to improve the
effectiveness of the Board of Directors,” which
have been established as a mechanism, in fiscal
2021 OMRON worked on three focus themes:
“completion of the next long-term vision and
determination of the next medium-term
management plan,” “response to increasing
geopolitical risks,” and “checking the progress
of establishing a companywide IT system.” As
regards “completion of the next long-term
vision and determination of the next medium-
term management plan,” what did discussion
center on?
Tateishi: We placed particular emphasis on
“completion of the next long-term vision and
determination of the net medium-term
management plan.” We had been working on
formulation of a long-term vision for two years, as
well as engaging in vigorous insightful discussion
on the medium-term management plan,
backcasting from 2030.
The Board of Directors set a new course by
resolving the key sustainability issues and medium-
to long-term targets of the long-term vision. By
clarifying the Board of Directors’ responsibilities for
sustainability, we were able to reiterate to
OMRON’s stakeholders our commitment to
“resolving social issues through its businesses.”
Board of Directors Operational Policy for Fiscal 2021
To enable the OMRON Group to achieve a drastic increase in
corporate value over the next 10 years, the Board of
Directors will exercise its oversight functions in a
multifaceted manner and from the short-term and medium-
to long-term perspectives.
Focus Themes
1) Completion of the next long-term vision and determination
of the next medium-term management plan
Points to be supervised
Response to the new normal era post COVID
Initiatives for key sustainability issues
Transformation of the business model and acceleration
of innovation
Reform of human resources management
Strengthening resilience
2) Response to increasing geopolitical risks
3) Checking the progress of establishing a companywide IT
system
87
OMRON Corporation Integrated Report 2022Governance OMRON aims to achieve a drastic increase in its
corporate value in the next decade. We had
intensive discussions on “human resources,”
“diversity and inclusion (D&I),” and “the
environment,” which are indispensable for realizing
this aim. Of these, the biggest issue is human
resources to lead growth. Our Outside Directors
and Outside Audit & Supervisory Board Members
have pointed out the need to utilize human
resources for business growth and the evolution of
the business model. Our discussions covered not
only education and training of employees and
mid-career hiring, but also various other
possibilities, such as the use of external human
resources through M&A and business alliances.
As for D&I, I believe that new ideas will bubble to
the surface as diverse values interact. We should
not just pursue quantitative targets, such as the
ratio of female managers. Having more female
managers will bring about qualitative changes. For
example, addition of a new perspective will
stimulate discussion, leading to innovation and
renewal of the corporate culture. In our
discussions, we tackled these issues in depth. It is
the responsibility of the Board of Directors to
oversee the effectiveness of D&I and to further
evolve OMRON’s initiatives in this regard.
On the environment, clearly both environmental
protection and corporate growth should be
achieved. For reduction of greenhouse gas
emissions, in addition to Scope 1 and 2 emissions
from OMRON’s own activities, we have had a
number of discussions on how best to promote
reduction of Scope 3 Category 11 emissions, which
are emissions from the use of OMRON’s products
and services sold, accounting for 80% of the total
emissions of the OMRON Group.
Kamigama: As for the long-term vision,
conceptualizing OMRON’s ideal configuration in
2030 and beyond, and then incorporating it in the
medium-term management plan by backcasting,
was no simple matter and we had to be creative to
accomplish this challenging task. The Outside
Directors and Outside Audit & Supervisory Board
Members were able to make proposals to the
Board of Directors from diverse perspectives based
on their own experience and knowledge.
OMRON’s inclusion of non-financial targets in its
medium-term management plan is noteworthy. And
OMRON’s actual integration of business growth
and promotion of sustainability is truly impressive.
Nowadays, there is hardly a company that does not
advocate sustainability, but I think OMRON is a rare
example of a company that integrates sustainability
into the main stream of its business, rather than
treating it as an obligation or a social contribution.
Agile Response to Geopolitical Risks
– What were the main points of discussion
on the second focus theme, “response to
increasing geopolitical risks”?
Tateishi: Long before COVID-19 appeared on the
scene, OMRON was strengthening integrated risk
management so as to adapt to changes in the
environment and promptly tackle problems through
concerted efforts of the management team and
employees. These accumulated efforts have helped
us respond agilely to the growing geopolitical risks
of recent years.
Immediately after Russian invasion of Ukraine, we
raised geopolitical risk to the highest rank on the
list of material risks. Specifically, we examined the
impact of the worsening Russia-Ukraine situation
on our business in terms of law and regulation,
tariffs, competition, restrictions likely to be imposed
by various countries, and prospects. Based on this
analysis, the Board of Directors discussed how to
minimize the impact. We are continuously
monitoring the implementation of measures and
changes in the international situation.
Geopolitical risk is inseparable from our business
and regional headquarters, and we have to think
about it. We had in-depth discussion at the Board
of Directors’ meetings on the need to increase the
speed of management by enhancing flexibility of
our global operations, for example by promoting
greater delegation of authority to overseas
subsidiaries.
Geopolitical risk is an important issue for every
company, regardless of industry or region. At
OMRON, having positioned “response to risks in
an era of uncertainty” as a focus theme for fiscal
2022, the Board of Directors will continue to
exercise its oversight functions regarding
geopolitical risk.
Companywide IT System Indispensable
in an Increasingly Uncertain and
Complex Environment
– Mr. Kamigama, how do you rate the
achievements to date for the third focus theme,
“checking the progress of establishing a
companywide IT system”?
Kamigama: Given the transition of OMRON’s
business from a focus on “products” to “services,”
as well as the need to further strengthen integrated
risk management mentioned by Chairman Tateishi,
establishment of a corporate IT system is
indispensable. The Board of Directors has been
deliberating on this as a focus theme since fiscal
2019.
Though good progress has been made so far, the
big challenge lies ahead. I have observed a number
of attempts by companies to introduce unified IT
systems throughout their operations. Such projects
tend not to proceed as initially planned both in
terms of schedule and budget. But you must go on
because in an increasingly uncertain and complex
environment, you can’t run a business effectively
88
OMRON Corporation Integrated Report 2022Governance we discussed the appropriate acquisition price of
common stock in terms of both return and risk,
taking into consideration the impairment risk after
the acquisition of common stock.
As collaborative business creation with JMDC is
about to get into full swing, I believe it is essential
to learn from our partner and emulate the best
aspects of its organizational culture. I made a
recommendation along these lines at a meeting of
the Board. The Outside Directors suggested that
OMRON should establish a project team consisting
of people from both companies, not only at the
executive level but also at the front line. Having a
joint team should accelerate discussions and
enable OMRON and JMDC to create new
businesses offering value that cannot be realized by
either company acting alone.
Kamigama: In my view, the biggest difference
between OMRON and JMDC concern
organizational culture and human resources.
OMRON is diligent yet somewhat rigid, and one
cannot deny the impression that it is culturally
rather conservative. On the other hand, JMDC is
freewheeling and open-minded, and the
individuality and opinions of each employee seem
to be respected. I think it is evident that the tempo
of management is also quite different between the
two companies.
What we must never do is to try to shoehorn our
partner into OMRON’s way of doing things. As
Chairman Tateishi said, it is important to respect
one’s partner, diligently learn everything that can be
learned from the partner, and apply it. This approach
will lead to true synergy. All the Outside Executives,
that is, Outside Directors and Outside Audit &
Supervisory Board Members, were at one on this
point.
The setting up of a carefully selected team drawn
from both companies, consisting of people who are
flexible in their thinking and have a positive
mindset, and engaging in open discussions is the
best way forward. It will lead to new data-driven
businesses offering essential value, not only in the
Healthcare Business but also in OMRON’s
mainstay Industrial Automation Business.
Toward an Ever-evolving Board of
Directors
– How would you rate the skills matrix of
OMRON’s Board of Directors?
Tateishi: OMRON has ensured the diversity of its
Board of Directors, which is composed of
individuals who possess the knowledge, expertise,
and experience necessary to realize our long-term
vision and medium-term management plan.
Nevertheless, in order to transform business
models and oversee new businesses, the Board of
Directors must also have knowledge and expertise
without a companywide IT system.
It is understandable that employees engaged in
businesses and operations closer to customers
have reservations and anxieties about the
implementation of a new companywide IT system.
This is because they may have to review their
existing workflow or are concerned that they may
no longer be able to meticulously respond to
customers. However, allowing exceptions and
customization will compromise operational
efficiency by impeding introduction of a unified
companywide IT system. So, the exercise of
leadership by top management will be crucially
important from now on. That is why I have urged
CEO Yamada to rally the workforce in this endeavor
and proceed with determination.
OMRON’s first attempt to establish a companywide
IT system is a major project that will span 10 years.
Therefore, in a new initiative, the Board of Directors
has established an independent third-party
evaluation team consisting of experts and
experienced professionals to monitor the progress
and other aspects of the project. We expect this
mechanism to ensure objectivity will help complete
the project on schedule.
New Possibilities Expanded by Capital
and Business Alliance with JMDC
– What opinions were expressed at meetings
of the Board of Directors about the capital and
business alliance with JMDC Inc.?
Tateishi: This was OMRON’s largest investment
project to date and the Board of Directors held
wide-ranging discussions on the matter. For
example, we considered the possibility of creating
a personalized solution for the prevention of serious
illness by combining JMDC’s medical data, such as
health insurance claims and records of medical
examinations, with blood pressure and vital data
that OMRON possesses, in order to achieve our
goal of extending healthy life expectancy. Naturally,
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OMRON Corporation Integrated Report 2022Governance – What are OMRON’s issues?
Kamigama: OMRON should make The OMRON
Global Awards (TOGA), an annual event, more
practical in nature. The participants’ enthusiasm and
their seemingly inexhaustible ability to generate
ideas impress me. These attributes are among
OMRON’s strengths. On the other hand, the ideas
presented at TOGA have yet to become businesses
of reasonable scale. There are several ideas with
great potential. I would like to see OMRON develop
the next pillar of its business from among the
solutions proposed at TOGA.
– What is the operational policy of the Board
of Directors for fiscal 2022?
Tateishi: The Corporate Governance Committee
judged that the Board of Directors exercised its
oversight functions in a multifaceted manner and
from the short-term and medium- to long-term
perspectives in fiscal 2021. In fiscal 2022, centering
on three focus themes, namely “monitoring the
progress of the long-term vision and the medium-
term management plan,” “response to risks in an
era of uncertainty,” and “checking the progress of
establishing a companywide IT system,” the Board
of Directors will continue exercising its oversight
functions and implementing the plan-do-check-act
(PDCA) cycle so as to contribute to the realization
of sustainable enhancement of corporate value.
– Finally, why did OMRON include the
OMRON Principles in its Articles of
Incorporation?
Tateishi: It is rare for a company to include its
corporate principles in its articles of incorporation.
We took this step in order to make OMRON’s
resolve widely known. By declaring both within the
OMRON Group and to external parties that the
basis of OMRON’s management, the very core of
our approach, remains unchanged, regardless of
changes in the environment, I believe that
OMRON’s initiatives to “resolve social issues
through its businesses” will gain greater impetus.
that are different from what were required in the
past.
Speaking from first-hand experience, the tempo of
management decision-making increased sharply
after the outbreak of the COVID-19 pandemic.
Many social issues that were expected to emerge
in the future have suddenly confronted us as
pressing issues during the pandemic. Remote
medical care without face-to-face contact is a
typical example. In these circumstances, a rich and
varied set of skills is needed for swift managerial
decision-making and decisions must be thoroughly
implemented in business operations. I believe it is
important to clarify the skills needed to realize
strategies through backcasting and to configure the
Board of Directors accordingly.
Kamigama: I think that OMRON’s Board of
Directors is well-balanced and diverse in its
composition but it definitely needs to evolve as we
look to the future. As OMRON promoted digital
transformation and the transition to a business
offering essential value, the need for expertise in IT,
AI, and cybersecurity is certain to increase. In
nominating Directors, we need to take this into
account.
– Mr. Kamigama, since your appointment as
Outside Director in 2017, have you noticed any
change in the characteristics and strengths of
OMRON’s Board of Directors?
Kamigama: The atmosphere of the Board of
Directors has remained unchanged. The
atmosphere in which our discussions are held is
very relaxed. I also feel that not only Outside
Directors but also Outside Audit & Supervisory
Board Members state their opinions more
frequently than at other companies. This is
supported by succinct information materials
prepared for Board of Directors meetings. So, we
are able to have focused discussions at Board of
Directors meetings and resolve matters.
In addition, in response to a request by the
Corporate Governance Committee based on
evaluation of the Board of Directors’ effectiveness
for fiscal 2021, Internal Directors and Internal Audit
& Supervisory Board Members have become more
proactive in stating their opinions, resulting in more
vibrant discussion. This is indicative of how the
Board of Directors is evolving. Exchanges of ideas
and opinions between Internal Executives and
Outside Executives, that is, Outside Directors and
Outside Audit & Supervisory Board Members, are
enhancing Outside Executives’ understanding,
enabling them to engage in deeper discussion.
Another characteristic is that every Board of
Directors meeting is shortly followed by a review to
evaluate its effectiveness. This ensures prompt and
accurate feedback, which is indispensable for the
evolution of the Board of Directors.
90
OMRON Corporation Integrated Report 2022Governance Interview with Outside Director
Path to Diversity Management
Outside Director
Chairman of the Personnel Advisory Committee
Vice Chairman of the Corporate Governance Committee
Member of the CEO Selection Advisory Committee
Member of the Compensation Advisory Committee
Izumi Kobayashi
– What do you think of the way Japanese
companies view “human capital”?
The collapse of Lehman Brothers triggered a
renewed emphasis on the concept of “human
capital.” People and environmental protection came
to be perceived as sources of value creation rather
than costs.
Although in Japan there was a term for “human
resources,” the unfamiliar Japanese translation of
“human capital” hadn’t readily taken hold. As a
result, although Japanese companies have
traditionally placed great importance on maintaining
employment, the idea that people are not a cost
but capital that is the key to enhancement of
corporate value and social value if education is
provided and the environment is improved faded
away in the course of the shift to management
emphasizing financial performance. This is most
unfortunate. Regarding the commitment toward
employees that today’s younger generation, in
particular, is demanding, Japan, with its emphasis
on maintaining employment, had been in the lead
in the past.
The most important thing in utilizing human capital
is “human resources development.” My impression
is that whereas European and American businesses
invest heavily in human resources development,
Japanese businesses do not invest to the same
extent. Although “membership-based
employment” built on the principle of lifetime
employment has its advantages, “job-based
employment” is more appropriate for raising the
value of human capital. Which is selected will likely
differ among companies, but OMRON’s
announcement that it will be shifting to job-based
employment is something that, as one who knows
the merits of such an approach, I welcome.
– You serve as Chairman of the Personnel
Advisory Committee. How do you view the
“current state of human capital utilization” in
OMRON?
As all the outside directors including myself
unanimously note, the activity that stands out most
at OMRON is “The OMRON Global Awards
(TOGA).” It is splendid how OMRON employees
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OMRON Corporation Integrated Report 2022Governance worldwide actively come together as one, in line
with the OMRON Principles, to “create business or
products and services useful to society,” and do so
not out of a sense of duty or in accordance with
instructions, but spontaneously.
TOGA is indeed a fine model of the utilization of
human capital to create corporate value. Recently,
in the context of purpose management, a value
system such that an enterprise in its totality
naturally endeavors to solve social issues in
accordance with its corporate philosophy is
permeating every aspect of business activities.
Indeed, through TOGA, personal growth is evident
throughout the OMRON workforce. I hear that
many of OMRON’s foreign employees joined
OMRON because they empathized with the
OMRON Principles. I have rarely come across a
company where an opportunity such as TOGA is
provided.
– Among the non-financial goals posted in
the medium-term management plan SF 1st
Stage, there are such goals as “ratio of women
in managerial roles of at least 18% worldwide”
and “100% attendance by managers of
management training to draw out the abilities
of diverse human resources.”
Although summed up in the single word “diversity,”
I consider there is “visible diversity” expressed by
numbers, such as the ratio of male to female or the
ratio of non-Japanese nationals, and “invisible
diversity” that cannot be expressed quantitatively.
Regarding “visible diversity,” I think OMRON is
promoting this quite vigorously. Although all
OMRON’s directors are Japanese nationals, the
number of executive officers who are non-Japanese
nationals is on the rise, and, overseas, local
employees are taking responsibility for business
development. Moreover, at Board of Directors
meetings, female employees make presentations
about their business or projects on various
occasions, and I think that the commitment being
shown by OMRON to diversity is considerable.
However, visible diversity is no more than the
beginning of the matter. The diversity that I have in
mind involves people with different experiences or
opinions respecting each other, at times arguing,
and, as a result achieving empathy and creating
something new. This is the real attraction and true
value of diversity. However, in Japan, raising an
objection or expressing doubt about someone’s
opinion in a meeting may be viewed as a personal
attack. However, different opinions and discussions
are about business matters, and if we do not put
aside not only gender differences, but also
personalities or age and hierarchical relationships,
then it is not possible to have a fruitful discussion.
Diversity is frequently discussed at board meetings
too. On those occasions, I always comment along
the following lines. “Visible diversity should of
course be pursued, but, much more importantly,
we should aim to be an organization where
different highly individual people can constructively
encounter one another, rather than taking a cookie-
cutter approach such that however you cut it, the
same kind of ‘excellent’ person based on the same
design appears.”
In addition, I make the following point. “Everyone
has strengths and weaknesses. How are those
strengths to be stretched and developed? And how
are those weaknesses to be covered and
compensated by the team? Surely that is the true
meaning of nurturing human resources.” At board
meetings, I can sense OMRON’s serious
commitment to strengthening its organizational
ability. This is why I have great expectations that a
virtuous cycle of diversity & inclusion will be
created, a cycle such that “every member of the
organization can fully display their individuality and
ability,” “the company draws out their individuality
and ability,” and “as a result, the organization is
activated and new value is created.”
– What do you think is required to
strengthen human capital? Ultimately, what do
you imagine will be the “New OMRON”?
I think OMRON employees are mainly serious-
minded, value the OMRON Principles, and have a
great desire to do something useful for society.
However, that vector is by and large uniform, and in
an era in which it is unclear in what direction the
world is heading, I think one could say without fear
of being misunderstood that there may be a need
for “misfits” and “eccentrics.”
In Japan, basic public services are well provided
and all needs are conveniently catered for.
However, what is taken for granted in Japan, may
be novel and pressing needs in other countries. If
we fail to notice those needs, there is a possibility
that we will end up missing good business
opportunities. Sure enough, various chances are
concealed in our encounters with those who differ
from us. By mixing with those of a different nature,
I anticipate, among other things, that “ways of
thinking and plans that were absent up to now will
be born,” “our hypotheses will become more
accurate, throughput will change” and “decision-
making will accelerate.”
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OMRON Corporation Integrated Report 2022Governance set goals should not be strictly adhered to no
matter what happens. It is important to be able to
adjust them as necessary. This may be a
troublesome task, but it is one of the
responsibilities that comes with management.
In OMRON’s case, since the spirit of OMRON’s
Corporate Motto and the OMRON Principles are
well-established and widely known, the values
system of the organization and the direction in
which it should be heading are clear. That is why I
expect even matters generally regarded as difficult,
whether it be on-site human resources
development or 360-degree appraisal, to proceed
smoothly. I relish the prospect.
– What contribution do you envisage making
as a director of OMRON?
I have worked for many years in organizations
outside Japan, so when some difference in opinion
or the way of thinking arises, I always throw in the
question “why?” Whatever the subject might be, I
think the biggest contribution I can make is to
continue to pose the question “why?” on matters
taken for granted within the company or in Japan.
I think it is dangerous for matters to proceed
unchanged because “everyone in the company
thinks so” or “this is the way we do things in our
company,” for example, without introducing any
viewpoints such as from outside the company. I
intend to keep on asking, from a global perspective,
not a Japanese perspective, whether the way of
doing things before my eyes is “the best and only
one,” “why it is regarded as normal,” and “whether
it really must be so,” and continue to assert the
need to consider matters from different angles.
– Forward-looking Japanese companies are
currently shifting to “job-based employment.”
What changes do you anticipate as a result of
this spread of job-based employment in the
Japanese industrial sphere? How do you think
OMRON’s human resources development and
requirements will change from now on?
I think that in order to make the most of each
person’s individuality, in other words, in order to
increase the value of human capital, there is no
option but to shift to job-based employment.
OMRON is currently forging ahead with this.
However, one point that must be given sufficient
attention is the question of who is to bear
responsibility for the nurturing of human resources.
Generally, in job-based employment, the authority
and responsibility that up to now had been held by
the human resources department are delegated to
the on-site managers. Though bearing responsibility
for profit, their most important job is “human
resources development.” In foreign companies, the
higher one’s job position, the more time one
devotes to human resources. However, looking at
Japanese enterprises, the money and time invested
in training and evaluating human resources seems
quite inadequate. Actually, in the work of an
executive, considerable weight should be given to
nurturing subordinates and developing their talent.
I think there are several points to be considered. In
the case of education and training, for example,
given the Japanese ethos of “equality,” it is usual
for everyone to uniformly receive the same
program. However, in order to leverage people’s
diverse strengths, programs should be customized
for each individual.
Moreover, although it requires time and effort, a
360-degree appraisal is of course effective. This is
because as well as leading to an understanding of
how various people evaluate the person subject to
evaluation, comparing evaluations by the superior
and by others, it is possible to ascertain the
superior’s abilities as a manager.
One other important thing is the setting of goals.
Even in job-based employment, it is necessary at
the beginning of the period for the superior and the
subordinate to discuss business and behavioral
goals sufficiently and align their perspectives.
Unless consensus is established, the superior and
the subordinate will be working toward different
goals, thus compromising the value of the
evaluation results and, in the worst case,
destroying a relationship based on mutual trust.
Moreover, although it is common for circumstances
to change midway in a project, many evaluation
systems cannot handle such changes. So, initially
93
OMRON Corporation Integrated Report 2022Governance Message from New Outside Director
Yoshihisa Suzuki
Outside Director
Member of the CEO Selection Advisory Committee
Member of the Personnel Advisory Committee
Member of the Compensation Advisory Committee
Member of the Corporate Governance Committee
On My Appointment as Outside Director
It is a great honor for me to be appointed as a new Outside Director
of OMRON. Longing to be an aircraft engineer, I entered the
engineering department in university, but a realistic appraisal of the
capabilities of my fellow students and seniors convinced me it was
not for me. So, instead, I joined ITOCHU Corporation, a general trading
company, that handles aircraft. In the more than 40 years since then,
I have accumulated wide-ranging business experience. Having started
with sales in the aerospace defense fields, I served as CEO of the US
headquarters and managed a manufacturing subsidiary in Japan. At
the head office, I served as president of ICT & Financial Business
Company, CDO/CIO, and then as president and COO of ITOCHU
Corporation, in which capacity I was involved with the integration of
information and finance, decarbonization, and so on. Currently, as Vice
Chairman of ITOCHU Corporation, I am undertaking various roles,
ranging from my role in Keidanren (Japan Business Federation) to my
roles in the British Market Council and Japan-U.S. Business Council,
and also in the Association of Corporate Executives and the Chamber
of Commerce and Industry in Tokyo and Osaka. I would be happy if
my experiences to date can assist in OMRON’s further development.
I felt great sorrow on learning of the assassination of former Prime
Minister Abe. Prime Minister Kishida, following in the tradition of former Prime Minister Abe, has announced a
policy of “new capitalism.” What will be the nature of this new capitalism? Also called multi-stakeholder
capitalism, it is I think essentially the traditional principle associated historically with the merchants from Omi,
present-day Shiga prefecture, namely, “all three parties doing well,” “the seller doing well, the buyer doing well,
society doing well,” which eventually led to the rise of general trading companies, and also is expressed by
OMRON’s Corporate Motto with its emphasis on the “public nature of business.” Although the central
government will prepare the systems and mechanisms needed to realize the new capitalism, it will in the end be
the enterprises themselves that implement this new capitalism. Its essence will lie in raising the motivation of
employees, promoting diversity & inclusion and innovation to contribute to the resolution of various social issues,
and increasing corporate value. OMRON’s long-term vision SF2030 will be its embodiment, and I look forward to
participating in its implementation as an outside director.
It should also be noted that the previous world order ended with the worsening of the Russia-Ukraine situation.
There is no doubt that for at least the following five years or so, Russia will represent the biggest risk to the world.
And there is one other risk too, which is likely to be found in the U.S. rather than in China. Divisions within the U.S.
are profound, with politics and diplomacy becoming increasingly inward-looking, making it hard for the U.S. to
display its former global leadership. I think one could say that we are now in a period in which both the Japanese
government and those of us in the business world will have to resolutely carve out a new path on our own.
OMRON is a global enterprise whose powers of technological innovation and progressive governance system are
already widely known. What will OMRON, as a pioneer of the “New Capitalism” operating in the uncertain
atmosphere of a post-COVID world, aim for next? Thinking about this question and reaching a solution to it along
with all of you is something I am very much looking forward to doing.
Career Summary
April 1979 Joined ITOCHU Corporation
June 2003 Appointed Executive Officer of ITOCHU Corporation
April 2006 Appointed Managing Executive Officer of ITOCHU
Corporation
April 2007 Appointed President (CEO) of ITOCHU International Inc.
June 2012 Appointed President and Representative Director of
JAMCO CORPORATION
April 2018 Appointed President & Chief Operating Officer of
ITOCHU Corporation
April 2020 Appointed President & Chief Operating Officer
and CDO.CIO of ITOCHU Corporation
April 2021 Appointed Member of the Board and Vice
Chairman of ITOCHU Corporation
April 2022 Appointed Vice Chairman of ITOCHU Corporation
June 2016 Appointed Representative Director and Senior
(to present)
Managing Executive Officer of ITOCHU Corporation
June 2022 Outside Director, OMRON (to present)
94
OMRON Corporation Integrated Report 2022Governance Roundtable Discussion between
Outside Audit & Supervisory Board
Members (Independent)
Deepening Diversity and Strengthening Growth Potential
Contributions to Corporate Value by Outside Audit & Supervisory Board Members
Tadashi Kunihiro
Audit & Supervisory Board Member (Independent)
Member of the Corporate Governance Committee
Hideyo Uchiyama
Audit & Supervisory Board Member (Independent)
Member of the Corporate Governance Committee
Role and Posture of Outside Audit &
Supervisory Board Members (Independent)
to Meet the Expectations of Stakeholders
Uchiyama: Under the Companies Act of Japan, the
role of company auditors is to audit the execution
of duties by directors. Having been elected at the
General Meeting of Shareholders of OMRON, we
audit the execution of duties by Directors in order
to earn the trust of stakeholders. At the same time,
however, OMRON wants both Directors and Audit
& Supervisory Board Members to serve as one
team in performing their functions to enhance
corporate value, while always mindful of their
respective legal statuses.
OMRON’s Corporate Governance Committee
consists of Outside Directors and Outside Audit &
Supervisory Board Members and its main function
is to evaluate and report on the effectiveness of the
Board of Directors. However, going beyond
evaluating and reporting on effectiveness, this
committee serves as a forum for those being
supervised and those supervising to exchange
frank opinions on how to improve governance.
Furthermore, in the process of deliberating on the
formulation of the long-term vision “SF2030” and
the medium-term management plan “SF 1st
Stage,” we, Outside Audit & Supervisory Board
Members, actively participated in the discussions
at the Board of Directors meetings to ensure more
effective monitoring.
Kunihiro: Yes, that’s right. I think Audit &
Supervisory Board Members should actively
participate in discussions at meetings of the Board
of Directors in their capacity as board members.
Some companies consider the role of auditors is to
check the directors’ discussions when necessary
and otherwise to keep quiet. But OMRON does not
see it that way. At OMRON, three Outside
Directors and two Outside Audit & Supervisory
Board Members with great experience in wide-
ranging fields represent stakeholders and discuss
OMRON’s potential and how to enhance its
corporate value. In doing so, we are not
preoccupied with whether we are Audit &
Supervisory Board Members or Directors.
Of course, when it is necessary to prevent damage
to corporate value, Audit & Supervisory Board
Members must apply the brakes to fulfill their role.
That is ultimately the point of being Audit &
Supervisory Board Members. However, such
situations are rare. We, Outside Audit &
Supervisory Board Members, will consider various
95
OMRON Corporation Integrated Report 2022Governance aspects of OMRON’s corporate value from outside
perspectives in response to the views expressed
by internal parties. For this purpose, there is no
distinction between Outside Directors and Outside
Audit & Supervisory Board Members.
Uchiyama: What we must always keep in mind is
that we are representing stakeholders, as Mr.
Kunihiro just mentioned. We must consider what
we should do to enhance or prevent damage to
OMRON’s corporate value from the viewpoint of
“representatives of stakeholders.”
Kunihiro: According to the traditional view, there
are “offensive” discussions to enhance corporate
value and “defensive” discussions to prevent
damage to corporate value, and both of internal and
outside Audit & Supervisory Board Members,
should focus exclusively on “defensive”
discussions and not get involved in “offensive”
discussions. However, defense and offense cannot
be neatly separated in that way. Since we are living
in uncertain times and prospects are unclear, risk
management is inextricably linked to finding
opportunities. So, the roles cannot be neatly
separated. To maintain that Outside Directors
should be “offensive” and Outside Audit &
Supervisory Board Members should be “defensive”
is simplistic. For example, Outside Directors should
be involved in discussions on compliance and
Outside Audit & Supervisory Board Members
should be involved in discussions on growth
strategies.
Therefore, Outside Executives need to be eagle-
eyed, knowledgeable, and insightful concerning the
company. For example, “I am an Audit &
Supervisory Board Member, so I don’t know
anything about growth strategies,” would not be a
helpful attitude. It is also important that diverse
Outside Directors and Outside Audit & Supervisory
Board Members can communicate fully with one
another and work constructively together while
demonstrating their personal qualities.
Evaluation of Long-term Vision and
Medium-term Management Plan and
OMRON’s Issues from Outside Perspectives
Uchiyama: A project team consisting of people
from whom the next generation of OMRON’s
leaders will likely be selected identified the fields
where OMRON should compete, based on their
view of current circumstances and forecasts of the
changes shaping the future business environment
presented by the executive team. This is how the
long-term vision “SF2030” and the medium-term
management plan “SF 1st Stage” were formulated
with a timeframe extending far into the future. I
highly regard the fact that the members involved in
the project took the initiative, assumed
responsibility, and developed the narrative of
OMRON’s enhancement of corporate value in an
objective manner.
OMRON’s management, based on the SINIC
Theory proposed by OMRON founder Kazuma
Tateishi accords value to predicting the future
based on an appreciation that three elements,
namely, science, technology, and society, develop
cyclically. In addition to these three elements, I
think the new long-term vision has another
element, the global environment. However, in the
global market where OMRON operates, the stages
of social development such as “introduction of IT”
and “optimization,” are discontinuous and
unbalanced. In addition, I believe that the cycle has
been accelerating owing to the progress of digital
technology. In other words, no matter how
elaborate a vision or plan may be, there is always a
risk that unpredictable environmental changes will
occur that render the vision or plan obsolete. So we
must recognize such environmental changes and
act accordingly. Or, even in times when it is
particularly difficult to predict the future, if you can
create the future through innovation, there will be
no need for prediction. With regard to such
autonomous initiatives, I have great expectations of
OMRON.
Kunihiro: Management issues related to achieving
this long-term vision and the medium-term
management plan will be the themes that we
Outside Audit & Supervisory Board Members will
monitor from now on.
Uchiyama: Absolutely. As I mentioned, I highly
regard OMRON’s plan for SF2030, but on the other
hand I have some concerns. For example, when we
interview the managers responsible for OMRON’s
businesses, they give polished presentations and
respond to our questions well. I wonder whether
there are signs of “big company disease.”
I say this because, in order to achieve the vision, it
is important to be ready and willing to implement a
plan even if there is a 30% risk provided there is a
70% chance of success, as Kazuma Tateishi
advocated in his “7:3 Principle” regarding the
venture spirit. It is also important to resolve on-site
issues promptly. I feel that too polished a
presentation might be an indication that OMRON
managers may be succumbing to the mindset of
seeking “10:0” instead of “7:3.”
So, I have recently changed the nature of my
questions. I ask OMRON managers: “What are
three issues that you have as the person in charge
of this business?” In order to fulfill my responsibility
as an Outside Audit & Supervisory Board Member,
I need to bring inherent management issues to the
surface and focus on whether OMRON is
implementing effective measures to deal with
them. I would like those responsible for OMRON’s
businesses to appreciate this.
Kunihiro: I totally agree with you. It is natural that
there will be difficulties and challenges to
overcome, and I hope OMRON managers will be
shrewd enough to use Outside Executives to
address these challenges. We, Outside Audit &
Supervisory Board Members, as well as Outside
Directors, share a concern that OMRON’s venture
96
OMRON Corporation Integrated Report 2022Governance Kunihiro: The key to strengthening OMRON’s
growth potential is to take advantage of its
diversity. The actions of all OMRON employees are
based on the OMRON Principles. This is the result
of management based on the corporate philosophy
and it is one of OMRON’s strengths. But at the
same time, we are concerned that the OMRON
Principles might become a superficial phenomenon
rather than penetrating and that OMRON
employees might become increasingly
homogeneous.
The investment in JMDC Inc. in February 2022 was
the subject of much discussion at the Board of
Directors meeting, as it was a case of investment
in a company with a very different corporate
culture. OMRON Directors and Audit & Supervisory
Board Members agreed that the investment in
JMDC should be a catalyst for changing OMRON
by learning from JMDC’s corporate culture, rather
than trying to instill OMRON’s corporate culture
and ways of doing things in JMDC. In pursuing
collaboration and synergy, if OMRON were to
attempt to compel the partner to become like
OMRON, the partner’s momentum would cease
and collaboration would go nowhere. OMRON
should emulate those attributes of the partner in
which OMRON is deficient while maintaining a
healthy tension and distance.
Evaluation of Effectiveness of the Audit
& Supervisory Board and Issues to be
Addressed
Uchiyama: Every year, OMRON conducts a
questionnaire-based evaluation of the effectiveness
of the Audit & Supervisory Board, and along with
self-evaluation, issues for the next fiscal year are
identified. This year, three issues were identified:
(1) enhancing opportunities for more open
discussion between Audit & Supervisory Board
Members and Outside Directors, (2) considering a
new approach for auditing in an increasingly
uncertain business environment and reforming the
Audit & Supervisory Board, and (3) strengthening
cooperation with the Internal Audit Division to
further enhance its performance.
As I mentioned at the outset, I believe that both
Directors and Audit & Supervisory Board Members
should fulfill their functions to enhance corporate
value as one team while taking into account their
respective stances. We have long been making
efforts to break down the barriers between Outside
Directors and Outside Audit & Supervisory Board
Members. However, the Corporate Governance
Committee is the only committee of which Outside
Audit & Supervisory Board Members are a part of.
As the Corporate Governance Committee is a
voluntary committee that does not meet frequently,
there are not many opportunities for Outside
Directors and Outside Audit & Supervisory Board
Members to discuss their views in a formal setting.
spirit may be weakening. In plain words,
“boldness” may be weakening. OMRON is a very
well-organized company with solid management
based on a corporate philosophy, but I feel that the
OMRON Principles based on the founder’s venture
spirit are sometimes put in a “frame” and hung on
the wall and are not really a springboard to decisive
action by OMRON.
Tackling challenges and innovating to advance
boldly are not at odds with management based on
a corporate philosophy, rather they can be integral
to it. But I cannot deny my impression that
OMRON feels comfortable when chanting its
corporate philosophy by rote and sometimes
doesn’t translate it into action.
As an indication of this concern, investors have
commented that the challenge for OMRON is to
have an insatiable appetite for progress. We are
aware of that.
Uchiyama: Looking at the figures regarding
OMRON’s growth potential, total assets increased
73% from ¥537.3 billion in fiscal 2011, 10 years ago,
to ¥930.6 billion in fiscal 2021, while the number of
employees decreased from 35,992 to 29,020 in 10
years, and capital efficiency has also improved.
However, when it comes to sales, OMRON’s net
sales have grown only 23% over the 10 years from
¥619.5 billion in fiscal 2011 to ¥762.9 billion in fiscal
2021. Some companies in the same industry as
OMRON have nearly quadrupled their sales over
the past decade. That is why OMRON’s lack of
growth is pointed out.
OMRON uses return on invested capital (ROIC) as
a KPI in management, but ROIC is an efficiency
indicator and does not include the concept of
growth. There is a need to examine whether the
emphasis on ROIC has been at the expense of
growth.
I agree with Mr. Kunihiro about management based
on corporate philosophy. The OMRON Principles
should be the driving force behind OMRON’s focus
on identifying social needs and its wholehearted
pursuit of solutions. You can only say that the
corporate philosophy has penetrated when
management based on the corporate philosophy
has reached that level.
97
OMRON Corporation Integrated Report 2022Governance Division,” I would like to express my opinion. The
conventional auditing by OMRON’s Internal Audit
Division is, to put it simply, to check whether
compliance is ensured. I would like this to be
changed. I want the Internal Audit Division to
perform internal auditing from the perspective of
Audit & Supervisory Board Members and enhance
risk-management-oriented internal audit functions.
For this purpose, strengthening cooperation
between the Audit & Supervisory Board and the
Internal Audit Division is necessary.
For example, when you audit a subsidiary and find
a problem, what is the recognition of the person in
charge of the subsidiary about management issues,
how are these issues addressed, are measures
adequately implemented, and is the relationship
with the parent company properly taken care of?
We are telling the Internal Audit Division that they
need to adopt such perspectives, otherwise they
will not know where the risks are.
Kunihiro: Internal audits progress from audits to
find deficiencies to risk-based audits, and then to
management audits. If the concept of risk
management as broadly conceived, policies, and
strategies do not permeate workplaces, they will
not benefit the company. The Internal Audit Division
must be able to find out what is really happening.
The consensus among us is that whether a
company’s growth strategy is actually working
should also be subject to audit. The Internal Audit
Division cannot adopt such an approach in a single
step, but the Audit & Supervisory Board will
encourage and cooperate with the Internal Audit
Division to move in that direction.
Uchiyama: In doing business globally with
overseas sales accounting for 60% of total net
sales, it is essential for OMRON to grasp what is
happening at each site and to constantly examine,
improve, and refine its basic functions, such as
development, production, and sales, as well as its
management decision-making process to draw out
the potential of the diverse human resources
underpinning the OMRON Group. I believe this is a
precondition for securing OMRON’s future growth.
Kunihiro: That is why we have been creating
opportunities for the five Outside Executives
(Outside Directors and Outside Audit & Supervisory
Board Members) of OMRON to meet and discuss
on an ad hoc basis, in addition to discussion in a
formal setting as in a committee meeting. The role
of both Outside Directors and Outside Audit &
Supervisory Board Members is to oversee
execution as representatives of stakeholders,
always with a view to accomplishing the goal of
enhancing corporate value. Therefore, it is in the
best interest of OMRON to have Outside Directors
and Outside Audit & Supervisory Board Members
discuss freely and openly and collaborate as one
team, rather than remaining in silos corresponding
to the difference in their legal statuses under the
Companies Act.
Uchiyama: “Enhancing opportunities for more
open discussion” does not mean simply increasing
the number of discussions but rather to always act
based on that awareness. So, from now on, this
mindset will be important.
Kunihiro: That’s right. The mindset of Outside
Executives will be tested in the future. Outside
Directors and Outside Audit & Supervisory Board
Members should be predisposed to act for the
purpose of enhancing corporate value and
preventing damage to corporate value, rather than
simply following what is stipulated in the
Companies Act or the Corporate Governance Code
about the roles of outside directors and outside
company auditors.
In this era of change, risks and opportunities are
shrouded in fog and always in flux. In these
circumstances, it would be wasteful to segregate
outside directors from outside company auditors
who, by virtue of their wide-ranging backgrounds,
have much to offer. It would prevent them from
making a valuable contribution to the management
of OMRON. At Japanese companies, outside
auditors’ narrow conception of their own role and a
sense of corporate stagnation may be connected.
The second issue, “considering a new approach for
auditing in an increasingly uncertain business
environment and reforming the Audit & Supervisory
Board,” concerns the operation of auditing.
OMRON’s Audit & Supervisory Board has been
quite progressive compared to counterparts at
other companies, but we are looking for ways to
improve the operation of auditing.
Uchiyama: We are considering that the activities of
the Audit & Supervisory Board in various phases
should be evaluated objectively.
Kunihiro: Is the Audit & Supervisory Board really
useful? In what sense are these activities of the
Audit & Supervisory Board meaningful? Such
questions have a particular resonance for us as
Outside Audit & Supervisory Board Members, and
our evaluation by the Board of Directors and other
bodies, for example, would be valuable, leading to
improvements.
Uchiyama: Regarding the third issue,
“strengthening cooperation with the Internal Audit
98
OMRON Corporation Integrated Report 2022Governance Corporate Governance
Basic Stance for Corporate Governance
At the OMRON Group, corporate governance is defined as the system of processes and practices based on the
OMRON Principles and the OMRON Management Philosophy. The system is intended to ensure transparency and
fairness in business and speed up management decisions and practices. This is done by connecting the entire process
from oversight and supervision all the way to business execution in order to boost the OMRON Group’s competitive
edge. OMRON’s corporate governance also involves building such a system and maintaining its proper function. The
ultimate objective is to achieve sustainable enhancement of corporate value by earning the support of all stakeholders.
OMRON Corporate Governance Policies
OMRON Corporation established the OMRON Corporate Governance Policies* based on the Basic Stance for
Corporate Governance. Since establishing the Management Personnel Advisory Committee in 1996, we have spent
more than 25 years formalizing and strengthening our framework of corporate governance.
We intend to continue our pursuit of ongoing corporate governance improvement as we develop our own unique
vision of governance.
* OMRON Corporate Governance Policies https://www.omron.com/global/en/about/corporate/governance/policy
Corporate Governance Initiatives
OMRON
Principles
1959:
Corporate
Motto
1990:
OMRON
Principles
OMRON Corporate
Governance Policies
1999
1998:
Revised
2003
2011
2006:
Revised
2015:
Revised
2022:
Stated in the Articles
of Incorporation
2015: Established
Chairman of the Board
Representative Director and President
2003: Chairman serves as Chair of the Board of Directors and
Chairman of the Board
President
1987: Yoshio Tateishi
2003: Hisao Sakuta
2011: Yoshihito Yamada
Separation of
management oversight
and business execution
30 directors
1999: Revised the Articles of Incorporation,
setting number of board members to 10 or fewer
1999: Adopted executive officer system
Advisory Board
1999: Advisory Board
2017: Abolished Directors
with title (excluding
Chairman of the Board)
2017: Positioned
president as an
executive officer
Outside Directors
Audit & Supervisory
Board Members
(Independent)
Advisory and Other
Committees
2001: One
outside
director
2003: Two outside directors
(seven directors)
2015: Three outside directors
(eight directors)
1998: One
member
1999: Two members
2003: Three members
(four auditors)
2011: Two members
(four auditors)
1996: Management
Personnel Advisory
Committee
2000: Personnel Advisory Committee
2003: Compensation Advisory Committee
2006: CEO Selection Advisory Committee
2008: Corporate Governance Committee
99
OMRON Corporation Integrated Report 2022Governance Corporate Governance Framework
OMRON has elected to be a company with an Audit & Supervisory Board.
The OMRON Board of Directors is made up of eight members to ensure substantive discussion and deliberations.
OMRON has separated the management oversight and business execution functions within the company, creating a
system whereby the majority of Board Directors are not engaged directly in business operations. We have also
adopted a policy setting the ratio of outside directors to at least one-third of the total number of directors on the board.
To increase objectivity on behalf of the Board of Directors, the titles and roles of chair of the Board and President
(CEO) have been separated. The Chairman serves as chair of the Board of Directors with no direct corporate
representational authority.
OMRON has established several advisory committees to enhance the oversight functions of the Board of Directors.
These committees include the CEO Selection Advisory Committee, the Personnel Advisory Committee, the
Compensation Advisory Committee, and the Corporate Governance Committee. The CEO Selection Advisory
Committee, the Personnel Advisory Committee, and the Compensation Advisory Committee are all chaired by outside
directors with at least half of the committee members being outside directors. The President and CEO is not a
member of any of these committees. The chair and members of the Corporate Governance Committee are outside
directors and outside members of the Audit & Supervisory Board. This structure offers another layer of transparency
and objectivity to the decision-making process.
In these policies, OMRON has created a hybrid governance framework that combining the best features of a company
with an Audit & Supervisory Board and a company with a Nomination Committee.
Outside directors and outside members of the Audit & Supervisory Board attended the 13 meetings of the Board of
Directors held during fiscal 2021 at a rate of 100%. Outside members had an attendance rate of 100% at the13
meetings of the Audit & Supervisory Board.
Fiscal 2022 OMRON’s Corporate Governance Structure
Shareholders’ Meeting
Audit & Supervisory Board
Board of Directors
Chair: Chairman of the Board
Audit & Supervisory Board Office
Board of Directors Office
CEO Selection Advisory Committee
Accounting Auditor
Sustainability Office
Personnel Advisory Committee
Compensation Advisory Committee
Corporate Governance Committee
Executive Organization
President
Executive Council
Internal Audit Division
Sustainability Committee*
Head Office Divisions
Business Companies
(Internal Companies)
* The Sustainability Committee identifies important issues relating to sustainability in the focus domains, the head office divisions, and various committees (the Corporate Ethics &
Risk Management Committee, the Information Disclosure Executive Committee, and the Group Environment Activity Committee) and oversees them on a Group-wide basis.
Board of Directors
Selects board directors, auditors,
and executive officers, determines
compensation for directors and
executive officers, makes
decisions on important business
issues, and performs other
supervisory functions.
Audit & Supervisory Board
Oversees corporate governance
framework and execution of
business operations; conducts
audits of day-to-day business
activities, including those
performed by directors.
CEO Selection Advisory
Committee
Deliberates candidates for
selection as new CEO; deliberates
succession plans and candidates
in the event of an emergency.
Personnel Advisory Committee
Sets standards and policies
related to selecting and hiring
directors, Audit & Supervisory
Board members, and executive
officers; deliberates on proposed
candidates.
Compensation Advisory
Committee
Sets policies for director and
executive officer compensation;
deliberates compensation levels
and specific compensation
packages.
Corporate Governance
Committee
Oversees ongoing corporate
governance improvement;
deliberates policies to advance
management transparency and
fairness.
Executive Council
Deliberates and discusses
important operational matters
within the scope of the authority
of the president and CEO;
determines the future direction.
100
OMRON Corporation Integrated Report 2022Governance Fiscal 2022 Advisory Committee
Title
Name
CEO Selection
Advisory
Committee
Personnel
Advisory
Committee
Compensation
Advisory
Committee
Corporate
Governance
Committee
Chairman of the Board
Representative Director
Representative Director
Director
Director
Outside Director
Outside Director
Outside Director
Fumio Tateishi
Yoshihito Yamada
Kiichiro Miyata
Koji Nitto
Satoshi Ando
Takehiro Kamigama
Izumi Kobayashi
Yoshihisa Suzuki
Audit & Supervisory Board Member
Shuji Tamaki
Audit & Supervisory Board Member
Kiyoshi Yoshikawa
Audit & Supervisory Board Member (Independent)
Hideyo Uchiyama
Audit & Supervisory Board Member (Independent)
Tadashi Kunihiro
Chairperson
Vice-Chairperson
Committee Member
Independent under Tokyo Stock Exchange rules
Approach to Composition of the Board of Directors
○
In order to strengthen the supervisory function of the Board of Directors, supervision is separated from execution,
and the majority of the Board consists of Directors who are not involved with business execution. In addition, at least
one-third of the Board of Directors consists of Outside Directors. To ensure independence, Outside Directors and
Outside Audit & Supervisory Board Members (Independent) are appointed based on OMRON’s Independence
Requirements for Outside Executives. The diversity of the Board of Directors will also be ensured by providing a
well-balanced mix of human resources with experience, expertise, and knowledge required for realizing our
management vision among the Directors and Audit & Supervisory Board Members who are the members of the
Board of Directors.
Composition of Board of Directors
Ratio of
Non-executive Directors
Ratio of
Outside Directors
Ratio of
Female Directors
Executive
Directors:
3
5/8
62.5%
Inside
Directors:
5
3/8
Outside
Directors:
3
37.5%
Nonexecutive
Directors:
5
Female
Director:
1
1/8
12.5%
Male
Directors:
7
Ratio of Outside Executives
(Outside Directors / Audit & Supervisory
Board Members (Independent))
Inside
Executives:
7
5/12
41.7%
Outside
Executives:
5
Main Areas of Experience and Expertise of Directors and Audit & Supervisory Board Members
Title & Name
Corporate
management
Sustainability
ESG
New business
creation
Innovation
Technology
Production
Quality
Financial
accounting
Legal affairs
Compliance
Internal control
Global
experience
Background
and
Qualifications
Chairman of the
Board
Representative
Director and
President
Representative Director,
Senior Managing
Executive Officer, CTO
Fumio Tateishi
Yoshihito Yamada
Kiichiro Miyata
Director, Senior
Managing Executive
Officer, CFO
Koji Nitto
Director
Satoshi Ando
Outside Director Takehiro Kamigama
Outside Director
Izumi Kobayashi
Outside Director Yoshihisa Suzuki
Audit & Supervisory
Board Member
Shuji Tamaki
Audit & Supervisory
Board Member
Audit & Supervisory
Board Member
(Independent)
Audit & Supervisory
Board Member
(Independent)
Kiyoshi Yoshikawa
Hideyo Uchiyama
Tadashi Kunihiro
101
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Finance
Manufacturing
industry
Financial and
international
organization
General trading
company
International
lawyer
Certified public
accountant
Lawyer
OMRON Corporation Integrated Report 2022Governance
Director Compensation
Compensation Policy for Directors
1 Basic Policy
2 Structure of
Compensation
The Company shall provide compensation sufficient to recruit as directors exceptional people who are capable of putting the
OMRON Principles into practice.
The compensation structure shall be sufficient to motivate directors to contribute to sustainable enhancement of corporate value.
The compensation structure shall maintain a high level of transparency, fairness, and rationality to ensure accountability to
shareholders and other stakeholders.
Compensation for directors shall consist of a base salary, which is fixed compensation, and performance-linked compensation,
which varies depending on the Company’s performance.
The compensation composition ratio of performance-linked compensation to base salary shall be determined according to each
Director’s role and responsibility.
Compensation for outside directors shall consist of a base salary only, reflecting their roles and the need for maintaining
independence.
3 Base Salary
The amount of a base salary, paid monthly, shall be determined for each role by taking into account the salary levels of other
companies, as surveyed by a specialized outside organization.
4 Performance-
Linked
Compensation
As short-term performance-linked compensation, the Company shall provide bonuses linked to yearly performance indicators, and
to the degree of achievement of performance targets. Bonuses shall be paid as a lump sum after the conclusion of the fiscal year.
As medium- to long-term performance-linked compensation, the Company shall grant stock compensation linked to the degree of
achievement of the goals of the medium-term management plan, and to the improvement in corporate value (value of stock).
The performance-linked component of stock compensation shall be paid after the medium-term management plan concludes,
while the non-performance-linked component shall be paid after the Director retires.
The Company shall determine the target amounts for short-term performance-linked compensation and medium- to long-term
performance-linked compensation based on the target pay mix specified according to each director’s role and responsibility.
5 Compensation
Governance
The compensation composition, compensation composition ratio, level of the base salary, as well as performance indicators and
evaluation methods of performance-linked compensation shall be determined based on the deliberations and recommendations of
the Compensation Advisory Committee.
The amount of compensation for each Director shall be determined by a resolution of the Board of Directors reflecting the
deliberations and recommendations of the Compensation Advisory Committee.
Overview of Compensation Structure for Directors (From fiscal 2021)
(1) Compensation Composition Ratio
Compensation for Directors and Executive Officers consists of a base salary (fixed compensation) and compensation according to Company
performance, namely short-term performance-linked compensation (bonuses) and medium-to-long-term, performance-linked compensation
(stock compensation). The ratio of compensation consisting of performance-linked compensation compared to base salary has been
determined for each role:
Base Salary
：
Short-term Performance-linked
Compensation (Bonuses)
Medium-to-long-term,
performance-linked compensation
(stock compensation)
：
= 1 : 1 : 1.5*
*Referring to Representative Director, President and CEO
*The ratio is based on the assumption that the performance targets are set as 100% for each performance-linked compensation.
(2) Base Salary
A base salary is paid monthly to Directors and Executive Officers as fixed compensation. Base salaries are determined for each role by
taking into account the salary levels of officers at other companies (benchmarked companies of the same industry and scope selected by
the Compensation Advisory Committee), as surveyed by a specialized outside organization.
(3) Short-term Performance-linked Compensation (Bonuses)
Bonuses are paid as a lump sum after the fiscal year concludes to Executive Officers and Directors excluding Outside Directors as short-
term performance- linked compensation, which is linked to yearly performance indicators and the degree of achievement of performance
targets. Director bonuses vary between 0% and 200% according to the achievement of operating income, net income, and ROIC targets
defined in the annual operating plan.
Base amount
for each position
×
Performance score
(Operating income 50%,
net income 50%)
×
ROIC score
=
Short-term Performance-linked
Compensation (bonuses)
*Individual targets and other benchmarks are set for evaluation of Executive Officer performance according to their duties.
(4) Medium-to-long-term, performance-linked compensation (stock compensation)
Stock compensation is paid as medium-to-long-term, performance-linked compensation to Executive Officers and Directors excluding
Outside Directors. Stock compensation comprises the performance-linked component (60%), which is linked to the degree of achievement
of the medium-term management plan, and the nonperformance-linked component (40%), which aims for retention and motivation to
improve share prices over the medium- to long-term, and is paid under the condition of a certain term of service. The performance-linked
component of stock compensation is paid after the medium-term management plan concludes, while the non-performance-linked
component is paid after the Director retires. The performance-linked component will fluctuate in the range of 0% to 200% depending on
the degree of achievement of performance targets in the medium-term management plan. In the event of serious misconduct during their
term of office, and such misconduct harms the Company, the Compensation Advisory Committee will deliberate and make a
recommendation. Based on this discussion and recommendation, the Board of Directors and President shall resolve to limit the payment of
stock-based compensation for Directors and Executive Officers, respectively.
102
OMRON Corporation Integrated Report 2022Governance Base amount for
each position
×（
Financial targets
evaluation
60%
+
Corporate value
evaluation
20%
+
Sustainability
evaluation 20%
）
=
Performance-
linked portion
Evaluation
weight
Evaluation indicators
Targets
Financial targets
evaluation
60%
EPS
ROE
Corporate value
evaluation
20%
Relative TSR*1
¥400
10%
100%
Reduction of greenhouse gas emissions (internal target)
−53% from FY2016
Sustainability
evaluation
20%
Score of Sustainable Engagement Index (SEI)*3 in engagement
survey*2 (internal target)
70 points
Dow Jones Sustainability Indices (third-party evaluation)
DJSI World
*1 Indicator that compares total shareholder return (TSR) of OMRON in the covered period to the percentage change of TOPIX, dividends included
(Relative TSR = TSR ÷ Percentage change of TOPIX, dividends included)
*2 Survey measuring employees’ voluntary motivation to contribute to targets of the organization
*3 Indicator that measures the presence of a high level of motivation to contribute to the achievement of targets, maintained
through good mental and physical health, or a strong sense of belonging to the organization, or a productive work environment
(5) Performance indicators of performance-linked compensation
The performance indicators for short-term performance-linked compensation (bonuses) were set from the short-term
management plan’s indicators for financial targets towards the realization of the short-term management plan based on “SF 1st
Stage” (fiscal 2022 to fiscal 2024).
The performance indicators for medium- to long-term performance-linked compensation (stock compensation) were set from
the indicators in SF 1st Stage for financial targets, non-financial targets and strategic targets towards the realization of “SF 1st
Stage” (fiscal 2022 to fiscal 2024). In addition, the long-term vision for 2030 “SF2030” aims to maximize corporate value, and
indicators for directly evaluating corporate value have been set.
Initiatives Towards Improving the Board of Directors’ Effectiveness
1. Overview of initiatives towards improving the Board of Directors’ effectiveness
The Company ensures transparency and fairness in business management, speeds up management decisions and practices,
and strives to boost the OMRON Group’s competitive edge. The ultimate objective is to achieve sustained enhancement of
corporate value. To this end, the Company reinforces the supervisory functions of the Board of Directors through initiatives for
improving its effectiveness.
Such initiatives are undertaken in a cycle of (1) evaluation of the Board of Directors’ effectiveness and (2) determination of the
policy for the operation and focus themes of the Board of Directors and formulation and implementation of annual plans.
(1) Evaluation of the Board of Directors’ effectiveness
The Company’s evaluation of the Board of Directors’ effectiveness is conducted by the Corporate Governance Committee
chaired by an Outside Director and comprising only Outside Directors and Audit & Supervisory Board Members (Independent)
(hereinafter “Outside Executives”). Outside Executives act as members of the Board of Directors while having the perspectives
of all stakeholders including the shareholders. The Corporate Governance Committee, which is composed only of Outside
Executives, performs evaluations in order to ensure that evaluations are both objective and effective.
(2) Determination of the policy for the operation and focus themes of the Board of Directors and formulation
and implementation of annual plans Based on the evaluation results by the Corporate
Based on the evaluation results by the Corporate Governance Committee in (1) and the business environment, etc., the Board
of Directors determines the policy for the operation and focus themes of the Board of Directors for the next fiscal year. The
Board of Directors formulates and implements annual plans based on this operation policy.
The Company continues to improve the Board of Directors’ effectiveness by implementing (1) and (2) above on a yearly basis.
The Corporate Governance Committee has evaluated these initiatives to be the Company’s unique, optimal activities that are
both objective and effective. The Board of Directors recognizes the Company's initiatives as being more effective than
evaluations by third parties.
103
OMRON Corporation Integrated Report 2022Governance Initiatives Towards Improving the Board of Directors’ Effectiveness
Fiscal 2020
Fiscal 2021
Evaluation
Analysis and
evaluation of the
Board of Directors’
effectiveness and
the execution status
of measures
Determination of
the operating
policy
Execution
Evaluation
Determination of
policies for
operating the Board
of Directors for the
following fiscal year
based on evaluation
results
Implementation of
measures to
improve the
effectiveness
through the Board
of Directors
meetings
Analysis and
evaluation of the
Board of Directors’
effectiveness and
the execution status
of measures
Board of Directors
Corporate Governance
Committee
Implementation
bodies
Corporate Governance
Committee
Fiscal 2022
Determination of
the operating
policy
Execution
Determination of
policies for
operating the Board
of Directors for the
following fiscal year
based on evaluation
results
Implementation of
measures to
improve the
effectiveness
through the Board
of Directors
meetings
Board of Directors
2. Evaluation of the Board of Directors’ effectiveness for fiscal 2021
The methods of the evaluation of the Board of Directors’ effectiveness and the evaluation items in the self-evaluation for fiscal
2021 are as described below.
2-1. Evaluation methods
1) Self-evaluations by Directors and Audit & Supervisory Board Members
Each Director and Audit & Supervisory Board Member performed self-evaluations of the contents of discussions at the
meetings of the Board of Directors and the extent of oversight functions exercised, immediately following each meeting of
the Board of Directors. Immediately after each meeting of the Board of Directors, Outside Executives evaluated the Board
of Directors and held a review meeting to review the Board of Directors.
Each Director and Audit & Supervisory Board Member performed self-evaluations of the operation, etc. of the Board of
Directors over the course of the year following the meeting of the Board of Directors held on March 1, 2022.
2) Interviews by the Chairman of the Board of Directors
The Chairman of the Board of Directors conducted individual interviews to Directors and Audit & Supervisory Board
Members between January and March 2022.
3) Evaluation by the Corporate Governance Committee
The Corporate Governance Committee conducted evaluations of the Board of Directors’ effectiveness on March 25 and
April 26, 2022.
2-2. Self-evaluation items
Self-evaluation items are as follows. Evaluations were performed from the perspectives of whether or not the Board of
Directors sufficiently exercised its oversight functions, and whether it contributed to the exercise of its oversight functions.
Evaluations are performed by completing anonymous questionnaires. For each evaluation item, answers are provided using
five-point scales and free comment fields.
1) Self-evaluations performed immediately following meetings of the Board of Directors
Contents of discussions at the meeting of the Board of Directors
Extent of oversight functions exercised by the Board of Directors
2) Self-evaluations for the entire year, performed at the end of the fiscal year
1. Operation of the Board of Directors
1) Policy for the operation of the Board of Directors for fiscal 2021
2) Fiscal 2021 focus themes
3) Deliberations and reports regarding issues other than focus themes
4) Policy for the operation and focus themes of the Board of Directors
2. Increasing information sharing opportunities
1) Individual meetings
2) Initiatives on information sharing opportunities
3. Advisory committees
4. Other overall issues regarding the Board of Directors
for fiscal 2022
104
OMRON Corporation Integrated Report 2022Governance 3) Other self-evaluations (evaluations performed when new officers are appointed, when changes are made to
the corporate governance system, etc.)
Scale and composition of the Board of Directors
State of operations of the Board of Directors
Operation of advisory committees
3. Policy for the operation and focus themes of the Board of Directors for fiscal 2021
Board of Directors Operation Policy for Fiscal 2021
“To enable the OMRON Group to achieve a drastic increase in corporate value over the next 10 years, the Board of
Directors will exercise its oversight functions in a multifaceted manner and from the short-term and medium- to
long-term perspectives.”
Focus Themes
1) Completion of the next long-term vision and determination of the next medium-term management plan
< Points to be supervised >
Response to the new normal era post COVID
Initiatives for key sustainability issues
Transformation of business model and acceleration of innovation
Reform of human resources management
Strengthening resilience
2) Response to the increasing geopolitical risks
3) Checking the progress of establishing a companywide IT system
Background of the establishment of the policy for the operation and focus themes of the Board of Directors for
fiscal 2021 (discussed and decided at the Board of Directors meeting held in May 2021)
Focus theme 1: Completion of the next long-term vision and determination of the medium-term
management plan
As the long-term vision “SF2030” (hereinafter, the “Long-term Vision”) and the medium-term management plan “SF
1st Stage” (hereinafter, the “Medium-term Management Plan”) begins in fiscal 2022, the Board of Directors
confirmed that exercising oversight functions towards the determination of the Long-term Vision and the Medium-
term Management Plan was a top-priority matter. Accordingly, when determining the Long-term Vision and the
Medium-term Management Plan, the Board of Directors discussed the improvement of corporate value from a
medium- to long-term perspective, including the response to the era post COVID, the strengthening of sustainability
initiatives, the transformation of the business model, the acceleration of innovation and the reform of human
resources management.
Focus theme 2: Response to the increasing geopolitical risks
As geopolitical risks have a material impact on business and performance, the focus theme from fiscal 2020 was
continued and the Board of Directors supervised in a timely and continuous manner.
Focus theme 3: Checking the progress of establishing a companywide IT system
Establishing a companywide IT system is OMRON’s first initiative, and as it is a large-scale decade-long project, the
focus themes from fiscal 2019 and fiscal 2020 were continued, and the Board of Directors supervised the progress in
fiscal 2021.
105
OMRON Corporation Integrated Report 2022Governance 4. Results of evaluation of the Board of Directors’ effectiveness for fiscal 2021
4-1. Performance of operation of the Board of Directors
4-1-1. Focus themes
Focus theme 1: Completion of the next long-term vision and determination of the medium-term
management plan
Contents of reports and resolutions at the meeting of the Board of Directors
The business execution division reported the following points to the Board of Directors.
Beginning with a look back at VG2020, they reported on how OMRON views social issues with a long-term
vision, how to create social value, the direction of the evolution of a business model that combine goods and
services, initiatives that aim for the realization of a carbon-neutral society, initiatives to respect human rights in
the value chain, the concepts of diversity and inclusion, data-driven corporate management based on DX, etc.
A new initiative to link employee thoughts with Company targets by deciding three out of the eleven non-
financial targets of the Medium-term Management Plan through a vote by all global employees was reported.
In addition, in order to raise employee awareness about participation in the Long-term Vision, they created and
reported an easy-to-understand Long-term Vision story for employees.
They reported the introduction of stock compensation for employees as a measure to maximize corporate value
in the Long-term Vision by uniting management, employees and shareholders. After a resolution by the Board
of Directors, stock compensation for employees that is linked to the degree of achievement of financial and
non-financial targets in the Medium-term Management Plan was introduced.
In addition to the strategic and financial targets of the Long-term Vision, material sustainability issues and
Medium-term Management Plan, the Board of Directors resolved non-financial and strategic targets related to
the environment, human rights and diversity, as well as the newly formulated environmental policy and the
human rights policy.
Main contents of discussions at the meeting of the Board of Directors
Human resources
The Board of Directors pointed out the importance of the utilization of human resources for business growth
and the evolution of the business model and discussed the need to secure human resources not only through
employee training and mid-career hires, but also through M&A and business alliances with other companies.
Diversity and inclusion
The Board of Directors recognized that the concepts of diversity and inclusion lead to the creation of new
things through the interaction of diverse values. Moreover, the Board of Directors discussed the need to not
only pursue quantitative targets for the number and percentage of women and foreigners, but also to develop
substance through the promotion of diversity.
Environment
The Board of Directors recognized the importance of addressing Scope 3 to reduce greenhouse gas emissions
not only within the Company, but also in the value chain as a whole, and discussed concrete initiatives to
realize carbon neutrality.
Disclosure
There was a discussion concerning the need to clarify the relationship between the Long-term Vision, the
Medium-term Management Plan and the material sustainability issues in order to increase empathy and
resonance with stakeholders, including investors and employees, and the Board of Directors recognized the
need to clarify and disclose the relationship among the three.
Examination system
The Board of Directors pointed out the need for the Long-term Vision and Medium-term Management Plan to
be recognized by all global employees, regardless of whether they are Japanese or foreigners. The Board of
Directors discussed the examination project system, the formulation process and the method of disseminating
information inside and outside the Company after formulation.
106
OMRON Corporation Integrated Report 2022Governance Focus theme 2: Response to the increasing geopolitical risks
Contents of reports at the meeting of the Board of Directors
The business execution division reported the following points to the Board of Directors.
After providing an opportunity for economists to explain the relationships and economic conditions of
countries that are at conflict from a macro perspective, the Global Strategy H.Q. reported on the business
impact of geopolitical risks at OMRON from the perspective of legal regulations, customs, competition, etc.
In the item on the operational status of the internal control system, it was reported that the geopolitical risk
would be raised to the highest rank of the material Group risks in light of the recent tense situation in Russia
and Ukraine.
Main contents of discussions at the meeting of the Board of Directors
Discussions were held at the Board of Directors on how to reduce the impact of various countries’ imposition
of regulations on business while hypothesizing the future trends of each country.
The Board of Directors recognized that how to perceive geopolitical risks is synonymous with thinking about
the ideal state of each business and regional headquarters, and discussed the need to increase the speed of
management with global flexibility through delegation to each region.
Focus theme 3: Checking the progress of establishing a companywide IT system
Contents of reports and resolutions at the meeting of the Board of Directors
The business execution division reported the following points to the Board of Directors.
Beginning with a look back on the basic plan of the new companywide system, they reported on the project
promotion system, including the Company and vendors, project progress in fiscal 2021, initiative planning for
fiscal 2021 and beyond, and issue recognition as a business execution division ((1) cost control, (2) scope
control, (3) resource securing, and (4) thorough enforcement of Fit to Standard).
The annual investment plan up until the completion of the project (fiscal 2030) was reported from the
perspective of cash flow and profit and loss impact, and the Board of Directors resolved the capital
investment plan for fiscal 2022.
Main contents of discussions at the meeting of the Board of Directors
The Board of Directors discussed the need to visualize operations before establishing the new system, the
need for a prioritized introduction plan based on the characteristics of each area, and the sustainability of the
new system.
The project is a large-scale decade-long project that requires a reasonable amount of investment, and as it has
begun in earnest, the Board of Directors discussed the need for the introduction of a new mechanism for
third parties to monitor the progress of the project and to increase the frequency of reports to the Board of
Directors.
4-1-2. Significant matters other than the focus themes (business portfolio management)
Board of Directors’ supervision of M&A and alliances, and business transfers
The Board of Directors regularly checks and discusses M&A candidates, mainly in the FA and healthcare fields, using long
lists and short lists.
M&A, including minority investments, and alliances with other companies were discussed from a wide range of
perspectives at the Board of Directors meeting in 2021. In addition to the acquisition of the common stock of JMDC,
investment into Techman Robot, a cooperative robot manufacturer in Taiwan (investment ratio: about 10%), and the
initiatives of the corporate venture capital company OMRON VENTURES CO., LTD. were reported. Moreover, while
working to transform the business model and create new businesses, the Board of Directors promoted the strengthening
of business portfolio management, as well as discussed and resolved on the transfer of semiconductor/MEMS (Micro
Electro Mechanical Systems) factories and MEMS development/production functions to MinebeaMitsumi Inc.
107
OMRON Corporation Integrated Report 2022Governance Acquisition of JMDC common stock
Contents of reports and resolutions at the meeting of the Board of Directors
The business execution division reported the following points to the Board of Directors.
The business execution division reported to the Board of Directors that it was considering acquiring the common stock of
JMDC, a company that operates a healthcare data platform business. Regarding the acquisition of JMDC’s common
stock, the business execution division aims to develop personalized aggravation and nursing care prevention solutions that
support prescription medication treatments and patient lifestyle changes, by predicting the risk of the onset of individual
patient events (possibility and timing). They aim to offer these solutions through the analysis of medical data that the
JMDC Group possesses (such as medical prescriptions and medical examinations) combined with blood pressure, vital
signs and levels of physical activity data gathered by OMRON.
This is OMRON’s largest investment project ever, and it was discussed from various perspectives. The Board of Directors
resolved to acquire 33.0% of JMDC’s common stock for JPY 111,864.6 million (JPY 6,000 per share) and to conclude a
capital and business alliance with JMDC.
Main contents of discussions at the meeting of the Board of Directors
The Board of Directors discussed how the combination of medical data possessed by the JMDC Group (such as medical
prescriptions and medical examinations) and data possessed by OMRON (such as blood pressure, vital signs and levels of
physical activity data) will lead to health promotion and aggravation prevention measures with the goal of Zero Events.
In addition to co-creating a business with JMDC, the importance of learning the good points of JMDC’s organizational
culture was discussed, and the Board of Directors recognized the need to learn from JMDC and utilize the knowledge
gained in OMRON’s management.
The Board of Directors recognizes the need to build a dedicated team at both companies not only at the management
level, but also at the basic operating level to accelerate discussions and lead to the creation of new businesses in order to
collaborate with JMDC.
The Board of Directors discussed the appropriate acquisition price of common stock in terms of both risk and return,
taking into consideration the impairment risk after the acquisition of common stock.
4-2. Evaluation by the Corporate Governance Committee
The Corporate Governance Committee conducted evaluations of the Board of Directors’ effectiveness during fiscal 2021 and
reported the following evaluation results at the Board of Directors meeting held on May 16, 2022.
4-2-1. General comments on evaluation
The Corporate Governance Committee commended and requested the following points regarding the Board of Directors in
fiscal 2021.
Points commended
Based on the policy for the operation of the Board of Directors and the focus themes for fiscal 2021, the Board of
Directors exercised their supervisory functions from various points of view from a short-term and medium- to long-term
perspective.
As the percentage of items centered on discussions about focus themes was more than 70% of the time required for the
Board of Directors meetings, the Board of Directors fulfilled their function as a monitoring board for improving corporate
value over the medium to long term.
In response to the presentation by the business execution division, the Outside Directors had various opinions and
suggestions from the viewpoint of management and the Audit & Supervisory Board Members (Independent) had various
opinions and suggestions from the viewpoint of legality and appropriateness, which enhanced the feasibility of strategies.
Moreover, there was an increase in remarks from the perspective of Audit & Supervisory Board Members, such as the
sharing of information obtained by internal Audit & Supervisory Board Members through on-site inspections.
Points requested
Internal Executives should speak more actively based on their respective roles, experience and expertise in order to
deepen two-way discussions with Outside Executives.
The reported items of the Board of Directors should further clarify issues and report them in order to enhance discussions
about solving issues.
4-2-2. Individual evaluation
The Corporate Governance Committee commended and requested the following points regarding the Board of Directors in
fiscal 2021.
Points commended
The Board of Directors fulfilled a significant role by recognizing that “completion of the next Long-term Vision and
determination of the Medium-term Management Plan” was a top-priority matter within the focus themes and completing
it after a total of six meetings over a two-year period.
108
OMRON Corporation Integrated Report 2022Governance The Board of Directors clarified their responsibility towards sustainability initiatives by approving financial and non-financial
targets as management targets in the Medium-term Management Plan after identifying material sustainability issues in
the Long-term Vision.
The newly introduced stock compensation for employees was a measure that allowed management, employees and
shareholders to work together to maximize corporate value in the Long-term Vision, and it is a compensation system that
is more effective than conventional monetary compensation and enhances employee motivation. In addition,
management’s intention to practice management with multi-stakeholder awareness inside and outside the Company was
concretely shown.
Considering the situation in Russia and Ukraine, as well as from the perspective of how to set upa risk management
network in an era characterized by Volatility, Uncertainty, Complexity and Ambiguity (VUCA), the Board of Directors
showed good foresight by continuing the focus theme “response to the increasing geopolitical risks” from fiscal 2020 in
fiscal 2021.
Regarding “checking the progress of establishing a companywide IT system,” understanding of the overall picture of the
project, the progress at the present time and the approval of the investment plan were a result of continuously exercising
supervisory functions as a focus theme since fiscal 2019. In addition, the Board of Directors agreed to the introduction of
a new mechanism for third parties to monitor the progress of the project and to increase the frequency of reports to the
Board of the Directors.
The Board of Directors has continuously considered growth investments such as M&A in order to improve corporate value
over the medium to long term and approved the acquisition of JMDC’s common stock. Regarding the acquisition of
JMDC’s common stock, in addition to the goal of creating a healthcare data platform business, the significance of
acquiring JMDC’s common stock developed into discussions concerning what OMRON can learn from JMDC’s
organizational culture and how it can be utilized in OMRON’s management in an era of rapid change, and thus the Board
of Directors fulfilled a significant role.
Points requested
Regarding the “Long-term Vision and the Medium-term Management Plan,” “response to the increasing geopolitical risks”
and “checking the progress of establishing a companywide IT system,” the Board of Directors should continue to exercise
its supervisory functions in fiscal 2022, including progress.
4-3 Initiatives on information sharing opportunities and evaluation by the Corporate Governance Committee
4-3-1. Initiatives on information sharing opportunities
On-site visits
Opportunities are provided for Outside Executives to visit major bases, exhibitions, etc. and participate in in-house events,
which leads to an improvement in understanding of the Company’s business and organizational culture.
Outside Executives’ and Accounting Auditor’s opinion exchange meeting (continuously held from fiscal 2015)
Supervisory and auditing functions are being strengthened by sharing the viewpoints of the Accounting Auditor with Outside
Executives. In addition, through this approach, we are building a relationship in which Outside Executives directly exchange
information about risks in the Company with the Accounting Auditor.
Interviews by the Chairman of the Board of Directors (continuously held from fiscal 2016)
The Chairman of the Board of Directors holds individual interviews with Directors and Audit & Supervisory Board Members
once a year to discuss improvement plans related to the operation of the Board of Directors.
Outside Executives’ and top Executives’ opinion exchange meeting (continuously held from fiscal 2019)
Opportunities are provided for the exchange of opinions between Outside Executives and top Executives, which leads to an
improvement in understanding of the Company’s business and organizational culture.
Board of Directors review (held from fiscal 2021)
Outside Executives conduct a review of the Board of Directors immediately after meetings of the Board of Directors. Outside
Executives sharing amongst themselves what they felt immediately following meetings of the Board of Directors leads to
the improvement of the evaluation of the Board of Directors.
Observation of Executive Committee meetings (held from fiscal 2021)
Outside Executives may observe Executive Committee meetings (management meetings by Executives), as fully
understanding the situation of the business execution division will lead to the expansion of the breadth and depth of
discussions at the Board of Directors meetings.
4-3-2. General comments on evaluation
The Corporate Governance Committee commended the implementation of various initiatives on information sharing
opportunities for Outside Executives to deepen their understanding of organizational culture and the situation of the business
execution division in order to improve the effectiveness of the Board of Directors.
109
OMRON Corporation Integrated Report 2022Governance 4-3-3. Individual evaluations
The Corporate Governance Committee commended the following points regarding individual information sharing opportunities.
On-site visits
Due to the impact of COVID-19, on-site visits did not take place in fiscal 2020, but in fiscal 2021, the committee visited the
Ayabe factory, automation centers and robot exhibitions, and we deepened our understanding of the production status of
the Company’s main business, the Industrial Automation Business (IAB), and applications that combine multiple products
and software.
Going forward, in order to deepen the understanding of business content and organizational culture, the effectiveness of
on-site visits will be further enhanced through the creation of opportunities to hear the voices of on-site staff.
Outside Executives’ and Accounting Auditor’s opinion exchange meeting
At the opinion exchange meeting between Outside Executives and the Accounting Auditor in fiscal 2020, the committee
did not dig deeper into management issues due to differences in perspectives and positions, but in fiscal 2021, efforts
were made to match the perspectives of both parties before the exchange of opinions took place, which led to deeper
discussions.
The Accounting Auditor raised current issues and potential risks such as goodwill impairment risks, securing accounting
personnel in emerging countries and unification of accounting IT systems globally, which led to a deeper understanding of
the items of the Board of Directors.
Interviews by the Chairman of the Board of Directors
Interviews by the Chairman of the Board of Directors are an opportunity for the Chairman of the Board of Directors and
each member of the Board of Directors to discuss issues and directions for the future, and they are beneficial as a place
for frank exchanges of opinions.
Observation of Executive Committee meetings
The establishment of a mechanism that allows Outside Executives to observe Executive Committee meetings makes it
possible to directly check the details, quality, quantity, etc. of the discussions of the business execution division before
presentation to the Board of Directors, and it is beneficial from the perspective of exercising supervisory functions.
Listening to the remarks of top Executives at Executive Committee meetings will help determine who will become the
next generation of top Executives.
5. Policy for the operation and focus themes of the Board of Directors for fiscal 2022
Based on the results of evaluation conducted by Corporate Governance Committee, Board of Directors engaged in a discussion
to determine its operational policy for fiscal 2022. Based on the results of this discussion, Board of Directors operational policy
for fiscal 2022 and its focus themes were determined at Board of Directors meeting held on May 31.
Board of Directors Operational Policy for Fiscal 2022
“Fiscal 2022 saw the launch of the OMRON Group’s long-term vision, SF2030, and the medium-term management
plan, SF 1st Stage. Toward achieving them, the Board of Directors will exercise its oversight functions together with
the ability to respond to change from near-term as well as medium- to long-term perspectives. This will be done
recognizing the link between the following three focus themes and issues subject to oversight.”
Focus Themes
1) Monitoring progress of the long-term vision and medium-term management plan
Transformation of business models (promotion of businesses reflecting an essential value perspective, including
alliance with JMDC)
Acceleration of diversity and inclusion
Improvement of supply chain resilience
Promotion of initiatives aimed at addressing important sustainability issues
2) Response to risks in the era of uncertainty
Improvement of ability to detect changes in the global geopolitical environment
Transformation of global business operations
Enhancement of cybersecurity
3) Confirmation of progress in the construction of the Corporate IT System
Monitoring corporate IT system construction with third-party evaluation in mind
110
OMRON Corporation Integrated Report 2022Governance Directors / Audit & Supervisory Board Members (As of June 30, 2022)
Directors
Fumio Tateishi
Chairman
Chair of the Board of Directors
CEO Selection Advisory Committee Member
Yoshihito Yamada
Representative Director
Aug. 1975 Joined OMRON
Jun. 1997 Director
Jun. 1999 Managing Executive Officer
Jun. 2001 Senior General Manager, Corporate
Strategic Planning HQ
Jun. 2003 Executive Officer and Executive
Apr. 1984 Joined OMRON
Jun. 2008 Executive Officer; Representative
Director and President, OMRON
Healthcare Co., Ltd.
Mar. 2010 Senior General Manager, Corporate
Strategic Planning HQ
Vice President; President, Industrial
Automation Business Company
Jun. 2010 Managing Executive Officer
Jun. 2011 Representative Director and
Jun. 2008 Director and Executive Vice
President (to present)
Chairman
Jun. 2013 Chairman of the Board (to present)
Directors
Outside Directors
Kiichiro Miyata
Director, Senior Managing
Executive Officer, CTO
Personnel Advisory Committee Member
Apr. 1985 Joined Tateisi Institute of Life
Science, Inc. (now OMRON
HEALTHCARE Co., Ltd.)
Mar. 2010 Representative Director and President
of OMRON Healthcare Co., Ltd.
Jun. 2010 Executive Officer
Jun. 2012 Managing Executive Officer, OMRON
Apr. 2015 Chief Technology Officer (CTO) and
Senior General Manager of
Technology & Intellectual Property HQ
Apr. 2017 Senior Managing Director (to present)
Jun. 2017 Representative Director (to present)
Apr. 2018 Senior General Manager of
Innovation Exploring Initiative HQ
Koji Nitto
Director
Senior Managing Executive Officer, CFO
Member of the Compensation Advisory Committee
Apr. 1983 Joined OMRON
Mar. 2011 Senior General Manager, Global
Resource Management HQ
Jun. 2011 Executive Officer
Mar. 2013 Senior General Manager, Global
SCM and IT Innovation HQ
Apr. 2013 Managing Executive Officer
Mar. 2014 Senior General Manager, Global
Strategy HQ (to present)
Apr. 2014 Senior Managing Executive Officer
(to present)
Jun. 2014 Director (to present)
Apr. 2017 Chief Financial Officer (CFO) (to
present)
Satoshi Ando
Director
Vice Chairman of the CEO Selection Advisory Committee
Vice Chairman of the Personnel Advisory Committee
Vice Chairman of the Compensation Advisory Committee
Apr. 1977 Joined The Bank of Tokyo, Ltd. (now
The Bank of Tokyo-Mitsubishi UFJ,
Ltd.)
July 2003 Branch Manager of Jakarta Branch,
The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (Resigned in Jun. 2007)
Jun. 2007 Audit & Supervisory Board Member
(Independent), OMRON
Jun. 2011 Executive Officer and Senior
General Manager, Investor
Relations HQ
Mar. 2015 Senior General Manager, Global
Investor Relations & Corporate
Communications HQ
Apr. 2015 Managing Executive Officer
Jun. 2017 Director (to present)
Takehiro Kamigama
Outside Director
Chairman of the CEO Selection Advisory Committee
Chairman of the Compensation Advisory Committee
Chairman of the Corporate Governance Committee
Member of the Personnel Advisory Committee
Apr. 1981 Joined TDK Corporation
Jun. 2002 Corporate Officer, TDK Corporation
Jun. 2003 Senior Vice President, TDK
Corporation
Jun. 2004 Director & Executive Vice President,
TDK Corporation
Jun. 2006 President & Representative Director,
TDK Corporation
Jun. 2016 Chairman & Representative
Director, TDK Corporation
Jun. 2017 Outside Director, OMRON (to
present)
Jun. 2018 Mission Executive, TDK Corporation
Jul. 2021 Chief Consultant, Contemporary
Amperex Technology Japan KK (to
present)
Izumi Kobayashi
Outside Director
Chairman of the Personnel Advisory Committee
Vice Chairman of the Corporate Governance Committee
Member of the CEO Selection Advisory Committee
Member of the Compensation Advisory Committee
Apr. 1981 Joined Mitsubishi Chemical
Industries Limited (now Mitsubishi
Chemical Corporation)
Jun. 1985 Joined Merrill Lynch Futures Japan Inc.
Dec. 2001 President and Representative
Director of Merrill Lynch Japan
Securities Co., Ltd. (now BofA
Securities Japan Co., Ltd.)
Nov. 2008 Executive Vice President of
Multilateral Investment Guarantee
Agency, The World Bank Group
Apr. 2015 Vice Chairperson of Japan
Association of Corporate Executives
Jun. 2016 Governor of Japan Broadcasting
Corporation
Jun, 2020 Outside Director, OMRON (to present)
Yoshihisa Suzuki
Outside Director
Member of the CEO Selection Advisory Committee
Member of the Personnel Advisory Committee
Member of the Compensation Advisory Committee
Member of the Corporate Governance Committee
Apr. 1979 Joined ITOCHU Corporation
Jun. 2003 Appointed Executive Officer of ITOCHU
Corporation
Apr. 2006 Appointed Managing Executive Officer
of ITOCHU Corporation
Apr. 2007 Appointed President (CEO) of ITOCHU
International Inc.
Jun. 2012 Appointed President and Representative
Director of JAMCO CORPORATION
Jun. 2016 Appointed Representative Director and
Senior Managing Executive Officer of
ITOCHU Corporation
Apr. 2018 Appointed President & Chief Operating
Officer of ITOCHU Corporation
Apr. 2020 Appointed President & Chief Operating
Officer and CDO.CIO of ITOCHU
Corporation
Apr. 2021 Appointed Member of the Board and
Vice Chairman of ITOCHU Corporation
Apr. 2022 Appointed Vice Chairman of ITOCHU
Corporation (to present)
Jun, 2022 Outside Director, OMRON (to present)
Audit & Supervisory Board Members
Audit & Supervisory Board Members (Independent)
Shuji Tamaki
Audit & Supervisory Board Member
Kiyoshi Yoshikawa
Audit & Supervisory Board Member
Apr. 1985 Joined OMRON Tateisi Electronics
Apr. 1983 Joined OMRON Tateisi Electronics
Co. (now OMRON Corporation)
Mar. 2008 General Manager of the Legal
Center, Management Resources
Innovation HQ
Mar. 2015 Senior General Manager of Global
Risk Management and Legal HQ
Apr. 2015 Executive Officer
Jun. 2021 Audit & Supervisory Board Member
(to present)
Co. (now OMRON Corporation)
Mar. 2010 Senior General Manager, Monozukuri
Innovation HQ (now Global
Manufacturing Innovation HQ)
Jun. 2010 Executive Officer
Apr. 2016 Managing Executive Officer
Jun. 2019 Audit & Supervisory Board Member
(to present)
Tadashi Kunihiro
Audit & Supervisory Board Member
(Independent)
Corporate Governance Committee Member
Apr. 1986 Registered as attorney with the
Daini Tokyo Bar Association; Joined
Nasu & Iguchi Law Office
Jan. 1994 Established Kunihiro Law Office
(now T. Kunihiro & Co.
Attorneys-at-Law)
Jun. 2017 Audit & Supervisory Board Member
(Independent), OMRON (to
present)
Hideyo Uchiyama
Audit & Supervisory Board Member
(Independent)
Corporate Governance Committee Member
Nov. 1975 Joined Arthur Young & Company
Dec. 1979 Joined Asahi Accounting Company
(now KPMG AZSA LLC)
Mar. 1980 Registered as Certified Public
Accountant
July. 1999 Representative Partner, KPMG
AZSA LLC
May 2002 Board Member, KPMG AZSA LLC
Jun. 2006 Executive Board Member, KPMG
AZSA LLC
Jun. 2010 Managing Partner, KPMG AZSA
LLC, Chairman, KPMG Japan
Sep. 2011 Chairman, KPMG Asia Pacific
Oct. 2013 CEO, KPMG Japan
Sep. 2015 Executive Advisor, ASAHI Tax
Corporation (to present)
Jun. 2016 Audit & Supervisory Board Member
(Independent), OMRON (to present)
111
OMRON Corporation Integrated Report 2022Governance Executive Officers (As of June 30, 2022)
President and CEO
Yoshihito Yamada
Senior Managing Executive Officers
Kiichiro Miyata
Koji Nitto
Managing Executive Officer
Shizuto Yukumoto
Company President,
Device & Module Solutions Company
Toshio Hosoi
President and CEO,
OMRON SOCIAL SOLUTIONS Co., Ltd.
Isao Ogino
President and CEO,
OMRON HEALTHCARE Co., Ltd.
Nigel Blakeway
Chairman and CEO,
OMRON MANAGEMENT CENTER
OF AMERICA, INC. and Chairman,
OMRON MANAGEMENT CENTER
OF EUROPE and Chairman,
OMRON MANAGEMENT CENTER
OF ASIA PACIFIC
Seigo Kinugawa
Senior General Manager,
Global Business Process and
IT Innovation HQ
Masahiko Tomita
Senior General Manager,
Global Human Resources and
Administration HQ
Junta Tsujinaga
Company President,
Industrial Automation Company
Tsutomu Igaki
Senior General Manager,
Global Investor & Brand
Communications HQ
Jian Xu
President and CEO,
OMRON (CHINA) Co., Ltd.
Kenji Eda
Senior General Manager,
Global Procurement and
Quality Management HQ
Executive Officers
Goshi Oba
Chairman and President,
OMRON INDUSTRIAL
AUTOMATION (CHINA)
Co., Ltd.
Seiji Takeda
General Manager,
Corporate Planning
Department, Global
Strategy HQ
Taisuke Tateishi
Senior General Manager,
Energy Solutions Business HQ,
OMRON SOCIAL
SOLUTIONS Co., Ltd.
Katsuhiro Shikata
President and CEO,
OMRON FIELD
ENGINEERING Co., Ltd.
Masayuki Yamamoto
Senior General Manager,
Strategy Planning Division HQ,
Industrial Automation
Company
Robert Black
President, CEO and COO,
OMRON ELECTRONICS
LLC, Industrial Automation
Company
Hisako Takada
Senior General Manager,
CEO Office
Masaki Suwa
Senior General Manager,
Technology & Intellectual
Property HQ and President
and CEO,
OMRON SINIC X Corp.
Motohiro Yamanishi
Senior General Manager,
Product Business Division HQ,
Industrial Automation
Company
Toyoharu Tamoi
Senior General Manager,
Global Finance and
Accounting HQ
Masahiko Ezaki
Senior General Manager,
Business Management
Division HQ,
Device & Module
Solutions Company
Masato Nishiyama
Senior General Manager,
Manufacturing and Supply
chain Management
Division HQ,
Industrial Automation
Company
Andre Van Gils
Senior General Manager,
Global Sales and
Marketing Group HQ,
OMRON HEALTHCARE
Co., Ltd.
Virendra Shelar
President, OMRON
MANAGEMENT CENTER
OF ASIA PACIFIC, and
General Manager, Global
Human Resource Strategy
Dept.
Hidetaka Ishihara
Senior General Manager,
Innovation Exploring
Initiative HQ
Ayumu Okada
Senior General Manager,
Management Strategy HQ,
OMRON HEALTHCARE
Co., Ltd.
112
OMRON Corporation Integrated Report 2022Governance Consolidated Financial Statements
Consolidated Balance Sheets
OMRON Corporation and Subsidiaries
March 31, 2021 and 2022
ASSETS
Current Liabilities:
(Millions of yen)
(Millions of yen)
FY2020
FY2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
FY2020
FY2021
Current Liabilities:
Cash and cash equivalents
¥ 250,755
¥ 155,484
Notes and accounts payable - trade
¥ 69,561
¥ 86,827
Notes and accounts receivable - trade
135,161
151,820
Short-term borrowing
Allowance for doubtful receivables
(756)
(798)
Accrued expenses
Inventories
Assets held for sale
Other current assets
103,265
141,935
Income taxes payable
—
363
Short-term operating lease liabilities
26,007
34,101
Other current liabilities
—
44,441
3,504
11,179
32,685
20,000
48,365
5,657
11,549
39,274
Total Current Assets
514,432
482,905
Total Current Liabilities
161,370
211,672
Property, Plant and Equipment:
Deferred Income Taxes
Land
Buildings
Machinery and equipment
Construction in progress
19,778
124,404
153,142
3,281
20,926
130,863
174,184
4,748
Total
300,605
330,721
Termination and Retirement Benefits
Long-term Operating Lease Liabilities
Other Long-term Liabilities
1,671
7,598
27,709
12,673
2,177
8,194
28,567
12,048
Total Liabilities
211,021
262,658
Accumulated depreciation
(187,577)
(208,623)
Shareholders’ Equity:
Net Property, Plant and Equipment
113,028
122,098
Capital
64,100
64,100
Investments and Other Assets:
Right-of-use assets under operating leases
Goodwill
Investments in and advances to affiliates
Investment securities
Leasehold deposits
Prepaid benefit costs
Deferred income taxes
Other assets
38,153
39,160
13,159
33,423
7,675
6,736
24,179
30,434
39,746
39,718
124,691
43,757
7,815
14,391
18,116
37,392
Common stock
Authorized: 487,000,000 shares in FY2020
487,000,000 shares in FY2021
Issued: 206,244,872 shares in FY2020
206,244,872 shares in FY2021
Capital surplus
Legal reserve
Retained earnings
101,403
100,652
22,931
24,503
476,185
517,566
Accumulated other comprehensive income (loss)
(32,945)
13,013
Treasury stock
(24,816)
(54,607)
Total Investments and Other Assets
192,919
325,626
4,574,294 shares in FY2020
7,053,647 shares in FY2021
Total Shareholders’ Equity
606,858
665,227
Noncontrolling Interests
Total Net Assets
2,500
2,744
609,358
667,971
Total
¥ 820,379
¥ 930,629
Total
¥ 820,379
¥ 930,629
113
OMRON Corporation Integrated Report 2022Financial Information Consolidated Statements of Income OMRON Corporation and Subsidiaries
Years ended March 31, 2020, 2021 and 2022
Net Sales
Costs and Expenses:
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Other expenses, net
Total
Income before Income Taxes and Equity in Earnings of Affiliates
Income Taxes
Equity in Earnings of Affiliates
Net Income from Continuing Operations
Net Income from Discontinued Operations
Net Income
Net Income Attributable to Noncontrolling Interests
FY2019
¥ 677,980
374,278
202,954
45,988
2,924
626,144
51,836
11,270
963
39,603
35,732
75,335
440
FY2020
¥ 655,529
357,178
192,687
43,184
(2,609)
590,440
65,089
15,093
6,098
43,898
－
43,898
591
(Millions of yen)
FY2021
¥ 762,927
416,100
213,234
44,277
2,602
676,213
86,714
23,046
1,624
62,044
－
62,044
644
Net Income Attributable to OMRON Shareholders
¥ 74,895
¥ 43,307
¥ 61,400
FY2019
FY2020
FY2021
(Yen)
Per Share Data:
Net Income Attributable to OMRON Shareholders:
Net Income Attributable to OMRON Shareholders from Continuing Operations
Net Income Attributable to OMRON Shareholders from Discontinued Operations
Basic
Diluted
¥ 191.00
174.26
¥ 365.26
－
¥ 214.72
－
¥ 214.72
－
¥ 305.65
－
¥ 305.65
－
Consolidated Statements of Comprehensive Income
OMRON Corporation and Subsidiaries
Years ended March 31, 2020, 2021 and 2022
Net Income
Other Comprehensive Income (Loss), Net of Tax:
Foreign currency translation adjustments:
Foreign currency translation adjustments arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Pension liability adjustments:
Pension liability adjustments arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Net gains (losses) on derivative instruments:
Unrealized holding gains (losses) arising during the year
Reclassification adjustment for the portion realized in net income
Net unrealized gain (loss)
Other Comprehensive Income (Loss)
Comprehensive Income
Comprehensive Income Attributable to Noncontrolling Interests
Comprehensive Income Attributable to OMRON Shareholders
FY2019
¥ 75,335
(23,674)
(119)
(23,793)
7,033
3,365
10,398
77
(160)
(83)
(13,478)
61,857
368
¥ 61,489
FY2020
¥ 43,898
23,138
310
23,448
24,630
3,053
27,683
(629)
295
(334)
50,797
94,695
727
¥ 93,968
(Millions of yen)
FY2021
¥ 62,044
40,078
2,029
42,107
1,625
3,012
4,637
(1,066)
383
(683)
46,061
108,105
747
¥ 107,358
114
OMRON Corporation Integrated Report 2022Financial Information Consolidated Statements of Shareholders’ Equity
OMRON Corporation and Subsidiaries
Years ended March 31, 2020, 2021 and 2022
Number of
common
shares issued
Common
stock
Capital
surplus
Legal
reserve
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Total
shareholders’
equity
Noncontrolling
interests
Total net
assets
(Millions of yen)
Balance, March 31, 2019
213,958,172
¥ 64,100
¥ 100,233
¥ 21,826
¥ 433,639
¥(70,200)
¥ (45,386)
¥ 504,212
¥ 2,099
¥ 506,311
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥84 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Change in shareholders’
equity due to decrease in
consolidated subsidiaries
Stock-based payment*1
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
Cancellation of treasury
stock
74,895
(17,107)
74,895
440
75,335
(17,107)
(17,107)
2
(74)
(2,386)
2,460
360
1,541
(1,541)
—
2
—
360
—
(293)
(293)
2
—
360
—
(13,406)
(13,406)
(72)
(13,478)
(18,541)
(18,541)
(40,578)
40,578
—
(18,541)
—
Balance, March 31, 2020
206,244,872
¥ 64,100
¥ 100,521
¥ 20,981
¥ 451,768
¥ (83,606)
¥ (23,349)
¥ 530,415
¥ 2,174
¥ 532,589
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥84 per
share
Cash dividends paid to
noncontrolling interests
Equity transactions with
noncontrolling interests
and other
Stock-based payment*2
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
and others
43,307
(16,940)
0
882
1,950
(1,950)
43,307
591
43,898
(16,940)
(16,940)
—
0
882
—
(401)
(401)
0
882
—
50,661
50,661
136
50,797
(1,467)
(1,467)
(1,467)
Balance, March 31, 2021
206,244,872
¥ 64,100
¥ 101,403
¥ 22,931
¥ 476,185
¥ (32,945)
¥ (24,816)
¥ 606,858
¥ 2,500
¥ 609,358
Net Income
Cash dividends paid to
OMRON Corporation
shareholders, ¥92 per
share
Cash dividends paid to
noncontrolling interests
Stock-based payment*3
Transfer to legal reserve
Other comprehensive
income (loss)
Acquisition of treasury stock
and others
61,400
(18,447)
(751)
1,639
1,572
(1,572)
61,400
644
62,044
(18,447)
(18,447)
—
888
—
(503)
(503)
888
—
45,958
45,958
103
46,061
(31,430)
(31,430)
(31,430)
Balance, March 31, 2022
206,244,872
¥ 64,100
¥ 100,652
¥ 24,503
¥ 517,566
¥ 13,013
¥ (54,607)
¥ 665,227
¥ 2,744
¥ 667,971
*1 Includes ¥(275) million, the amount of decrease in capital surplus due to changes in the estimates of stock-based payment.
*2 Includes ¥309 million, the amount of increase in capital surplus due to changes in the estimates of stock-based payment.
*3 Includes ¥19 million, the amount of increase in capital surplus due to changes in the estimates of stock-based payment.
115
OMRON Corporation Integrated Report 2022Financial Information Consolidated Statements of Cash Flows
OMRON Corporation and Subsidiaries
Years ended March 31, 2020, 2021 and 2022
Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Net gain (loss) on sale and disposals of property, plant, and equipment
Impairment losses on long-lived assets
Loss on impairment of goodwill
Loss related to sale of business
Net loss on valuation of investment securities
Net loss on sale of investment securities
Termination and retirement benefits
Deferred income taxes
Equity in earnings of affiliates
Gain on sales of business
Changes in assets and liabilities:
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase in other assets
Decrease in notes and accounts payable - trade
Increase (decrease) in income taxes payable
Increase (decrease) in accrued expenses and other current liabilities
Other, net
Total adjustments
Net Cash Provided by Operating Activities
Investing Activities:
Proceeds from sale or maturities of investment securities
Purchase of investment securities
Capital expenditures
Decrease (increase) in leasehold deposits, net
Proceeds from sale of property, plant, and equipment
Increase in investments in affiliates
Proceeds from sale of business, net of cash paid
Acquisition of business, net of cash acquired
Other, net
Net Cash Provided by (Used in) Investing Activities
Financing Activities:
Net borrowings (repayments) of short-term debt
Dividends paid by the Company
Dividends paid to noncontrolling interests
Acquisition of treasury stock
Other, net
Net Cash Used in Financing Activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of the Year
Cash and Cash Equivalents at End of the Year
FY2019
FY2020
FY2021
(Millions of yen)
¥ 75,335
¥ 43,898
¥ 62,044
28,605
(1,487)
498
—
—
1,170
43
(436)
(125)
963
(51,450)
12,944
10,704
6,442
(1,319)
15,614
3,570
1,600
14,452
89,787
1,423
(2,344)
(37,629)
62
4,565
(2,231)
64,460
—
333
28,639
6,365
(17,250)
(293)
(18,571)
319
(29,430)
(13,713)
75,283
110,250
185,533
22,756
(325)
1,976
—
—
(7,615)
—
(617)
1,164
6,098
—
3,893
5,425
955
6,237
833
5,301
3,852
49,933
93,831
751
(1,057)
(26,662)
(189)
2,069
7,850
2,453
—
0
23,367
901
410
3,384
1,116
(5,447)
—
(662)
4,632
1,624
—
(9,074)
(30,427)
(3,178)
13,293
1,749
2,316
1,380
5,384
67,428
921
(5,386)
(33,357)
(140)
748
(112,444)
(505)
—
0
(14,785)
(150,163)
(1,587)
(16,952)
(352)
(1,471)
10
(20,352)
6,528
65,222
185,533
250,755
20,000
(17,754)
(504)
(31,430)
85
(29,603)
17,067
(95,271)
250,755
155,484
Cash and Cash Equivalents from Continuing Operations at End of the Year
¥ 185,533
¥ 250,755
¥ 155,484
* Consolidated statements of cash flows consist of cash flows from continuing operations and cash flows from discontinued operations. We have not presented cash flows separately for
discontinued operations.
116
OMRON Corporation Integrated Report 2022Financial Information 11-Year Financial and Non-Financial Highlights
OMRON Corporation
and Subsidiaries
Long-term Management Strategy
Value Generation 2020 （VG2020）
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
Financial Indicators:
Operating Results:
Net sales
Gross profit
Selling, general and administrative expenses (excl. R&D expenses)
R&D expenses
Operating income
EBITDA (Note 1)
Net income (loss) attributable to OMRON shareholders
Cash Flows:
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Free cash flow (Note 2)
Net cash provided by (used in) financing activities
Financial Position:
Total assets
Cash and cash equivalents
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Net income (loss) attributable to OMRON shareholders (EPS) (Yen)
Shareholders’ equity
Cash dividends (Note 3) (Yen)
Dividend payout ratio
Other Financial Data:
Gross profit margin
Operating income margin
EBITDA margin
Return on invested capital (ROIC)
Return on equity (ROE)
Ratio of shareholders’ equity to total assets
Total return ratio (Note 4)
Capital expenditures
Depreciation and amortization
Ratio of overseas sales
Non-Financial Indicators:
Number of employees
Ratio of overseas employees to total employees
Ratio of non-Japanese in key managerial positions overseas (Note 5)
Ratio of women in managerial roles (OMRON Group worldwide) (Note 6)
Ratio of women in managerial roles (OMRON Group in Japan) (Note 7)
Ratio of employees with disabilities (OMRON Group worldwide) (Note 8)
Ratio of employees with disabilities (OMRON Group in Japan) (Note 9)
Number of overseas sites employing employees with disabilities
Number of patents held (Note 10)
Environmental contribution (thousand ton-CO2)
CO2 emissions of production sites (thousand ton-CO2)
Number of carbon zero sites in Japan
Net sales to CO2 emissions (million yen / ton-CO2)
Greenhouse gas emissions (thousand ton-CO2)（Scope1・2）
¥619,461
227,887
145,662
42,089
40,136
62,753
16,389
31,946
(26,486)
5,460
(33,492)
537,323
45,257
18,774
320,840
74.5
1,457.5
28
37.6%
36.8%
6.5%
10.1%
4.8%
5.2%
59.7%
37.7%
28,341
22,617
52.2%
35,992
67.7%
34%
ー
1.4%
ー
2.2%
ー
5,959
189
193
ー
3.21
ー
¥650,461
241,507
152,676
43,488
45,343
67,795
30,203
53,058
(28,471)
24,587
(18,550)
573,637
55,708
5,570
366,962
137.2
1,667.0
37
27.0%
37.1%
7.0%
10.4%
8.6%
8.8%
64.0%
27.0%
28,285
22,452
51.1%
35,411
67.4%
36%
ー
1.5%
ー
2.2%
ー
6,448
313
203
ー
3.21
ー
¥772,966
297,208
181,225
47,928
68,055
93,144
46,185
79,044
(31,125)
47,919
(16,298)
654,704
90,251
488
430,509
209.8
1,956.1
53
25.3%
38.5%
8.8%
12.1%
11.3%
11.6%
65.8%
25.3%
33,653
25,089
55.4%
36,842
69.1%
42%
ー
1.8%
ー
2.4%
ー
6,635
661
215
ー
3.60
ー
¥847,252
332,607
198,103
47,913
86,591
114,930
62,170
77,057
(39,517)
37,540
(29,303)
711,011
102,622
0
489,769
283.9
2,254.4
71
25.0%
39.3%
10.2%
13.6%
13.4%
13.5%
68.9%
49.1%
38,143
28,339
60.1%
37,572
69.7%
42%
ー
1.9%
ー
2.4%
ー
7,194
851
221
ー
3.83
ー
Note: 1. EBITDA = Operating income + Depreciation and amortization
2. Free cash flow = Net cash provided by operating activities + Net cash provided by (used in) investing activities
3. Cash dividends per share represent the amounts applicable to the respective year, including dividends to be paid after the end of the fiscal year.
4. Total return ratio = (Total dividends paid + Amount of shares repurchased) / Net income (loss) attributable to OMRON shareholders (does not include repurchases of less than one trading unit)
5. The ratio of local employees to the number of important positions determined by OMRON depending on the size of the overseas OMRON Group companies, concurrent positions for governance
and development positions are excluded.
6. Figures for overseas sites represent results as of March 31 of each fiscal year.
The ratio of women in managerial roles in the OMRON Group worldwide has been calculated since fiscal 2018.
7. The ratio of women in managerial roles (section managers or higher) at OMRON Group companies in Japan.
8. For the ratio of employees with disabilities (OMRON Group worldwide), applicable sites in countries with legally mandated employment rates are within the scope. The ratio is calculated based
on the calculation method stipulated by laws and regulations of each country.
117
¥833,604
320,812
205,735
52,790
62,287
93,747
47,290
84,207
(67,116)
17,091
(31,550)
683,325
82,910
0
444,718
219.0
2,080.0
68
31.1%
38.5%
7.5%
11.2%
9.7%
10.1%
65.1%
62.7%
36,859
31,460
60.3%
37,709
69.3%
46%
ー
2.3%
ー
2.4%
ー
7,686
508
202
ー
4.12
ー
¥794,201
312,161
193,093
50,539
68,529
97,495
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
215.1
2,193.7
68
31.6%
39.3%
8.6%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
49%
ー
3.3%
ー
2.5%
ー
8,224
593
202
ー
3.94
250
¥732,306
327,585
201,777
48,622
77,186
101,501
63,159
73,673
(55,842)
17,831
(33,082)
744,952
106,223
298
505,530
296.9
2,400.4
76
25.6%
44.7%
10.5%
14.6%
12.7%
13.0%
67.9%
48.2%
33,027
24,315
57.3%
36,193
68.1%
49%
ー
3.6%
ー
2.6%
ー
8,774
659
204
ー
4.22
271
¥732,581
325,484
208,895
49,335
67,254
92,609
54,323
71,245
(34,957)
36,288
(40,783)
749,878
103,850
2,086
504,212
260.8
2,455.2
84
32.232.2%
44.4%
9.2%
12.6%
10.6%
10.8%
67.2%
79.5%
35,661
25,355
56.5%
35,090
67.6%
62%
12.7%
5.2%
ー
2.5%
ー
9,782
1,055
193
ー
4.47
235
¥677,980
303,702
202,954
45,988
54,760
80,466
74,895
89,787
28,639
118,426
(29,430)
758,124
185,533
1,593
530,415
365.3
2,626.6
84
23.0%
44.8%
8.1%
11.9%
14.1%
14.5%
70.0%
47.7%
33,110
25,706
54.1%
28,006
62.2%
70%
16.0%
5.9%
ー
2.8%
ー
10,087
971
135
ー
5.02
166
(Millions of yen)
¥762,927
346,827
213,234
44,277
89,316
112,683
61,400
67,428
(150,163)
(82,735)
(29,603)
930,629
155,484
20,000
665,227
305.7
3,339.6
92
30.1 %
45.5 %
11.7 %
8.6 %
9.6 %
9.7 %
71.5 %
79.0 %
34,210
23,367
62.0 %
29,020
65.0 %
80 %
16.9 %
8.0 %
2.2 %
3.1 %
27
12,061
881
109
5
7.02
123
¥655,529
298,351
192,687
43,184
62,480
85,236
43,307
93,831
(14,785)
79,046
(20,352)
820,379
250,755
0
606,858
214.7
3,009.2
84
39.1%
45.5%
9.5%
13.0%
7.8%
7.6%
74.0%
42.6%
23,959
22,756
57.8%
28,254
62.9%
75%
16.4%
6.7%
2.0%
3.0%
25
11,037
826
106
ー
6.16
124
OMRON Corporation Integrated Report 2022Financial Information
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
Selling, general and administrative expenses (excl. R&D expenses)
Net income (loss) attributable to OMRON shareholders
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Free cash flow (Note 2)
Net cash provided by (used in) financing activities
Financial Indicators:
Operating Results:
Net sales
Gross profit
R&D expenses
Operating income
EBITDA (Note 1)
Cash Flows:
Financial Position:
Total assets
Cash and cash equivalents
Total interest-bearing liabilities
Total shareholders’ equity
Per Share Data:
Shareholders’ equity
Cash dividends (Note 3) (Yen)
Dividend payout ratio
Other Financial Data:
Gross profit margin
Operating income margin
EBITDA margin
Net income (loss) attributable to OMRON shareholders (EPS) (Yen)
Return on invested capital (ROIC)
Return on equity (ROE)
Ratio of shareholders’ equity to total assets
Total return ratio (Note 4)
Capital expenditures
Depreciation and amortization
Ratio of overseas sales
Non-Financial Indicators:
Number of employees
Ratio of overseas employees to total employees
Ratio of non-Japanese in key managerial positions overseas (Note 5)
Ratio of women in managerial roles (OMRON Group worldwide) (Note 6)
Ratio of women in managerial roles (OMRON Group in Japan) (Note 7)
Ratio of employees with disabilities (OMRON Group worldwide) (Note 8)
Ratio of employees with disabilities (OMRON Group in Japan) (Note 9)
Number of overseas sites employing employees with disabilities
Number of patents held (Note 10)
Environmental contribution (thousand ton-CO2)
CO2 emissions of production sites (thousand ton-CO2)
Number of carbon zero sites in Japan
Net sales to CO2 emissions (million yen / ton-CO2)
Greenhouse gas emissions (thousand ton-CO2)（Scope1・2）
¥619,461
227,887
145,662
42,089
40,136
62,753
16,389
31,946
(26,486)
5,460
(33,492)
537,323
45,257
18,774
320,840
74.5
1,457.5
28
37.6%
36.8%
6.5%
10.1%
4.8%
5.2%
59.7%
37.7%
28,341
22,617
52.2%
35,992
67.7%
34%
ー
1.4%
ー
2.2%
ー
5,959
189
193
ー
3.21
ー
¥650,461
241,507
152,676
43,488
45,343
67,795
30,203
53,058
(28,471)
24,587
(18,550)
573,637
55,708
5,570
366,962
137.2
1,667.0
37
27.0%
37.1%
7.0%
10.4%
8.6%
8.8%
64.0%
27.0%
28,285
22,452
51.1%
35,411
67.4%
36%
ー
1.5%
ー
2.2%
ー
6,448
313
203
ー
3.21
ー
¥772,966
297,208
181,225
47,928
68,055
93,144
46,185
79,044
(31,125)
47,919
(16,298)
654,704
90,251
488
430,509
209.8
1,956.1
53
25.3%
38.5%
8.8%
12.1%
11.3%
11.6%
65.8%
25.3%
33,653
25,089
55.4%
36,842
69.1%
42%
ー
1.8%
ー
2.4%
ー
6,635
661
215
ー
3.60
ー
¥847,252
332,607
198,103
47,913
86,591
114,930
62,170
77,057
(39,517)
37,540
(29,303)
711,011
102,622
0
489,769
283.9
2,254.4
71
25.0%
39.3%
10.2%
13.6%
13.4%
13.5%
68.9%
49.1%
38,143
28,339
60.1%
37,572
69.7%
42%
ー
1.9%
ー
2.4%
ー
7,194
851
221
ー
3.83
ー
¥833,604
320,812
205,735
52,790
62,287
93,747
47,290
84,207
(67,116)
17,091
(31,550)
683,325
82,910
0
444,718
219.0
2,080.0
68
31.1%
38.5%
7.5%
11.2%
9.7%
10.1%
65.1%
62.7%
36,859
31,460
60.3%
37,709
69.3%
46%
ー
2.3%
ー
2.4%
ー
7,686
508
202
ー
4.12
ー
¥794,201
312,161
193,093
50,539
68,529
97,495
45,987
77,875
(15,041)
62,834
(15,012)
697,701
126,026
156
469,029
215.1
2,193.7
68
31.6%
39.3%
8.6%
12.2%
10.3%
10.1%
67.2%
31.6%
25,692
28,966
58.4%
36,008
68.3%
49%
ー
3.3%
ー
2.5%
ー
8,224
593
202
ー
3.94
250
¥732,306
327,585
201,777
48,622
77,186
101,501
63,159
73,673
(55,842)
17,831
(33,082)
744,952
106,223
298
505,530
296.9
2,400.4
76
25.6%
44.7%
10.5%
14.6%
12.7%
13.0%
67.9%
48.2%
33,027
24,315
57.3%
36,193
68.1%
49%
ー
3.6%
ー
2.6%
ー
8,774
659
204
ー
4.22
271
¥732,581
325,484
208,895
49,335
67,254
92,609
54,323
71,245
(34,957)
36,288
(40,783)
749,878
103,850
2,086
504,212
260.8
2,455.2
84
32.232.2%
44.4%
9.2%
12.6%
10.6%
10.8%
67.2%
79.5%
35,661
25,355
56.5%
35,090
67.6%
62%
12.7%
5.2%
ー
2.5%
ー
9,782
1,055
193
ー
4.47
235
¥677,980
303,702
202,954
45,988
54,760
80,466
74,895
89,787
28,639
118,426
(29,430)
758,124
185,533
1,593
530,415
365.3
2,626.6
84
23.0%
44.8%
8.1%
11.9%
14.1%
14.5%
70.0%
47.7%
33,110
25,706
54.1%
28,006
62.2%
70%
16.0%
5.9%
ー
2.8%
ー
10,087
971
135
ー
5.02
166
(Millions of yen)
¥762,927
346,827
213,234
44,277
89,316
112,683
61,400
67,428
(150,163)
(82,735)
(29,603)
930,629
155,484
20,000
665,227
305.7
3,339.6
92
30.1 %
45.5 %
11.7 %
8.6 %
9.6 %
9.7 %
71.5 %
79.0 %
34,210
23,367
62.0 %
29,020
65.0 %
80 %
16.9 %
8.0 %
2.2 %
3.1 %
27
12,061
881
109
5
7.02
123
★
★
★
☆
★
★
¥655,529
298,351
192,687
43,184
62,480
85,236
43,307
93,831
(14,785)
79,046
(20,352)
820,379
250,755
0
606,858
214.7
3,009.2
84
39.1%
45.5%
9.5%
13.0%
7.8%
7.6%
74.0%
42.6%
23,959
22,756
57.8%
28,254
62.9%
75%
16.4%
6.7%
2.0%
3.0%
25
11,037
826
106
ー
6.16
124
9. Figures represent results as of June 20 of each fiscal year.
For companies subject to the Act on Employment Promotion etc. of Persons with Disabilities. Employment rate calculation is based on the Act on Employment Promotion etc. of Persons with
Disabilities.
10. Patent information is as of March 31 of each fiscal year.
Indicates assurance performed by Bureau Veritas Japan Co., Ltd.
Indicates assurance performed by KPMG AZSA Sustainability Co., Ltd.
Indicates independent verification or review performed by Bureau Veritas Japan Co., Ltd.
Operating Income
OMRON applies the single step presentation of income under U.S. GAAP (that is, the various levels of income are not presented) in its consolidated statements of income. For comparison with
other companies, operating income is presented as gross profit less selling, general and administrative expenses and research and development expenses.
Changes in Accounting Policies
With the company’s adoption of US GAAP in fiscal 2018, we have reclassified consolidated statements of income for fiscal years 2016 and later for presentation herein.
Financial Data Reclassification
The Automotive Electronics Components Business (AEC) was transferred, and the AEC business was classified as a “discontinued business.”
Accordingly, some financial data for fiscal 2017 and 2018 have been reclassified.
118
OMRON Corporation Integrated Report 2022Financial Information Responsible Engagement with Our Stakeholders
As stated in our Management Philosophy, OMRON cultivates strong relationships with its stakeholders
through responsible engagement. Relationships of trust cultivated through engagement with stakeholders is
an indispensable asset for the sustainable growth of OMRON and an essential element in our creation of
innovation driven by social needs. We are committed to responsible engagement with all of our stakeholders
to sustainably improve our corporate value and solve social issues through our business.
Stakeholders
Major initiatives
Means of communications
Actual initiatives (examples)
Customers
The OMRON Group
provides better
products and services
with the aim of
solving social issues
through its business.
Transaction
partners
The OMRON Group is
engaged in global
procurement activities
and working with its
suppliers to improve
the level of
sustainability in its
supply chain.
Employees
The OMRON Group is
committed to creating
a company where
employees can
unleash their abilities
and passions and
demonstrate them to
the fullest.
Shareholders
and
investors
The OMRON Group is
working to engage in
two-way interactive
communication with
shareholders and
investors, with the
aim of “realizing
highly transparent
management.”
Communication through sales activities
Customer support
Collaborative creation with our customers by utilizing 37 Automation Centers (ATC) of
the Industrial Automation Business.
FY2021 results:
Established a structure with 1,600 engineers (45% increase from FY2017)
Renewed ATC-KUSATSU (January 2022)
Industrial Automation Business: Contributed to the improvement of customers’ global
competitiveness through 150 or more support networks in 40 countries around the
world.
Healthcare Business: Inquiries about thermometers and blood pressure monitors and
access to the website’s FAQs doubled amid the COVID-19 pandemic. Focused on
improving website navigation and response content to enhance customer satisfaction.
User monitoring
Healthcare Business: Set up a residential environment space for monitoring and
utilized the results to develop wheeze detectors.
Exhibitions
We enhanced the recognition of the OMRON brand through exhibition at China
International Import Expo (CIIE) 2021. Communicated a message as “an innovative
enterprise that resolves social issues through automation.”
Briefings on our purchasing policy
(Global Partner Conference)
We shared OMRON’s management policies and sustainable procurement policies
with major suppliers.
We held one-on-one online meetings with some 20 suppliers in FY2021.
Sustainability self-assessment
We requested suppliers to conduct self-assessment of compliance with the
Sustainable Procurement Guidelines. We confirmed the compliance status of 603
global suppliers in FY2021.
Assessment based on third-party
standards
We conducted self-checks using the RBA* evaluation tool. We requested 50 suppliers
that were identified as having sustainability risks to implement corrective actions.
*RBA: Responsible Business Alliance
“Green procurement” that helps reduce
negative environmental impact
Survey on conflict minerals
Awarded or renewed green supplier certification.
During FY2021, we certified 100 more companies as green suppliers and completed
assessments for a cumulative total of 3,126 companies.
We proactively adopted materials that do not contain hazardous chemical substances
to help reduce negative environmental impacts in the OMRON Group’s supply chain.
Using the Conflict Minerals Reporting Template (CMRT) of the Responsible Minerals
Initiative (RMI), which is a standardized reporting template, conducted a survey of 286
suppliers worldwide from which the OMRON Group purchased parts and materials in
the past 2 years. We promoted procurement in a manner not to drive environmental
destruction and human rights violation.
VOICE
(Global Employee Engagement Survey)
In FY2020, the survey covered all 28,006 employees of the OMRON Group. (The
survey to be conducted every other year.)
Response rate of 90%, more than 40,000 free comments
“The KURUMAZA” meeting to facilitate
direct communication between the CEO
and employees
We organized a forum for communication between the CEO and employees to make
the OMRON Principles the driver of OMRON’s growth.
“OMRON Principles Missionary
Dialogues” to facilitate direct
communication between the
Chairman and employees
Held direct dialogues with top executives to inculcate the practice of the OMRON
Principles throughout the organization. In FY2021, held the dialogues in 4 overseas
areas. A cumulative total of about 100 people, mainly leaders and young employees,
participated.
TOGA
(The OMRON Global Awards)
An event where teams that received Gold Awards gather at the Kyoto Head Office,
make presentations on their commitment to putting the OMRON Principles into
practice to the executives and employees, and are applauded.
In FY2021, TOGA was conducted as a hybrid of real and virtual events. It drew a total
of 12,000 entries from inside and outside the Company, inspiring more and more
people to embrace the OMRON Principles and practice them.
Employee Health Management
Declaration “Boost5 Project”
We consider the health of our employees as an important management foundation,
and issued “The OMRON Health White Paper” based on the visualization and analysis
of the status of their health.
Briefing on business results / briefing on
medium-term management plan /
individual meetings
We held briefings on business results (four times), briefing on SF2030 long-term
vision and medium-term management plan, and meetings with institutional investors
(more than 700 times) online and face to face. As always, conducted highly
transparent IR activities.
Ordinary General Meeting of
Shareholders
Publication of IR-related materials
The Ordinary General Meeting of Shareholders was also streamed online (June 24,
2021). Fifty-six shareholders attended the Meeting at the venue and 120 shareholders
viewed the live streaming. The percentage of voting rights exercised was 89.1%,
hitting an all-time high.
We actively disclosed information through publication of IR-related materials, including
the Integrated Report and Shareholders’ News. In addition, enhanced the information
in the annual securities report (including the value creation story, sustainability targets
and results, risk information, etc.) to strengthen information disclosure to a wide range
of investors.
Planning and operation of the IR website
and sustainability website
We conducted timely disclosure of financial results-related materials (financial
statements, presentation materials, financial data compilations, etc.). Provided a
broader range of non-financial information.
119
OMRON Corporation Integrated Report 2022Corporate Information External Evaluation
Inclusion in Japanese and International
Investment Indexes
OMRON has been a component of the world-renowned Dow
Jones Sustainability World Index (DJSI World) for five
consecutive years since 2017 and a component of the Dow
Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) for
twelve consecutive years since 2010.
OMRON has been selected for the MSCI ESG Leaders Indexes
for eight consecutive years since 2015
OMRON has been selected for the FTSE4Good Index Series for
seven consecutive years since 2016
OMRON has been selected for the following indexes for six
consecutive years since 2017: FTSE Blossom Japan Index,
MSCI Japan ESG Select Leaders Index, MSCI Japan
Empowering Women Index (WIN), MSCI AAA & GPIF, FTSE
indexes adopted by GPIF
OMRON has been selected for Nikkei 225 since 2019
OMRON has been selected for the S&P/JPX Carbon Efficient
Index for four consecutive years since 2018
Evaluation by International ESG Ratings
Organizations
OMRON awarded the Silver Class Distinction in the S&P Global
Sustainability Awards 2022
OMRON Awarded Gold Rating from EcoVadis for sustainability
in FY2021
OMRON included in the “Nadeshiko Brand” for five consecutive
years since 2017
OMRON included in the “Health & Productivity Stock Selection”
for four consecutive years since 2018
OMRON certified as “Health & Productivity Management
Organization” for six consecutive years since 2016
OMRON rated “A-” by CDP in Climate Change Report
OMRON awarded the Gold Rating under the PRIDE Index for
five consecutive years since 2017
Other External Evaluation
OMRON selected as Top 100 Global Innovator 2022 (six
consecutive years since 2016)
OMRON included in the Best Japan Brands Top 100. OMRON’s
brand value amounted to 1,088 million US dollars (approximately
124 billion yen), up 14% from the previous year.
OMRON ranked No.1 overall in Toyo Keizai Inc.’s SDGs Ranking
of 500 Companies Representing Japan for two consecutive years
OMRON won the Governance Award at the 1st Nikkei Integrated
Report Awards
OMRON received Award for Excellence in Corporate Disclosure
from the Securities Analysts Association of Japan for two
consecutive years (7th time to receive this award)
THE INCLUSION OF OMRON CORPORATION IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE
MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF OMRON
CORPORATION BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI
AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
120
OMRON Corporation Integrated Report 2022Corporate Information Corporate Information As of March 31, 2022
Major Manufacturing & Development, Sales & Marketing, and
Research & Development Centers in Japan
Manufacturing &
Subsidiaries and Affiliates
Development
Kusatsu Office
Okayama Office
Ayabe Office
Yasu Office
OMRON SOCIAL SOLUTIONS Co., Ltd.
OMRON HEALTHCARE Co., Ltd.
OMRON RELAY & DEVICES Co., Ltd.
OMRON SWITCH & DEVICES Co., Ltd.
OMRON AMUSEMENT Corporation
OMRON FIELD ENGINEERING Co., Ltd.
Research & Development
OMRON SOFTWARE Co., Ltd.
Keihanna Technology
OMRON ASO Co., Ltd.
Innovation Center
OMRON EXPERTLINK Co., Ltd.
Sales & Marketing
Tokyo Office
Osaka Office
Nagoya Office
Mishima Office
Regional Headquarters
North America
OMRON MANAGEMENT
CENTER OF AMERICA
(United States of America, Illinois)
Europe
OMRON MANAGEMENT
CENTER OF EUROPE
(The Netherlands, North Holland)
Greater China
OMRON MANAGEMENT
CENTER OF CHINA
(Shanghai)
Asia Pacific
OMRON MANAGEMENT
CENTER OF ASIA PACIFIC
(Singapore)
Korea
OMRON MANAGEMENT
CENTER OF KOREA
(Seoul)
Established
May 10, 1933
Incorporated
May 19, 1948
Capital
¥64,100 million
Number of Employees
(Consolidated)
29,020
Common Stock
Issued: 206,245 thousand shares
Trading Unit: 100 shares
Number of Shareholders: 29,390
Stock Listings
Tokyo Stock Exchange
Frankfurt Stock Exchange
(listing of depositary receipts)
Securities Code
6645
Fiscal Year-End
March 31
Annual Shareholders’ Meeting
June
Custodian of Register of
Shareholders
Mitsubishi UFJ Trust and Banking
Corporation
Depositary and Transfer Agent for
American Depositary Receipts
JPMorgan Chase Bank, N.A.
Head Office
Shiokoji Horikawa,
Shimogyo-ku, Kyoto
600-8530, Japan
Tel : +81-75-344-7000
121
OMRON Corporation Integrated Report 2022Corporate Information Stock Information
Share Price and Volume
(Yen, Point)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2012/3
Daily Trading Volume
OMRON
TOPIX
TOPIX Electric Appliances
(1,000 Shares)
5,000
4,000
3,000
2,000
1,000
0
2013/3
2014/3
2015/3
2016/3
2017/3
2018/3
2019/3
2020/3
2021/3
2022/3
* OMRON share prices prior to July 16, 2013 reflect prices on the First Section of the Osaka Securities Exchange. Share prices on July 16, 2013 and later reflect prices on the First Section of the
Tokyo Stock Exchange.
Total Shareholder Return (TSR*1)
Holding Period
OMRON
TOPIX
TOPIX Electric Appliances
3 years
163.6%
131.2%
172.4%
5 years
176.7%
144.3%
191.2%
10 years
506.9%
283.3%
361.5%
*1 Represents total investment return to shareholders, combining capital gains and dividends.
The return for each holding period, which ended March 31, 2022, is calculated by referring to the calculation formula
stipulated under Cabinet Office Ordinance.
The 3 years return is calculated from the closing stock price at the end of fiscal 2018, the 5 years from 2016 and 10 years
from 2011, respectively.
52-Week High / Low, Volatility*2
Dividends per Share / Payout Ratio
FY
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
High (¥)
12,115
10,040
6,870
6,300
7,670
5,120
5,900
5,800
4,730
2,478
Low (¥)
Volatility (%)
7,306
5,330
4,410
3,740
4,385
3,045
2,742
3,365
2,213
1,436
30.1
28.8
32.3
34.5
27.1
32.5
40.0
30.9
39.7
29.9
FY
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Dividends per Share (¥)
Payout Ratio (%)
92
84
84
84
76
68
68
71
53
37*3
30.1
39.1
23.0
32.2
25.6
31.6
31.1
25.0
25.3
27.0
*2 Volatility: Price fluctuation risk expressed in standard deviations
*3 Including ¥5.0 per share of 80th anniversary memorial dividend
Ownership and Distribution of Shares
%
100
80
60
40
20
0
12.6%
11.5%
12.6%
35.4%
36.9%
36.0%
5.5%
1.9%
5.1%
2.1%
4.7%
2.4%
44.6%
44.4%
44.3%
2019
2020
2021
(FY-end)
Individuals and others
(including treasury stock)
Foreign investors
Other corporations
Financial instruments
dealers
Financial institutions
Shareholder Distribution by Number of
Shares Held (Trading unit: 100 shares)
100 to less than1,000
1.6%
10 to less
than 100
14.0%
1,000 to less than 5,000
0.4%
More than
5,000
0.2%
29,390
Shareholders
End of March 2022
Less than 10
83.8%
122
OMRON Corporation Integrated Report 2022Corporate Information Independent Third-Party Assurances
To enhance the reliability of the information presented in Integrated Report 2022, the following information
associated with social and environmental performance provided herein has been assured or reviewed by
independent third parties*.
Data subject to independent assurance
Data subject to independent assurance
Ratio of non-Japanese in key managerial
positions overseas (P32, 118)
Ratio of women in managerial roles
(OMRON Group in Japan) (P32, 118)
Ratio of employees with disabilities
(OMRON Group in Japan) (P32, 118)
GHG emissions (P32, 35, 77, 81, 118)
Net sales to CO2 emissions
(P32, 35, 77, 81, 118)
Data subject to independent review
Environmental contribution
(P32, 35, 77, 81, 118)
Independent Assurance Report
To the President and CEO of OMRON Corporation
We were engaged by OMRON Corporation (the “Company”) to undertake a limited assurance engagement of the social
performance indicators marked with “
” (the “Indicators”) for the period from April 1, 2021 to March 31, 2022 (with the
exception of the Indicator “Ratio of women in managerial roles”, which is as of April 20, 2022) included in its Integrated Report
2022 (the “Report”) for the fiscal year ended March 31, 2022.
The Company’s Responsibility
The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s
reporting criteria”), as described in the Report.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We
conducted our engagement in accordance with the ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance
Engagements other than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance
Standards Board. The limited assurance engagement consisted of making inquiries, primarily of persons responsible for the
preparation of information presented in the Report, and applying analytical and other procedures, and the procedures performed
vary in nature from, and are less in extent than for, a reasonable assurance engagement. The level of assurance provided is thus not
as high as that provided by a reasonable assurance engagement. Our assurance procedures included:
l Interviewing the Company’s responsible personnel to obtain an understanding of its policy for preparing the Report and
reviewing the Company’s reporting criteria.
l Inquiring about the design of the systems and methods used to collect and process the Indicators.
l Performing analytical procedures on the Indicators.
l Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with
the Company’s reporting criteria, and recalculating the Indicators.
l Making inquiries and reviewing materials including documented evidence of the Company’s headquarters selected on the
basis of a risk analysis, as alternative procedures to a site visit.
l Evaluating the overall presentation of the Indicators.
Conclusion
Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that the
Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described
in the Report.
Our Independence and Quality Control
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for
Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behavior. In accordance with International Standard on
Quality Control 1, we maintain a comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
5h inno叫セ知y加I
、
Shinnosuke Kayumi
Director
KPMG AZSA Sustainability Co., Ltd.
Osaka, Japan
November 2, 2022
123
* KPMG AZSA Sustainability Co., Ltd.
Bureau Veritas Japan Co., Ltd.
INDEPENDENT ASSURANCE STATEMENT To: OMRON Corporation Bureau Veritas Japan Co., Ltd. (Bureau Veritas) has been engaged by OMRON Corporation (OMRON) to provide limited assurance and to conduct an external review over sustainability information selected by OMRON. This Assurance Statement applies to the related information included within the scope of work described below. Selected information The scope of our assurance work was limited to assurance over the following information included within the ‘Major sustainability Data’ page of the OMRON’s corporate website (the ‘Website’) or reported internally to OMRON Group only for the purpose of internal management for the period of April 1, 2021 through March 31, 2022 (the ‘Selected Information’): 1) GHG emissions (CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3) through business operations of OMRON Group’s 94 sites both inside and outside Japan. However, CO2 emissions generated from use of electricity for living use, steam and hot water at OMRON DALIAN CO., LTD. are out of verification scope. 2) Water usage and Waste water discharged through business operations of OMRON Group’s 27 sites both inside and outside Japan. 3) Waste volume, Final disposal of waste, Hazardous waste volume and Final disposal of hazardous waste through business operations of OMRON Group’s 41 sites both inside and outside Japan. Note: The scope of ‘hazardous waste’ was defined by OMRON with consideration of laws and regulations. 4) VOC handled and VOC released to air through business operations of OMRON Group’s 27 sites both inside and outside Japan. 5) Renewable energy purchased or generated at OMRON Group’s 94 sites both inside and outside Japan. 6) Categories 1, 2, 3, 6 and 7 of Scope 3 GHG emissions accounted and reported in line with the GHG Protocol’s ‘Corporate Value Chain (Scope 3) Accounting and Reporting Standard’ within the boundaries defined by OMRON for each category. 7) Carbon Productivity (Global sales / CO2 emissions from global production sites) The scope of our review work was limited to review about the following information included within the ‘Major sustainability Data’ page of the Website for the period of April 1, 2021 through March 31, 2022 (the ‘Selected Information’): 1) The amount of contribution to CO2 emission reduction through the use of products and services sold in FY2021 Note: The boundaries and accounting methodologies are defined by OMRON. 4. Reviewing OMRON systems for quantitative data aggregation and analysis; 5. Verification of sample of data back to source by carrying out three physical site visits and one remote audit, selected on a risk based bases at the following locations: [Physical site visits] - OMRON Corporation head office - OMRON RELAY & DEVICES CORPORATION - OMRON ASO CO., LTD. [Remote audits] - OMRON DALIAN CO., LTD. 6. Reperforming a selection of aggregation calculations of the Selected Information; 7. Comparing the Selected Information to the prior year amounts taking into consideration changes in business activities, acquisitions and disposals. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Verified greenhouse gas emissions We performed our verification work on greenhouse gas emissions data in accordance with the requirements of ISO14064-3(2019). Verified data in greenhouse gas assertion made by OMRON are as follows. Greenhouse gas emissions [t-CO2e] Boundary Scope 1 13,749 GHG emissions (CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3) through business operations of OMRON Group’s 94 sites both inside and outside Japan. However, CO2 emissions generated from use of electricity for living use, steam and hot water at OMRON DALIAN CO., LTD. are out of verification scope. Scope 2 (market-based) 108,294 Scope 3 (Category 1, 2, 3, 6 and 7) 1,543,028 Categories 1, 2, 3, 6 and 7 of Scope 3 GHG emissions accounted and reported in line with the GHG Protocol’s ‘Corporate Value Chain (Scope 3) Accounting and Reporting Standard’ within the boundaries defined by OMRON for each category. The breakdown of Scope 3 emissions are as follows. Category t-CO2e Category t-CO2e 1 2 3 1,276,671 105,987 152,857 6 7 4,521 2,992 Reporting criteria The Selected Information included within the Website needs to be read and understood together with the reporting criteria stated in the Website. The Selected Information reported internally to OMRON Group only for the purpose of internal management needs to be read and understood together with the internal reporting criteria defined by OMRON. Limitations and Exclusions Excluded from the scope of our work is any verification of information relating to: - Activities outside the defined verification period; - Any other information within the Website, which is not listed as the ‘Selected Information’. This limited assurance engagement relies on a risk based selected sample of sustainability data and the associated limitations that this entails. This independent statement should not be relied upon to detect all errors, omissions or misstatements that may exist. Responsibilities This preparation and presentation of the Selected Information in the Website are the sole responsibility of the management of OMRON. Bureau Veritas was not involved in the drafting of the Website or of the Reporting Criteria. Our responsibilities were to: - obtain limited assurance about whether the Selected Information has been prepared in accordance with the Reporting Criteria by conducting our assurance work; - assess the reliability and accuracy of the Selected Information by conducting our review work; - form an independent conclusion based on the procedures performed and evidence obtained; and - report our conclusions to the Directors of OMRON. Assessment Standard We performed our assurance work in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information (Effective for assurance reports dated on or after December 15, 2015) issued by the International Auditing and Assurance Standards Board and ISO14064-3 (2019): Greenhouse gases - Part 3: Specification with guidance for the verification and validation of greenhouse gas statements. We performed our review work by using Bureau Veritas’ standard procedures for external review of sustainability information. Summary of work performed As part of our independent verification, our work included: 1. Conducting interviews with relevant personnel of OMRON; 2. Reviewing the data collection and consolidation processes used to compile Selected Information, including assessing assumptions made, and the data scope and reporting boundaries; 3. Reviewing documentary evidence provided by OMRON; OMRON Corporation Integrated Report 2022 Editorial Team Members for Integrated Report 2022
Global Investor & Brand Communications HQ
Tsutomu Igaki (Editor-in-Chief)
Satomi Somekawa (Deputy Editor-in-Chief) Kisho Iida Takuro Okada Hiroshi Oda
Kenji Kawauchi Masayuki Sato Arihiro Yokota
Members for Integrated Report 2022
Industrial Automation Company
Hidetaka Kitajima
Takehiko Hioka
Takeshi Murakami
OMRON HEALTHCARE Co., Ltd.
Kaori Iijima
Yoichi Tomita
OMRON SOCIAL SOLUTIONS Co., Ltd.
Shingo Imamura
Atsushi Takahashi
Device & Module Solutions Company
Katsuhisa Suzuki
Naru Yasuda
Innovation Exploring Initiative HQ
Makoto Ohira
Hirotaka Ogino
Yoko Kitamura
Audit & Supervisory Board Office
Shunji Okumura
Erina Omoto
Global Investor & Brand
Communications HQ
Ikutoshi Ikeda
Koji Sadamori
Tomomi Sato
Noboru Shibata
Megumi Nakai
Kazuki Matsuyama
Keisuke Miura
Yuko Murayama
Yu Yanagihara
Takeshi Yamamoto
Mana Yamamoto
Global Corporate Venturing Office
Kaori Okumura
Global Human Resources and
Administration HQ
Nobuyuki Hangai
Yasuhiko Ueshima
Tomohiro Kitazato
Yuichi Suzuki
Shuji Tatsuoka
Global Risk Management and Legal HQ
Koji Okamoto
Yoshichika Tanabe
Yasuo Fujii
Yoshiaki Murakami
Sustainability Office
Rumi Ueyama
Masaru Kaizaki
Koichi Tamura
Yasuyuki Hirakawa
Yuki Yamamoto
Yuki Yoshikawa
Liu Yue
Board of Directors Office
Ryohei Suzuki
Yuriko Sunaga
Production cooperation
TAKARA PRINTING CO., LTD.
DIAMOND, Inc.
Delights co ltd.
In this report, an emphasis was placed on communicating financial information, sustainability information, and content disclosed in
various reports posted on our website as well as content that OMRON is working for sustainable enhancement of corporate value in an
easy-to-understand manner. Please see the OMRON website for details.
Investor Relations
https://www.omron.com/global/en/ir/
Sustainability Information
Sustainability initiatives
GRI Content Index
Major Sustainability Data
Reports
Corporate Governance Report
https://sustainability.omron.com/en
https://sustainability.omron.com/en/guide_line/
https://sustainability.omron.com/en/performance/
https://www.omron.com/global/en/assets/file/about/corporate/
governance/policy/20220624_governance_report_e.pdf
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OMRON Corporation
Contact
Shiokoji Horikawa,Shimogyo-ku, Kyoto 600-8530, Japan
Global Investor & Brand Communications HQ
https://www.omron.com/global/en/
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