Ricoh has shifted responsibility for production printing to Europe as part of its new "Ricoh Resurgent" initiative, a program which Yoshinori Yamashita, CEO, says will deliver savings of ¥100 billion by 2019 - equivalent to roughly $1.2 billion AUD.
In a wide-ranging presentation, Yamashita, who became president and CEO of Ricoh on April 1, repudiated the company's previous management strategy and signalled a shift of focus from market share to profitability. He enumerated what he saw as the four main failings of the approach that saw the company's operating margin drop to two percent:
- We did not overhaul the cost structure of our core business as it was weakening.
- We failed to be selective about our business portfolios and did not decide to exit businesses despite not generating envisaged profits.
- We ended up merely dabbling a little in everything in growth businesses without adequately evaluating our business strategies and earnings models.
- We failed to fulfill the pledges that we made under our mid-term management plan.
"This is why I stated that we would break from past management approaches," Yamashita said.
Internal simulations showed that Ricoh was potentially headed for a loss in the 2019 financial year if nothing was done. According to Yamashita, the company's financial growth peaked in 2007, after which the global financial crisis, and a slowdown in the switch from black-and-white to colour machines, contributed to Ricoh's profit decline. "The global financial crisis caused a profit plunge from which we have yet to recover," he said.
As part of the plan, the company will focus on growth areas of its business and expand into sectors such as thermal in-line printing, 3D printing and bio-printing: using print technology to create layers of living cells. "We will support the creation of customer value by broadening the potential of printing technology beyond commercial and industrial printing," Yamashita said.
Ricoh will also overhaul its management structure to avoid 'ambiguous responsibilities, roles, and authority', shifting oversight for production printing to Europe and office printing to the United States as part of a broader review of the roles of each of its regions. "We are shifting oversight to those that are leading in their markets and delegating decision-making authority to business leaders near the front lines, enhancing the quality and speed of strategic deployments," Yamashita said.
Ricoh Australia had its own management shake-up earlier this year with Andy Berry stepping into the managing director’s role following the shock departure of John Hall. There will undoubtedly be a major impact on the local operation from the far-reaching changes. Andy Berry was unavailable for comment as Print21 goes to air.