100 Stories2013 The SL200 Project - Over 50 billion yen in cost reductions

In the 2013 fiscal year, the Asahi Kasei Group launched the SL200 Project (Stream-line/Step to Launch; SL200 below) with the aim of strengthening its structure to prepare for future changes in the business environment and to build a competitive earnings base.

In April 2013, the SL200 Project Promotion Office was established, with President Taketsugu Fujiwara as project director and Director and Managing Executive Officer Hideki Kobori as project manager.
This was a major company-wide project that aimed to reduce costs by 20 billion yen in FY2015 compared to FY2012, with each function of the operating companies and holding company promoting cost reductions along two axes: the business axis (vertical) and the functional axis (horizontal).

On the business axis, each operating company examined measures and set cost reduction targets.
Rather than forcing reduction efforts on businesses in a top-down manner, the project also provided a forum for each business company to present its progress and “visualize” its figures and efforts. The purpose of this was to raise awareness of initiatives. Some operating companies, such as those in the chemicals business, actively promoted initiatives to achieve the target figures, for example, by holding events to commend departments that were able to reduce costs.

For the functional axis, eight functional subcommittees were established, including purchasing and energy.

The purchasing subcommittee worked on cost reduction of indirect materials (all goods and services procured from outside the company, excluding direct materials such as equipment materials and raw materials, labor costs, etc.), an endeavor which had not been taken on before. The Group has been taking advantage of economies of scale by unifying specifications and procurement methods while making market price comparisons for procurement of goods and services that are purchased individually by each department and whose prices and suppliers vary widely. As a result of analyzing accounting data, conducting internal interviews, visualizing indirect material costs, identifying reduction projects, and quantifying reduction potential, the following items were selected as priorities to be addressed: copying costs, printing costs, vehicle leasing costs, moving costs, office rent, and switching from outside payment to in-house production.

The Energy Subcommittee tackled the cost reduction of electricity, steam, and raw fuel used at branch offices and manufacturing plants from both supply and demand perspectives. On the demand side, the subcommittee promoted reductions by promoting “visualization” of consumption, and on the supply side, it reduced raw fuel purchase costs and equipment costs by improving the efficiency of service operations.

The Functional Subcommittee was particularly effective in reducing costs for indirect materials and energy. At that time, procurement of copiers and other equipment was left to each location to decide, but as a result of compilation through SL200, copying costs were successfully reduced to less than 1/3 of the previous level. In addition, by showing the ratio of color copies and single-sided printing for each business side by side, a mechanism was implemented to stimulate cost awareness in the business companies with high ratios.

The voluntary and hard work of each operating company, IT, accounting, human resources, general affairs, etc., working together on both the business and functional axes, bore fruit, and SL200 succeeded in improving the profit structure by approximately 50 billion yen, far exceeding the initial target of 20 billion yen.

However, SL200's achievements were not limited to cost reductions. It has also contributed greatly to the revitalization of cross-sectional ties and connections within the company. The regular meetings and the get-togethers held after the meeting seemed to have provided a good opportunity to promote communication among the planning and management managers of each business.