Foundation of business
1. Although Panasonic enjoys a leading position in the electronic manufacturing industry where it belongs, it cannot sit on its laurels because competitors are also aggressively seeking their own profits. Faced with only a 5 percent profit margin in 2006, Panasonic needed to gain more competitively without increasing its price. Its solution was to reduce company costs while increasing sales. Product development has always put it on the lead but it needed a major improvement in the area of data management to be able to compete better in the field. Because of slow data flow within the company, competitors are able to take advantage of Panasonic’s three to six months lag that occurs during product launches.
2. In 2006, Panasonic’s operating profit margin was only 5 percent despite it’s seemingly massive global business. President Otsubo is facing the task of doubling this by 2010 through reducing company costs and improving sales. However, Panasonic had to rely on various sources of company data that were not in uniformed format nor were these always complete. Language and data format were diverse because of the global nature of the company. Each of the company’s multiple facilities had their own contribution in making raw products
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3. IBM’s Master-Data-Management software addressed this problem by putting uniformity in handling information. This software made it easy for Panasonic to adapt the “push” model of data dissemination instead of its past “pull” model. Now, all information are collected into a centralized data bank using standardized formats. These data are then sent to different employees, retail partners and e-commerce vendors. This resulted to more consistent product rollouts and product information. Using this strategy for 18 months, Panasonic Europe was getting products to market faster utilizing only half their usual time to create and maintain product information. Time to market for a new product was reduced from six months to one or two months. This translated to Panasaonic Eurpe’s being ablet o sace approximately one million euros in a year and a sales increase of 3.5 percent.
4. The challenges that Panasonic faced in implementing the “push” model were the autonomy of the different facilities from which the data would be coming from and the adaptation of the system for manufacturing partners. The different facilities enjoyed their autonomy and were reluctant to release information so easily because this tended to lessen their power. Traditionalists are wary of the scheme because the data that they held may go into wrong hands and be manipulated against the company. Manufacturing partners, especially in Asia, on the other hand, have their own systems of data encoding and storage (most of them still manual processes). Adapting Panasonic’s uniformed data format required adjustment on the part of these manufacturers. However, the effectiveness of the system eventually won over those who partook in Panasonic Europe’s move and found satisfaction in the strategy.