Excess Demand Relative to Contracted Services Capacity and Deterioration in Project Quality
First written in FY2018. 3 of 6 entries say "Mitigated", first in FY2019-Q1. Latest entry: FY2022.
The whole theme swung hardest in 2017: 9 of 31 companies on the "Worse" side.
15 other companies' latest entry also says "Mitigated".
- FY2022MitigatedAnnual report
「Regarding service quality, we are taking measures to mitigate the impact on operating results, financial position and other matters by focusing on improving project quality through the establishment of a quality management department and by obtaining insurance to prepare for unforeseen events.」
Measures to mitigate the impact of risks including estimation discrepancies, technical problems and delivery delays in contracted services through a quality management department and insurance were specified. - FY2020RestatedAnnual report
「Regarding service delivery capacity, we are working to respond to fluctuations in orders by outsourcing to external partner companies and to improve service quality and delivery capacity for customers through alliances. However, if these partnerships do not progress as planned, they may affect operating results and financial position.」
The risks of demand exceeding contracted-service delivery capacity, uncertainty surrounding outsourcing and alliances, and deteriorating project profitability due to complex requirements continued to be disclosed. - FY2019-Q3RestatedAnnual report
「In addition, efforts to shift toward contract structures centered on quasi-mandate agreements reduced the risks associated with undertaking projects and restrained the occurrence of unprofitable projects, contributing to a substantial increase in operating income to ¥546 million, up 142.2% year on year.」
The company continued to explain that shifting toward contract structures centered on quasi-mandate agreements reduced the risks associated with undertaking projects and restrained the occurrence of unprofitable projects. - FY2019-Q2MitigatedAnnual report
「In addition, efforts to shift toward contract structures centered on quasi-mandate agreements reduced the risks associated with undertaking projects and restrained the occurrence of unprofitable projects, contributing to operating income of ¥313 million, up 203.5% year on year.」
The company continued to explain that shifting toward contract structures centered on quasi-mandate agreements reduced the risks associated with undertaking projects and restrained the occurrence of unprofitable projects. - FY2019-Q1MitigatedAnnual report
「In addition, efforts to shift toward contract structures centered on quasi-mandate agreements reduced the risks associated with undertaking projects and restrained the occurrence of unprofitable projects, contributing to operating income of ¥102 million, up 370.2% year on year.」
The company stated that shifting toward contract structures centered on quasi-mandate agreements restrained the risks associated with undertaking projects and the occurrence of unprofitable projects. - FY2018First statedAnnual report
「Because the amount and frequency of orders are unclear, there may be cases in which demand exceeds our service delivery capacity depending on circumstances, preventing us from accepting orders from customers and resulting in lost sales opportunities. In addition, although we have established a specialized project quality management department to strengthen project management and pay close attention to project profitability, if obstacles exceeding the expectations of the Group or estimation errors caused by changes in specifications or delivery schedules arise as a result of increasingly advanced and complex project requirements, project profitability may deteriorate or projects may become loss-making, potentially affecting the Group's operating results and financial position.」
New risks were identified, including lost opportunities caused by demand exceeding the supply capacity for contracted services and deteriorating profitability or losses resulting from complex project requirements and specification changes. Outsourcing and alliances, together with management by a specialized department, were described as countermeasures.