Cost Efficiency Through Expanded In-House Manufacturing and Operational Reform
First written in FY2016. 10 of 33 entries say "Advanced", first in FY2017-Q2. Latest entry: FY2026.
The whole theme swung hardest in 2020: 2 of 18 companies on the "Worse" side.
5 other companies' latest entry also says "Other".
- FY2026Additional measures implemented to address the impact of tariffsAnnual report
「For products destined for Japan, we are transferring production to Asia and establishing a system for direct supply to Japan in order to avoid routing through the United States. We will work to reduce the impact of tariffs and build an efficient supply chain.」
In addition to in-house production, multiple sourcing and regional diversification, the company has set out plans to transfer production to Asia and establish a direct supply system to Japan in response to US reciprocal tariffs. - FY2026-H1Cost ratio deteriorated due to tariffs and supply prioritisation measuresAnnual report
「Cost of sales increased to ¥4,582 million, up 6.3% from ¥4,310 million in the same period of the previous year, due to higher procurement costs, including the impact of US reciprocal tariffs on procurement from Europe and Taiwan, as well as higher indirect costs such as labour costs associated with supply prioritisation measures, which raised in-house manufacturing costs. As a result, the cost of sales ratio was 39.5%, compared with 36.5% in the same period of the previous year.」
Higher procurement costs and increased indirect costs associated with supply prioritisation measures raised in-house manufacturing costs, causing the cost of sales ratio to deteriorate from 36.5% to 39.5%. - FY2025-H1Cost of sales ratio rose while SG&A-to-sales ratio declinedAnnual report
「The cost of sales ratio was 36.5% (35.9% in the previous year) due to higher procurement costs associated with inflation in the U.S. and the weaker yen, among other factors. Selling, general and administrative expenses increased to ¥6,837 million, up 6.7% year on year, as commissions and royalties accompanying the increase in U.S. sales and personnel expenses resulting from wage increases rose. The SG&A-to-sales ratio was 57.9% (58.5% in the previous year).」
While the cost of sales ratio rose year on year due to higher procurement costs driven by inflation and the weaker yen, the SG&A ratio to net sales declined from 58.5% to 57.9%. Cost-efficiency measures varied by expense category. - FY2024Cost-reduction measures given concrete form through the SAICO Project and other initiativesAnnual report
「To improve profitability through initiatives including the SAICO Project (Strategic Actionable Initiatives for Cost Optimization), we will implement the following measures: 1. Reduce costs by expanding the in-house manufacturing ratio. 2. Strengthen supply-chain resilience by purchasing from multiple suppliers (contract manufacturers) in the U.S. 3. Reduce costs by expanding outsourcing to suppliers in Asia and Europe. 4. Improve profitability by increasing the sales ratio of proprietary products. 5. Reduce capital investment and expenses (depreciation) by lowering the cost of medical instruments through the use of the Chinese joint venture WOMA (Changzhou Waston Ortho Medical Appliance Co., Limited).」
In addition to the previous initiatives to expand in-house manufacturing and reform operations, measures were given concrete form under the SAICO Project, including in-house production, purchasing from multiple suppliers, procurement from Asia and Europe, increasing the proprietary product ratio, and use of the Chinese joint venture. - FY2024-Q3The cost of sales ratio and SG&A-to-sales ratio worsened due to greater use of external vendors, inflation, the weaker yen and other factorsAnnual report
「The cost of sales ratio was 36.0% (34.1% in the same quarter of the previous year) due to the use of external vendors to avoid supply-chain problems, higher procurement costs resulting from inflation, the weaker yen, lower reimbursement prices in Japan and other factors. Selling, general and administrative expenses increased as commissions and royalties accompanying the increase in U.S. sales, research and development expenses, personnel expenses following wage increases, and sales promotion expenses including customer seminars held every other year by the U.S. subsidiary all rose. Total selling, general and administrative expenses increased 10.4% year on year to ¥9,694 million, partly because U.S. expenses increased on a yen-translated basis due to the weaker yen. The SG&A-to-sales ratio was 57.0% (56.2% in the same quarter of the previous year).」
While external vendors were used to avoid supply-chain problems, the cost of sales ratio rose to 36.0% and the SG&A-to-sales ratio to 57.0% due to inflation, the weaker yen, lower reimbursement prices, and higher personnel expenses and other costs. - FY2024-Q2The cost of sales ratio and SG&A-to-sales ratio worsened due to greater use of external vendors, inflation, the weaker yen and other factorsAnnual report
「The cost of sales ratio was 35.9% (33.7% in the same quarter of the previous year) due to the expanded use of external vendors to avoid supply-chain problems, higher procurement costs resulting from inflation, the weaker yen, lower reimbursement prices in Japan and other factors. Selling, general and administrative expenses increased as commissions and royalties accompanying the increase in U.S. sales, research and development expenses, personnel expenses following wage increases, and sales promotion expenses including customer seminars held every other year by the U.S. subsidiary all rose. Total selling, general and administrative expenses increased 12.5% year on year to ¥6,405 million, partly because U.S. expenses after translation into yen increased due to the weaker yen. The SG&A-to-sales ratio was 58.5% (57.0% in the same quarter of the previous year).」
While measures including greater use of external vendors were implemented to avoid supply-chain problems, the cost of sales ratio rose from 33.7% to 35.9% and the SG&A-to-sales ratio from 57.0% to 58.5% due to higher procurement costs resulting from inflation, the weaker yen, lower reimbursement prices, wage increases and other factors. - FY2024-Q1Expense ratios worsened due to the weaker yen, lower reimbursement prices and the strengthening of the business structure, among other factorsAnnual report
「The cost of sales ratio was 35.4% (33.4% in the same quarter of the previous year) due to the weaker yen, lower reimbursement prices in Japan and other factors. Total selling, general and administrative expenses increased 10.3% year on year to ¥3,142 million as commissions and royalties accompanying the increase in U.S. sales, personnel expenses associated with strengthening the business structure, research and development expenses for new products, and sales promotion expenses including customer seminars held every other year by the U.S. subsidiary all increased. U.S. expenses after translation into yen also increased due to the weaker yen. The SG&A-to-sales ratio was 58.2% (56.7% in the same quarter of the previous year).」
The cost of sales ratio rose from 33.4% to 35.4% and the SG&A-to-sales ratio from 56.7% to 58.2%. The stated factors included the weaker yen, lower reimbursement prices, the strengthening of the business structure, new-product research and development, and higher expenses associated with holding seminars, among others. - FY2023-Q3Expense ratios worsened due to the weaker yen, lower reimbursement prices and the strengthening of the business structureAnnual report
「The cost of sales ratio was 34.1% (32.1% in the same quarter of the previous year) due to the weaker yen, lower reimbursement prices in Japan and other factors. Total selling, general and administrative expenses increased 17.0% year on year to ¥8,784 million as personnel expenses and other costs rose with the strengthening of the business structure in Japan, commissions and royalties increased with the rise in U.S. sales, and U.S. expenses after translation into yen increased due to the weaker yen. The SG&A-to-sales ratio was 56.2% (53.7% in the same quarter of the previous year).」
The cost of sales ratio rose from 32.1% in the previous year to 34.1%, while the SG&A-to-sales ratio rose from 53.7% to 56.2%. The stated factors included the weaker yen, lower reimbursement prices, the strengthening of the business structure in Japan, and higher commissions associated with U.S. sales. - FY2023-Q2Expense ratios worsened due to the weaker yen, lower reimbursement prices and the strengthening of the business structureAnnual report
「The cost of sales ratio was 33.7% (32.2% in the same quarter of the previous year) due to the weaker yen, lower reimbursement prices in Japan and other factors. Total selling, general and administrative expenses increased 15.1% year on year to ¥5,691 million as personnel expenses and other costs rose with the strengthening of the business structure in Japan, commissions and royalties increased with the rise in U.S. sales, and U.S. expenses after translation into yen increased due to the weaker yen. The SG&A-to-sales ratio was 57.0% (55.8% in the same quarter of the previous year).」
The cost of sales ratio rose from 32.2% to 33.7% and the SG&A-to-sales ratio from 55.8% to 57.0%. The stated factors included the weaker yen, lower reimbursement prices, the strengthening of the business structure in Japan, and higher expenses associated with U.S. sales. - FY2023-Q1Weaker yen and revised reimbursement prices worsened the cost of sales ratio and SG&A-to-sales ratioAnnual report
「The cost of sales ratio was 33.4% (32.0% in the same quarter of the previous year) due to the weaker yen, revisions to reimbursement prices in Japan and other factors. Total selling, general and administrative expenses increased 12.5% year on year to ¥2,849 million, partly because U.S. expenses after translation into yen increased due to the weaker yen, and the SG&A-to-sales ratio rose to 56.7% (55.8% in the same quarter of the previous year).」
The cost of sales ratio rose from 32.0% to 33.4% due to the weaker yen and revisions to reimbursement prices in Japan, while the SG&A-to-sales ratio rose from 55.8% to 56.7% as the weaker yen increased U.S. expenses after translation into yen, among other factors. - FY2022-Q3SG&A-to-sales ratio improved while cost of sales ratio roseAnnual report
「The cost of sales ratio was 32.1% (31.9% in the same quarter of the previous year) due to the impact of exchange-rate movements and other factors. Total selling, general and administrative expenses increased 10.2% year on year to ¥7,506 million due to higher commissions and royalties accompanying the increase in U.S. sales and higher personnel expenses and other costs following the strengthening of the business structure, but the SG&A-to-sales ratio declined to 53.7% (55.4% in the same quarter of the previous year).」
The SG&A-to-sales ratio improved from 55.4% to 53.7%, while the cost of sales ratio rose from 31.9% to 32.1% due to exchange-rate movements and other factors. - FY2022-Q2SG&A-to-sales ratio improved while cost of sales ratio worsenedAnnual report
「The ratio of sales from proprietary products reached 79.6% due to the recovery in U.S. sales and other factors, but the cost of sales ratio was 32.2% (32.0% in the same quarter of the previous year) due to the impact of exchange-rate movements and other factors. Total selling, general and administrative expenses increased 11.2% year on year to ¥4,943 million due to higher commissions and royalties accompanying the increase in U.S. sales and higher personnel expenses and other costs following the resumption and strengthening of sales activities. The SG&A-to-sales ratio declined to 55.8% (57.4% in the same quarter of the previous year).」
Although expenses increased following the resumption and strengthening of sales activities, the SG&A-to-sales ratio improved. However, the cost of sales ratio rose year on year due to exchange-rate movements and other factors. - FY2022-Q1AdvancedAnnual report
「The cost of sales ratio was 32.0% (32.3% in the same quarter of the previous year) as the ratio of sales from proprietary products reached 80.1% due to the recovery in U.S. sales and other factors. Total selling, general and administrative expenses were ¥2,532 million, up 22.6% year on year, due to higher commissions and royalties accompanying the increase in U.S. sales and higher personnel expenses and other costs following the resumption and strengthening of sales activities. The SG&A-to-sales ratio declined to 55.8% (60.6% in the same quarter of the previous year).」
The cost of sales ratio declined from 32.3% to 32.0% and the SG&A-to-sales ratio from 60.6% to 55.8%. Expense ratios improved despite higher expenses associated with the resumption and strengthening of sales activities. - FY2021-Q3Cost of sales ratio worsened while SG&A-to-sales ratio improvedAnnual report
「The cost of sales ratio worsened to 31.9% (28.6% in the same quarter of the previous year) due to the decline in the ratio of sales from proprietary products resulting from lower U.S. sales caused by the COVID-19 pandemic, among other factors. Total selling, general and administrative expenses declined 10.4% year on year to ¥6,813 million as commissions and royalties fell with the decline in U.S. sales, while travel expenses and sales promotion expenses declined because operating activities were restricted by the COVID-19 pandemic. The SG&A-to-sales ratio declined to 55.4% (56.3% in the same quarter of the previous year).」
The cost of sales ratio worsened from 28.6% to 31.9% due to lower U.S. sales and other factors, while the SG&A-to-sales ratio declined from 56.3% to 55.4% due to lower expenses resulting from restrictions on operating activities. - FY2021-Q2COVID-19 caused the cost of sales ratio and SG&A-to-sales ratio to worsenAnnual report
「The cost of sales ratio worsened to 32.0% (28.9% in the same quarter of the previous year) due to factors including the decline in the ratio of sales from proprietary products. Total selling, general and administrative expenses declined 10.7% year on year to ¥4,446 million as commissions and royalties fell with the decline in U.S. sales, while travel expenses and sales promotion expenses declined because operating activities were restricted by the COVID-19 pandemic. The SG&A-to-sales ratio was 57.4% (56.7% in the same quarter of the previous year).」
Although total SG&A expenses declined, the SG&A-to-sales ratio worsened from 56.7% to 57.4% and the cost of sales ratio from 28.9% to 32.0% due to the decline in sales. - FY2021-Q1Expense efficiency worsened as sales declined due to COVID-19Annual report
「The cost of sales ratio was 32.3% (29.0% in the same quarter of the previous year) due to factors including the decline in the ratio of sales from proprietary products. Total selling, general and administrative expenses declined 15.8% year on year to ¥2,066 million due mainly to lower commissions and royalties associated with the decline in U.S. sales, but the SG&A-to-sales ratio rose to 60.6% (56.2% in the same quarter of the previous year).」
Although total SG&A expenses declined, the SG&A-to-sales ratio worsened from 56.2% to 60.6% and the cost of sales ratio from 29.0% to 32.3% due to the decline in sales. - FY2020AdvancedAnnual report
「Although the cost of sales ratio was adversely affected by factors including phased reductions in reimbursement prices in Japan and the lower ratio of sales from proprietary products, the benefits of lower manufacturing costs from expanded in-house manufacturing capacity at the U.S. subsidiary and stronger overseas procurement reduced the cost of sales ratio to 29.2% (29.4% in the previous consolidated fiscal year). Total selling, general and administrative expenses increased 6.1% from the previous consolidated fiscal year to ¥10,159 million due mainly to higher commissions and depreciation, but the SG&A-to-sales ratio declined to 56.2% (57.2% in the previous consolidated fiscal year).」
Expanded in-house manufacturing capacity at the U.S. subsidiary and stronger overseas procurement improved the cost of sales ratio from 29.4% to 29.2% and the SG&A-to-sales ratio from 57.2% to 56.2%. - FY2020-Q3AdvancedAnnual report
「The cost of sales ratio declined to 28.6% (29.3% in the same quarter of the previous year) due to lower manufacturing costs resulting from expanded in-house manufacturing capacity at the U.S. subsidiary and stronger overseas procurement. Total selling, general and administrative expenses increased 10.2% year on year to ¥7,601 million due mainly to higher commissions and depreciation, but the SG&A-to-sales ratio declined to 56.3% (57.3% in the same quarter of the previous year).」
The benefits of lower manufacturing costs from expanded in-house manufacturing capacity at the U.S. subsidiary and stronger overseas procurement continued, reducing the cost of sales ratio from 29.3% to 28.6% and the SG&A-to-sales ratio from 57.3% to 56.3%. - FY2020-Q2AdvancedAnnual report
「Although the ratio of sales from proprietary products declined to 83.0% (87.6% in the same quarter of the previous year), the cost of sales ratio was 28.9% (29.0% in the same quarter of the previous year) due to lower manufacturing costs resulting from expanded in-house manufacturing capacity at the U.S. subsidiary and stronger overseas procurement. Total selling, general and administrative expenses increased 10.6% year on year to ¥4,982 million due mainly to higher commissions and depreciation, but the SG&A-to-sales ratio declined to 56.7% (59.6% in the same quarter of the previous year).」
The benefits of lower manufacturing costs from expanded in-house manufacturing capacity and stronger overseas procurement continued, improving the cost of sales ratio from 29.0% to 28.9%. The SG&A-to-sales ratio also declined from 59.6% to 56.7%, while the proprietary product ratio declined. - FY2020-Q1Lower manufacturing costs helped, but the cost of sales ratio worsened as the proprietary product ratio declined, while the SG&A-to-sales ratio improvedAnnual report
「Although the cost of sales ratio benefited from lower manufacturing costs resulting from expanded in-house manufacturing capacity in North America and stronger overseas procurement, it was 29.0% (28.4% in the same quarter of the previous year) due to the decline in the ratio of sales from proprietary products to 83.3% (88.0% in the same quarter of the previous year) and the impact of lower reimbursement prices. Total selling, general and administrative expenses increased 9.7% year on year to ¥2,454 million due mainly to higher commissions and depreciation, but the SG&A-to-sales ratio declined to 56.2% (59.4% in the same quarter of the previous year).」
Despite the benefit of lower manufacturing costs, the cost of sales ratio worsened from 28.4% to 29.0% due to the lower ratio of sales from proprietary products and lower reimbursement prices. Meanwhile, the SG&A-to-sales ratio improved from 59.4% to 56.2%. - FY2019-Q3Cost of sales ratio worsened while SG&A-to-sales ratio improvedAnnual report
「The cost of sales ratio was 29.3% (27.6% in the same quarter of the previous year), reflecting the decline in the ratio of sales from proprietary products to 86.6% (89.2% in the same quarter of the previous year) and the impact of lower reimbursement prices. Total selling, general and administrative expenses increased 11.4% year on year to ¥6,896 million due mainly to higher salaries and allowances and commissions, but the SG&A-to-sales ratio declined to 57.3% (58.2% in the same quarter of the previous year).」
The cost of sales ratio worsened from 27.6% to 29.3% due to the lower ratio of sales from proprietary products and lower reimbursement prices, while the SG&A-to-sales ratio improved from 58.2% to 57.3%. - FY2019-Q2Cost of sales ratio worsened while SG&A-to-sales ratio improvedAnnual report
「The cost of sales ratio was 29.0% (27.5% in the same quarter of the previous year), reflecting the decline in the ratio of sales from proprietary products to 87.6% (89.4% in the same quarter of the previous year) and the impact of lower reimbursement prices. Total selling, general and administrative expenses increased 13.1% year on year to ¥4,502 million due mainly to higher salaries and allowances and commissions, but the SG&A-to-sales ratio declined to 59.6% (60.2% in the same quarter of the previous year).」
The cost of sales ratio worsened from 27.5% to 29.0% due to the lower ratio of sales from proprietary products and lower reimbursement prices, while the SG&A-to-sales ratio improved from 60.2% to 59.6%. - FY2019-Q1Efficiency gains receded as the proprietary product ratio declined and the SG&A-to-sales ratio roseAnnual report
「The cost of sales ratio was 28.4% (27.5% in the same quarter of the previous year), reflecting the decline in the ratio of sales from proprietary products to 88.0% (89.7% in the same quarter of the previous year) and the impact of lower reimbursement prices. Total selling, general and administrative expenses increased 12.7% year on year to ¥2,236 million due mainly to higher salaries and allowances and commissions, while the SG&A-to-sales ratio was 59.4% (58.9% in the same quarter of the previous year).」
The ratio of sales from proprietary products declined from 89.7% to 88.0%, and the cost of sales ratio rose from 27.5% to 28.4%. The SG&A-to-sales ratio also rose from 58.9% to 59.4% due to higher salaries and commissions, among other factors. - FY2018-Q3Manufacturing cost ratio improved while SG&A-to-sales ratio worsenedAnnual report
「Despite the effects of the weaker yen and lower reimbursement prices, the cost of sales ratio improved to 27.6% (27.8% in the same quarter of the previous year), reflecting lower manufacturing costs and the rise in the ratio of sales from proprietary products to 89.2% (87.5% in the same quarter of the previous year). Total selling, general and administrative expenses increased 9.2% year on year to ¥6,192 million due mainly to higher salaries and allowances resulting from increased staffing to strengthen sales capabilities in Japan and the U.S., higher depreciation resulting from an increase in loaned medical instruments to promote sales of new and existing products since the third quarter of the previous year, higher commissions due to increased U.S. sales, and the increase in U.S. selling, general and administrative expenses after translation into yen due to the weaker yen. The SG&A-to-sales ratio was 58.2% (57.3% in the same quarter of the previous year).」
The cost of sales ratio improved from 27.8% to 27.6% due to lower manufacturing costs and the higher ratio of proprietary products, while the SG&A-to-sales ratio worsened from 57.3% to 58.2% due to higher expenses associated with strengthening sales capabilities and expanding sales. - FY2018-Q2Manufacturing cost ratio improved while SG&A-to-sales ratio worsenedAnnual report
「Despite the effects of the weaker yen and lower reimbursement prices, the cost of sales ratio improved to 27.5% (27.9% in the same quarter of the previous year), reflecting lower manufacturing costs and the rise in the ratio of sales from proprietary products to 89.4% (87.3% in the same quarter of the previous year). Total selling, general and administrative expenses increased 6.1% year on year to ¥3,980 million due mainly to higher salaries and allowances resulting from increased staffing to strengthen sales capabilities in Japan and the U.S., higher depreciation resulting from an increase in loaned medical instruments to promote sales of new and existing products since the third quarter of the previous year, higher commissions due to increased U.S. sales, and the increase in U.S. selling, general and administrative expenses after translation into yen due to the weaker yen. The SG&A-to-sales ratio was 60.2% (58.7% in the same quarter of the previous year).」
The manufacturing cost ratio improved from 27.9% to 27.5%, while the SG&A-to-sales ratio worsened from 58.7% to 60.2% due to higher expenses associated with strengthening sales capabilities and expanding sales. Progress in cost efficiency varied by expense category. - FY2018-Q1AdvancedAnnual report
「As a result, despite lower reimbursement prices, the cost of sales ratio improved to 27.5% (29.3% in the same quarter of the previous year), reflecting the effect of lower manufacturing costs and the rise in the ratio of sales from proprietary products to 89.7% (87.1% in the same quarter of the previous year).」
The cost of sales ratio improved from 29.3% to 27.5% due to lower manufacturing costs and the higher ratio of proprietary products. The SG&A-to-sales ratio also improved from 60.1% to 58.9%. - FY2017AdvancedAnnual report
「We will seek to reduce manufacturing costs by expanding in-house manufacturing capacity and achieve further improvements in cost efficiency through the use of IT and a review of business processes. Total selling, general and administrative expenses increased 4.0% from the previous consolidated fiscal year to ¥7,798 million, due mainly to higher salaries and allowances and increased sales promotion expenses, but the SG&A-to-sales ratio was 57.2% (57.6% in the previous consolidated fiscal year).」
The cost-efficiency measures were reiterated, while the full-year SG&A-to-sales ratio improved from 57.6% to 57.2%. - FY2017-Q3AdvancedAnnual report
「As a result, the ratio of sales from proprietary products rose to 87.5% (85.1% in the same quarter of the previous year), and the cost of sales ratio was 27.8% (29.0% in the same quarter of the previous year), despite a reduction in reimbursement prices, partly due to the stronger yen and other factors.」
Against a backdrop of the higher ratio of sales from proprietary products and the stronger yen, the cost of sales ratio declined from 29.0% to 27.8% despite the impact of lower reimbursement prices. The results of cost-efficiency initiatives are reflected in the figures. - FY2017-Q2AdvancedAnnual report
「As a result, the ratio of sales from proprietary products rose to 87.3% (85.0% in the same quarter of the previous year), while the cost of sales ratio was 27.9% (29.0% in the same quarter of the previous year), partly due to the stronger yen and other factors.」
The cost of sales ratio declined from 29.0% in the same quarter of the previous year to 27.9%, reflecting the higher ratio of sales from proprietary products and the stronger yen. - FY2016First statedAnnual report
「Further cost efficiencies: We will seek to reduce manufacturing costs by expanding in-house manufacturing capacity and achieve further improvements in cost efficiency through the use of IT and a review of business processes.」
Measures also include diversifying procurement sources in Japan and overseas, negotiating with existing procurement sources, and simplifying administrative processing through IT.