R&D Function Strategy
Haruo Ogawa
Head of R&D GroupOlympus Corporation
March 30, 2016

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development Process
Strategy)
6. Appropriate Resource Allocation (R&D Resource Shift)2

2016/3/30

No data copy / No data transfer permitted

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development ProcessStrategy)
6. Appropriate Resource Allocation (R&D Resource Shift)3

2016/3/30

No data copy / No data transfer permitted

１．Current Conditions and Issues
Medical: Importance of value with high economic benefits, medical effects, and patient satisfaction
 Pursuit of customer value related to early diagnosis and minimally invasive treatments••

Further evolve endoscope technologies and strengthen lineups of endoscope ET devices, therapeuticenergy devices, etc.
Formulate new medical solutions for realizing customer value

Shared: Appearance of “innovatorʼs dilemmas” resulting from new technological revolutions
 Transition from process innovation era to product and business innovation era•

Redefine “Business to Specialist” business processes (utilize ICT, etc.)

 Shift from Japanese-style technology development to global R&D•

Position as growth businesses treatment technologies of Medical Business and nondestructive testing
technologies of Scientific Solutions Business

Shared: Improvement of development efficiency through cross-business application of technologies
 Utilization of 4K and 8K technologies, robotics technologies, deep learning, ICT, and othertechnology trends•42016/3/30

Proactively apply advanced Imaging Business technologies to Medical Business and Scientific Solutions
Business and form alliances with other companies

No data copy / No data transfer permitted

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development ProcessStrategy)
6. Appropriate Resource Allocation (R&D Resource Shift)5

2016/3/30

No data copy / No data transfer permitted

２．R&D and Manufacturing Strategy Framework
Management Strategy
Business Strategies (5 Medical BUs, Scientific Solutions, Imaging, Business Development)
R＆D Function Strategy
Businessfieldstrategies

Manufacturing Function Strategies

R＆D and Manufacturing function strategies for business fields

Core technology based on customersʼ requirements / Requirements for manufacturing

R＆D and Manufacturing common function strategy

Functionalenhancement
strategies

Core technology management／Streamlining a V-model development process/ Human resource acquisition and development / Human resource allocation

R＆D functional enhancement strategy

Manufacturing functional enhancement strategy

Fundamental technology strategy (products)

Fundamental technology strategy (manufacturing)

Global R&D / R&D Support Infrastructure

Fundamental
technology
strategies

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Product basic technology / SW＆ICT / IP strategy

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Global Manufacturing Landscape / Procurement

Production technology / Manufacturing technology/ Solution technology

２．R&D and Manufacturing Strategy Framework
Relationship to management targets
Strategyframework

Business fieldtechnology
development
function strategies

Capital efficiency

Development efficiency
improvement

MedicalScientificSolutions
ImagingFunctional
enhancement
strategies
Basictechnology

Fundamental
technology
strategies

Productiontechnology
Manufacturingtechnology
Solutions
technology

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Profitability

Cost of sales ratio
reduction

Business growth
Sales expansion

Business growth
Preparations for newbusinesses

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development Process
Strategy)
6. Appropriate Resource Allocation (R&D Resource Shift)8

2016/3/30

No data copy / No data transfer permitted

３．Technology Development Function Enhancement Strategy

V-modeldevelopment
process

Core technologymanagement

Strategies for enhancing R&D functionsof R&D Group and Manufacturing Group

GlobalR&Dsystem

Securing anddevelopmentof strategic
humanresources9

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Optimal
R&D
resources

Development
supportinfrastructure
establishment

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development Process
Strategy)
6. Appropriate Resource Allocation (R&D Resource Shift)10

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No data copy / No data transfer permitted４．Core Technology Management Strategy

Ⅰ. Accesstechnologies

Ⅱ. Imaging
and sensing
technologies

Optical Technologies
Electronic Imaging Technologies
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Ⅲ.Recognition
and analysis
technologies

Ⅳ. Treatment
andtherapeutictechnologies

OPTO-DIGITAL Technology

Ⅴ. Report andevidence
technologies

Precision Technologies
Biological Based Technologies

４．Core Technology Management Strategy：I. Access technologies

Ⅰ. Access technologies:
Expand range of diagnosis, inspection, and imaging through usage of ultracompact actuators, etc.

Endoscopic diagnosis:

Expand range of diagnosis by further reducing diameter,
improving bend operability, and employing motor-driven
insertion technologies

Industrial videoscope inspection：

Expand range of inspections by evolving remote observation
technologies

DSLR camera photography:

Expand range of photography with compact,
lightweight design; dust/splash proof systems;
high-speed autofocus; and powerful image stabilizers

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４．Core Technology Management Strategy：Ⅱ. Imaging and sensing technologies

Ⅱ. Imaging and sensing technologies:
Strengthen diagnosis, examination, and imaging functions with 4K and 8K resolutions,
3D imaging, specific light spectra observation, live image retrieval, image merging, etc.
Endoscopic diagnosis and treatment:

Enhance ability to diagnose cancer with 4K images,
image highlighted observation, and magnified endoscopic
observation; enable visualization behind scope withultrawide angle colonoscopes; and improve operability
for localized endoscopic treatment with 3D images

Real-time live cell observation:

Decipher brain functions in regenerative medicine researchwith 4K images, live image retrieval, 3D observation,and special laser light observation

Application to photography underspecial conditions:

Enhance macro photographs with Focus Stacking, photographstarry nights with Live Composite, and take 4K and 8K videos

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４．Core Technology Management Strategy：Ⅲ. Recognition and analysis technologies

Ⅲ. Recognition and analysis technologies:
Utilize deep learning to substantially improve image diagnosis and inspection and analysis capabilities

Improved lesion detection capabilities:

Support lesion detection and reduce false diagnosis rates
by utilizing similar image analysisFailure analysis through nondestructive testing：

Predict failures and facilitate optimal maintenance by improving
analysis capabilities

Standardobservation

NBI

NBI (magnified)

Images provided by National Cancer Center Hospital East

*NBI（Narrow Band Imaging）

Defect analysis with industrial inspection
equipment:
Classify defects by categorizing retrieved images

Drug discovery screening throughcell observation:

Provide solutions with live cell observation and image analyses
Samples provided by Dr. Mike Davidson
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４．Core Technology Management Strategy：Ⅳ. Treatment and therapeutic technologies

Ⅳ. Treatment and therapeutic technologies:

Reduce patient burden with localized treatments that utilize treatment, therapeutic, disposable device, robot,
and energy device technologies in accordance with procedure based medical business model

Localized endoscopic treatment:

Expand disposable ET device lineup; increase value related tohemostasis, stone destruction, and other areas; and extend
application to orthopedics

Surgical energy device treatment:

Expand application of THUNDERBEAT surgical energy device,
reduce surgeon burden with surgery support robots,and develop energy devices for localized treatment
in ENT and Urology / Gynecology fields

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４．Core Technology Management Strategy：Ⅴ. Report and evidence technologies

Ⅴ. Report and evidence technologies:

Strengthen medical RA functions and utilize ICT to create business models

Diagnosis and treatment evidence:

Address diagnosis and treatment guidelines by strengthening
evidence acquisition systems and ensure safety and peace ofmind

ICT for medical information:

Utilize endoscopic workflow information, support inspections(image records and cleaning history), and create procedure
based medical business model

Initialdiagnosis

CloudInformation
sharing

Surgicaltreatment

ICT for Scientific Solutions Business solutions:

Save large quantities of data, utilize data for maintenance,
create reports, and realize operation via tablets

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Environment analysis

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development Process
Strategy)
6. Appropriate Resource Allocation (R&D Resource Shift)17

2016/3/30

No data copy / No data transfer permitted

５．New Technology Acquisition (V-Model Development Process Strategy)
Process for clarifying concept and feasibility (innovations)
Creation of new business concepts
Identification of major technology issues
Rapid POC（Proof of Concept)

R&D
Rapid POC
Core technology
development

Concurrent development encompassing production andmanufacturing technologies

Quality creation process

Validate

Customerrequirements

Productdevelopment

Quality/service
requirements
Module design
requirements

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Quality verification
process次期製品技術開発

VerifyCustomersatisfaction
evaluation
Product/service
evaluation

VerifyModule evaluation

Todayʼs Agenda
1. Current Conditions and Issues
2. R&D and Manufacturing Strategy Framework
3. Technology Development Function Enhancement Strategy
4. Core Technology Management Strategy
5. New Technology Acquisition (V-Model Development Process
Strategy)
6. Appropriate Resource Allocation (R&D Resource Shift)19

2016/3/30

No data copy / No data transfer permitted

６．Appropriate Resource Allocation (R&D Resource Shift)
Establishment of matrix-style organization system that allows for flexible resource shifts
 Prior lack of inter-business resource shifts••

Lacked ability to respond to rapid market contraction in Imaging Business
Recognized importance of shifting resources to growth businesses for realizing organic growth

Increased allocation of resources to treatment technologies and strengthening of global R&D
 Rectification of 6:4 diagnosis technology to treatment technology resource
allocation ratio by increasing allocation of resources to treatment technologies••

Strengthen R&D systems that focus on treatment technologies in Europe and U.S.
Enhance disposable device startup and manufacturing capabilities (low-cost massproduction and automation)

Strengthening of RA capabilities
 Need for enhanced product registration capabilities to respond to productregulation changes in various countries•

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Shift from product development systems focused on new products to systems considering
product life cycle management

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６．Appropriate Resource Allocation (R&D Resource Shift)

Utilization of Imaging Business technologies in other businesses Advanced digital technologies

 Utilization in Scientific Solutions Business•••

High-resolution displays and EVF devices
AF and IS technologies for 4K imaging• Low-cost production and designcapabilities••

Low-cost mass production technologies
Composite part integration technologies

 Mobile technologies••

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Energy-efficient designs (mobile batteries)
Wireless and cloud capabilities

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Application of devices to scientific inspection
equipment
Realization of 4K microscopes and industrial
endoscopes

 Utilization in Medical Business••

Mass production of disposable devices
Development of low-cost energy devices

 Utilization in Scientific Solutions Businessand Medical Business••

Development of mobile (compact) products
Storage of acquired data in cloud servers