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Fujitsu plans to slash production costs up to 30%

Japanese technology giant Fujitsu Ltd said yesterday it aims to cut production costs by 30 percent to stay globally competitive and maintain its domestic production.

Fujitsu will restructure its factories in a bid to improve efficiency in making such hardware as servers, large mainframes, external data storage devices and telecommunications equipment, a company spokeswoman said.

The company hopes to compete more effectively with Chinese and Taiwanese-made goods, she said, adding it wanted to reach its goal by March 2006.

"On September 1, we launched a special division to review our domestic production operations," she said. "We want to stay competitive and we want to improve efficiency of our production sites."

The firm intends by the end of fiscal 2005 to halve its factory inventory, the time it takes from receiving orders to completing products, and the manufacturing expenses, the Nihon Keizai Shimbun said.

In order to lower the manufacturing cost of servers, Fujitsu will unify the basic design of its Windows and Linux-compatible models, the paper said. It will also consolidate production of external data storage devices to Fujitsu IT Products Ltd, a main factory for information technology equipment, the newspaper said.

Fujitsu will also receive from Toyota Motor Corp know-how to cut manufacturing cost at key sites, the spokeswoman said.

The reform initiative came less than three weeks after Standard and Poor's downgraded its rating on Fujitsu to "BB plus" from "BBB minus."
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