28 March 2001
Company:
Information Services International - Dentsu, Ltd. (ISID)
Representative: Jutaro Takinami, President & CEO
(Code: 4812, TSE, 1st Section)
Contact: Yutaka Kimura, Senior Executive Director
(Tel.: 03-3228-6160)
ISID and America's ITI agree to set up
joint engineering consultancy company
joint engineering consultancy company
Information Services International - Dentsu, Ltd (ISID, representative: Jutaro Takinami, President & CEO) has announced that it has agreed to set up a joint venture company in Japan with International TechneGroup Inc., (ITI, head office: Milford, Ohio; representative: Dr Jason R. Lemon, Chairman & CEO). Under this agreement, decision reached at a meeting of the ISID board on March 28, 2001, ISID will also acquire shares in ITI.
The key points of the agreement are as follows:
1) A joint company specializing in engineering consultancy will be set up in Japan, with 66% funding from ISID and 34% from ITI.
2) ISID will purchase ITI shares to the value of US$5 million and appoint one outside executive director to ITI board.
("Engineering consultancy" refers to proposing and assisting the implementation of innovation and changes to all manufacturing industry processes; from product development and design through to manufacturing and market introduction.)
[Background and Benefits]
ITI was established in 1983 as an engineering consultancy built primarily centered around a methodology called Concurrent Product/Manufacturing Process Development (CP/PD). ITI used this methodology to provide consulting and technical support services aimed at helping businesses to improve their business processes. The CP/PD methodology uses computer-based IT tools to integrate each of the steps in product development, design, production, supply and distribution, allowing realtime data to be exchanged concurrently between the different steps so that products can be developed and manufactured more efficiently. CP/PD has already been implemented with exceptional results in major corporations such as Hitachi Koki, GE, IBM, Caterpillar and Fiat.
Since ISID first launched its CAE business in 1982, it has provided Japan's manufacturing industry with CAD*1, CAM*2, CAE*3 and PDM*4 software along with full technical support to help businesses implement and make the best possible use of that software. Since 1995, ISID has embarked on as many as 150 engineering consulting projects based on software implementation each year. Under a business alliance established with ITI in 1991, ISID has been supplying ITI's consulting and technical support services, along with the QFD (Quality Function Deployment)*5 software and data exchange software developed by ITI to allow data sharing among different CAD/PDM systems.
As the rationalization of workplaces in the manufacturing industry approaches its limits, ISID has foreseen the following:
- Business will focus on the upstream design and development processes, seeking to cut resources and shorten development times by drastically reforming business processes rather than piling on improvement after improvement.
- Businesses will use simulation techniques based on 3-D design to reduce product trials and redesigning to levels close to zero.
Many corporations have already recognized these trends as a source of competitive strength in the manufacturing industry of the future, and ISID predicts that there will be increasing demand for consulting services in the manufacturing sector.
The decision to establish this joint venture was taken with these trends in mind. The combination of ISID's knowledge and expertise in systems installation and implementation with ITI's skills as business process improvement consultants will establish a new methodology which this joint venture can then build on to achieve real growth in engineering consultancy in Japan. Indeed, the new company, specializing as it will in consultancy to the design and development sectors of the manufacturing industry, will be the first of its kind in Japan.
The operation of the joint venture will be undertaken by ISID, and sales for the new company are expected to reach 1.5 billion yen in the first year and 2 billion yen in the following year.
*1: Computer-aided Design: The use of computers to create product designs and drawings.
*2: Computer-aided Manufacturing: Manufacturing in which the machining data used by machine tools is automatically generated from data created using CAD
*3: Computer-aided Engineering: The process of using models created using CAD to run simulations under actual production conditions and then analyzing and evaluating the results
*4: Product Data Management: A concept in which product data is managed in an integrated way that supports collaboration between engineers.
*5: Quality Function Deployment: A product quality maintenance method in which client requirements regarding product quality and functionality are collated and displayed in a matrix with the technical specifications for the products. The data is then analyzed to determine which requirements should be stressed in view of the strategies of competing companies, and the results are reflected in product development.
[Joint Company Outline]
(1) Company name (title): iTiD Consulting, Ltd.
(2) Main business activities:
- Using the new methodology as a core strategy, provide appropriate support services through consulting for presenting and implementing ways of optimizing all the processes involved in product development, design and market introduction
- Providing appropriate support services for presenting and implementing methods of installing product design and development systems based on 3-D CAD and CAE
- Proposing systems for data exchange applications between differing CAD and PDM systems (Sales of software licenses will continue to be handled by ISID.)
(3) Establishment: May 1, 2001
(4) Head office location: Nakano-ku, Tokyo
(5) Representative: Atsushi Yoshimoto (Chief Technology Officer, ISID Manufacturing Industry Business Operations)
(6) Capital: 300 million yen (ISID 66%, ITI 34%)
(7) Employees: Approx. 30 (28 from ISID at startup)
(8) Settlement term:To the end of March
(9) Expected sales: First year: 1.5 billion yen; 2nd year: 2 billion yen
[Summary of ITI Share Acquisition]
(1) Purpose: To strengthen ISID's ties to its partner company ITI on the establishment of their joint venture in Japan
(2) Investment: US$5 million
(3) Investment mode: Investment being considered via ISID's US arm, ISI-Dentsuu Holdings, Inc (ISID/Holdings). In this event, the investment will take the form of additional investment in ISID/Holdings by ISID.
(4) Other: One outside executive director to be transferred from ISID to ITI
[Timetable]
March 28, 2001: Decision by Board of Directors
May 1, 2001: Joint company established, completion of payment for ITI share acquisition
[Future Outlook]
Because the establishment of the new company falls into the next period, it has no effect on the consolidated results forecast for the current period (ending March 2001).
The consolidated results forecasts for the next and subsequent periods will be released as soon as the outlook is clear.
<ITI Company Outline>
Company name (title): International TechneGroup Incorporated (ITI)
Head office location: 5303 DuPont Circle, Milford, Ohio 45150, U.S.
Representative: Dr Jason R. Lemon, Chairman & CEO
Established: 1983
Capital: US$5,432,533
Sales: US$24.4 million
Employees: Approx. 150
Branches:
US: ITI Head office
UK: ITI UK Ltd
France: ITI France
Germany: ITI Deutschland GmbH
Italy: ITI Italia
Korea: ITI Korea
Switzerland: ITI Switzerland, LtdURL :www.iti-oh.com
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