Page 48 - KRA Annual Report 2020

KRA ANNUAL REPORT Key
2020 Highlight

COST REDUCTION PERFORMANCE

FY2020 was a year full of challenges where sales tended to decrease and the component sales
composition has changed. In order to achieve the target cost reduction, KRA has made improvements in all
lines, not only focusing on reducing part costs (salvaging), but also making improvements to processes
(Machining / Fabrication), utilities and consumable good

COST REDUCTION ACHIEVEMENT FY2020

In the part cost, the expansion of salvaging to non-HD
components, expansion of salvaging on non-metal parts
and expansion of cooperation with the Komatsu Group to
accelerate salvaging research
In the process, parts were moved from the vendor to the In-
House Machining with a more efficient process and better
quality, so the cost can be reduced.

For consumable-good, the effort for more competitive
sourcing has been carried out by prioritizing quality as well
as tight control for the consumption level.

By above several improvement activities, KRA can achieve
the target cost reduction 2.7% (as SVC ratio), significantly
increase compare to previous year, although achieve 56%
only if compare to BP20

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