- Solution vs Commodity business. - For every Omron commodity product, the market - It is becoming easier to find them

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2 Introduction - Solution vs Commodity business - Commodity products are easy to compare - For every Omron commodity product, there is lower cost alternative available on the market - It is becoming easier to find them

3 Let s have a look at example - If customer wants to buy industrial i timer Why would he consider buying more expensive product?

4 Because of the total value of the product -Very good quality of the product? -Worldwide organization and product availability? -Ability to source all control components from one supplier? -Technical support?

5 We ll try to answer this question by introducing T.S.O.P. Tateisi Standard for Operations & Procedures

6 Omron was founded in 1933, by Dr. Kazuma Tateisi. Almost 70 years of development experience is now available. All this experience has lead to many design rules for the Omron engineers - T.S.O.P. Includes EMC + CE + UL + SEV + VDE + ISO But, it goes much further

7 TSOP T.S.O.P. - Few simple examples: High frequency distortion on the Power Supply ppy lines should not lead to a product failure! ->Power Supply filtering INCLUDED! Inductive sparks, even of high Voltage or high Energy on the Power Supply lines should not lead to a product failure! ->Power Supply protection INCLUDED! Distortion on Input signal lines to a product should not lead to a product failure! ->Input filtering INCLUDED!

8 Omron & Quality But T.S.O.P. goes much further Let s Let s have a look at few inside scenes Design P d ti Production Inspection Testing

9 T.S.O.P. in action Design

10 H3CR Inside - All selector switches are gold plated Reliable operation under hot + cold + dry + humid conditions

11 The timer setting potentiometer

12 The timer setting potentiometer Standard low-cost carbon potentiometer means: Larger variation in time setting Larger setting error Much more variation due to temperature changes OMRON uses a Cermet potentiometer as standard! This is a Ceramic potentiometer that has much higher accuracy and also is much more stable at lower + higher temperatures!

13 Omron & Quality Cermet potentiometer means Better linearity Better B tt setting tti accuracy The setting accuracy of the H3CR-A is (much) better than 5% of full g of 10 to +55 degrees g C. scale,, over the FULL range

14 The MOST CRITICAL factor for a product is the temperature! Every 10ºC increase in temperature reduces the lifetime of EVERY electronic product by 50% (20ºC => 75% shorter, etc.) TSOP has VERY STRICT rules regarding the INTERNAL temperature of the OMRON product The most critical COMPONENTS are the Electrolytic Capacitors Typically, manufacturers use types for use up to 85 C, OMRON uses as standard types approved for 125 C! These are the reasons of long life times of our products.

15 T.S.O.P. in action Production o

16 H3CR Production process The production line is completely automated, with number of robots in place Okayama factory - Automatic assembly line

17 H3CR Production process Mounting Pick- and place units mount all the parts. (And H3CR has many!) Soldering Soldering robots are used to guarantee the internal connections Inspection During the production there are many inspections!

18 H3CR Production process And most important of all - Quality inspection of EVERY product Not a single product outside specification leaves the factory!

19 H3CR Production process Even if you would buy a 1000 Timers, all of different production dates, than ALL timers will be WITHIN the specifications!

20 T.S.O.P. in action Testing

21 Failure on start-up - a frequent problem for users of electronic equipment Typically, complex electronic equipment consist of number of IC s and Electronic Components (Transistors, Diodes, Capacitors, IC s, Resistors etc ) If only ONE component fails, the whole SYSTEM can fail!

22 OMRON has studied the possibility of malfunction/failure of products for many years. This had lead to extensive knowledge on the possible cause of problems with Electronic components. After detailed study of the products the relationship between life time + failure rate became much more clear

23 The Bath-tub curve Early failure period Intrinsic failure period Possibility of failure in the lifetime of a product Wear-out failure period 1week 1 Month 1Year 2Years 3years 4years 5years 6years 7years 8years Life time

24 If the product survives the first week, It is almost certain that it will work properly for next 7 to 8 years! After 8 years the possibility of malfunction will start to increase again

25 How does Omron handle it? Our products are put in an oven for 48 hours at 60 degrees, and operated under power, running several test programs. This is equivalent to more than 1 week in "normal condition! And that s precisely what we need to see.

26 T.S.O.P. in action Documentation o

27 Product specifications Know what you are comparing Example: Maximal operating temperature Ideal World Specification Omron definition: At max. temp. also max. Power Voltage will be applied to generate max. internal product temperature. (for example: 240V +10%= 264VAC) At max. temp. also max load condition (to outputs) needs to be applied. Also Humidity must be max. spec. at the same time. Maximum shock and vibration will be applied With noise on the Power line Specification? Many competitors are too positive about their specifications Omron assumes Worst-case conditions!!

28 What s in there for the Customer?

29 At the end, back to the price Price customer pays for the product is only one component of the cost. Costs that may come afterwards can outbalance it significantly!! Difference Price of new product Replacement + engineering TSOP add-on Cost of production losses + workers waiting Base product price Base product price

30 Machine Builders Exported machines with technical problems can seriously damage OEM business. For an OEM customer Quality means RELIABILITY => Machines that are sold operate reliably and require a minimum of service or replacement!

31 End Users Cost of people or leased equipment standing still for hours calls for solution. For an End user Quality means Continuity it of production => Machines in the production line operate Machines in the production line operate without interruptions and without production stops!

32 Omron & Quality High Quality in every step in the process made p H3CR Not the cheapest timer The best sold timer in the world!!

33 This different way of thinking has also lead to the following: -No.1 global supplier of Industrial Relays, SOM 34% -More than 617 million Industrial Relays sold World-wide -No.1 global supplier of Industrial DIN-rail Power Supplies -New Block/Modular concept launched in 2001 and new S82JX launched in 2006 to assure 1st place -No.1 global supplier of Temperature Controllers -Absolute world leader in 48x48mm digital controllers -No.1 global supplier of Conductive Level Controllers - -61F series controllers are used all over the world Source: IMS