Introduction to PX: Breaking Legacies and Further Accelerating Enhancement of the Group’s Competitiveness

Panasonic’s FY23 Group Management Policy identifies PX as a priority initiative in terms of both strategies and operational capabilities. This article unpacks the meaning of PX and its implication for the Group’s business activities.

The Panasonic Group has been promoting its own DX initiative called Panasonic Transformation (PX), which aims to speed up operations and management through the use of digital technology, thus enhancing competitiveness. The goal of PX is not to promote IT adoption itself, although the use of IT is a fundamental premise of the initiative. Rather, it is to maximize efficiency by transforming and standardizing business processes, thus maximizing the benefits of IT. 

At the Panasonic Group Strategy Briefing in May 2023, the Group CEO noted that the company clearly made some progress through two-year initiative of enhancing competitiveness; however, the efforts over the past two years have not been fully reflected in its financial figures. Under these circumstances, PX focuses on breaking down old IT systems and other negative legacies, including our conventional business processes, culture, and mindset. PX seeks to innovate the way we do business and the way we work to increase our contributions to customers and our corporate value.

The triangle diagram shown below represents the framework for transformation through PX. The IT systems at the top of the triangle must be based on the operating model in the middle tier, which includes the company’s business processes and practices, as well as its relationships with suppliers and other partner companies. Culture, at the base of the diagram, represents the mindset and workstyle of employees who build and use IT, as well as our corporate culture, and it has a significant impact. 

Therefore, IT transformation will not be possible if the operating model and culture are not transformed, and the legacies of the past remain intact. Even if IT systems can be updated, they will soon become obsolete if the other two tiers remain outdated. 

“We have defined a good corporate culture as the basis of a three-tier transformation, and we recognize this culture as an integral part of PX,” says Hajime Tamaoki, Group CIO, who has been leading this project for two years. “This means that we must create a culture of open discussion, where employees can speak up when they should. I hope to improve corporate value as a result of this endeavor.”

Panasonic believes that one of the keys to sharpening its competitiveness is the enhancement of operational capabilities, and one of the pillars of operational capabilities is business process reform, which is the fundamental purpose of PX. 

To further expand and accelerate frontline innovations, it is effective to use digital technology to develop plans for Production, Sales, Inventory (PSI) based on sell-out demand and to analyze and visualize waste in the Group’s work. 

Another key to enhancing competitiveness is finetuning the strategy. For example, as part of its strategy, Panasonic Group is striving to understand its customers through the data obtained from internet-connected consumer electronics and touchpoints created as a result of various marketing and customer success activities. However, these data are only being used by the operating companies and business divisions concerned. 

Panasonic, therefore, is working to integrate and leverage these data across organizational boundaries to maximize Group value. To this end, in April, the Future Business Division (which is now renamed to PanasonicWELL as of July 1) was established to build a platform for integrating family and lifestyle data as a way to create truly user-first products and services.

In March 2023, the senior management of Panasonic Holdings (PHD), operating companies, and divisional companies held a two-day Group Executive Meeting (GEM) to discuss business process transformation with the goal of positioning PX to contribute to corporate value. 

At the meeting, participants reaffirmed their commitment to leveraging data across our businesses to pursue the Panasonic Group’s purpose, “Live Your Best,” and to specifically designate business process owners as the parties who will be tasked with driving further work process efficiencies. 

The PX-7 Principles were drafted as the manifesto for promoting PX, which was agreed upon and signed by the management members participating in the meeting. The key is for everyone in the Group to work together to make Panasonic an excellent company by effectively using data while completely moving away from outdated business practices. 

“I believe that PX can move forward only when each employee feels the urge to change the status quo and endeavor to achieve happiness, which will become a driving force for the initiative,” says Group CEO Yuki Kusumi.

Panasonic Group is committed to spreading PX across the Group, which ultimately seeks to innovate the way the company does business and the way it works for the purpose of increasing its contributions to customers and corporate value. To echo Panasonic’s brand slogan, “Live Your Best,” the PX slogan states “Bring happiness to life. Bring happiness to work. It’s digital, it’s our value.” This slogan embodies exactly why PX is considered a priority strategy for the Group.

*This article was adapted from “Live Your Best Vol.6,” the internal communications magazine of the Panasonic Group, and edited for an external audience.