Dispose non-performing asset ASAP-performing assets only-

Inamori shared how to conduct the above motto with Seiwajuku members. What Inamori mentioned is quoted with “”

“Kyocera strictly avoids having non-performing assets. This principle is to buy only what you need when you need it, and to produce only what our client needs. If you buy or make extra materials or products, you will end up with bad inventory and extra expenses. However, in case a non-performing asset appears, it should immediately be written-off. Although this will result in a temporary loss, we must dispose of the non-performing assets regardless of short-term results. Failure to do this and postponing the problem will lead to even greater losses. Management must always be carried out with at least performing assets.”

This is very important and I think we should keep in mind the below three points.

1 Always think about the value of goods and services

2 Find what have already been given to you

3 Create the circulation

Let me elaborate on each point.

1 Always think about the value of goods and services

“ As to the inventory of good ceramics, even if we don’t want to sell them, it will be recorded as assets on the balance sheet in the form of work-in-progress or product inventory, which will eventually be counted as revenue, the taxable item. In reality, that ceramic inventory looks like just a stone and we don’t know if we will sell them in the future, but we have to pay taxes. Thus, I thought it is not good to list such items as assets, so I decided to write those assets off. ”

Our core business is real estate appraisal. This always requires us to think about the value of goods and services. How much would the owner be willing to sell, how much would the buyer be willing to buy, how much would it cost to newly make that product? Is it worth investing? Appraisal is the process of thinking about those questions.

In this analysis, we must develop the spontaneous attitudes to thinking about the value of the things around us. Then, we come to consider what are the most valuable things/items of our lives? When you think about this question, you may have to think about what fulfills us. Some may say materials, physical conditions, or other people think we should be fulfilled mentally. We always come back to this point, when we think about the value. We keep developing this analysis of where the value comes from and bring the outcome of the analysis to our daily works.

2 Find what have already been given to you

Inamori also mentioned that in Kyocera people purchase what they really need for the time being and staff are not allowed to purchase extra materials or products, considering some deficits. This is unique but has been one of the important principles in Kyocera.

People get frustrated when they realize that they don’t have enough materials or resources compared with others. Some people feel that it is not unfair. When we feel that we lack something, we move on to take goods from others.

This mentality sometimes leads to developing one’s abilities, incentivizes us to learn new things, and to elevating oneself both mentally and professionally. We call them “skill up”. However, this frustration also drives envy or unnecessary anxieties in us. Human mind drives every action of us. To avoid such negative emotional drives, it is important to realize that “I already have many things” and “I have been given many things.” There is a saying, ” We should be aware of what is sufficient.” Our behavior will change when we have enough. Such a mentality ultimately leads us to fulfillment.

3 Create the circulation

“However, the important thing here is that you shouldn’t dispose of non-performing assets to control the profit and loss under your financial statements. Asset disposal should not be done for the tax purpose or for the specific accounting outcomes. You should always keep on your balance sheet only healthy and performing assets, which can directly be associated with revenues.”

If you are aware of what you’ve already had, you can create the circulation: disposal, transforming, recycling, and reuse. In this way, if you save something just because it looks pricey, the good would gradually lose its value without being used by us humans. Goods will be disposed of before fulfilling their mission, the reason to be. Instead, I think it is important to create a cycle in which goods can be transformed into materials and converted into other products, within a recycling process.

In summary, it is very important what kind of assets are stored in the company and keep only the performing assets. We should learn how to determine the value of things, look at what we have now, and proactively create a dynamic cycle of reuse and disposal.