Since it was founded nearly 70 years ago, Tokyo Keiso has been producing flow control devices for use across the world. A firm that embraces monozukuri, the pursuit of perfection that’s behind the success of Japanese manufacturing, Tokyo Keiso’s interpretation of the concept is focused on technical prowess and meeting customers’ precise needs, says President and CEO Ryoichi Sugi.
In recent decades, Japan has seen the rise of regional manufacturing competitors that have replicated Japan's monozukuri process. Despite this fact, many Japanese firms, both very large and chuken kogyo, maintain a large global market share, especially in B2B markets and niche fields. As a specialized manufacturer of flow and level meters that supports various industries in Japan and around the world, what does monozukuri mean to you? What do you believe to be some of the competitive advantages of Japanese firms that allow them to maintain their competitiveness in this environment?
The 'Made in Japan' has become a global brand that lays claim to high functionality and top-of-the-mark standards as a direct result of Japanese manufacturers forging an impressive level of technical capabilities. Also, the Japanese ethos means the altruistic spirit of sincerely responding and making improvements to best cater to clients' requests. Most companies have continually striven to implement 'kaizen’, which refers to continually improving their productivity and manufacturing processes and operations to ensure that products have a competitive edge over our global counterparts. These factors have contributed to Japanese firms winning the trust of their clients.
In the last 15 years, our company has been working towards enhancing our productivity and optimizing our manufacturing processes by incorporating different policies in our assembly line. Our approach of assigning each person multiple roles has not only diversified our workers' capabilities and skills but has also conditioned our assembly line to shave off unnecessary tasks. We have successfully decreased the time of transitioning from one step to the next for the operation and workers; hence, the ceaseless flow eliminates bottlenecked situations in every stage of the process. In addition, our shift from a labor intensive to a knowledge/capital intensive strategy has allowed us to triple productivity. We never thought that it was a goal that could be achieved. In time, however, each of our workers have displayed greater awareness and initiative in suggesting new ideas to improve our productivity. As a result, we have not only improved our productivity, but also succeeded in changing our company's old monozukuri culture into a modern interpretation.
In the next 15 years, a third of Japanese people will be over the age of 65, causing two major repercussions: firstly, there is a labor crisis, where there are fewer young graduates to replace seasoned workers and pass on the expertise to the next generation. Secondly, there is a shrinking of the domestic market. What challenges has Japan's demographic situation posed for your firm, and how are you overcoming those challenges?
Even before the government approved the change in retirement age from 60 to 65, our company had already put a policy in place for those over 60 years old who want to use their technical skills and continue to be an asset to our company. Furthermore, we are enabling a 'global approach'. We are increasingly implementing 'non-Japanese' employees into our company to counteract this domestic demographic development. We have established the culture of effectively transferring technological skills from the older employees to the younger generation through standardizing our processes and publishing them in our manuals. Also, we have been trying to employ more automation in our processes.
We produce flow control devices that combine a flowmeter and a valve, and in that process, we calibrate the flowmeter and inspect the controllability of the valve. There needs to be someone to move the products from assembly to the inspection stage, but we decided to use a Robotic arm for that, which has enabled us to automate the inspection process that can run at night, therefore, increasing productivity.
SEMICON, the international convention for semiconductor manufacturers, was held at the end of last year. Can you share with us some of the products that you displayed and your experience at that exhibition?
This is our UCUF: Ultra-Clean, Ultrasonic Flowmeter designed for measuring small flow rates of ultrapure water and chemical liquids in semiconductors, which are used by various semiconductor manufacturers throughout Japan, Asia and North America.
With our flowmeters, fluid flows through semiconductor grade PFA (plastic) tubing and is measured using ultrasonic waves. The transmission and receiving devices mounted at both ends of the tubing emit and receive ultrasonic waves alternately. The changes in ultrasonic waves are calculated to measure the flow rates with high accuracy. No mechanical sensors come into contact with the fluid, which makes our product ideal for the ultimate cleanliness required by semiconductor manufacturing.
Is this one of your latest products?
The basic sensing technology we utilize has not significantly changed, even in the newest models. The difference is that our latest product is more compact, and we have products that can be clamped from the outside instead of being inserted into the pipe. Additionally, we have upgraded the accuracy of our devices by way of improving our signal processing technology.
When we met with the president of Horiba, he expressed the importance of collaboration and co-creation for his business, and how finding local partners was essential for their expansion throughout the US and North America. How would you describe the role that collaboration or co-creation plays for your business? Are you currently looking for new partners in Japan or overseas?
I fully agree that cooperation and co-creation is crucial for modern day business, especially in our high tech setting. Developing products on the highest technological level requires cooperation, co-thinking and permanently utilizing available synergies.
Domestically, we have been directing our R&D efforts to different collaborations and partnerships with some research institutes, universities, and companies closely related to our technologies with regards to our product development and upgrading of our foundational technologies, like the one I mentioned earlier. Our co-creation partnerships with other companies in Japan and globally involve outsourcing a number of our development processes.
Are you looking to transfer these methods that have enabled you to develop unique products and technologies to other countries where you operate? Do you believe that blending your Japanese monozukuri with the local know-how of other countries that you plan to tackle will enable you to become more competitive on a more global scale?
We have had an OEM supply contract with a German firm called KROHNE through the Tokyo Keiso product brand name, which has solidified our relationship based on trust built with our dealings with them for over 40 years.
KROHNE supplied the products that we could not fully manage within our in-house resources to roll out to our clients.
Our plans to develop a new co-creation product with them for the global market are underway. We acknowledge the reliability of our partnership, and we have a mutual understanding of the high standards for inspection. Despite Japan's shrinking market, the semiconductor market continues to globally expand. Tokyo Keiso, therefore, is targeting Asia and the US, where we have already been supplying our products to. Also, moving forward, I think Europe is going to be a very strategic region for expansion. A joint approach of 'Made in Japan' together with 'Made in Germany’ - bringing together both value-philosophies and engineering-capabilities will reveal enormous synergies and huge potential for the future. In preparation, to continue to supply products and our services to these markets, those are the kinds of partnerships that we want to cultivate amid COVID.
As part of the development of your overseas business, what strategies do you have in mind? Can you please elaborate a little bit about your international strategy?
A strategic plan that we want to pursue is locally manufacturing products that sell well in a specific market for local distribution. Moreover, we are looking to fully take advantage of the 'Made in Japan ' brand to expand in industries where Japanese products are recognized for their high quality and advanced functionality like semiconductor devices. In the realm of flowmeters and level gauges, some instruments are only applicable in the Japanese market, and others can only be useful in global markets. For instance, the difference in population size between Japan and China is pertinent to China’s consumption of flowmeters at a much larger scale. Therefore, we need to discern the different characteristics of each of the markets we operate in and concurrently implement monozukuri in our manufacturing in line with the local needs and requirements.
We are truly convinced that applying the kaizen activities that we have created and accumulated in Japan, such as enhancing our productivity to our global manufacturing sites, will allow us to maintain our competitive edge even in the overseas market.
Do you have any particular product that you are proud of that can define the brand of Tokyo Keiso?
Our AM7000 Series, an analog-based device, has been a part of our portfolio since we began our operations. Its measurement principles are based on tried-and-true mechanical technologies. This product has a float in a tapered tube that extends from the bottom to the top and is pushed by the flow to move upwards. As the float rises, the amount of fluid that escapes between the inner wall of the tapered tube and the float increases, and the force that pushes up the float weakens. Finally, the float stops at the pushing force and the weight of the float is balanced. It also has a gauge that indicates the flow measurement of the liquid that moves through the device. This gauge follows the movement of the float through magnetic force and displays the flow rate at this position through this clear window.
It is a heavy mechanical analog product, but it is durable, versatile and easy to maintain.
We also make overhauls upon customer request so that they can be used for a long time. More than anything, since the flow rate can be measured and displayed only using the energy of the measuring fluid, it has the advantage of not requiring any power supply. These features strongly support SDGs.
This product serves to be our emblem considering that it has been most useful during the Tohoku or Eastern Japan Earthquake in March 2011. Due to the nuclear power plant explosion, they needed to keep pumping water into the tank to control the cooling; and this was the device used to measure the flow and the level of the water during that precarious and disastrous situation.
Imagine we come back 7 years from now, for your 75th anniversary, and have this interview again. What would you like to tell us? What are your dreams for the company? And what goals would you like to have accomplished by then?
First off, “Happy People Make A Happy Company". I want my employees, and myself, to be healthy and safe and to keep working with happiness until then. Our amount of sales indicates the constant upward growth since our company's founding. At first, we began to incorporate our products, including our level gauges, which was another major product that contributed to our company’s profits, in various factory sites, plants, and facilities, which helped us grow. Then, we heavily invested in the semiconductor industry, which led us to our next important trigger of growth. As the president, I hope that I can detect and identify what the next major arena with significant growth potential will be to invest our resources and set in motion another wave of growth. In 2029, on our 75th anniversary, I would like to tell you that our great employees, who are the real treasure of the company, are even more proud and happy to be with Tokyo Keiso.
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