Wednesday, Jun 26, 2019
Science & Technology | Asia-Pacific | Japan

Japan

Innovations for the next century


3 weeks ago

Mr. Kazunari Shozen, President & Chief Executive Officer of CENTURY CORPORATION
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Mr. Kazunari Shozen

President & Chief Executive Officer of CENTURY CORPORATION

In this interview for the Worldfolio, Mr. Kazunari Shozen, President and Chief Executive Officer of CENTURY Corp., discusses the evolution of Japan’s ‘Monozukuri,’ the positive impact his company has had on society, and unveils his vision for the future.

 

Despite the rise of regional competitors who benefit from cheaper labor costs, Japanese manufacturers have retained a dominant market-share in added-value sectors. How do you explain this success?

From a historical perspective, I believe that one of the differences between Japan and its Asian neighbors is its geography. As an island nation, and as opposed to its peers, Japan has never had to fear territorial invasion or conquest by other nations. By virtue of this isolation, the effort that wasn't devoted in preparing for war was invested in societal development.

The concept of “TA-KU-MI Masters” embodies Japan’s production spirit, and ultimately, its competitive advantage in manufacturing. Commonly explained, the essence of “TA-KU-MI” is to gain a sublime and complete understanding of a given art-form; an achievement only few individuals can pretend to. To achieve such a state of excellence, one must work with great zeal, digging deep within one’s heart and soul to passionately devote oneself to the mastering of a given skill. In Japan, our national ethos has pushed us to have a sincere appreciation and an utter respect for hard-work. This mentality is naturally embedded within our vision of what “Monozukuri”(making-things) should be. As such, Japan’s Monozukuri has, throughout the years, been a source of creativity and innovation. When a craftsman produces an item, he systematically considers the usability of his creation. Ultimately, his aim is not simply to ‘make-something,’ but rather to create an item that will add-value to its user.

The question now is: why do the Japanese have this spirit? Is it because of their island geography? Is it due to their unique language? In a world where borderless globalization continues to advance, nations must consider their respective values and analyze what they can bring to the world. Utilizing our strengths to collaborate with others will lead to the betterment of man-kind. To avoid the “Galapagos Syndrome” we must be open to others while remaining true to our core values.

 

As innovative technologies such as AI and IoT are becoming omnipresent, manufacturing experts argue that we are currently living at the eve of ‘Industry 4.0.’ What will be the impact of these innovative technologies on CENTURY? And on Japanese manufacturers?

The dramatic changes technological innovations are bringing to our societies can be compared to the transition from the dinosaur era (Mesozoic) to the Mammalian era. In a society where “IoT” is rolled out at ever-increasing speed, the key to survival is found not in the scale of a country or a company, but rather in its ability to use information swiftly and appropriately in order to react with quickness and accuracy. To use a famous adage from Charles Darwin, “it is not the strongest species that survives, nor the most intelligent, but the one most responsive to change.”

As a small-scale organization, one of CENTURY’s greatest strengths is to maximize our mobility and reaction time. In comparison to larger firms, we can move swiftly with short decision-making processes. This allows us to focus on innovative areas such as “5G,””IoT,”and “AI” and create new businesses.

 

How has CENTURY evolved through the years?

When the computer era began, we started as a “semiconductor export and trading company” and quickly evolved into a “PC peripheral equipment manufacturer and trader.” As society began to enter the smartphone-era, we expanded our business to “mobile phone peripheral equipment manufacturing and sales.” With our historical expertise in the development of electronic circuit board and mold manufacturing techniques, we made added “prevention equipment manufacturing and sales” to our operation in order to protect human life, property and social infrastructure.

 

Can you tell us more about the philosophy and evolution of CENTURY?

CENTURY’s mission is to “make it happen.” This pro-active attitude is the force that will drive us into the future.

The logo of Century was designed by my predecessor. He often pondered on the concepts of past, present and future. The three waves present in Century’s logo represent these three states. To be successful in one’s life, one must understand that the present is a consequence of actions taken in the past; and the future, the result of the actions of the present. At Century, we apply that thinking in our product development: We apply the knowledge of our past to create, today, the products that will better the society of tomorrow. As such, we constantly ask ourselves: what do people want? What is the product they wish they had?

What have been your best-selling products?

Our small LCD sub-monitor "plus one" series has been sold continuously since its launch in 2008. Since its beginning some 11 years ago, it has attained a cumulative sales volume of approximately 200,000 units for a total revenue of approximately $64 million.

The LCD sub-monitor "plus one" series is used in a wide range of applications across a variety industries. Mitsubishi Motors uses it as an autonomous car monitoring device. Dwango, a leading Artificial Intelligence laboratory, adopted it as monitor to observe and retransmit their “AI  Shogi  (Japanese Chess) Competition.”  The University of Tokyo employs it for their robot contest operations; and, in airports, you can also find the sub monitor "plus one" at the check-in counters of ANA’s domestic flights.

The “plus one” was developed as a small, lightweight and portable monitor. As a “Bus-Powered USB Device,” it can be used in an environment without power outlets. (Note: Powered USB devices take their power from the USB connection, and don't require an external power source.) As such, it is highly user-friendly and mobile.

By virtue of its proprietary design, Japanese production system, and thorough quality control, the image sharpness has been improved. In terms of quality, this product is superior to its competitors.

Small LCD sub-monitor "plus one" series

 

Based on the success of the "plus one" series, we developed the "Emergency Earthquake JMA monitor." To transform it into an effective disaster prevention device, we integrated an alarm within the hardware. When an earthquake occurs, the alarm will ring before the shake reaches its location, effectively warning its surroundings from an incoming threat and allowing for precious time to find shelter. This device is introduced in the Japanese junior high school textbook "Science 1.”

Emergency Earthquake JMA monitor

 

Can you tell us more about your R&D efforts?

In order to effectively develop new products, one must always prioritize the “bigger picture.” To illustrate that concept, let us propose a metaphor: Imagine a man lost in the woods. To find his path out of the forest, he cannot focus on a single tree; he must consider the area as a whole. Consequently, I always say that to navigate through the woods, you must “look at the forest, not the tree.”

This metaphor applies to R&D processes. In many cases, one can become so obsessed with details that it causes one to lose sight of the bigger picture; to lose one’s vision. As a creative task, R&D activities systematically run into problems. In order to surpass these issues and never to lose track of our vision, we always question ourselves: Why did we decide to develop this product? How will this product be used? How can this product contribute to society?

Repeating these questions allows one never to lose sight of one’s original vision. At CENTURY, the success of our R&D has resided in our ability never to lose track of our ultimate objective.

 

What new products or technologies are currently under development?

Domestically, we have a 95% market share for emergency earthquake bulletins, tsunami warning and eruption warning monitors. Thanks to its internet-based notification terminal, the Meteorological Agency of Japan immediately distributes disaster-related data to licensee companies, including ours, who then seamlessly relay the relevant information through their monitors.

Despite our dominant market share, we, at CENTURY, have pursued R&D efforts to deliver next-gen added-value products for future catastrophes.

Since Japan is located atop tectonic plates, it is a country with a high risk of natural disaster. In the future, a major earthquake is expected to strike along the Nankai Trough, a submarine trench running off the Japanese archipelago spawning from Shizuoka prefecture to the east seas of Kyushu. In preparation for this catastrophic eventuality, we will soon launch a new product on the market: the “D-HOPE.” The “D-HOPE Series I, II & III” -produced by the Original Equipment Manufacturer Harwar International Aviation Technology Co., Ltd.- are industrial drones capable of self-supporting automatic flights. We are currently pursuing our efforts to further integrate AI and IoT technologies within the drone in order to transform our creation into a life-saving solution. We recently introduced the first “D-HOPE I” and reached an agreement with the Japan Aerospace Exploration Agency (JAXA) for a drone lease.

 

D-HOPE III

720 Omnidirectional Detection /AI

 

Dedicated Control Panel
with GCS function

    

What international strategy have you adopted to penetrate oversea markets?

In the past, we considered advancing internationally through M&As in order to gain speed and local market intel. However, after carefully considering country risks, such as political sentiment and legal systems, we abandoned that strategy and began searching for local partner companies. By establishing long-term partnerships with local agents, we were able to promote the internationalization of our products and company. Throughout my life, I have experienced production and sales in many places around the world. For over 20 years, I have travelled and conducted business in Europe and Southeast Asia, passing by Africa and India. What I witnessed is that no matter the country I travelled to, I never met consumers more demanding than the Japanese. In other countries, what matters most is the functionality of the product: if it works, it is accepted by the market. In Japan however, functionality is but a feature, and to be sold successfully, the finishing, design and details of the said product must be perfect. As such, I believe Japan to be the hardest country to sell to. For example, items manufactured in overseas OEM production bases cannot be introduced directly to Japan. In order to satisfy Japanese clients (which are the most demanding in the world) it is necessary to closely monitor on-site production lines and convey the concept of “TA-KU-MI.” Throughout my carrier, and still to this day, I personally attend production meeting and I spend long hours in my factories to oversee and understand current production processes. To secure stable production quality one must ensure that on-site employees have the same perspective as managers.

Furthermore, we find it necessary to jointly attend local exhibition with our overseas sales agents and to strengthen local sales cooperation systems. In general, “Made by Japan” products are reputed for their safety and security. However, the final price is often not in line with local market and that remains a priority for future development.

 

Because of the unique demands of the Japanese market, observers have claimed that Japan’s electronic firms suffer from the “Galapagos syndrome;” meaning that certain products can only be sold and accepted domestically…

The “Galapagos Syndrome” was best exemplified in the late 90’s and 00’s when Japanese firms developed their own brands of smartphones. Consumers argued that the phones were simply too complicated and had a variety of useless features. However, in the no-so-distant future, certain of these features were to become adopted internationally. For example: today, it is widely accepted that the success of smartphones is due to the multitude of applications that can be downloaded. Interestingly enough, downloadable software applications were first invented in Japan. But, these apps were so complex and picky that consumers disregarded them. Furthermore, Japanese developers refused to release their creations before having attained product perfection. Soon enough, smartphones manufacturers swiftly transformed these ideas into usable and popular features. Unfortunately, what was to become a competitive advantage of Japan’s industry became a weakness! In today’s globalized world where information travels instantaneously, Japan must become faster at identifying market trends and at marketing its ideas.

 

What market do you expect to see most growth potential in?

The market most expected to grow in the future is the “disaster prevention-related market.” From FY 2015 to FY 2021, the market size is expected to increase by 20%, ultimately reaching a total size of $9.7 billion by 2021. The reason is the policy of the Abe administration, commonly known as the "Fundamental Plan for National Resilience," which has put forward drastic measures to mitigate natural disasters, such as the historically recurring Nankai Trough earthquakes.

 

What are the competitive advantages of CENTURY?

I believe that the competitive advantages of CENTURY is found in its desire to fulfill its social obligations while contributing to creating a safer world. This philosophy has allowed us to invest in innovative technologies before our competitors, ultimately leading us to be a step or two in front.

As a matter of fact, CENTURY has changed society on two occasions. Firstly, it was by producing market-leading fire alarms. When fire alarms became mandatory for housing purposes, we manufactured a product which was high in value but 75% more cost-effective than the market price. We went on to sale over 6 millions such devices nationally, for a +50% market share within 2 years. Thanks to this technological, yet affordable device, we contributed to spreading safety measures to the whole country. Despite the dominant market-share we acquired, we failed to commercialize this product directly to house constructors. The reason being that the Japanese construction industry is composed of large and historical firms who have collaborated with each other since hundreds of years. Even though our product was more competitive than that of our direct competitor, it was impossible to breach the trust that was installed between them and our potential clients. This situation served as a lesson for CENTURY: to be successful, we must compete on “new fields;” we must compete on sectors where no other company has a long track-record. After this episode, we began researching disaster prevention equipment, and it led to our second success.

The second time CENTURY had an impact on society at large was when we produced the “Emergency Earthquake JMA monitor.” At the time, such devices were produced by large electronic firms, and despite being quite basic, they cost up to $274,000. In comparison, our  “Emergency Earthquake JMA monitor” was one-hundredth to one-thousandth times more cost effective than the market price and we were able to democratize it throughout the country, effectively allowing people to purchase state-of-the-art disaster prevention technology.

Since its inception, the core of our identity has been to contribute to people and society through the promotion of our frontier spirit, speed, and creativity. Ultimately, I believe that the true success of a company can only be evaluated by "the positive social impact and significance it has had.” If we judge CENTURY through this scheme, I believe us to be superior to other corporations. As such, I do not care about becoming famous or incredibly wealthy. My aim, and the aim of CENTURY, is to contribute to society and to people. All in all, I believe that the greatest testament to my life will have been to help others.

 


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