Innovative winding methods keeping the motors running at the core of society

For over 70 years now Odawara Engineering has been making motor winding machines which are indispensable for the production of motors. What are the qualities of Japanese monozukuri? Why do you think Japanese companies such as yourselves have been so successful despite tough regional competition from China, Korea and Taiwan?

The greatest advantage and specific feature of all Japanese companies related to monozukuri manufacturing are being capable of adapting and applying the best features of a product to the diversified needs of the customers. companies are always on the side of the customers. They strive to always be loyal, truthful, and capable of supplying products which satisfy the needs of customers.

Japanese companies find that once they step into a field and take steps towards developing excellent techniques and products, they tend to become one of the leaders in the market. The hallmark of Japanese companies is their ability to satisfy customers' needs in Japan and beyond. I see this as a very traditional way of thinking and was created many years ago. Still, we see Japanese companies holding the best positions, forerunner positions in niche markets. This can be easily illustrated by the presence of so many Japanese companies in the automotive industry. So many cars are being made in Japan, and these companies are very well respected and recognized brands.

There obviously is a flip side to all this. Often people will talk about a lack of originality in terms of Japanese companies and a suggestion that Japanese companies are behind the times in terms of meeting the needs of the global market. As the size of the global market for products increases, the commoditization of products will continue, and Japanese companies will not be able to play to their strengths because their commoditized products will be superior to their ability to respond to diverse needs.

We are in the industry of designing, producing and selling winding equipment for motors. The motor is an indispensable part of any electronic, domestic, or even office appliance. You can imagine the number of diverse needs coming from different kinds of customers. There are so many different appliance manufacturing companies in Japan, and for that reason, one of the greatest achievements of our company is to always stay loyal to the customer's needs, no matter how diverse, complex, or demanding that may be.

Head-quarter in Odawara, Japan

Many commentators are saying that Japan’s monozukuri is in jeopardy. The population changes taking place here in Japan are having a large effect. It’s an aging and declining population, leading to a shrinking domestic market to sell products to, and in terms of recruitment, a smaller pool of talented graduates to recruit from. In the case of Odawara Engineering, how are you reacting to these population changes?

We don’t see that as a big problem for our company because in most cases, the motors were manufactured outside of Japan. We even saw this tendency when I joined the company 42 years ago. At that time, it was around 50/50 for motor equipment oriented for the domestic market vs global market. Now, 80% of all motor equipment manufactured are for export. So, you can see why an aging society and shrinking domestic market in Japan aren’t having that much effect on the company.

With an aging population, we are also looking to extend the lifespan of our employees. On the other hand, since we are hiring more new graduates, the number of new hires within five years of joining the company is 30% of the total number of employees in the company. We are always looking to find time, and have our older workers pass on their knowledge and technology to younger employees. We believe this is of utmost importance by our corporate continuity.

Many of your clients, especially manufacturers of home and office equipment are starting to localize and regionalize their supply chains. This is something that has been accelerated with the COVID-19 pandemic. China’s 2022 zero COVID policy has created very big disruptions along the supply chain. What has been the effect of these logistic disruptions on your business and how do you think they will impact your business going forward?

COVID-19 has caused many problems logistics wise and obviously made big headaches in procurement. The non-availability of engineering personnel from the customers has made the pre-acceptance of winding machines challenging to say the least. Customers have to send their QA personnel responsible for pre-acceptance to Japan before shipment, to make sure everything is safe and sound. Although, the effects of COVID-19 made this difficult; most borders were closed, even for those with visa permission.

To overcome this issue, we have begun web-based pre-acceptance. The power of the internet has helped conduct online meetings with QA personnel being able to look over the machines before shipment and check that everything is to standard. In the long run, this can’t compensate for face-to-face meetings, which are a vital part of the business. Looking a customer in the eyes and making sure everything is applicable to their needs. As stated previously, we are 80% export and would like to establish our brand as the “made in Japan,” label. We want to, sustain good quality products here in Japan and export this equipment to overseas countries. If this is achieved, our mission is to hire and educate local engineers to conduct trial runs at the premises of the customers as well as after-service. Local hires and educating them are one way we are looking to contribute to local industry, as well as continue to provide Japanese quality products to our overseas customers.

Your clients that you provide winding machines to are in a variety of fields including, automotive, industrial, and medical to name a few. Which fields do you see the most potential growth for your machines?

One of our main focuses right now is in the automotive sector. The sector itself is experiencing a lot of changes right now with the “electrification” of vehicles. A lot of things are changing inside the cars and many numbers of hybrid and electric vehicles that are motor-driven have also been introduced. Add onto that the fact that many car manufacturers are in Japan and with the electrification of cars, obviously they will require big quantities motors. We are very optimistic about the market's future in and out of Japan with the “electrification of vehicles”.

Winding machine with Odawara developed new winding technology

Our company has an extensive track record for being capable of supplying so many big-name companies. Our efficient COIL WINDING methods and numerous technological breakthroughs speak to our company’s competence when talking about coil winding machines.

Winding machine at exhibition

One of the big changes in the automotive sector that is less discussed is the change in materials. Pushed by regulation, automotive makers are forced to make cars that are more lightweight and decrease use of ferrous metals like steel or iron. Lightweight materials are key right now, with the use of aluminum or plastic sweeping across the sector. How are these changes impacting your business and the products you make for automotive clients?

We have been paying close attention to this tendencies and trends. Lighter-weight vehicles means a smaller size and lighter-weight of the motor. We are following the strengths of these materials and trying to comply with the new standards that are coming out.

Our company is an R&D oriented company, and we consider that a big strength. Compared to a lot of global companies, especially Chinese companies, that are geared towards mass volume, we like to think that we are listening to our customers more closely and adapting to the market needs. This compliance with customer requirements is embedded in the DNA of the company. Perhaps we are losing the battle in terms of costs and mass production, but we feel we are winning the battle in gaining the trust and admiration of our customers, as well as our customers competitiveness.

What challenging have customer requests have been presented to you and which ones have you been able to overcome to provide an acceptable solution? Which ones are you most proud of?

If I’m completely honest, every case is a challenge, every single one of them. Every day is a challenge of some sort. I can’t mention exact companies because we respect confidentiality with our clients.

One client submitted an inquiry to us and other winding machine manufacturers for a mass production facility for motors, and we were able to receive the order. However, during the production of the equipment, the client discovered that a motor that had been hand-made for performance testing did not perform as well with the equipment being manufactured, which had changed its winding method to mechanize the motor. After various investigation by our company, we found that the same performance could be achieved by changing the winding method. We explained this to the client, which they asked us to modify the winding equipment that was being manufactured to be compatible with the new winding method. This new winding method was not possible with the conventional technology, so our designers had to develop a new winding machine which could handle the new winding method in a very short period of time. The entire company was mobilized to conduct experiments and tryouts to establish a winding method, and finally a winding machine equipped with an unprecedented new winding method was delivered on time to the client. At that time, the client told us that the motor, which had been created under the very difficult circumstances in which both the client and our company had been pushed to the limit, would actually be used in the first generation of hybrid car, and we were proud to have contributed to such a project. What we are most proud of is our founding spirit of always getting things done right to the end.

Your company is completely independent and separate to the hierarchical structure we see normally in the Japanese automotive industry, for example. What are some of the advantages your independence allows you to have?

Being independent has great benefits, the first that comes to mind is being able to work with so many customers. Each customer has their own needs and demands. This helps in accumulating knowledge and information. Working hand-to-hand with customers in different markets and countries creates opportunities for better proposals from the next customer. Opening the boundaries and going across so many fields, industries and customers has allowed us to think outside the box and bring in a lot of attention.

Independence also allows us to meet the needs of each client and to make innovative suggestions, thereby giving them more confidence in us. It’s not like our company came up with this yesterday, it has been this way for a long time, since our establishment. Independence is the idea of our founder and is embedded in the DNA of the company since birth.

In the past, you’ve used M&As to acquire new technology and new equipment. Could you tell us about your two big acquisitions, one in 1986 with OTT-A-MATIC, INC, and another in 2013 with Royal Electric Co., Ltd and Taga manufacturing?

The motivation for these two acquisitions was to create a presence in the areas we didn’t and as a result, synergies were made. The acquisition of OTT-A-MATIC in 1986 was triggered by Japanese trade friction and the strong yen, which prompted Japanese companies to begin local production in the U.S. The acquisition was intended to strengthen sales to the North American market and establish a system to supply products and service Japanese customers from there. The second is the 2013 acquisition of Royal Electric and its subsidiary Taga Manufacturing, in which Royal Electric produces and sells industrial machinery, machine tools, and servo motor blowers. At the time of 2013, the coil winding machine market was larger than the motor winding market, and the acquisition of Taga Manufacturing, a long-established coil winding manufacturer, has allowed the company to enter the coil winding market and generate synergies in the areas of production and technology.

In 1996 you established yourselves in the US, and later in Shanghai in 2013. Most recently you’ve opened an operation in Germany in 2017. Moving forward, which regions do you see as having the most potential future growth for your firm?

Two regions currently interest us for different reasons. Firstly, China and other Asian countries, because of the geographical closeness to Japan. The vast population and the outrageous number of electronics and appliance manufacturers there make it an attractive destination, another factor would be that China is the world leader in automobile sales.  Next is America, in the past 40 years, America has seen a decline in its motor manufacturing capabilities, and there are probably only a few left as a competitor. I believe there is a great opportunity for us if the production of motors for electric vehicles expands in the U.S.  Europe is a very complex market with far too many players. Maybe in the future when the situation is more beneficial to us.  

Imagine that we came back to do an interview with you on the last day of your presidency. What would you like to tell us? What are your goals for the future of Odawara Engineering?

I’m a third generational employee and president of the company. Recently our board of directors had a big change, leaving only me as the sole remaining president of the third generation. It’s my responsibility to connect the dots between visions throughout the generations.

We have been in our business for over 70 years, and it hasn’t always been easy. All of the hardships and struggles the previous generations have felt paved a way for our generation to be where it is today, and we understand their sacrifices. My role is to connect the people of the company to all share the same vision for the future. Our future goals are the same as our past goals: to strengthen our product competitiveness and technological development capabilities under the motto of "serving our customers with a pioneering spirit.