Since its founding over 70 years ago, the company has used its foundations of quality, price, and delivery to grow, both figuratively and literally, with Horizon now operating out of the world’s largest facility for manufacturing products for the five major print finishing operations: folding, collating, binding, stitching, and cutting. Horizon Group Chairman Eijiro Hori explains that this integrated system allows the company to not only make the highest-quality products, but also tailor these products to the customers’ needs.
In the last 25 years Japanese manufacturers have been put under pressure from regional competitors in China, South Korea, and Taiwan, who have replicated the Japanese monozukuri processes, but done so at a cheaper labor cost, providing the world with cheaper, yet lower quality products. What is your take on monozukuri and how does it allow you to outcompete such regional competitors?
In my opinion, the SMEs always try to maintain their employees while the large-scale companies lay off their employees if the business is not going well. The large-scale companies put a lot of importance on their shareholders, which they base their business on. Conversely, the presidents of SMEs put employees as the most important asset. Since the foundation of our company, we have never laid off any employees and we would like to continue our business where there is no need to lay them off and to achieve this, we are trying to enhance their skills. Monozukuri has three important elements: quality, price, and delivery. To improve these three elements, it is very important to invest in the development of our employees, especially since manufacturing sites are crucial. Every September we have a one-day event called ‘Horizon Study Fest’, where each employee does a presentation on what they did for the improvement of their operations and everyone else gives them an evaluation.
Industry 4.0 is transforming the production line to a fully-automated system where we have ongoing maintenance and smart sensors which continually optimize the production. Here in this facility you have the world’s largest book binding operation. Could you tell us the benefits of having this automated facility and the advantage of the prints?
With folding, we have many items around, such as restaurant menus, and for stitching, we have brochures which are made by our machines. Japan has a long history in the printing industry and I will not be surprised if you find companies out there that are still using machines for these processes that were probably from the Edo period as it is still very much a manual process in many parts of the world. Business cards are made from cutting and we can put together the books as the mainline with our integrated system because we have all the components. We are the only company who can provide this kind of solution where we combine all the folding, collating, binding, stitching and cutting. Having an integrated system is beneficial for us, as we have marketing, research and development, design, quality control, machining, assembling, sales, and service in one place. We also have a flexible manufacturing system. We are producing over 14,000 units per year from 600 machine models - 500 of which are only 25 units or less. Furthermore, we are trying to meet the market demands because everybody wants different things and we are responding to their requests. We make products that are universal, but we do custom-made products as well, depending on the customers.
Has it been difficult having the high-mixed volume and the mass-produced items? How do you combine these two types of productions in one location?
That is just the nature of our manufacturing system. At the beginning, we were making just the collator, which was easy, and then we kept adding more processes. As we got more requests, we were responding to the needs of the market.
Among these products that you are offering, which one is the best-selling? Could you tell us the synergy you have been able to create between these diverse lines of products?
It depends on which era we are talking about. In the past, paper collation was a necessary step and we grew our business from there. Currently, due to digital printing technology, collation is no longer necessary, and that market is shrinking. Perfect binding is our bestselling equipment.
This is an example of our Perfect Bound Book, which is essentially just using glue to hold the pages as opposed to staples. We can balance all these kinds of different technologies and individual units, and our customers can get all the machines they need for their process from one manufacturer. We are able to provide total solutions from start to finish without them having to go to multiple vendors as we are essentially a one stop shop. Overseas, we work with many dealers who we have exclusive deals with, who provide service and local training, then we provide all that support in manufacturing directly from Japan. We started our business in 1946 after the Second World War and in 1973, we started to get into the print finishing market. At the beginning, it was a very small, perfect binding machine and then we were able to grow our business even further. In 1981, we started with our exporting activities. Fast forward to today, our company has grown this much already.
In regards to our manufacturing process, we do the safe metal base instead of die casting. 70% of the mechanical parts are made in-house which makes us different from other companies, plus we are doing plating, plastic injection, PCB, and assembling in-house as well. The machines are then packaged before being shipped all over the world, and of course, we do a quality check before shipment. We manufacture our products based on the received orders from the customers and the whole process takes about two months to produce one unit. There are many competitors that can produce larger machines, but our focus is the middle range, thus we do not compete with larger competitors. These days automation has increasingly become a necessity and we are focusing on this area, but we must use an automated machine that is user-friendly. We have many pieces of equipment that can do different processes, so we need to combine them all together to simplify the whole process.
Can you tell us how you are helping your clients on digitalization and to transform their machines and devices in order for them to be operated by IoT and to increase productivity?
We have been developing software for many years to respond to this trend on digitalization, with our first product being the pXnet and now we are introducing our iCE LiNK Network. Printing is essentially putting the ink on paper, which is a difficult, labor-intensive process and everything that goes into making a finished product happens afterwards. With those types of equipment that people are traditionally using, such as the guillotine cutter, there is not a lot of data that people would gather from that conventionally. Now that labor prices are going up exponentially, in order to help our customers still make money, we need to figure out a way for them to optimize their workflow. One way we can do this is by creating our iCE Link, where we take all their connected machines. Basically, collect any type of data we can get out of it into the machines. We utilize our Overall Equipment Effectiveness (OEE), which is a fancy way of saying how efficiently you are using the machines. Our company is always trying to improve our processes and we are giving our customers the tools to do the same. Our philosophy is ‘whoever is using our bottom-line office equipment should be able to use our largest smart binding line as well’. Obviously, the machines are bigger and more complicated but that is where our experience comes into play; we started with small machines and we gradually got bigger, but our mindset stayed simple. It is geared towards the user, not the engineer or the craftsmen. If you can use a cellphone, then you should be able to use the touch panels in our machines.
The printing global market is expected to be worth (USD or ¥) by 2025. What are the key drivers of this growth in the printing industry? What strategies are you adopting to take advantage of this?
Actually, the demand for printing is decreasing due to the internet. When it comes to printing, there are two types: magazines and books. The demand for magazine printing is decreasing because magazines contain content which can now be found on the internet but conversely, the internet cannot replace books and that is why we are expecting the demand for books to continue increasing, especially during this pandemic. A lot of people have stayed home and as a result, the demand for books has increased. It is very important for us to capture that growing part of our business.
Your R&D center was launched in 2006 and more recently, you launched the Horizon Academy in 2015. Can you tell us the benefits of having these facilities and more about your R&D strategy?
This is driven by the philosophy that we have succeeded since the foundation of our monozukuri, which has three elements - development, manufacturing, and sales. Development and manufacturing should happen in one place. Next to our manufacturing lines is the development center and through these facilities, we invite our customers and have them experience using our machines. We listen to the thoughts of our customers and we forward them to our development team and manufacturing lines. Having these elements in one place gives us the competitive edge.
There are testimonials from Japanese and German printing companies that are speaking about the benefits of the Stitch Liner and the Pxnet reducing the need for labor on the production line. Japan has very high standards when it comes to machines and the Japanese consumers have high expectations. When we go to Europe or America, the expectations are different, however. How are you able to adapt to both domestic and international demands?
The Japanese customers are the strictest when it comes to quality but on the other hand, the demand for automation is much stronger in Europe. Sixty percent of our products are tailored to the foreign market and were developed based on the needs of the foreign market. We bring those products into Japan and the local customers are appreciating the cutting-edge technology for automation. The foreign customers feel assured with Japan-made products, while the Japanese customers give much appreciation to the technologies brought from the foreign market. We are trying to mix the strengths of both Japanese and European markets and bring those qualities into our products and technologies. In any type of industry, it is said that the trends in Europe and North America are five to ten years ahead of Japan. If something sells very well in the European or American market, that product should also sell well in the Japanese market five to ten years later. That is the reason why we are always observing the European and North American markets.
Are you looking for co-creation partners as you expand internationally?
We are always looking for potential co-creation partners and once we find one, we will be ready to negotiate with them.
New technology is always invented abroad. The printing press was invented in Germany many years ago. Can you tell us the benefits of having your sales office in that location? How can you further penetrate the European market?
The printing machine was first invented in Germany in the 15th century, and now Germany is, obviously, the center of the printing industry. Therefore, it is very important to keep our eyes on this industry, and thus, we decided to establish ourselves there in 2014. We then started selling our products to German customers in order to grasp the local needs, which should be five to ten years ahead of the Japanese market. Furthermore, Japanese customers like Germany and having a German office means our value to the Japanese customers rises.
What areas are you planning to further expand your operations into? What strategies will you implement, will it be more sales offices, overseas factories, joint-ventures, or an M&A?
What I am thinking is to produce machines that can solve our customer’s problems. We always try to pursue the best quality, price, and delivery - the three elements of monozukuri. We bring the best solutions and the best products to the customers and if we keep doing this, I believe that our products should sell. I do not have financial sales targets because my goal is to develop good products for the market.
Which markets do you believe hold the key for your global sales?
The European market is the biggest market for us because it is the heart of the printing industry. In recent years, our sales in Europe have been declining slightly, while the US market remains strong. We must be competitive in the Asian markets too, because China, India, and other markets are growing.
Imagine we come back to interview you again in 2026 for your 80th anniversary, what would you like to tell us? What are your dreams for the company and what would you like to have accomplished by then?
We believe that our company’s core principle is our monozukuri, which is the founding principle. We would like the next generation to continue the relentless pursuit for perfection of our monozukuri and I would like to keep manufacturing in our factory, here, in Japan, while maintaining a good quality, price, and delivery by doing so.
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