Wednesday, Nov 21, 2018
Industry & Trade | Asia-Pacific | Japan

Japan’s ChukenKigyos

Shigiya Machinery Works: the art of ‘co-creation’


3 months ago

Mr. Norikazu Shigitani, President of SHIGIYA MACHINERY WORKS LTD.
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Mr. Norikazu Shigitani

President of SHIGIYA MACHINERY WORKS LTD.

Since the 1950s, Shigiya has specialized in the production of metal machine tools, primarily cylindrical grinders, universal grinders and specialized machinery. By working collaboratively with its customers, Shigiya offers bespoke solutions to meet diverse customer needs, whether they are in the automobile, electronics, IT or other businesses. In this interview Norikazu Shigitani discusses the ‘co-creation’ concept in Japanese industry and explains how his company backs up unrivalled product quality with unrivalled quality of service.

 

Since the rise of Japan’s private sector, the concept of ‘Made by Japan’ has been somewhat criticized in today’s globalized world. With the rise of emerging economies we are now seeing that the processes of ‘monozukuri’ are being replicated at a cheaper cost. If competing enterprises play on price competitiveness, how can Japanese companies not just survive, but thrive in this kind of environment?

As you said, companies in China and South Korea have found ways to mimic manufacturing processes and replicate similar products at a lower cost than Japanese companies. However, just because products are similar does not entail that they are the same. What I mean by this is that the quality of the products is noticeably different. Japanese companies are very meticulous in the way they undertake their manufacturing processes and are known for their high-quality products. Usually, several teams of people are involved in production processes.

For example, in our production of cylindrical grinders, our sales teams will listen to the needs of our customers. This information will then be relayed to our design department where our staff will model products according to the exact requirements of our customers. Our assembly team is then in charge of putting components together to obtain a final product that can then be delivered to our clients. In this way, we have highly qualified employees who oversee every single step of the development and production processes so that we can provide our customers with equipment of the highest quality. It is this collaborative system, this ‘co-creation’ that we and other Japanese companies have adopted that allows us to thrive. This ‘co-creation’ extends past the collaborative approach undertaken by teams within individual companies – Japanese companies actively work with one another in order to better our products and stay relevant. We believe it is important to work together and think together and the Japanese manufacturing system excels in this endeavor.

 

You mentioned a very interesting concept, that of ‘co-creation’ between Japanese firms. This ‘co-creation’ came to fruition due to Japan’s unique manufacturing structure where there are a lot of small to medium sized enterprises (SMEs), the so-called chūkenkigyō, that use very high levels of technology and that provide services to the giant corporations. Could you explain to our audience, who is not familiar with this structure, what is the role of Japan’s ChūkenKigyō in Japan’s manufacturing chain and what is the role of Shigiya Machinery Works from behind the scenes?

Large corporations have a lot of employees which means they can afford to establish several different business segments. In contrast, SMEs cannot handle as many business activities and so opt to specialize in certain fields. This specialization allows SMEs to manufacture products of high quality which are essential in the larger-scale assembly and manufacturing of goods distributed by ‘giant’ corporations.

In the case of Shigiya Machinery Works, the company developed and expanded its activities as more and more business opportunities presented themselves and more jobs could be provided. As we grew, our company gained more expertise and consequently received more challenging demands from several ‘giant’ corporations. Shigiya responded to these demands accordingly and continued to showcase its ability to create and innovate. Over time, our production processes improved drastically and the Shigiya Machinery Works of today now proudly stands as a manufacturer of products and services of elite and unparalleled quality.

 

You said that ‘co-creation’ is within your history of collaborating with these large corporations, to always do more for them. Could you give us an example of this ‘co-creation’ today?

When Honda was expanding its operations overseas, particularly to the US, they were looking into the production a novel type of engine (CVCC engines) for their cars. For this engine, they required very specific components that they asked us to develop and provide for them. The job was demanding and proved to be a challenge for our company, but it was one we accepted and successfully delivered on. That event was significant in Shigiya Machinery Works’ path towards technological improvement.

 

We took a look at the price of your machines and compared it with the price of machines made by foreign competitors. We found that your machines were slightly more expensive, 15-20% depending on the competitor. When you are in front of clients and you are trying to convince them to purchase your products, what argument(s) do you utilize to convince them to spend that extra dollar?

We pride ourselves in the high-level quality and durability of our products. Some clients require machines that can function for 24 hours a day, 365 days a year – machines capable of excellent endurance and performance are a must for them. Our clients know that we can offer them those kinds of machines so they routinely come to us to provide them with what they need. Over the years, we have seriously taken into account the feedback of our customers and have strived to improve our products in order to not only live up to the expectations of our customers, but to exceed them. We want to give our customers the best quality machinery they can get. Thus, a 20% difference in price may seem significant upon first look, but on the long term I can guarantee you that the extra investment is worth it. I am sure our customers would be happy to tell you that they are satisfied with their purchases and the durability of their machines. 

 

Staying on the topic of endurance performance, we had an interview with the CEO of Toyoda Van Moppes during in which he told us that, like you, his company’s competitive advantage lies in the durability of their products – one machine can last for at least 20 years. However, he also told us that this durability could sometimes be a business handicap as clients would buy machines once and not have to buy another for 20 years. He termed this the ‘technical shrink’. Could you explain to me how you diversify your sales revenue in order to avoid this ‘technical shrink’?

Two or three years ago, a client came to us for assistance when the machine they had bought from our company malfunctioned. This machine had actually been purchased 40 years prior to this event, thus, we had to send one of our oldest and most experienced service men from Tokyo to repair it as he was the only person familiar with the model of that specific machine. Upon assessment, the service man realized that overall, the machine itself was still in good condition but that the motor had failed and had to be replaced. However, motors of the same model were no longer in production, so he drew a precise diagram of how the replacement motor needed to be and what modifications would be required for the machine to function again. He then bought a similar motor to the original, implemented the necessary modifications and was able to fix the machine. The client was impressed with this sincere response and our devotion to service, so they directly passed an order and purchased a brand new machine.

The message I am trying to portray through this story is that our company not only provides an unparalleled quality of products, but also an unparalleled quality of services. Our teams of service men, both in Japan and overseas, are always available to fix problems associated with machine malfunction if there were to be any. We pride ourselves in the ‘after-service’ we offer our customers and we believe that this is one of many reasons why our customers remain loyal to us.

 

If we were to come back in 10 years to have another interview with you, what goals/objectives would you want to be able to tell us you have achieved?

Although it may not seem as such, 10 years is actually quite short in the grand scheme of things. However, the main objective I hope we will be able to say we have achieved by then is significant overseas expansion. I would like to be able to say that we will have successfully established new bases abroad, for example in Taiwan, and that we will have successfully boosted our operations in China and other regions in South-East Asia. By targeting foreign markets and establishing more overseas bases, we hope to increase our exposure to potential clients, and to showcase to the world that Shigiya Machinery Works delivers products and services of unparalleled quality and reliability.

 

 


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