Sunday, Nov 18, 2018
Industry & Trade | Asia-Pacific | Japan

Machinery Industry, Japan

Waida Mfg - A cut above the rest


3 weeks ago
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Mr. Mitsuo Waida

Chairman & CEO of WAIDA MFG. CO. LTD

For this interview with the Worldfolio, Mr. Mitsuo Waida, President of Waida MFG, explains the importance of high-precision grinding machines and the unique role his company upholds to support international manufacturers.

 

Since the rise of Japan’s private sector in the post-war period, Monozukuri has been widely spoken about, but often misunderstood. In recent years, we have seen regional peers copying and replicating the manufacturing processes of Monozukuri at a lower cost.What are the main competitive advantages of the “Made By Japan” compared to its competitors (China, Korea)?

During the two lost decades, we noticed that Japan’s competitors, such as China and Korea emerged, and their clear strategy was to keep the cost and the price as low as possible, while providing some sort of quality. However, our strategy has been to emphasize on quality above all. WAIDA MFG is a perfect example or Japanese Monozukuri : highly complicated, fully-automated grinding machines combined with unbeatable quality and value. One of the main reasons why Japanese companies, especially in the home electrical appliances and in the electronics industries, saw regional competitors catch them up is because they forgot the importance of own manufacturing technologies, and began outsourcing a lot of their manufacturing. This can be said of Panasonic, SONY, Sharp and many of the big Japanese firms, and I personally believe that this is one of the main reason of their decline.

 

At the eve of the 4th Industrial Revolution, many industries are living tremendous changes due to innovative technologies, such as automation, miniaturization, IoT and many more. While these technologies influence end-products, they are also having an impact on production processes. What has been the impact of innovative technologies on Waida?

Our machinery is utilised 24 hours a day and 365 days a year, so it is clear that being able to incorporate these cutting edge technologies within our machines is essential. However, there are also some technologies that cannot be replaced, such as «  Scraping », as these particular tasks can only be performed by a highly skilled and dedicated craftsman. What is important is to be able to combine human technical skill and machines to achieve the best possible result. It is indispensable to have a clear harmony to manufacture the high precision grinding machines that we produce. Technologies and humans can be compared to the human body: Arms and legs are very useful, but without the brain they are useless.

 

The term “hidden champion” is a Japanese concept that defines a Strong-Medium Size firm. While largely invisible to the general public, these corporations are the strength of Japanese industry, and they are often found to be market leaders in niche fields or behind some of the world’s best known brands. What is the role of Japan’s “Hidden Champions” in the manufacturing chain? Why can we consider Waida to be a “Hidden Champion?” 

Japan’s manufacturing industry is a pyramidal structure, with the big companies at the top, and the remaining 90% are the chuken kygio and SMEs. This structure allows them to support the huge companies. We work behind the scenes, we support different industries, but we are truly essential to the Japanese industry. Whereas a majority of Chuken Kygio find a derived value out of supporting the larger firms through their specialized technologies, our company is different. We are clearly a SME, excelling in a niche field, we are nevertheless unsatisfied with remaining solely in Japan, and we have a very outward looking mentality. We want to expand internationally, engage with the world business leaders and conquer new markets. In many cases, Japanese companies fall into the trap of not understanding the trends of the international market. However, we have really made a huge effort to understand the trends of the international market. For us it is clear that to fully understand a client, and to be able to customize a grinding machine to his needs, we need to talk to him, to understand him, and to understand the world we live in. Our main philosophy here at Waida is to always ask a client: « What are you struggling with ? », and from there, we will find a solution !

 

Your products are applicable to so many industries, such as the automotive or the electronics sector. Could you tell us which industry represents the highest growth potential for your company?

When it comes to our cutting tools, we can notice that the biggest growth potential comes mainly form the automotive industry. Currently, 60% of our products are destined to the automotive industry, but we nevertheless believe that it still has tremendous growth possibilities.  Also, for our high precision stamping tools, we firmly believe that the electronics industry - such as parts for smartphones and for electronics parts - represents a golden opportunity. Smartphones are continuously evolving, and with this evolution comes a need for smaller, more compact and more precise parts such as micro connectors and fine pitch connectors. This is so precise that our machines are one of the only worldwide that can manufacture such accurate components.

 

Can you tell us more about your international strategy? Which markets show the greatest growth potential for Waida?

We have about 175 employees working at WAIDA MFG, which means that it is very hard to internationalise, as is takes up a lot of precious resources. It is easier for larger firms to internationalise, as their human resources are much bigger than ours. Therefore, our main strategy has been to further develop and strengthen our competitive advantage, which is the development of grinding machines for precision die making and for industrial cutting tools.  In one of these two sectors, we have a big market share in Japan, China and Korea with about 60% of the market. However, we wish to attack global market share further, which is the main reason why we opened an office in the United States of America.

 

It has been states by various experts that one of the problems with Japanese products is that quality is so high, meaning that when you sell a product to a client you also lose that client as he won’t be needing product for the next 20 years. This is also known as the « technical shrink ». How do you ensure that you maintain a steady revenue?

First of all, it is very true that we strive to ensure our machines have a very long life. For example, some machines we sold 50 years ago are still in activity! Some people may think that high quality may be a barrier to increasing your revenue, but we strongly disagree with this. We will not hold back in providing the highest of quality, and we have always been in pursuit of the highest possible quality, because this is the only way to gain trust with your clients.  This quality is also the only way to ensure our clients come back to buy our latest machines.

In addition, we also have a dedicated after service team. Our philosophy is that selling the machine to a client is just an instant. That point of sale is the start of a business relationship that will hopefully continue for 30 or 40 years. This is the main reason why aftercare is essential here at WAIDA MFG. We strive to ensure our machines are perfectly maintained, that we can orientate our clients to the most efficient way of using them, and that we can see our machines last as many years as possible. Currently, 18% of our revenue comes from aftercare, but we hope to see this percentage grow in the future, and this is the reason why we have branches in China, Thailand, Taiwan, USA and a partner in Germany

 

You mentioned you had a partner in Germany. Are you currently on the lookout for more international partners?

We have collaborated with our German partner for the past 6 years. They specialise in making high precision grinding machines, like us. It is true that some of our markets overlap and that we are in fact competitors. However, the main reason why we partnered with them is that our values are very similar, and we think alike. In addition, when it comes to another type of high precision grinding technologies, they have certain machines that we do not, so we import them and spread them to Asia. And also, they import our machinery to Europe for them to distribute over there. We have created a healthy Win-Win situation with this company, and we hope to do so with many other companies around the globe.

 

If we were to have this interview again in 10 years, where would you like to see your company?

Personally, I want this firm to last at least 100 years. There is a huge difference between two and three digits! In order to be a long lasting firm, it is key to be able to create strong business relationships where we and customers trust each other for long time. For example, I personally have some clients I have known for over 45 years and we are still working together. We want to increase these type of close and lasting relationships, because they are to key to a healthy, long lasting company!

 

 


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