Tuesday, Jul 23, 2019
Industry & Trade | Asia-Pacific | Japan

Japan

Yagi Industries: The perfect combination of technology and creativity


3 weeks ago

Norihiro Yagi, President of YAGI INDUSTRIES CO., LTD.
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Norihiro Yagi

President of YAGI INDUSTRIES CO., LTD.

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)?

The competitive advantage for an affiliate company like Yagi Industries stems in the evaluation given to us by larger companies, to whom we supply, especially related to quality, cost and delivery time.  Something we always try to have in mind is that we need to be extremely careful when it comes to quality because we do not wish to pass any irregularities further on in the production line. Our quality standard goal in the next couple of years is to reduce our defective products to less than one every 1 million pieces. Mistakes are extremely detrimental for the company and the consumer and we need to make sure that we make no mistakes. It is necessary to carry out preventative measures to avoid dents and scratches early in the process. Sometimes irregularities in components are so slim that cannot be identified with the naked eye, which can lead to complaints and higher costs. We must perform thorough in- house reviews of the product.  

Regarding the cost, I will say that the Japanese market has it´s own unique features. There is great competition here and that can lead to lower pricing strategies by some firms. This can be observed regularly within the domestic market and can sometime present short-term economic loss for the company. However, the intention behind such strategies is to gain market share and medium-long term success.  

I understand that some people might see these strategies as odd, but they have been proven to be very effective under certain circumstances.

Japan has adopted a well known strategy called the «Kanban» method. In my opinion there is need for more flexibility in production and this is something that differences us from the competition.  Cost reduction has become a virtue of the company and by always conducting Value Analysis and Value Engineering we are able to respond to our customer needs in the best way possible.

 

Could you run us through your best selling products through the time?

In the past, it used to be the inner and outer rings of tapered roller bearings (currently still in production) and clutch rotors for car air conditioner. Nowadays, automotive bearings (tapered hub bearings) and torque sensor gear for Toyota Land Cruiser

 

Could you Talk to us about SHINKA, your company philosophy?

Place a spark in your Heart: feeling of excitement that fills the hearts of our employees

New challenge: will to challenge something new,

Evolution: constantly adapting to the changing times,

Deepening: your deep pursue for your own and overall purpose, and finally

True value: something that is given to only a worthy individual, he can become one if truth is on his side. If you go beyond that, you can become a myth

 

What are the competitive advantages of your company?

One of our key competitive advantages is that we have been able to vertically expand, meaning we are able to manage every process of our production line in house. This allows for cost reduction in areas such as Inventory stock fees and transportation expenses, which in turn results in more appropriate price for the customers and more flexibility.

Another key point for our growth resides within our relationships of trust with customers, cost reduction capabilities, integrated processing, global expansion, etc. All of them are vital points and exceptional tasks

We are very proud of having access to technology that most of our competitors do not. Some of them include fully enclosed die forging, coreless forging, composite forging and automatic forging just to name a few

30 years ago we introduced a managerial educational policy that focuses on goal achievement as the primary effective management method. We divide the companies overall target by department and divisions to track our progress and situation at all times.

For this year, we need to introduce IOT on-site as we plan to improve the productivity and reduce defects by arranging PCs at the work site that can form unified processing of accumulated production data.

 

Could you briefly run us through some of the key milestones your company has experienced in your overseas expansion?

2003: established company in Zarow, Poland

2005: started production

In 2018: completed the plant expansion

In 2007: established company in Zhangjiagang, China

In 2008: started production

In 2018: eliminated joint venture agreement

 

What countries would you say are the main targets for Yagi Industries today?

Right now, our main target is North America, as there are 270 million cars running. This represents a huge market of 14 million new + 40 million used cars, also SUV and truck numbers are expected to continue growing until 2023.

Generally we do not focus on rapid development. We have to trust in our entrepreneurial spirit to be able to adapt to change, which is the key for growth.

 

What would you say are some of the advantages and disadvantages of expanding overseas?

When we cooperate with customers who pursue globalization, our business relations become closer. Orders from newly emerged rival companies of our parent company also leads to increased orders overseas. Profit from overseas growth can be returned to boost domestic business.

Once you can recognize global market environment, you are able to understand that there is a market much bigger than what you are used to and filled with opportunities. That is why we decided to pursue this strategy.

On the other hand, as disadvantages, it could be difficult to keep up with development of human resources for globalization.  However, I believe it is essential to develop the globalization of human resources in the long term.

 

What are some of the advantages and disadvantages of becoming an affiliate of a bigger enterprise?

I will give you an example. In 1968 we moved our location to Kuragano town due to pollution problems and shortly after we received a capital injection of 30% stakes from NSK Ltd, our major customer, so we were capable to establish an integrated production system for heat treatment and machining.

When a bigger company has your back you have steady work, credibility towards banks, and improvement in the companies’ performance by exchanging human resources and technology. Also, you can control the vetting power of the bigger company and securing your autonomy with the stake percentage you sell.

The disadvantage is that there is now a lot more control. The frequencies of audits such as evaluation of seismic capacity, financials and safety have increased. We are hard to receive orders from rival companies of our parent company and it is difficult to come up with a quantitive scale of merits compared to independent competitors.

 

Could you explain to us your policy regarding human resources?

Securing and cultivating human resources is the key to corporate growth in all ages.

Ideal human character cannot be developed overnight, so I think, with time we can get better experience with people of good nature by our side. It is people who have good brains, character and work well, with indomitable spiritual power who can overcome any difficulties. They are the ones that lead to possibility for growth. 

When my father experienced hard times , he had to put his kimono in a pawnbroker to pay our employee's salary in the early 40's when our company was established.  For my 25 years as a president of the company, I have only one time felt insecure in cash flow when our business volume was decreased by 70% for consecutive 3 months from January to March 2009 due to an influence of the Global Financial Crisis.  We were able to survive this situation because we were in a blessed funding environment and the relationship of trust with the banks was good despite such severe situation.

 

How do you conduct technology enhancement? 

Most of our technological developments come from the observation of our current capabilities and analysis in order to become more efficient. Cooperation and added know how between stakeholders is also crucial. Rarely can an individual come up with new inventions by himself. It is better to have the support of others and cooperate towards innovation.   This is why we believe organizational strength is very important

 

What makes good labor-management relations and social welfare?

It is important to be frank in labor-management relations. In the management council which is held four times a year, accounts settlement is presented and explained in all detail.  From the previous generation of management, we inherited our motto that aims towards high wages and high productivity. Welfare programs are enriched by our parent company, so we are putting an effort to apply these measures as soon as possible.


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