Thursday, Aug 16, 2018
Industry & Trade | Asia-Pacific | Japan

Japanese Monozukuri

‘Yoshitake takes great pride in the reputation we have built: quality and reliability’


1 week ago

Mr. Tetsu Yamada, President of YOSHITAKE INC.
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Mr. Tetsu Yamada

President of YOSHITAKE INC.

Yoshitake Inc. is a comprehensive manufacturer of the regulating valve that is essential for fluid control, and contributes to energy conservation and high-efficiency. In this interview, president, Tetsu Yamada, says that while his company’s products are more expensive than their competitors’, their superior quality and high reliability make them worth the price tag. He also explains that a change of mentality amongst Asian manufacturers regarding quality has increased Yoshitake’s business in the region, which, along with North America, South America, Russia and in the Middle East, forms part of its globalization strategy.

 

Often copied but rarely matched, the “Made by Japan” label is known as a symbol for quality. What makes up the essence of “Monozukuri”?

The essence of “Monozukuri” is to reduce the total number of manufacturing errors. As corporations manufacture products and devices, they abide by the highest of international standards while attempting to make the least possible mistakes. For example, when a given company manufactures 10,000 products, flaws are bound to occur. The objective of “Monozukuri” is to bring the amount of errors to zero.

At Yoshitake, we have turned this objective into a tangible guideline: “Never repeat an error. While making a one-time mistake is inevitable, repeating it is an unacceptable blunder.” When we get a complaint from a customer, not only do we correct our wrongdoing, but we also conduct horizontal, vertical, and in-depth investigation along the entire manufacturing process. By doing so, we insure that the error is never repeated.

In Japan and abroad, the majority of valve manufacturers are supplied with their materials by external sources. At Yoshitake, we deal with a dozen distinctive parts to produce our valves. In order to guarantee optimal quality, we produce the necessary manufacturing devices and parts in-house. This allows Yoshitake to significantly reduce the amount of defective products, while abiding by the highest level of quality control. As an SME, it would be extremely difficult for us to properly track and conduct quality control analysis of our supplier’s product. Unlike larger corporations, such as Toyota Motors, we are not able to properly monitor our suppliers. Therefore, our strategy to maintain an unrivalled level of quality is to produce the maximum of manufacturing components and devices in-house.

In the valve-making business, the most important manufacturing part is the casting device. Internationally speaking, there are 3 types of valve castings available: Steel, Bronze and Stainless Steel. At Yoshitake, we produce all our steel and bronze castings in-house. We are proud to say that we are one of the only valve manufacturers in the world to do so.

 

How do you ensure that Yoshitake’s quality remains optimal and uncompromised?

Traditionally, casting plants have always been dirty and unpleasant factories to work in. The temperatures are extremely high, the atmosphere is intensely dry, and the overall facility tends to be somehow dirty. At Yoshitake, we make great efforts in keeping our factories as clean as possible. As a matter of fact, I believe that we have the cleanest one the world. Many years ago, Japan had a large number of casting factories. As time went on, these plants were shut down because of environmental problems and rising labor costs. Nowadays, no one wants to work in casting facilities. At Yoshitake however, we believe that to provide optimal quality to our clients, we must produce our castings in house. We therefore invested our resources in the construction of a casting plant located in Thailand. At the start, we were amateurs to the casting world. As time went on and we learned from our trials and errors, we successfully developed the best and cleanest casting factory in the world. After 20 years of operations, I am proud to witness that the rate of defects in our casting factory is at an all-time low.

For Yoshitake, producing in-house casting devices wasn't enough to guarantee the quality we hoped for. So we decided to take it a step further and began manufacturing our own casting machinery. This dedication to in-house integration is extremely rare in the world of valve manufacturers.

 

What are the competitive advantages of Yoshitake in comparison to your competitors?

In Korea and in China, there are many valve manufacturers, and these corporations compete on lower cost in comparison to our products. In recent years, we have seen a change in the mentality of Chinese end users. Ten years ago, very few Chinese corporations bought our valves, and our products were unknown. Over the past decade however, the name Yoshitake began to resonate in China. Today, we supply our valves to a variety of Chinese companies. This business trend reflects an important change in the spirit of Asian manufacturers.

At Yoshitake, we take great pride in the reputation we have built: quality and reliability. Our Asian collaborators regard us as a company that makes little to no errors. While our valves are expensive, the reliability and comfort we offer is highly respected by our clients.

Another feature that differentiates us from our competitors is the quality of our after-service and of our consultation activities. Not only do we sell our valves, but we also provide technical explanations to best-use our products. Furthermore, we provide consulting services to our clients in order to assist them in successfully ameliorating their facilities’ processes.

 

How do you convince a potential client to spend an extra-dollar for Yoshitake’s products?

Often times, our clients attempt to negotiate our prices down. From my point of view, certain discounts are simply not acceptable. The price we give our clients is always the best price, especially for the level of quality and service we offer. As we refuse to cut our prices, we often worry that our collaborators may leave us. Despite our fears, this situation rarely materializes; our clients appreciate us for who we are. At Yoshitake, our corporate identity is to have “fair business.” We must be fair to all our customers and we cannot prioritize one over another. This emphasis on fairness, on treating everyone equally, is another strong point of appreciation from our customers.

Furthermore, our profitability margin per-unit is not so high. Since we calculate profitability under a systematic scheme, we never cheat our customers. When I try to convince a potential client, I release information about Yoshitake’s profitability margin and manufacturing cost. Despite the fact that the cost of labour has been increasing in China, some of our products’ price tags are double that of our competitors. To justify such investments, I explain that while the cost of our products is indeed double, our quality check is also double, the amount of product errors is doubled-down, and our raw materials are 100% traceable. We use that information to convince customers as to the superiority of Yoshitake.

 

Can you tell us more about your international strategy?

With Japan’s decreasing demographic, the domestic market is naturally shrinking. To counter this loss, Yoshitake is pro-actively expanding overseas. For us, the greatest potential for growth is in ASEAN and China. In the case of Europe, historical valve manufacturers in England and Germany extensively cover the market. In the valve world, reducing errors and getting your customer’s trust are the keys to success. Since European end-users are satisfied with their historical partners, it is difficult for us to penetrate the market without having a solid reputation first.

In the USA, we have a partnership with Armstrong International Inc. Through this partnership, we have established sales channels in Mexico and Canada. Since our North American customers are evaluating us highly, I believe that market shows solid potential. Looking at the future, we would like to invest in South America, Russia and in the Middle East.

 

Over the last 4 years, Yoshitake’s sales have increased year-on-year, as your operating income jumped by 20% over FY 2017. What will be your mid-term strategy to pursue sustained growth?

We have been aggressively investing in equipment procurement, sales channel multiplication, increased production capacity and employee training. We have also made efforts in terms of renewable energies. We constructed a one-mega-watt solar plant for our Thai factory. This investment provided us with two advantages. Firstly, it allowed us to become more environmental friendly. Secondly, it significantly reduced the cost of electricity.

In order to make our company more global, we also invested in new internal software. Many Japanese organizations use an order and shipment software in Japanese only. In order to employ non-Japanese workers, we require a system that utilizes a common language. While this investment cost us 300,000 USD, I strongly believe that it was a necessity.

At last, we are investing time and money in human resources. Due to Japan’s shrinking labour force, we cannot rely on the Japanese youth exclusively. We therefore employ Chinese, Thai and Filipino individuals, and we have invested large sums of money in human resource training.

 

What ambitions do you have for Yoshitake?

The most important to me is our customers’ evaluation. Having our clients believe that Yoshitake’s valves are the best is my ambition.

 


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