With manufacturing plants across Japan, the USA, and Europe, Kyowa Manufacturing engineers high-precision components, ranging from gears/shafts for automobile transmissions to motorized rollers for logistics/factory automation equipment. In this interview, president Shigeyuki Fujimoto talks about the global growth of e-commerce and how Kyowa will meet booming demand for products like its motorized PulseRoller system.
In the last 25 years Japanese manufacturers have been put under pressure from regional competitors in China, South Korea, and Taiwan that have replicated the Japanese monozukuri processes, but done so at a cheaper labor cost, providing the world with cheaper yet lower quality products. How would you define monozukuri and why should one choose the Japanese products?
Speaking of the Japanese monozukuri, I would define Japanese Monozukuri as “Mass of Commitment” of employees. Kounosuke Matsushita, the founder of Panasonic, used to say that “Monozukuri is hitozukuri”, which means that the production of goods equals to the production of people. Truly good products can only be produced by good people and their commitment and passion. In this spirit, we continue to treat and train our employees well as assets of our company and with this philosophy, we strive for the improvement in the quality of our products and the enhancement of our services.
You have manufacturing plants overseas in the US and Europe. How do you maintain the same quality of products and services there as you have here in Japan?
Basically, what we are distributing in the overseas market is Motorized Drive Rollers named under the “PULSE ROLLER” brand and its internal engine, which is the heart of the PulseRoller, is produced in Japanese plants. We have Kyowa USA, Inc and Kyowa Europe, Ltd in Bulgaria for manufacturing and Kyowa Europe GmbH for sales/customer services. All main assembly machines and equipment for the assembly line are engineered, made and tested here in Japan, and we distribute them to our manufacturing sites in the USA and Bulgaria. There are “standardized assembly processes and rules” to be followed, which is proven by the experience and history of Kyowa Manufacturing Japan. Before the covid-19 pandemic we regularly visited our plants overseas and provided training to our employees there when necessary.
While the Covid-19 pandemic has brought negative impacts, there are positive impacts in e-commerce which has led to the growth of the logistics industry and to the growth of your company as well, specifically with your Motorized Drive Rollers. How do you take advantage of the growth in e-commerce in Asia Pacific Region, US and Europe? What strategies are you going to implement to be number one in terms of global market share?
It is true that the Covid-19 pandemic has accelerated the growth of the e-commerce business. Most people think that e-commerce only includes the goods to sell but moving forward it will also include life services. With its growth comes an increased demand for logistics equipment and our company is required to keep upgrading our product to be selected as an important drive source for advanced conveyor systems. We see that there are more opportunities for our PulseRoller products and our strategy to be number one is simply to “Focus on what we do today”. We have seen how the e-commerce business has been growing at high speed but its growth rate we see from now is going to be tremendously higher than it has ever been on a global scale and in order to fulfill the demand, we need to keep increasing our production capacity as well. We are benefiting from this growth as there are companies that are expanding and are using our PulseRoller products that is truly our honor.
Are you looking to introduce your Pulse Roller to the overseas market, if you do, which market would it be? What strategies are you going to utilize?
I am not sure how much I can disclose about the innovation for our PulseRoller. Let me just have a big e-commerce company with a smile as an example. Our products are used as a part of AGV (Automated Guided Vehicle) in their system. AGV is a kind of robot that functions as an automated cart that Amazon uses in their logistics centers. This robot could transport goods, boxes and such from the shelf or sorted point to the shipment point. There are many other possible applications for Sorting, Picking and AGV technology which we are currently looking into for PulseRoller to be used as a power train.
Countries such as Japan and Italy are facing the shrinking populations which is resulting in the decline of the labor force, therefore companies such as yours are looking to increase the utility of AI, IoT and Factory Automation to offset these changes. In your specific case, tell us what the impact of these innovative technologies will be and the ways you are using them to offer better solutions to your customers.
Recently our customers required us to produce more difficult products and the recent demands are including more sophisticated technology and performance. Here at Kyowa, we always try to meet the demands and requests from our customers. Due to the coronavirus situation e-commerce has grown rapidly and as a result, we need to increase our capacity, on the other hand the labor force is declining in the market, therefore we need to accelerate Digital transformation ( DX ) in our production process and office work that is undergoing right now.
Speaking of innovative technologies, we supply core components for the logistics equipment, and our products must be robust not to break down easily which is our responsibility. If you order some goods online, even if the logistic systems are in place but the components in the logistics are defective, then on-time delivery will not be possible. We have to be able to maintain the quality and sustain the lifespan of our products. With our Ai (Advanced Intelligence) technology in our products, we provide our clients accumulated/real time based diagnostics data that is implemented for the purpose of predictive maintenance in order to minimize the risk of unexpected downtime of the logistics systems.
Please tell us your competitive advantages and the reasons why you are a go-to partner when it comes to Motorized Drive Rollers.
We have been in the business for seventy years and we started our business as a component/material processing company as a subcontractor. Ten years after the company was founded, we launched a business division to manufacture our own products and equipment, then eventually we developed our own products for Industrial machineries. Our expertise in mechanical engineering is one of the competitive edges of the company. As I have mentioned already, Kyowa started as a component processing company and that still exists today under the Material Processing Division where we supply parts for the transmission and shaft of high performance motorcycles and tractors. We have an accumulated know-how and expertise for the production of Motorized Drive Rollers. We are excellent in the processing technology for the gear and shaft and describe ourselves as expert mechanical engineers, however we are not experts of control/software engineering, and we decided not to do something we are not good at but looked for companies that specialize in that specific field. We established a partnership in the USA with a company called Insight Automation and a Bulgarian company called Industrial Software and that’s how PulseRoller business started on a global scale. Each company focuses on their own core competence and brings them together for co-development of the products in order to provide the most beneficial package for our customers.
Is there any specific industry that you would like to introduce your technology into?
For the time being we are putting more focus on the industries that we are currently serving - that is, the logistics system field. Our products are also used for factory automation but we need to do more research on how exactly our products can contribute as a part of next level factory automation.
Japanese companies invest massive amounts into their R&D to introduce new products and technology as well as to be competitive domestically and globally. Japan’s R&D expenditure back in 2019 was around $19 trillion. Recently, we have seen different Japanese companies shifting overseas to find partners in terms of co-creation and joint development. Do you have any products that you would like to showcase to our international readers? Are you actively looking for co-creation partners?
Basically, that is what we have been doing, as I have mentioned above, we have been working with companies in the US and Bulgaria under the global “PulseRoller” brand umbrella. We make the motorized drive rollers, but the controller is engineered and made in Bulgaria, this is how we collaborate as business partners. Both Motorized rollers and Controllers are also tested by three companies from different application points of view before each product is launched in the marketplace. Back in 2014 at CeMat Hannover show held in Germany, we introduced our current flag-ship product to the market, the product was called Senergy-Ai (Advanced Intelligence inside) that contained network communication with ConveyLinx-Ai family controllers and since then, we as one team have been improving its quality and performance to the next level.
What is your midterm strategy to continue your corporate growth? What role does international expansion play in your company?
We have two different midterm strategies: internal and business. We are in the middle of reforming our monozukuri process and from the manufacturer’s standpoint we have to add IoT into our monozukuri. We are gradually doing one step at a time to realize our plan to incorporate IoT. For example, we are trying to select the data from multiple functionalities of our pulse rollers for us to be able to visualize the production line. This data will also be used for further development of our technology and for the optimization of our factories. We can also use a data network to get connected with Kyowa USA and Kyowa Europe. We hope that what we are doing would make our customers happy and that the demand for our products and services would increase.
Imagine we come back to interview you again in two or three years, what would you like to tell us? What are your dreams for the company and what would you like to have accomplished by then?
My long-term objective or my ultimate vision as the president of this company is to make everyone who is connected to Kyowa happy. The world is changing at an unprecedented speed, within the next few years we will keep challenging ourselves to provide better products and services and hopefully much better opportunities will come. I hope that this way of thinking will continue to be our guiding philosophy.