Automation & accuracy with social responsibility

As the fifth generation of Ishida’s how have you managed to fuse the values of the company’s humble beginnings, to the company’s global operations today?

The first generation of our Ishida family started the business approximately 123 years ago, as a manufacturing company for scales and weights. Before that they were actually running drug stores. We then got a license to sell the weights and scales and the rest is history.

Our company works around the concept of Sanpo yoshi, which means the three levels of satisfaction: what benefits you should ultimately benefit your partners also, and then society at large. These are the three ‘satisfactions’. I believe that we were able to continue our company and business until this day because we had this philosophy and followed it. Of course as a business it is important to make profits also, but first and foremost we have to think about the philosophy of why we are operating this business, which is to provide satisfaction and joy to our customers while also contributing to society.

Ishida today is selling in over 80 countries and has operations all over the world. Recently I had the pleasure of meeting with the CEO of one of the largest food manufacturers in the United States, and shared our company philosophy with her. She liked our approach and way of thinking, and she was intrigued with our three-way satisfaction philosophy of our company, because in the United States, companies rather privilege stockholder satisfaction than social contribution. She thought it was a great idea that there is satisfaction among all of the stakeholders, not just stockholders, but the customer, society and employees. In our 123-year history we have never laid off any employee. You can say that we are socially responsible and we enjoy paying our fair share of taxes, which we believe is one of our social responsibilities. However, she believed that minimization of tax was more important in the United States. She was amused to see that a company is happy to pay taxes, whereas in the United States that is not the case.

How is Ishida positioned to be able to weather what is sure to be a prolonged period of turbulence across global markets?

First of all we have the best product. As I mentioned before our core technology and engineering is in the scales sector. We have the best, accurate and most reliable product compared with any other competitors, and offer total customer solutions centered around our scales. We have a total integrated system with our packaging, boxing and inspection for foreign objects. We are the only company in the world that can provide this kind of totally integrated and one-system solution.

Depending on the customer’s volume we can also customize the system, which is scalable up or down for them. We have various customers using our weighing scales, but each customer has their own individualized scale and weighing system fit for their business. Finally, for the total integrated systems in the manufacturing environment, we currently have 60% of the market share in Japan, and our main customers are factory workers and not engineers.

The global economy slow down has not affected us because our company has a strong engineering function and positioning. Our main customers are food manufacturers; 60% of the equipment that they use is Ishida’s, so we hold 60% of the market share in Japan. The global slowdown and the slowdown in China doesn’t affect us that much because we are mostly dealing with the food industry, where the number of stomachs doesn’t decrease, so food packaging and the industry itself therefore doesn’t decrease and we have a stable income stream. So the current economic slowdown has not significantly affected our business one way or another.

Ishida has extended its network to cover more than 80 countries. Could you enlighten us as to Ishida’s growth strategies and your mid-term management plans?

As I stated before, our business is linked to the number of stomachs, so we aggressively go where there are high populations or where there is large population growth. Therefore in the last 20 years we heavily focused on areas such as the BRIC: Brazil, Russia, India and China. Also in the last three to five years we have been focusing on the VISTA countries, which are Vietnam, Indonesia, South Africa, Turkey and Argentina, which all witness big population growth. In the last three to five years we started in Vietnam and Indonesia; we were also looking to go next to Turkey, but are a bit more hesitant now that the country is somewhat unstable currently, even though it offers significant population growth as well. Instead we decided to begin operations in Kenya and Nigeria this year.

Can you take us through the Ishida mind or philosophy; what is it which you feel sets you apart from you competition?

There are a number of global trends at this time and Japan finds itself at the center of two of them, which are food safety and automation. With the rise in wages and labor costs automation is becoming a big trend. In the last 5 to 10 years, China, for instance, was not so concerned with food quality or safety, but now we see a bigger demand for safer and higher quality food products, and people start to pay attention to such things.

The same thing is also happening in India as well. Food safety is becoming more and more important, especially for parents who want to feed their children food that has been safely processed. Our X-ray machines that detect metal or foreign objects in the food during the inspection process are being installed and used for that purpose. With labor costs and wages rising in China and India, the robo-tech automation is becoming more vital and increasing, and we can offer that technology.

What are the other products, solutions and functionalities that Ishida can provide to a company today?

Our products help customers save on natural resources and electricity. For example the potato chip bags that we are currently offering enable you to use only half to seal the top of the bag, which saves on material resources and film loss. Another example is the food trays used by grocery stores to package products: now with our products they can package the food without the trays. Customers have praised us for these types of machines.

We also received an appreciation letter from one of the largest snack food manufacturers saying that in the past they were unable to weigh 100g exactly in their potato chip bags but always ended up with 102g or 101g, but with the accuracy of our products they were able to weigh exactly 100g. When they calculated the volume saved from these spare 1 or 2 grams per package, they found that the volume would equal 2/3 of Japan’s Tokyo Bay. We believe that we can do the same in developing countries such as Indonesia and South Africa. By providing such services we can contribute to developing countries food safety and high quality foods.

In terms of product and design what kind of steps is Ishida taking in order to reduce its environmental impact?

I can highlight another example: grocery stores’ current biggest issue is the high rate of food waste. Using our linked POS system grocery stores can see what they are selling, they can better predict the volume of demand from their customers, and better manage their stocks. This can help reduce the loss and overall wastage of vegetables, meat, fish and poultry, which are thrown out in great quantities every day.

What are your views in terms of affects likely to be felt when the Trans-Pacific Partnership (TPP) comes into place, and how will Ishida stand to benefit from this pact?

There are various views on the TPP, but one view is on patents and regulations. By reducing the number of patents and regulations it will be easier to enter new markets and countries. In a country like Japan, which is heavily reliant on imports for food, Japanese people are concerned about not being able to import food at the current levels in the future. If other countries decide not to export food to Japan, then we will have to negotiate with countries on an individual basis and that will become a big problem and issue for Japanese people.

For example, for rice or corn production, Japan can’t compete with the US or any other countries that have large land masses and farms, which we are very concerned about. Yet on the other side, we in Japan can produce high quality products with very little land or resources, and by using our future technologies such as the X-ray and foreign object detectors, we can have better tasting, better looking and sweeter tasting products. We can use our products to produce the best meat and vegetables. Using our equipment you can measure the fat in the meat, or even measure the sweetness of a product.

We have an opportunity to provide high-end products to the global market. Our company started with the weights and scales, so those are very important tools used for fair trading throughout the years. There are different aspects and views on the TPP with advantages and disadvantages, but how do we balance it to make it fair? This is the biggest question; and by using our equipment to measure and weigh the items we can have a fair trade.

Can you tell us more about your international expansion strategy and the challenges you face to move into new global markets?

In the international arena, almost all of the global food manufacturers are our customers. Our major customers are global players such as PepsiCo, Nestlé or General Mills who operate globally, and they are actually the ones who ask us if we can provide the equipment or services in the new countries that they are entering. We follow our customers globally; for example when they say that they are building a factory in India and ask if we can follow them there and provide services and equipment there. We follow our customers; that is how we operate globally.

What type of company would you like to hand over to the next Ishida generation?

In the future I would like Ishida to be a globally integrated company manufacturing in the cheapest locations and selling at the highest price location. We want to utilize human resources from everywhere in the world for our company.

Language and communication are a real challenge that we face now, and we need to find ways to be able to communicate with people in Switzerland, the UK and China. We have to develop a solid grasp of language especially English – that is vital for our company’s future.

As a final message what would you like to tell to our readers?

I have been president at Ishida for six years, during which the sales of the company have risen over 1.5 times and have exceeded 100 billion yen. These successes can be partially attributed to what I learned during my MBA, and I appreciate the opportunity that I had to learn and benefit from the high quality of education in the United States.

However, I believe that the United States companies in general tend to pursue profit with short-term vision, putting the customers in second place sometimes. It is presumably because of the demanding pressure from stockholders, but I think they should manage to find the way to run the business with a more comprehensive strategy, which should benefit them in long term.