Futa-Q: ‘4M + S = 29’

We know traditionally Japanese manufacturing involves an extreme attention to detail and the relentless pursuit of perfection in manufacturing. But nowadays, the modern version involves responding to customer requests, providing added value in the final product delivered. As a precision parts manufacturer, can you tell us what is your take on monozukuri? What for you is the essence of monozukuri?

Regarding the philosophy of monozukuri, our precision machining parts aim to contribute to society, and my theme for the manufacturing is to have big dreams while manufacturing the small stuff. For example, in the medical industry, we are making some products that are used for the human body and health. We need to produce something small but something good, and we want to produce products that have an impact on the patient’s body. Our mission is to give shape to the requests or the desires of the people who are developing or designing certain products.

Our company is slightly different from the competitors because we do not want to produce something that is the same as the existing products, and we do not want to produce something that is cheap. We want to produce something good, and we would like to pursue perfection in manufacturing. For example, we are not interested in mass production, so we just want to produce one piece that is ¥1 million and we do not want to produce one hundred pieces of ¥10,000.

We are always challenging the difficult tasks and we are also expanding the size of the company by hiring a lot of people. We would like to give more assurance to customers, so we are increasing the people, machines, and inspection instruments needed for manufacturing. That is how we are advancing monozukuri.

You mentioned that you are a small small-medium-sized enterprise (SME), and we have often met a lot of these in reports that we conduct here. We have learned that they are known as the hidden champions in Japan because of the key role they play which often goes unnoticed to the end user. For example, we met a company called Kono Seisakusho which is producing the world’s smallest surgical needle with a .03 mm diameter at the tip. We know that in the case of your company, you are producing similar products, such as your titanium forceps, which has a 1.0 mm tip as well. Can you tell us what is it about Japanese SMEs that allows them to produce such unique, niche technologies?

In our case, we are dealing with so many different customers in different industries. Some customers are working globally, and the others are staying in the domestic market. When we look at our customers, we try to find customers who are trying to work globally or who are already working globally, and we have business relationships with only such customers now. We would like to give support to those companies which would like to expand to the global market and we are trying to give the best solution to such companies. We are looking into the companies which are targeting the global market, and most of those customers request us to give the traceability for the manufacturing. We do our best to meet their requests, and we do provide the data that they need. We are trying to give assurance to the customers, and when they visit our factories, we show everything to them. We show every technology to them. There is nothing to hide.

One more thing is that one man here for example has a PhD. We have about 50 such people in this company, so the level of the technologies is almost the same as the major companies. They can have conversations with major companies as equals.

As you said earlier, you said your company serves a number of different industries with the products that you produce. We know that you plan, you develop, and you manufacture your precision products. For example, you serve the medical industry with the nozzles that can be used for testing medical equipment. Or you have your NiTi tubes which are used for catheter applications or cardiovascular applications. Then you also serve in the semiconductor field where your sealing technology is used in machines to prevent gas or leakage. Which, though, is your best-selling product and which industry are you putting most of your efforts in?

This pie shows the breakdown of the industries. 23.4% is the medical analyzers, 22.2% is the medical equipment, and then 19.7% is analyzers and measuring instruments, 23.7% is for semiconductors and electronics, 8.1% is for the industrial machines, and 2.9% is for the consumer goods.

Actually, we are not keen on appealing to a particular industry or product because a lot of requests and orders are coming in naturally. What I feel is that since we are pursuing perfection in one technology, then different customers in many different industries come to us to find solutions. For example, since we have developed the β-titanium, then many other customers came to us to learn more from our technology for the β-titanium. And we do not really focus on any particular industries but the customers who come to us have problems and want to find solutions by learning from our technologies. We provide the know-how and expertise related to the polishing, pipe-making, the machineries, or any other technologies so that we can give them solutions.

This is one of the examples of how we gave a solution to a customer who had a problem. This is fluorine coating technology, and there used to be fluorine coating technology in the market, however most of them are resistant to acid. But the customers could not find any coating technology that is resistant to alkaline. They needed it because the alkaline effect is produced when you clean the product. Because of this, there was a strong request from a customer, and then we developed this fluorine coating technology. This technology is applied by many other customers now.

Let me add something. We have an analyzer which can produce reports on the assessment on this kind of technology. This differentiates us from the competitors. We can produce reports regarding the assessment, the actual sickness, or the performance of the technology, and we are disclosing such data to the public. Engineers in other companies do not need to spend their resources to do the same tests at their companies. That is something different from the competitors.

You are contributing 23% of your product portfolio towards the semiconductors industry. We know that miniaturization is obviously the huge trend driving the development of new semiconductors, and we know Japan has been a leader in this field for many years now. Last week, we saw the Japanese government METI did a public-private partnership with TSMC in Taiwan worth $340 million in order to strengthen the capabilities of Japanese manufacturing with 3D-packaging technology to allow for even smaller semiconductors. Can you tell us how your company contributes to the semiconductor field and allows Japan to remain number one in materials and machinery when it comes to semiconductors?

I am not sure if we are really contributing to the semiconductor industry, but we just happen to be related with a company that is making the parts for the manufacturing device for the semiconductor. Those parts take up 60% of the total market share. We do not want to do mass production, but we would like to pursue new development and core development. As you said, there is a trend that the semiconductor parts and components are being miniaturized recently. We are getting a lot of orders for the core parts that need to be smaller than now. Because the other companies cannot make such small components, they do not have such technologies, so that is why we are getting a lot of orders.

There is one more thing I would like to add. In the breakdown of our sales, that 23% is for the semiconductor. But although the share of the total sales is getting smaller, the total sales for the semiconductor has not changed. 20 years ago, the proportion of semiconductors to the total sales took up more than 50% and now it is less than 25%. However, the total sales volume has not changed. It is actually increasing.

You are a company clearly committed to innovation and want to create unique products; you are not looking to mass-produce products. You have made products such as the titanium tube catcher, which we know can be used in space or in liquid nitrogen experimentation. Can you tell us more about your R&D strategy? Tell us what products you are focusing on and what is the strategy for your company?

My dream is to support clients to become the global niche top company. There are some major companies that have good business relationships with us, but five top companies are among them. They are getting a really large global share in their particular field, and my dream is to make those companies become the global top company.

Of course, with becoming a global company, it is important that a lot of companies, especially Japanese companies, co-create with companies in similar industries that have skills that their company does not have, in order to expand internationally. Can you tell us if you use co-creation partners in your business, or are you looking for co-creation partners?

We are actually engaging in some co-creation with the academia or the public sector and the private sector as well. And in any partnership we have, we are acting like the conductor of the orchestra to do the creation or development. There are so many other companies which would like to become a conductor of the pyramid. However, most of those companies tend to have a desire to make some profit. On the other hand, we do not.

You said you are focusing on those customers that are looking to expand internationally, looking to have an international presence. Often, we meet many companies here in Japan who create these unique technologies which are very successful here in Japan. But then when they go overseas, they often fail to convey the qualities and unique advantages of those products, and they therefore fail in the overseas markets. How are you overcoming this problem with Japanese companies? What strategies are you adopting to allow your customers to expand and showcase their qualities internationally?

We of course establish and accumulate the know-how and the technologies internally, and if we reach a certain point, then we think about sharing the know-hows and technologies with others. If we try to do everything internally, then it is not cost-effective. If needed, we are willing to share the technologies and know-how with others. We really cherish the network in this industry. In order to continue to get the constant jobs or constant tasks, then we have to share such knowledge or profits with others. That is the kind of direction we are taking.

We looked internationally at your strategy, and we know that your company has an office in Frankfurt, Germany. Can you tell us more about your international strategy and what benefits this location brings to your business?

The main purpose of having that office in Germany is to give assurance to the clients in the European market. We have that office as a hub to listen to the local customers’ voices. We also have some offices in the US and China. We have offices in both the West and East, so we are operating 24 hours per day. Recently we are operating online, so it is very hard to deal with the offices around the globe. One of the things that I would say is a weakness for the SME is that they cannot speak English, so the language barrier is very high for the SMEs when they want to go abroad. However, in this company, we have 5-6 people who can speak English, so we are trying to overcome this barrier by having these people. It is very hard to communicate if you cannot speak English to the global customers. That is one of the reasons why we have an office in Frankfurt.

What strategy will you be adopting to continue to grow your business internationally? Will you be opening more sales offices or would you for example be interested in a joint-venture or an MMA, and if so, which location?

First of all, we would like to have a presence in the United States. For Europe, I think that the status quo is good enough. But I am getting a lot of information from our sales team, and when I get any ideas that will give the nutrition to grow this company, I put in a lot of effort to grow that part. As such, we have grown up to the current level. We built the Tokyo office like an antenna shop in the beginning, but it has grown to a good size now. We would like to establish an environment that gives assurance to the clients, and in order to do so, we need to be physically close to the customers. That is why we would like to have a presence or footprint in the United States.

We are not really thinking about a joint-venture, but we would like to utilize the consultants there and we would like to have more conversations with engineers there. Since we work remotely now, we realize that remote working is very effective globally after Covid19. We do not need to actually go to the site to communicate with the local people. Without going there, we can communicate with local engineers. Then we are not spending money on travel expenses, and are getting a profit out of it. Drawing is the common language among engineers, so if we have the drawing, then we can communicate effectively with global engineers.

Interestingly, when there are any global issues such as the pandemic, environmental pollution, or the need for vaccination, if anything happens globally, then we get a lot of orders from our clients because most of our clients are dedicated to high-performance analyzers. There is more demand for parts needed for such analyzers when there are any global issues, such as the pandemic or any environmental emission problem.

Are you involved as well in the vaccine? Is the company involved in any case with the vaccine?

We do produce nozzles for the blood test, and those are applied by some hospitals. They are distributed in 200 countries globally. Our products are also used for the analyzers, and those analyzers are also distributed globally. The president of that company gave us this picture, shaking hands. The president also said to the employees that family is the most important and the company comes next. I always tell our people to go home early and spend more time with your family. But all of our employees tend to work very late. For their honeymoon, the president encourages them to spend two weeks rather than just one week.

Imagine we come back in 10-15 years to interview you all over again. What legacy would you like to leave to the next generation?

I hope that this company will grow enough to become a business beyond the family. I hope that someone who has the skill to be a CEO will be a CEO. I am not sure if I will be around at that time. There are some people who have the potential to become the next CEO. We have identified candidates, and it is a matter of those people, whether they are able to make the right decision 10-15 years from now.