We sat down with Mr. Hirohide Suzuki, president of ESTIC Corporation to discuss their proprietary ESTIC Pulse technology, a high speed, highly precise fastening system for dissimilar materials widely praised by their clients in the automotive industry.
What are the strengths of Japanese firms that allow them to compete in the global marketplace?
I think the strength of Japanese companies is the Kaizen philosophy of continual improvement in the technologies and products they provide. At the same time, they are also good at lowering costs and also making smaller products and more lightweight materials.
Due to this ability, Japanese companies were able to dominate through mass production before the economic bubble burst in the 1990’s, but after that, IT companies from the US started emerging in the global market with new technology. They’d started their businesses from scratch, whereas the Japanese companies were good at improving on existing products.
That is the difference between Western companies and Japanese companies, and I think that is why we are now struggling in the global market and in Japan. I think the structure of Japanese carmakers best illustrate Japanese monozukuri, where there is a leader on top with contractors and parts manufacturers forming a multi-tiered system with all its constituents working together to produce something.
As someone with a lot of experience working and living overseas, how have you helped ESTIC to overcome the challenge of understanding and integrating new technologies from overseas?
That's a very good question. In fact, Japan is an island nation where all the people are of the same ethnicity and they speak the same language. They have the same culture, they have the same mindset, so in Japan it's often said that you don't need to be able to say everything, you can just say one word and you will be understood 100%. We’re used to doing business with people of the same mindset.
However, more recently in the context of a declining population, we need to go out to overseas markets but we face both lingual and cultural obstacles which we struggle to overcome when trying to promote our technologies or products. In order to overcome these issues I think we need to customize the products or the technologies we have, just slightly, to be accepted by the Western or the Chinese market. It's very important to be flexible enough to go out to overseas markets, so that people in those markets will accept our technologies and products. That's something I learned through my experience in the past when I was working in the US for five years.
Could you tell us more about the features of your ESTIC Pulse technology, and how it represents the strengths of your company?
In manufacturing, there are many kinds of objects that you may want to fasten or join together. For example, an engine in a car is made with iron or aluminum, which is very hard. On the other hand, there may also be components in a car that are plastic, and furnishings which may be made by resin, and these things are relatively soft materials. There are a wide variety of different materials used, and what is good about ESTIC Pulse is that it can achieve the precise fastening of these materials with high precision and at high speed. It can also be adapted to cater for different requirements regarding speed or strength.
Competitors are able to produce something similar to ESTIC Pulse, but it's very difficult to achieve the same level of precision, mobility or safety that ESTIC Pulse has. That is why our US customers were interested in this product. Even Japanese car makers in the US didn't initially know about it but they ultimately became interested in it later. I think that's why we were able to succeed with this product, especially in the US. In short, the features of ESTIC Pulse are that it can be applied to a wide range of objects that you want to fasten at high speed and with high torque while maintaining accuracy, which will lead to a reduction in the cycle time.
This is also connected to the mindset we have in this company. In terms of the longevity of our products, we repeat our durability test 1,000,000 times before we launch a product. We do that for every new model that we produce and we receive a lot of compliments about that. On the other hand, our distributors are struggling to do business because our products just don't break down. The clients, however, are really happy with our products.
The automotive industry is seeing huge shifts both from traditional engines to EV’s and from heavier materials such as steel to lighter ones like aluminum. Can you please share with us how your firm is capitalizing on this transformation in the automotive sector?
As you said, car makers are facing a material change and they are undergoing a transitional period as the engines or the transmissions are being replaced by batteries or motors for EVs. We need to deal with these new materials. The materials we used to deal with were iron or aluminum - hard materials.
However, more recently, we need to deal with electronic components, parts and modules etc. Looking at the home appliance industry, we also need to deal with FRP (fiberglass-reinforced plastic) or electric substrates that are smaller and softer, and used for battery cells. For these smaller and softer materials you need smaller screws, and to tighten smaller screws you need smaller screwdrivers.
Our screwdriver is equipped with a sensor which can keep feeding data regarding torque, and so on, to the motor so that it can maintain its accuracy and precision whilst operating. Our competitors are able to produce automatic screwdrivers, but ours are equipped with those precise sensors.
Usually, if you want to tighten a screw on a simple product then you can just do it manually and if it loosens then you can just tighten it again. However, in the case of cars, if a screw is loose then that can become a safety issue.
Due to the principle of quality in the car industry, you can never have loose screws so that’s why our screwdrivers are equipped with the precise sensor that allows it to maintain accuracy and feed data to our customers. Our products also has traceability features so that the data it produces can be accumulated on a server.
Efficiency and ease of use are two important aspects you focus on for your products. Could you tell us a little more about your ERS robotics series and how you're overcoming the challenge of integration and ease of use on behalf of your customers?
It's very difficult for clients to integrate robots into their production systems and processes. Normally clients needed to purchase the robots together with the screw tightening components. Then they needed to integrate those two different things into their assembly line. However, we are now able to provide a total engineering solution by integrating the bolt tightening and the robotics for the client.
We've simplified our products and services. Our products allow our customers and their engineers to input a program for the screw tightening and the robotic motion, and we provide this as an integrated package to our clients.
If the client bought the robots and the screw tightening components separately, it would require more time and represent a greater cost, and they would need certain other technology as well, but if we provide a packaged solution, then it’s more efficient and makes the client’s life easier, so that's something we are targeting with this technology.
We also have different lines of robots apart from the ERS series, like the Cobot solution, or the Cartesian robot, which can be applied for different applications.
What role does collaboration or co-creation play in your business model? Are you currently looking for overseas partners to help in local markets?
Our Cobot solution is something that we’ve developed in collaboration with other companies. When you want to install a robot in your assembly line, normally you need to put a fence around the robots for safety reasons, so that the robot doesn't hit humans or engineers. However, with our Cobot solution, when the Cobot hits a human then it stops moving so you don't need the safety fence around it. You can put the Cobot in between human operators. That's one of its main merits. Furthermore, the robot is able to handle higher torque variations which human beings cannot handle.
Our competitors are also producing similar machines, but with their machines, when they generate a reaction force, they stop. However, with our ESTIC Pulse technology we can reduce the reaction force so that the robots don't need to stop and they’re able to perform a higher level of tightening.
That's something we’ve been pursuing in collaboration with other companies, and we are also trying to apply a higher torque tightening application. With the Cobot, you don't need to activate the safety function, you can just install it in the assembly line and start using it, and that's something we’ve been promoting at an exhibition recently.
Looking to the future, are there any particular countries, markets or regions that you consider particularly important for your international growth?
Our largest customer base is in the United States, which is 25% of our total sales globally, and that is followed by China. With regard to the industries we are serving, 90% of our customers are from the automotive industry.
In terms of the production volume of the automotive sector, China has the larger market compared to the United States. However, we are not yet able to establish a process whereby we can listen directly to customers’ demands in China and customize our products to their needs. That process has been successful in the United States, but we’ve not been able to replicate it in the Chinese market yet.
In China we just post the price and they do the bidding and choose the cheapest solution. We would therefore like to replicate the successful practice that we had in the US and bring it to China so that we can have the same level of the sales or maybe even more sales in China. We believe that they have the larger market in terms of EVs and I think that China is also going to lead future trends in the automotive industry.
Speaking of our international strategy, I think that collaboration with robotics makers is an important option, so we would like to continue pursuing that kind of collaboration. However, we think our strong point is that we are able to provide customizable solutions to our clients. We can tailor our products and services, including the machinery and software, to our clients’ needs and we are also good at providing after sales support of our machines.
We would therefore like to have a direct presence – in other words our own offices - in local markets rather than making use of local partners for sales and distribution. We would like to target countries like India and China and also Europe as well. That’s also on our radar. We would like to have a presence close to our clients.
Let's say we come back to interview you again in six years' time for your company’s 35th anniversary. What would you like to tell us about your goals and dreams for the company in that timeframe, and what would you like to have achieved by then?
Six years from now I would like to be able to offer our products and services to global carmakers like Ford, Volkswagen and GM. That is one of my goals in expanding our business. Also, we would like to diversify in terms of the industries that we serve. It's very difficult to predict what's going to happen in six years from now, but by that time we would like to become a global company that can provide products and services to the global market.