Exploring new possibilities in apparel

What is your interpretation of the monozukuri manufacturing philosophy and what, for you, is the essence of monozukuri?

I'm not sure if we are putting every aspect of monozukuri into practice, but we place an emphasis on the comfort of our apparel, so whether it is the material or garment, I think what's most important is the comfort when you’re actually wearing it, together with the appearance.

The textile industry is very labor intensive and there has been a trend towards increased automation. How are you adapting to this trend?

For automation to be cost effective we would need lots of orders for large batches of garments but our customers tend to order smaller lots so we haven’t implemented much automation in our factory.

About 20 or 30 years ago we tried to implement the ‘hanger system’ in our sewing process because it suited the fixed design patterns of the time. More recently, though, we use a wider variety of patterns so that type of automation is not conducive to that, although we have introduced some automation to our facilities in China and Vietnam where we could accept orders for mass production.

Can you tell us more about the commitment to manufacturing?

For example, when we produced a certain kind of mask, we tried to make a product that was comfortable to wear with the fine adjustment of the length of the ear strap.

And also, different materials have different levels of stretch, so when we cut the different materials, small adjustments are needed for making comfortable products

Your company has a textiles division and an apparel division. Could you give us a brief overview of your business and tell us what you are focusing your efforts on?

In this industry most companies specialize in either sewing or textile production, however from an early stage we did both knitting and sewing, and when we started the company, we used to produce Gunte cotton gloves, which is a type of white glove that is worn by craftsmen or those doing work outside. After that we used the same technology to start producing inner wear, the materials for which we procured from Wakayama. That was in the 1950s, but around the 1960s we realized that it would be better to produce the fabric as well rather than buying it from another company. So we purchased a small sized knitting machine, and we started producing the fabrics.

However, we didn’t want to produce the same thing as our major competitors. They mass produced the standard white inner wear so we had to differentiate ourselves from them by turning our focus to some niche fields such as wellness wear, outdoor wear and even clothes that can help with recovery from fatigue.

Your company provides a one stop service where you plan, develop, knit, cut, sew and you also inspect. Can you tell us more about this one stop service and why it makes you the ‘go-to’ partner when it comes to OEM textiles?

Since we don’t make the yarn for the materials, we get our woolen yarn, for example, from a company called Nikke with whom we have a strategic partnership. We also work with another company which is also a good supplier for the yarns, so we have many such partnerships.

When making products that involve to dyeing, many companies work with compound fibers, so we’ve looked for partners involved in such to dyeing materials in Gifu, Nagoya and Osaka in order to produce inner wear.

Can you tell us more about how this integrated production process with your partners can reduce production lead times?

Our lead times are relatively long because we use special yarn that is quite difficult to source. The time required to go from obtaining the yarn to finishing the garment, including the knitting and sewing, can take up to six months. Some of the sewing is done offshore, so that adds to the lead time, and sometimes our clients will have particular types of yarn in mind, which may be patented, that we would mix with wool or cotton and knit into our garments.

We consider this ability to mix different types of yarn as being one of the core competencies which differentiate us from other producers. Dealing with bespoke yarn and mixing it with standard yarn is very complicated and is a big obstacle for many companies in the industry, so that's why we specialize in it.

We are now working with our clients to produce wellness products, outdoor products and recovery wear although I can’t reveal who those clients are due to confidentiality considerations. We are focusing on these types of specialty products because there is high demand in Southeast Asian countries such as Taiwan, not only in Japan.

In terms of revenue, our peak level was more than ¥6 billion but it's now down to around ¥4 billion and the largest share of our portfolio is sports garments. The main material used in sportswear is polyester and since so many companies use this material there is fierce price competition associated with it.

In the past we were producing the fabric in Japan and sending it to the Chinese plant for sewing. However, more recently we needed to reduce the cost, so we switched production of the fabric to China also, but other manufacturers over there are now producing fabrics as well, so there is fierce competition and this is a significant challenge for us.

You also have a brand called Nobiluza. Can you tell us more about your efforts to increase your sales of the Nobiluza brand?

Nobiluza is an advanced Japanese technology that allows us to create a soft and easy to stretch material that makes clothes more comfortable to wear. We definitely want to generate B2C sales at some point through channels such as e-commerce but we need to improve recognition of the Atago brand first, so we are asking our team members to work with our partners and clients to showcase that brand name. Now we are working together with Factelier and they are using our Nobiluza material to produce their garments. They are interested in emphasizing Japanese quality and they are actively engaged in e-commerce so our brand gets some exposure via that channel since they showcase our brand with theirs, and this is one example of how we are raising awareness of our brand.

Would you like to pursue more co-creation partnerships such as the one you just described?

Yes, we are looking for the partners like Factelier to work together with and we are also looking into the possibility to run a crowdfunding campaign on Makuake but I'm telling my employees to produce something good first then think about it, so yes, we are exploring different ways to expand our brand and we are also looking for partners and actually working with Factelier to raise the recognition of our brand as well.

Can you tell us more about your mid-term strategy and how are you going to pursue your company’s mission of disseminating Japanese fabrics around the world?

We would like to study the Chinese market in more depth since we have a plant in China. We’d like to sew our products in the Chinese plant and distribute them there as well. We expect our wellness and recovery wear to sell better in overseas markets than in Japan so we are discussing with our clients the possibility of making that fabric in Japan and doing the sewing in China so the clients can distribute the products in the Chinese market.

It would be great if we could complete the process right the way up to the sewing stage in Japan and then sell those products in the Japanese market as well, and then at some point enter into the B2C business using an e-commerce platform.

Are you looking to attract more clients internationally with your OEM business?

It may be difficult to do the same thing as the large companies are doing, but as an SME we’d like to do whatever we can in Southeast Asia, but we'd like to work with local partners as well. We would like to receive support from partners with yarn production functions that we do not have in order to promote our products in overseas markets.

Can you tell us more about the benefits of your international integrated sales and production approach?

Our customers always ask us to reduce costs so extracting a benefit is getting harder to do. In the production process, the proportion of the cost for sewing is very high so we’ve been particularly focused on lowering the cost of the sewing. This is why we moved our operations from Japan to China and from China to Vietnam. The Chinese plant is a textile manufacturing operation, so we are trying to achieve an integrated production system there because there are plenty of raw materials there too.

And as for Vietnam, we are looking for more reasonably priced fabrics in the local market, but what we're also trying to do there is bring Japanese made fabrics to make products in Vietnam.

Would the continued international expansion of your company be driven mainly by further joint ventures, MMA’s, or would you be looking to open up new factories?

In Vietnam, we have completed only 50% of our initial plan, so as we receive more orders, we'd like to expand the capacity of the existing plant. That is our plan for Vietnam.

And which markets specifically would you be looking to target with that further expansion?

In order to expand the Vietnamese plant, we are currently trying to target mass retailers in order to get orders for mass production runs, particularly in the sportswear sector and in the inner wear sector. In Vietnam we have started working together with a new customer which is a growing company, and we need to work with such growing companies if we are to expand our own business.

What are your dreams for the company over the next few years and what legacy would you like to leave for the next generation of your family?

We’d like to have launched some B2C business on an e-commerce platform for our own brands. And we’d like to have worked closely with a large wool manufacturer to bring finer quality, niche types of garments to the market and hopefully enter into the US and European markets also.

Finally, we’d like to grow sales of our Nobiluza brand. The word Nobiluza actually means ‘to stretch and grow’, so we’d like that brand to also stretch and grow first in our domestic market and then in China also.