Incorporating both software and hardware, Itoh Denki’s fully-integrated conveyer solutions enable customers to reach the cutting-edge of logistics technology. We speak with president Tetsuya Itoh to learn more about how the company develops market-leading automation solutions for factories and logistical centers based on innovation, modularity and security.
In the last twenty-five years, we have seen the rise of cheaper competitors such as China, South Korea or Taiwan replicating the Japanese Monozukuri at the cheaper cost but lower quality. You mentioned that your company has been able to win several awards especially the Global Niche Award which is highly renowned here in Japan especially for a high technological field. Could you please tell us how Japan has been able to maintain its leadership when it comes to a high specific field? What role has Monozukuri played within it?
We keep conceiving and developing new products in advance of our customers’ specific requirements. We just try to keep producing and developing in a trial and error manner as part of our continuous improvement process toward the ultimate innovation. That is the difference between a big and a small company.
Speaking about competitiveness, we know that Itoh-san has been able to constantly introduce new products that enable factory automation; if we look at the global modular factory automation itself, it is expected to reach a value of nearly $200 billion by 2025 and the need for your products, for example, the motorized conveyor rollers, will increase. As a global company, how do you plan to take advantage of this market growth?
We currently have the image of our products being used everywhere where innovative, high quality transport and logistical lines are required. The logistics centres are one area that we are pursuing in our business, but our main focus is on factory automation, that was our origin. About twenty-five years ago we realised that there was great potential in the area of the logistics due to our success in modernization of the USPS in the US. That was the start of our logistics focus because amazon.com was founded around the same time, triggering the start of the e-commerce business. Before that, everybody wanted to get a special supply chain management system similar to the USPS, and they have been leaders in distribution centres for direct to consumer in the US until now. Every e-commerce business tries to install the same system as USPS and e-commerce has rapidly increased everywhere in the world except Japan. Why? Because Japan has a more unique market and culture but, finally, e-commerce is now growing in Japan.
You mentioned that you came to introduce your products through factory and logistical lines, including e-commerce. We know that you are present in the US and China, which are the two biggest markets when it comes to factory automation, and you are also present in Europe. How do you plan to take advantage of these opportunities and what strategies are you implementing to introduce your products and capture new customers?
Our key concept is based on light, thin, short, and small. What we do is based on this concept. When we look at the conventional material handling or factory automation, the transportation is heavy, thick, long, and big. These are contrary to our key concepts and what we think are unreasonable. In our concept at Itoh Denki, we would like to utilize more compact tools to facilitate distribution in a flexible manner. Recently, the Multi-Tenant Distribution Centre is getting popular and we are now in kind of a phase where only the building is rented, and the owners of the items in inventory use that place for handling and transporting the articles. We are trying to introduce our material handling solutions to clients so that they can optimize the distribution of these goods.
Conventionally, material handling equipment requires a compressor where you produce air by high pressure. When we convert it to a motorized roller conveyor, the only thing that you need is electricity. Also, electricity is only consumed when necessary to move the articles being transported. What we are trying to achieve is to introduce our motor technology to every part of the material handling process. Interestingly, the airless technology which eliminates pneumatics is drawing a lot of attention from every segment of material handling.
When we talk about factory automation, we talk about connectivity, safety, and productivity. According to latest G20 that was held in Ibaraki, the Japanese government is basically leading the world when it comes to the new society 5.0 in which everything will be interconnected to make our lives easier. I know that your company is supporting this cause through the Itoh IOT (The Internet of Things) technology. Could you please talk to us about this and present it to our international audience?
The corporate name is Itoh Denki, I am not sure how you think about it but a lot of German people are familiar with the name because Itoh is spelled as I-T-O-H, and that is very similar to IoT. Also, Denki sounds like “denken” which is German for “think”.
Looking back in 1980s, Mr Itoh, our chairman, envisioned that the Power MollerⓇ will be connected with computers. At that time, I thought “what is he thinking?” as at that time we were only using floppy disks! Even before we were using keyboards, Mr Itoh said that our motor operation would be controlled from connected computers, and he was not wrong at the end of the day. The Industry 4.0 concept identifies that we are facing a serious shortage of human resources. Due to Covid-19 we are in a very difficult time in our society. Fortunately, our idPAC seems to have been developed for this time, as it provides predictive maintenance. Even though maintenance teams cannot travel during this time to the customers site, our new technology is connected to each Power MollerⓇ through an IP address, and there is a remote monitoring mode. But doing this depends on the type of network system. If they have an open network, we can get into their system, even somewhere as far away as Brazil. Through the internet, we can find not only where the problem is, but what the trouble is immediately. Actually, we have recently opened a showroom in Amsterdam, they are starting to use our system and we have access to it over the internet. We have TeamViewer for accessing other PCs, and we can control the entire system. Our engineers do not have to be there, it requires just a phone call to open the IP address.
As a company, you already introduced to us idPAC, I also know you have different types of products, you have F-RAT, Multi Angle Ball Sorter and Slide Open Gate. Is there any specific products that you would like to showcase to us and to our international audience?
idPAC is simply defined as a point and click solution. If you use that you can easily change the layout for a conveyor. This is purely based on the concept of light, thin, short, and small. I am not sure how it will fit in the needs around the global market, but this is the latest technology, and very unique in its ability and operation. We developed our original market which has now expanded to a new and unique market, especially for idPAC. This is a new frontier for us and we are breaking new ground. That means we are also very concerned. We are optimistic, because some of the Japanese customers love idPAC. AC motor runs on alternate current. It is a little bit older motor technology. DC, direct current motor is newer and opens new horizons. AC motors have technical limits, while our latest technology DC motors capitalizes on this by having signals to tell us when to replace it. It can even give diagnostic information so that you can maximize operational time, and predict the remaining motor life. That means before the motor dies, we recommend a replacement. The customer does not have to worry about down time with DC technology.
Speaking about technologies, we are seeing that Japanese companies are investing massively into R&D in order to introduce new products and new technologies, not only that but we are seeing also a trend in which from the big corporations are now shifting overseas to find partners in terms of co-creation and sharing the Japanese Monozukuri with the foreign know-how in order to capture the global market. In your specific case, could you please first of all talk to us about your R&D capabilities and the innovation centre that you have? Looking at the future, how would the possibility of co-creation work for your company?
I think we are making a relatively big investment into R&D. We needed 3D printers to quickly make a prototype for new products, and now we have printers for rapid prototyping. We also have latest laser processing machine called a water jet machine. There are also a lot of machines prepared for producing new products. We would like to immediately respond to customers’ request. In order for us to do so, we need more than just machines. We also need the drive, desire, and technology. We need to keep improving these things, and we are trying to foster the kind of human resources that understands and shares the same value and vision with the customer. In terms of the technology, probably over three to four years ago, we tried to work with a German research centre to develop a new technology. However, the idea of a product development timeline was much different from ours. We wanted to exhibit a new product at a tradeshow, but we missed the timeline because of a holiday. It has become difficult recently to pursue collaboration with our clients. This may be due to Covid-19, or possibly a conflict of interest.
Itoh-san, throughout this interview we have seen how your company has been always adapting to new markets, how you have been a visionary in creating new products. And you also, as your company slogan states, ‘Technology for Tomorrow,’ looking towards the future, what would be your mid-term strategy to continue your corporate growth? And what role do international markets play for your company?
We are expanding the market share in Japan, but we are seeing more potential in the global market. We would like to raise awareness for the brand of Itoh Denki in the global market and we are making a lot effort in this regard. In addition to this, we have built a technology centre in Amsterdam and in Ontario, California. These are the global versions of the innovation centre. This is where we are educating people about how to use Power MollerⓇ. If we introduce only the hardware part of the motorized rollers, we cannot be competitive against China. What value we can add to this is the software part, the program. We are trying to combine both hardware and software to come up with the better solution that is again, light, thin, short, and small. We are trying to introduce standardized machine components for conveyors, and as we bring more of them into the market, the customers can create any kinds of layout or pattern they desire. It is like Lego blocks. As you have more types of pieces, you can make many kinds of shapes with them. That is what we are doing. We are trying to be an import part of the material handling with conveyor technology and that is what we are pursuing for Monozukuri.
I have one last question for you, and it is a bit more personal to get to know your professional ambitions. We know that your father was and is a visionary today. What legacy would you like to leave as a president of the company? How would you like to be known in the future?
By the time I retire from the CEO position, maybe time will have changed. Time will be very different even ten years from now. We are the company having the core competence in motor technology. Our principle direction remains unchanged to pursue the Monozukuri (product making) through the continuous evolution of motor technologies. With that said, it is also important to adapt ourselves to the changes in the next decades. Our compliance effort to the SDGs initiative is one of them.
Our goal is to combine software technology including control and communication, and hardware technology including conveyor modules, on the top of our motor technology for bilateral complement, to achieve connected factory, seamless logistics, and eventually contribute to the solution for challenging labor shortage. To be more specific, having our Power Moller as the master cell, we build up our own MDR-based intelligent platform, where every peripheral device is connected through autonomous decentralized control we developed, so as to combine cyber space in the computer and the physical part of conveyor equipment. Though these efforts, we endeavor to achieve conveyor innovation in the next generation, by capitalizing on the big data from the logistic site to perform predictive maintenance as well as a waveless workload.