Located in Osaka, Japan, New-Era has been a reputed parts supplier to the automotive industry for eight decades. In this interview, New-Era president, Hiroshi Miyashita, explains how the company is shifting more focus to the two other high-potential areas of its business: power supply and factory automation equipment, while continuing to supply high-quality automotive electrical parts to aftermarkets around the world.
The Japanese manufacturing spirit or philosophy, known as monozukuri, has traditionally meant seeking product perfection through craftsmanship. Nowadays, however, it involves responding to the ever-evolving demands from customers and providing that added value in the final product delivered. How do you define monozukuri, what for you is the essence of monozukuri?
I think the origin of the monozukuri spirit lies in the deep-rooted practice of any Japanese company in the manufacturing industry’s pursuit of the highest quality in production. Monozukuri is not just about making something, but about focusing on the quality or finished condition of the goods produced. This mindset makes for good products, so monozukuri is highly recognized by other countries. I hope that the employees continue to employ monozukuri moving forward and for this culture to be practiced by the next generations to come.
When we spoke to Dr. Inaba from Fanuc, he told us how robotics and factory automation (FA) often unfairly gets bad press, as in people say that robots are replacing humans in the workplace, but in his opinion FA compliments human labour, it creates more human resources for companies and provides opportunities for workers to be up-skilled. Can you give us your take on the introduction of robotics on the factory line and its relevance for a country like Japan where we see an ever-decreasing population and thus a dwindling labour force?
We are cognizant of the concern that some people may lose their jobs because of robotics and factory automation. However, I believe that factory automation is unavoidable for our factory or any other factories. It is important to note that machines perform simple tasks with uniform quality and production standards. It is inevitable that the use of co-working robots will be increased as FA becomes increasingly the norm.
In fact, we will announce our new product within two to three months. It is an actuator gripper attached to a co-working robot. Along with this, there will be an increased demand for coworking robots in many industries.
The material revolution in the automotive industry has seen a change from old and heavy materials that increase CO2 emissions like steel and iron, to lighter and stronger materials that help reduce it such as aluminium, magnesium and high strength steel. We learned that your company is developing products that are lighter, waterproof, and reduce vibration. What materials have you adapted to meet this material requirement from the automotive industry?
There are many requirements for automotive components that include the consideration of different conditions. Let us take the waterproofing process as an example. The process is applied to the external surface of the component which is required on cars and construction machinery and in each case the required level of waterproofing itself is different. A slight difference in the condition affects our choice of material and we must be ready to flexibly respond to the needs and requests of our end-users.
Among the three business divisions of your company, namely automotive electrical parts, FA equipment, and power supply, what is the main focus of your business? What synergies were you able to create between these three distinctive yet similar types of business?
Our main focus has been in automotive electrical parts up until now. In 2035, however, our government is targeting for 100% of all new car sales to be electrical. We expect a substantial sales decrease of automotive electrical parts related to internal combustion engines that burn fossil fuels.
I do not think that we will have any major innovation for the pneumatic equipment business which is well matured in terms of product functions. We may focus on a collaborative business such as grippers for coworking robots. Also, we see enormous potential in the power supply business due to its wide array of applications.
Regarding synergies, our power supply technology works in conjunction with our automotive products and many aspects of our FA equipment. For instance, the automotive industry, which is moving towards electric vehicles, will require new types of parts or units from our power supply technology. These three distinctive business divisions are actually relevant to each other and effectively contribute to new products with each technology.
How have you developed modular systems that can adapt to different types of robots in other industries?
Our pneumatic equipment fits well with the semiconductor industry, so we are better at smaller products than other competitors. Since we do not produce big-sized or heavy products, our existing products are not used in many industries, but instead are sought after in niche markets.
For many companies or plants, they are not big enough to introduce full automation of their production lines yet, however they still seek to promote more automation year-by-year. We will have more opportunities there by applying our co-working robot gripper and this poses a challenge for our sales team because they must showcase our strength to these potential new customers.
We don’t have a whole modular system by ourselves, but we wish to supply a critical component which is needed in robotics related to FA.
Is the hand gripper from the NEOK series released in 2010 still the smallest in the world? How did the rollout of it go?
It must be! We have not heard about a smaller hand gripper from any of our competitors. As I mentioned earlier, as an SME, we should have one outstanding product to survive in this industry. We are not able to function as larger corporations that produce many different products and distribute them across the nation. Sometimes, they do not want to produce a product that requires too much effort and a higher cost. We, therefore, target the niche field and develop products according to the needs of this specific domain. Also, we continue to enhance our marketing abilities to appeal to our customers.
We want to know how you came up with this intricate product because Japan is famous for its level of spending on Research and Development, up to 3% of the annual Gross Domestic Product. Can you explain to us your R&D strategy? Is there any particular product that you are working on now that you would like to share with us?
Pneumatic equipment in FA has already matured as an industry which makes it very difficult to create something brand new. Our product line-up includes the standard products and customized products. We focus more on customized products as they give shape to our customers’ requests.
While we of course constantly need to develop new products, we think catering to our customers’ requests takes on more importance. They can give us a hint as to the size and function of products. We want to expand our business through our R&D strategies and give prominence to our customers’ needs.
We are increasingly seeing Japanese companies co-creating with both domestic and international partners like, for example, Toyota partnering up with Amazon to create cloud-connected vehicles for the connected, autonomous, shared and electrified (CASE) era of motoring we are on the brink of. What role does co-creation play in your business and are you looking for partners at the moment?
We have our strengths and weaknesses. One of our main objectives is to find the best way, regardless of the scale of the project. We would gladly receive a collaboration with a company in any country that can support and strengthen us. We want to learn from them and improve in areas where we are lacking. Especially if we can find a way that would work positively on both sides of the co-creation process.
At this moment, we do not have a specific plan or project, but we sometimes hear from the overseas market that they would like to utilize our new technology for their components or parts.
Is diversification into other industries something that you are looking at moving forward?
It is not easy to step away from metal processed components, which continues to be the base of all our products. In my opinion, we should progress from the accumulation of technology and experience that we have gained in the past eighty years. The continuous practice of monozukuri is vital to new ideas for new industries.
The current internal combustion engine may be replaced by electric motors a few decades from now, thus the automotive electrical parts division has to change, we must develop new business.
What are the benefits of international sales production and distribution to your business?
The primary merit of the assembly plant we set up in Thailand in 2009 is the labour cost. It was an opportunity for us because the government of Thailand was then encouraging companies to upskill their local engineers.
On the other hand, we thought that the Chinese market would be a good prospect for our pneumatic equipment, but we judged that it was difficult for the size of our company to deal with the issues and uncertainties in that market, so we decided to dissolve the local office in Hong Kong two years ago.
Would you like to expand in Southeast Asia to countries such as India or Indonesia? If so, how would you do it?
We have learned from setting up a plant in Thailand that we should consider more than the cost perspective. It took a lot of effort and time on our part to upskill the engineers and enhance the quality of products produced locally. The most fundamental factor in choosing a country or region is maintaining the Japanese quality of our standard products. The quality of our products upholds the overall reputation of our company. At this point, we are not pursuing expansion for temporary benefits. On that note, we will take on the challenge when a good opportunity comes our way.
Imagine we come back to interview you again in two or three years; what would you like to tell us? What are your dreams for the company, and what would you like to have accomplished by then?
I set up goals every day and every year. It might be difficult to achieve them in a few years. At first, we hope that we can talk about co-working robot grippers which we are working on now then other new technology and products in two years’ time. I want to keep trying new challenges every single day and continue the sound management of the company. In two years, you might think that we have not changed at all, which could be a good thing because it shows that we can pass along the monozukuri spirit to the next generation.