From cash recycling machines on the shop floor to humanoid robots on the factory line, Hirokazu Onoe, President of the Glory Group, explains how in an ever-changing market environment, Glory has stayed true to its pioneering DNA to provide its customers with innovative currency handling products by continually improving its technology.
Since 1918, Glory has continually responded to the market by providing value-added and unique products and services to your costumers. Indeed 2013 was a remarkable year for Glory, since you dramatically increased your net sales as well as your net income by almost 45%. What would you attribute this impressive growth to?
It was largely due to the fact that we acquired an English company that was our competition. This is what increased sales for 2013. So that, and the synergy created, resulted in this dramatic growth. So it was the effect of the M&A, not simply our sole effort, which led to this growth. We are now shifting our operations focus to the international scene, because Japan is one of the most technologically advanced countries in terms of the mechanization at banks and other financial institutions, so we see more potential for future growth abroad and that is where our investments are increasing.
Glory already operates in over 100 countries in a wide range of sectors such as financial services, retail and transport, but now Glory is aggressively expanding overseas. What are your top priorities in this further international expansion?
Our company was founded in 1918 and at the time we were a contractor, but our founder felt that the company wouldn’t achieve a secure position, so at the same time as doing contracting work we started to produce our own products. In 1950 we were asked by the Office of Monetary Affairs to come up with a coin counter and this was how we started growing apart from the contracting sector. Later in 1953 we sold our machinery to a private financial institution for the first time. Since then our business has been focused on providing machines specializing in the currency sector and we’ve created a whole range of machines, for example wrappers, recyclers, coin lockers and exchangers. We were the first company to create the prototypes for most of these machines in Japan. This heritage of continually creating new products is something that is in our DNA and will continue to be in it. Recently, the first machine that we provided to the Office of Monetary Affairs has been designated as mechanical engineering heritage in Japan, so it definitely has been carried on in our company and will continue to be.
We have always focused on the currency handling area, which meant that we have always been within the finance sector, and that led to our involvement in the distribution, transportation and other sectors. We have always made an effort to be involved in the sectors where the money is.
It’s fair to characterize Glory as a pioneer and in this pioneering way you’ve created some of Japan’s most ground breaking products, the first being the currency counting machine – and most recently the CashInfinity system – and in the Nextage humanoid robot, which is set to revolutionize the assembly line. Can you outline some of these new products and why are they the future of Glory?
Regarding the CashInfinity machine, this has been adopted by retailers because it takes care of the money recycling at the front of the store. For the back of the store we provide deposit machines for the employees to place the sales money in and then that cash is transported out of the company. We aim to provide a complete currency control system from the front office to the back office and beyond.
We brought this system to Europe three or four years ago and now it’s starting to take root and is becoming more popular in the continent.
In Japan we have almost 70% market share of the cash recyclers for the stores cashiers, and it took us 20 years to achieve this result. We believe that the cash handling machines that we provide will be something that we should export abroad further into the future. We had been working solely with banks abroad and then we expanded our operations to work with distributors. That is how we expanded our market share.
About the humanoid robots, we don’t actually manufacture the robots themselves, but we appraise the robots produced by the manufactures and incorporate them into the assembly lines where both humans and robots can coexist, and this is something that has taken root in our plants. We do manufacture the software for these robots and provide an environment most appropriate for robots. This has received a lot of attention and mass media focused on this, until on June 19th, 2014, Prime Minister Abe himself came to inspect one of our plants. This attends to the fact that we are going to face a decline in human capital in the future here in Japan, and in order to adapt to this new situation we believe this is a great solution because with robots you can achieve higher accuracy since they come with a camera, while with humans working on assembly lines there’s bound to be mistakes. With robots we can also achieve the multifunctionality of the plant so that during the daytime, robots and humans can work side by side, but at nighttime only robots work.
You can see that something like this can be done in real life. They are just like humans.
Where is this manufacturing plant?
In Saitama. I think it would be very interesting for you to visit. With the robots normally you have to place something in the exact spot for them to handle it, but because these ones come with cameras even if you place things in a random place they are able to judge the location, so it’s very useful.
One of Glory’s most competitive advantages is its corporate culture, which is quite unique because it’s about having an almost obsessive focus on customers and the quality of your product with the One Glory slogan. Can you outline how this translates into day-to-day business practices and why it’s so important to Glory’s success?
Our corporate vision is to make Glory the world’s top brand. This is something that we’ve already said. And in order to do that we believe we must not only make our brand grow in terms of the share it holds, but also by increasing customers’ satisfaction, which will in turn lead to further purchases from the customers. To achieve this, we believe it is imperative that the employees work as a single unit with a striving spirit and cooperative efforts as stipulated in our Corporate Philosophy.
With our recent overseas acquisitions and with parts of the company having different cultures, it is very important that we unify these principles, and that is what our One Glory mantra symbolizes.
The most important thing for us is to satisfy our customers and in order to do that we must focus on providing high quality services to our customers; without that we can’t achieve satisfaction. Also, we’ve translated our employee action guidelines – the Glory Spirit – into eight languages and our employees carry them around with them.
In this push to internationalize, Glory enjoys strong brand recognition here in Japan but how are you working to grow and communicate this brand internationally? Do you think the international community understands the quality of your products?
Actually, our recognition here in Japan from the general public is not so high because our business is B2B (business to business), so of course within the financial and distribution sectors we’re very well known, but not to the general public. Either way, we’ve started to have a very strong reputation overseas, for our European and American customers, particularly now because of the acquisition of our competition abroad and our name is spreading. The major international companies that may not have thought of us before our acquisition have started to pay attention, and one big financial institution in the United States just visited our head office in Japan. I believe that the key to strengthening our brand is not to launch some sort of catch-all quick measure to dramatically gain recognition but rather provide high quality products and services on a steady basis. That is the key.
Reaching out to heads of states and leading businessmen, why do you think Glory should be their partner of choice when they want to make their businesses more efficient and more effective?
The financial institutions system is very different in every country, and we have been able to reach such a large share in the Japanese market by working together with financial institutions and coming up with solutions together. For example, we made some weeklong visits to financial institutions to get a good idea of the overall flow of their work and then propose machinery that could improve the efficiency of those companies. Since various countries have different systems, I believe that we should be collaborating with their financial institutions to provide solutions that match their needs, and in order to do this we must strengthen our marketing strategies. The key is to accurately assess the needs of each country’s financial sector and to provide solutions together in order to secure a win-win outcome.
What would you say has been the impact of Abenomics on the manufacturing sector and on Glory Group specifically?
Abenomics was an attempt by Prime Minister Abe to take Japan out of the economic crisis after the Lehman incident, so I believe that the gross strategy within the Abenomics policy really matched the needs of the business community and provided various policies that produced opportunities for Japanese businesses. By the end of March 2015, many corporations in Japan had achieved the best financial results ever and Abenomics has enabled Japanese businesses to increase their investments in their facilities and equipment, and that has in turn led to an increase in demand that has benefited the manufacturing sector in particular.
Abenomics has improved the circulation of the domestic business market as well, so this has been very beneficial to us. Also the effect of the weakening yen has increased Japanese exports abroad because for a long time Japanese businesses had suffered from a very strong yen, so this cheaper yen has had a positive effect on sales and revenue results for corporations. So, all in all, Abenomics has had a very positive impact on us. On the other hand, imports costs have risen so that has caused the prices of daily goods to rise as well.
In many ways, we believe that Glory is a success case in terms of being successful nationally and now transforming into a global enterprise, just as Abenomics is trying to do for the economy. What advice would you give to other Japanese CEOs and chairmen that could be interested in following your footsteps in creating a global company such as Glory?
I don’t know if I should be the one to be giving advice, but I would say that – given our 30-year experience working abroad – the important thing is to work steadily on your business because progress can only be made little by little, not all at once. In Japan we tend to think in the medium and long term, so I would encourage companies to follow their medium and long-term management plans, and once they’ve achieved their objectives, start another cycle and repeat that on and on.
Another important thing is to seize the opportunities, to make the appropriate decisions when chance strikes. When we decided to acquire the company abroad around 2012, there was a lot of discussion within our company since there were very high costs related to that purchase, but we seized that opportunity because opportunities rarely present themselves. I believe it’s very important to actively try to make the right call when opportunities come.