Stiching Together Clients and Solutions

Japan is navigating many interesting and different challenges. One example of this is the diversification of supply chains that has been prompted by the US Inflation Reduction Act (IRA). There are also some factors that are in Japan’s favor. For example, Japan’s reputation for reliability and advanced technology positions its products favorably. The weak JPY also makes products made in Japan more cost-effective and appealing globally. Do you believe this to be the case, and if so, how can Japanese manufacturers strategically leverage these current conditions to enhance their competitive advantage?

In terms of diversifying the supply chain for more stability, it’s not just foreign companies doing this. Japanese companies are doing this as well. To determine whether Japanese high technology is acting in favor of Japanese companies, let’s look at technology from two different perspectives. The first could be categorized as research and development technology, and the second is processing and producing technology. For R&D technology, unfortunately, Japan is not necessarily in an advantageous position right now, nor do I think that Japanese companies have a real advantage in this area. In contrast, for production technologies, I feel that many Japanese companies have an advantage over their global counterparts. For example, in the semiconductor business, there are many world-renowned companies in terms of “products,” but in terms of semiconductor production technology and semiconductor production machinery, Japanese companies are at the forefront. In this sense, I feel that Japan is still in an advantageous position in terms of processing and producing technology.

In today’s more digitalized world, I feel that monozukuri or manufacturing is getting left behind or put aside, but when thinking about humans with their five senses and abilities, monozukuri is definitely needed as a foundation, and Japan will continue to strive to be a manufacturing hub. Also, if we think about ESG, Japanese companies have evolved around that concept, so we have an advantage in ESG management and manufacturing.

Automation and robotics are revolutionizing the industrial sewing industry, bringing unprecedented levels of precision, speed, and efficiency in manufacturing processes. We also have the Internet of Things (IoT), which is further enhancing systems by enabling real time monitoring and data-driven decision making, providing valuable insights into production performance, and improving maintenance and overall operational efficiency. What role do you see automation and IoT integration playing in the future of the sewing industry?

JUKI has developed around the industrial sewing machine, which is used for making clothes, which is one of the three essential elements of human beings, along with shelter and food. As this basic essential for humans, the clothes industry has grown, but it has done so based on mass production, mass consumption, and mass waste, so it is now going against the sustainability trend.

DDL-9000C / improved seam quality through digitalization

Trends in the apparel industry are short, so low volume, high mix, and a short turnover time are necessary. These factors must be met for the sewing industry to move forward. It is absolutely necessary for production to use more smart technology. We have three concepts: digitalization, automation, and networking. By combining these three, we can achieve more sustainable production. IoT is a part of that, and in March 2023, we established an IoT unit. Initially, this IoT work was a part of the sewing and industrial machinery area, but when it’s included within one area, it becomes more dependent on the core business, so we have made IoT separate so it can create and develop as an edge technology.

The progress over one and a half years has been very positive. Technological advancement and understanding amongst our customers have been achieved. We will take this IoT work back to each group, combining sewing with IoT and industrial machinery with IoT, creating two pillars starting in January 2025.

Your company was started in 1938 when you began developing household sewing machines. Since then, the company has expanded into new business fields, though your core area is industrial sewing machines. In fact, Juki leads the global market in this area. How would you define the main strengths and key technologies that make Juki the number one global choice for industrial sewing machines?

When we meet our customers, what they always say is that our machinery does not break. There’s a positives and negatives to making the machinery so robust. The positive is that you get a good reputation from the customers, but the negative is there’s no replacement needed. The reason customers keep using our products is the after-sales service support that we provide.

With the apparel industry which mainly uses this industrial sewing machinery, since the trend is very short-lived, it requires high turnover and high mix, low-volume production. There’s also a new demand for transforming the existing sewing machines by adding automation, digitalization, and network.

JUKI have achieved 30% of installed industrial sewing machinery. The biggest business opportunity that we have is with this existing installed machinery. We want to fully leverage these existing installed sewing machines to provide automation, networking, and digitalization. By adding these capabilities to the installed sewing machines, we’ll be able to create a barrier to entry that allows us to maintain our market presence. Once these machines have been fully automated, it becomes more difficult to replace them with other companies’ machines, which gives us a long-lasting advantage.

Of course, our competitors will incorporate IoT within their systems, but JUKI’s strength is its long standing relationship with customers and accumulated knowhow. If we didn’t have the trust of our customers, they would not allow us to automate their factory with our system. Another thing is that our automation system does not need to be applied only to JUKI machines. It can be used with other companies’ machines as well.

As mentioned before, you have other operations, including an Electronics Assembly & Systems Businesses which offers pre- and post-processing equipment using the latest technologies, including IoT and AI. You also have a storage business which offers automation of warehouses. And you have the group business, which supports manufacturers with your comprehensive strengths. Which of these areas do you believe have the most growth potential?

For the Electronics Assembly & Systems Businesses, the mounter business is of course at the core, but when it comes to mounters alone, the standards for competitiveness are speed and precision. At the same time, there’s a technological limitation. Even if we speed up the machinery, that does not necessarily mean it meets the needs of the customer. Faster is generally better, but if it reaches a certain speed, it doesn’t make much of a difference because the demand is dependent on the semiconductor. We have reached a high technological standard in terms of speed and precision, so now our goal is to pursue a more comprehensive solution with support from ancillary systems for frontend and backend processes. One of the auxiliary businesses is the storage business for the front-end processes. The strength that we have here is the intimacy among the machines.

Mounter products to enable the creation of flexible lines

Intelligent Storage Management System ISM3600F.A.

You started with sewing machines, and now you’re venturing into these totally different businesses. What was the motivation behind that?

As I mentioned before, despite technological and software advancements, since people must use the machinery, the concept of monozukuri or manufacturing remains, and from an ESG perspective, how to make our equipment sustainable is the key consideration. In all manufacturing processes, increasing efficiency, reducing energy consumption, and automating is important. We have limited resources, so our core business is technology that has been derived from sewing machine technology. For example, our mounters use sewing machine technology to go back and forth in repeated actions.

Looking at your manufacturing facilities, you have a factory in Ohtawara. Apart from developing new products and turning out refinements, the hope is to disseminate the research and technology from this factory to all the production facilities across Japan and overseas. Can you tell us about the production technology and the improvements and initiatives at the Ohtawara plant and how you try to deploy them to other production sites?

If you just look at the organization chart, you cannot tell that the Ohtawara plant has a priority, but it is the main source of many things. In fact, that factory is where we developed the industrial sewing machinery. The R&D for automation, digitalization, and networking, as well as their application to machinery and systems, are also conducted at Ohtawara. Although there are many research facilities and personnel at the head office, people frequently move back and forth between the head office and the Ohtawara plant. The Ohtawara plant manager also stays at the headquarters for half a week.

All the factory managers across our global sites are originally from the Ohtawara plant, and many of the management and executive-level staff in our overseas factories trained at the Ohtawara plant for over a year. The structure is that the executives of the global factories all have training, experience, and human connections with people in the Ohtawara plant, so disseminating the work and developments from that factory are horizontally applied through these personal relationships. Also, in June 2024, we established an assembly factory in India and dispatched personnel from the Ohtawara plant for training there.

Part of your medium-term management plan is to address potential risks of supply chain disruption. Can you elaborate on how your new plant in India will better service South Asia, the Middle East, and Africa?

There are two main goals of having a factory in India. The first is to serve the domestic Indian market. The second is to serve markets west of India, including the Middle East and Africa. Needless to say, the population in India is massive. Also, with the political tension between China and India, Chinese companies have a hurdle to enter the Indian market, so there’s an advantage for us as a Japanese company locating there.

We are also focused on the Middle East, and Africa, and that is because there’s been huge economic development there, and with that kind of development, the first industry that tends to flourish is the sewing industry. China is now actively approaching African nations, and they are providing machines, but there are not enough people trained to use them. We are a latecomer in this region, but we feel we have an advantage in providing our machines with complete after-sales service and training support.

JUKI INDIA GUJARAT FACTORY

The North African market is also very close to the European market, and there are many automotive interior parts manufacturers that have factories in North Africa. Those factories used to be in Eastern Europe, but the cost of wages increased there, and with Russian aggression, there’s a geopolitical threat of having factories in Eastern Europe, so these factors have moved to North Africa.

Our industrial sewing machine technology has an application in the automotive field as well for the stitching of seatbelts, airbags, and car seats. We currently have a 30% market share for that, so expanding into North Africa is a positive move for us. As you know, the automotive industry dislikes changes in security parts, so once they install a specific company’s machinery, they keep using it. That’s especially true for airbags.

You told us about your internationalization goals in terms of your management plan for Africa, Asia, and the Middle East. You have a long-term vision of becoming a global, innovative monozukuri company capable of thriving in the 21st century. Could you tell us how your management plan approaches this vision?

What we need to establish is the circular model of the clothing industry. The apparel industry is also thinking about the creation of this circular economy, but as sewing machine manufacturers, we feel we have an advantage in having a more comprehensive vision from material procurement to machine manufacturing, replacement, and retirement, as well as clothing waste.

We also have a comprehensive scheme for using household sewing machines to upcycle pre-owned clothes. We also purchase pre-owned JUKI industrial sewing machines to refurbish and reuse or to dispose of them in an eco-friendly way.

Our long-term vision is to achieve sustainability as a responsible sewing machine manufacturer. Europe is at the forefront of all these restrictions, so it’s important that we are in line with these regulations as a responsible company. We are targeting the global market, including India, Southeast Asia, and China. I think we need to create such a circular model of the clothing industry that can be completed in these areas as well.

In 2022, you formed a joint venture with Mitsubishi Electric and Meiryo Technica. The aim of this was to expand the industrial sewing machinery business by providing high-value products and services to customers who were not in the traditional apparel market. Two years later, can you tell us the benefits that this joint venture has brought to your business? Are you seeking any new joint ventures, M&A activity, or business alliances?

The purpose of the joint venture was to fully leverage Mitsubishi’s market access and technology. Mitsubishi technologies have been a driving force in the promotion of IoT automation and digitalization. Without going into too much detail, their software for the motor and the automation, especially for the pre-operation process of the sewing machine, is very advanced. They also have advanced software for moving clothes or fabric. Traditionally, it was the human workers moving the fabric to stitch, but Mitsubishi has the technology to automate that.

JUKI is a global company that services 185 countries. You have production facilities in China, Vietnam, and now India. You already touched upon which countries you’d like to focus on: Asia, Africa, and the Middle East. Are there any other countries that you haven’t mentioned that you are targeting?

Geographically, what I mentioned earlier mostly covers all areas, but as for the segment, we want to create a circular model globally, and we are especially interested in expanding our presence in the auto industry, as well as expanding digitalization in all industries. For the auto industry, once we enter, the customers are reluctant to change the machinery, and since it requires high-end technology, we hope to create a competitive advantage and barrier to entry.

1-needle, CNC sewing machine (head-turning type) AMS-251

In 2024, your company is celebrating its 86th anniversary. Let’s imagine that we come back in four years for your 90th anniversary to interview you again. What dreams and goals do you have for Juki, and how would you like your company to be seen through the eyes of the global market?

We want to be recognized as a company who has achieved a complete circular model in the clothing industry, and in four years, what I want to achieve is the amalgamation of IoT with sewing, which is a new business model.

When I joined this company, with the presidential message I gave to the employees, I said that I wanted to make the employees’ happiness the core goal of management. The company needs to create an environment where each employee can fully assert their capabilities, and that will be the core driver of the company’s growth. If we cannot achieve that environment, we will not be able to grow. The definition of happiness may differ by person, but from the company management perspective, it’s important that we establish the employees’ independence and pride in the company. Therefore, in four years, when you come back for the next interview, if I could say that I was able to achieve this, that would be my utmost pleasure.

For more information, visit their website at: https://www.juki.co.jp/en/