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The innovative spirit giving Fuji Corp. its competitive edge

Interview - March 27, 2023

From the invention of a revolutionary hydraulic lathe to the development of leading-edge pick-and-place machines, Fuji’s innovative spirit has been present throughout its history.

NOBUYUKI SOGA, PRESIDENT, FUJI CORPORATION
NOBUYUKI SOGA | PRESIDENT, FUJI CORPORATION

Over the past 25-30 years, Japan has seen the rise of manufacturers who can replicate certain manufacturing processes and products at a cheaper cost, pushing Japan out of mass industrial markets. However, we still see that many Japanese firms are leaders when it comes to niche B2B fields. How have Japanese firms been able to maintain their leadership despite the stiff price competition?

Japan has been independent and has created its own original culture. The natural environment in Japan is harsh, with many earthquakes and a lack of natural resources, so Japanese people have collaborated with each other and placed high value on those resources, sharing them in order to get the most out of them. This idea of optimizing existing resources has been embedded in the Japanese tradition and allows Japanese people to manage such scarcity well. It is in the Japanese blood that since the Japanese are the cultivators of land, you have to treat others with great respect, working together to create harmony.

The idea that it is shameful if you do not show great respect to others is strong, so when you create something, you will be criticized or you will feel ashamed for not achieving the required level of quality for the given purpose.

The philosophy of Japanese monozukuri is to create a product that would not bring feelings of shame when another uses that product, rather than creating something that satisfies your own ego, so that is why Japanese companies are so particular about making high quality products, even small parts that are not visible from the outside. That is how Japanese quality products are created. It is not only a type of quality that stays for a short time, it lasts for a long time and has the user in mind. Making the best use of scarce resources is the essence of Japanese monozukuri and is reflected in products such as early portable music players. They were created to be small and durable, but also had high functionality.

Also, the value of collaboration in Japan is reflected in the value of the gemba, or the shopfloor, where the designers, engineers and the other people involved all work together to make the best product. By going through continuous improvement, the product is made, so this accumulation of knowledge and experience cannot be copied easily. 99% of Japanese companies are chusho kigyo (SMEs), but the idea of collaboration is embedded within the industry and society. Our company has many dealings with these smaller and mid-sized companies, and we collaborate with them to elevate the quality and the level of technology together. We are on the same page in making the optimal use of resources and making the best product.

The Japanese have established this process of efficiency. For example, the ‘just in time’ processing method is now actually going beyond monozukuri, for example with Uber or Amazon, where you feel like everything is personalized for you. You can search for the product you want to have, and it tells you when it is delivered, and it also actually tells you if it has been delivered at any given moment.

 

You have developed the Fuji Smart Factory, a unique solution that combines system and automation technologies, contributing to maintaining and improving quality and productivity. What pushed you to develop the Fuji Smart Factory and how will it change factory automation for your clients?

Currently there is rapid growth for digital needs, for example, 5G, 6G, IoT and cloud computing, and now the price of sensors and cameras have decreased. There has been rapid growth recently in the field of DX, but we had this idea of a smart factory 10 years ago. As a global company, you have to control and manage the production system globally. In which factory, what kind of products are made at when and at what quantity, is important management information. Also, increasing efficiency and optimization of the production line using IoT, and also keeping control of stock so that you can oversee the whole production process is the important approach. With the rapid growth in the digital industry, the digital tools that are required to establish this ‘just-in-time’ production have actually been created. It is very important to ensure lean production using these digital tools in the SMT lines we offer. We have assembled all the latest technology at our Smart Factory to provide a solution for our customers. Simply put, you have to be at the forefront of cutting-edge technology, or you will lose in this industry.

 

When it comes to CASE vehicles, cars are becoming more like computers on wheels and the cost share of electronic components in relation to the total value of the car will grow to 35% by the year 2035. How have you adapted to the shift in the automotive industry, and what opportunities does this emphasis on electronics that comes with EV present for your company?

With electrification, the car will certainly become like a drivable smartphone in the near future. As you mentioned, increasing up to 35% in 10 years’ time will happen. It is my understanding that half of the smartphones that are made globally use our machinery, so we have strength in smartphone production. The circuit boards in smart phones usually consist of 2000-3000 electronic components, and our machinery is used to mount these components onto the circuit boards. These components are then placed on the boards with a precision of around 20 microns. The space between components can go down to 60 microns. These components should not be touching each other, but to the naked eye, they appear to be touching. This is the level of precision that we have, and we can certainly utilize our technology in the switch to EV.

Looking back at the past, the most important thing in automotives is safety, and to ensure safety, electronic components are placed a certain distance apart on the circuit board to allow for heat dissipation. To avoid the negative impacts of heat from power semiconductors, components are spaced out on circuit boards that are larger than those used in smartphones. However, the size of the printed circuit board is becoming smaller now. The technology has been advancing, and this so-called ‘power semiconductor’ now dissipates less heat while being smaller in size. Also, the mounting technology has advanced, so in smaller printed circuit boards, the electronic components are placed a smaller distance apart.

There has been demand for adding more electronic components, for example, resistors and capacitors, for circuit boards used in the automotive industry due to increased functionality, so now many thousands of electronic components need to be placed on these circuit boards. With our technology which we have accumulated through smartphones, we have this high precision mounting technology which we can utilize in response to the electrification of automobiles.

Also, with the arrival of this era where information technology and communication is important and requires faster speeds, we are advancing our research and development so that we can have more precision and the ability to place higher numbers of electronic components on smaller circuit boards so that communication within the board will be faster. We can do this by combining multiple functionalities onto the circuit board which used to be separate.

We are currently seeing a trend in miniaturization, as devices are becoming smaller and have more functionality. As a manufacturer of circuit board manufacturing machinery, how are you reacting to the trend towards miniaturization in the industry?

As Moore’s Law states, printed circuit boards become smaller, but the functionality is increased. Currently, the 0.4 x 0.2 mm resistor, or the capacitor, has become common, and even smaller components are entering the market. To your eyes, it would look like you are mounting an electronic component that is the size of a piece of dust.

Picking up small components and mounting them onto circuit boards sounds simple enough but it requires us to be equipped with higher technology for handling smaller components.

Companies are making these electronic components smaller, but they cannot just manufacture small electronic components unless there is a technology to mount them, so we collaborate together with these companies, and exchange information to improve the technology so we can cater to the miniaturization of electronic components and the circuit boards. It is this interdependency and communication that allows us to come up with new ways. For example, if it is a very small thing, how about we put that into a cartridge and try to set the container and mount those small things as is. There are many ideas that come out of these discussions.



Can you tell us more about your R&D strategy, and are there any new products or technologies you are currently working on that you would like to showcase to our international readers?

From the establishment of our company, we have always focused on technology, and of course as a manufacturer, technology is the core essence that we value. We are actively introducing as well as developing new technologies. We not only develop in-house, but also adopt technologies from outside companies and apply them so that we can establish a new technology or new products. When I joined the company, it was conducting various R&D projects and many of them failed. There was a period where the company was at risk, but among these failures, there was some fruit that grew, for example a board assembly insertion machine that assembled printed circuit boards for an early portable music player manufacturer.

However, this was too far over-spec for the manufacturer, so they only purchased one unit from our company. We then took this technology and the machinery and promoted it globally. We garnered a lot of attention and were able to sell 852 units. At the time, selling that amount of units was a remarkable achievement and this is what actually saved our company and put the company on a track for further growth. The customer need at the time was still for the inserter. However, we found that the future could possibly be the surface mounter, so we conducted our own research and development to enter a new, challenging field, and we did have many failures along the way.

Along the way, we created the CP series, which goes up to CP8. At CP2, we first introduced image processing technology in the machinery itself, and the CP3 became the global standard. CP6 became a big hit globally, reaching toward 5000 units of sales. However, with the birth of the IT bubble in the year 2000, the manufacturing method changed. In this era, software technology has been updated and enhanced to increase precision in the industry, and in response, compact, modular-type machinery came into the spotlight.

Our company was endangered with the shift towards modularization of the machinery, but this threat and the anxiety it caused had been shared among all our employees, and we were able to continuously make efforts to establish a new type of modular mounting platform that is called NXT, which has sold over 110,000 modules to date.

I still remember clearly how the senior managers in charge of development were so caught up in past successes, and leaned toward the commonly held idea in the machine-tools industry of making the machinery itself sturdy so it could have increased precision, and thus were resistant to making changes towards modularization. I remember them saying “Are you trying to endanger our company even more by going along a path that we have never been down?”. The divisional head, who was from the sales department, gave it the go-ahead, saying that it was the idea of youth and may be a new innovation that could save our company.

Back to 1959, at the foundation of the company, the founder Mamoru Sakagami invented a revolutionary hydraulic lathe suited to mass production, which contributed greatly to the growth of the Japanese automotive industry with its unprecedented productivity. However, at the time of development, he also faced resistance from people around him who thought that his idea was not applicable, but he continued to make efforts and completed the machinery. That spirit of pursuing innovation still remains in our company, and it has become a core value among employees.

Engineers are actively taking up the challenge, and although there may be many failures, they are not considered so, but they are used as something positive that will lead to future innovation.

 

Can you tell us which countries or regions are you targeting growth in as part of your mid-term, and what strategies will you employ to do so?

We take the approach of establishing a sales agency in our international sales strategy so it is quick and easy for us to penetrate into a new market. The market for electronic component mounting robots will increase and maybe the market will see a 50% increase or even double in size over the next 10 years.

In consideration of the risks involved in centering production solely in China, markets will steadily shift to different countries such as Southeast Asia, India, South and Central America and Mexico. We are increasing the areas of the globe where we serve our products and markets are growing. Along with this, we are speedily dealing with the increase of the agency offices as well as training and educating their personnel and allocating more staff in a flexible manner.

Marketing has two approaches. One is focusing on what to create by absorbing the demand of the market, and the other is after the production, how you sell it; this is the marketing for sales. We have always been focusing more on marketing for production, but we want to fortify the marketing for sales as well so we can be thorough in figuring out how to sell our products and what measures to take to sell our products around the world. Web marketing and web sales is one of the future options that we are seeing. Twenty years ago, when we came up with the NXT series, the idea was to be able to sell it over the internet and the device would be small enough to be carried by a courier company, but it has not become small enough to be carried by a courier company yet. The idea was that no staff from the company needs to visit the customer to set up the machinery, while the customer is also able to enjoy a simple yet comprehensive maintenance service. This idea has not come true yet, but I like to hold on to this idea as we look to enhance the marketability of our machines. The current ways of sales will change greatly. I hold a sense of urgency but at the same time I am excited to see a new way forward.

With this concept in mind, we want to continue to improve our technology and adapt to new ways of doing sales.

 

Let's say we come back to interview you again in two years' time. What would you like to have achieved by then?

Putting whether I myself will be here or not aside, I envision this company to be an innovative firm that is trusted by society and our customers. I strongly believe that creating a well-rounded company culture is much more efficient and effective than making a good strategy. It is important that the employees are enjoying their work and are also being motivated to work while realizing their personal growth. Having this innovative spirit is something that is shared among the employees, and making the company culture more prevalent among employees is important, so what I am trying to do now is improve this cultivator spirit in this period that has been ongoing since our foundation so we can create a family or a team which is taking up the challenge head-on and being innovative to serve the community.

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