The Japanese specialists in high-precision air conditioning and humidity control

What is your manufacturing philosophy or monozukuri, and what are the strengths that allow you to compete in the international marketplace?

First of all, I think it is something as obvious as quality, with monozukuri companies often being very reliable in terms of providing top-notch quality. That also points to our excellence in terms of quality, and our ability to provide the kind of quality that satisfies our customer's needs. The source for our excellence and high-quality standards not only comes from inside our company but also from our many valued customers. Our ability to apply our best efforts to reach excellence results to a great level of satisfaction among our customers as we can meet their precise needs. There are so many sophisticated requests coming from customers, so our ability to satisfy those needs proves the quality of the company itself.

Monozukuri is not a one-sided activity, and it is always a mutual collaboration with customers, with meeting customers and listening to their sophisticated requests being key. Reaching the customer's ultimate needs can only be achieved by working together and making the highest quality products possible.

We actually design products with the idea of going the extra mile, not just satisfying the customer’s basic needs but also to go beyond that and expand our business and high-quality standards. Obviously, we go from the design phase to assembly, after-service, and maintenance services, culminating in the greater efficiency and portability of our products as well as satisfying the customer's needs beyond their expectations.

An existential problem for SMEs in Japan has been the departure of skilled workers due to age, and the associated loss of that technical expertise. For Rasco, what has been your response to this challenge? What challenges or perhaps opportunities do you see given Japan’s declining demography?

In our job, it is very hard to some extent to introduce digitalization or digital tools that could simplify or even eliminate the need for human labor. You also have to consider the expertise accumulated by the older workers in the company. Our response has essentially been on-the-job training (OJT). I think that this is giving a 100% guarantee that when applicable, our technology will be adopted properly. What helps here is the creation of manuals and the standardization of processes, meaning that the younger generation of workers can understand to the full extent what should be done and how it should be done.

This standardization process helps a lot. I cannot stress enough the importance of noting things down in a precise manner, and creating a step-by-step approach that is easy to understand. This kind of approach has had good results and works very well for our company.

We are all human beings and we all make mistakes, and in that respect, we all learn from the mistakes we make. What’s important is to learn from any mistakes you make. If you fall down, you need to show you have enough strength to get back up again. If you make a mistake, it is important to not make the same mistake again, and this philosophy helps with the whole process and makes our work efficient.

If we could talk about the diversity of your clientele now, you have many different types of customers with many different types of requests. Machine tools and semiconductor manufacturers are just a small sample of the types of customers you have. Do you have a type of customer that you would consider your main focus or main type of client? Is there a particular sector that you are anticipating higher demand for in the future?

Overall the semiconductor industry itself is very promising and has been very steady in terms of demands coming in from the industry. As you know, the industry demands a high level of sophistication and preciseness. The process of semiconductor manufacturing is divided into two steps: front end and back end, and up until now, most of the products that Rasco has been providing have been the front end processes. However, we are now seeing a rise in demand for back end processes. The rise in the global standards of temperature-controlled clean rooms is being driven by this industry, and we see that as most promising.

A growing trend in the semiconductor sector is the growing consciousness about the environmental impact of these manufacturing machines. Obviously, the temperature is very important, and the process needs a delicate environment. How is Rasco and your machinery helping these equipment makers and semiconductor makers lower their environmental impact and make their processes more sustainable?

The first is to lower the electricity supply, and another is to apply corporate carbon neutrality and SDG principles. Most of our customers are already aware of that, and of course, they are complying. In fact, our products help them to fit into this expectation. Precision air conditioning and temperature control yield a quality that is greatly affected by the working environment and the production side. Our products by definition are helping improve the working environment and extending the life cycle of their products.

Would you say there is a particular product or a particular type of technology that best represents the capabilities of your firm?

Our environmental chambers are something that the company is known for, as well as the high efficiency and high precision for this kind of heat and water supply that is constantly pumped into the chambers. You could say that it is a hybrid chamber that is introducing both air and water at a consistent temperature in order to improve the quality and efficiency of production. I think this is the distinguishing product of Rasco.

I would like to talk about your high-temperature heat exchanger, which uses a two exchanger system. Can you give us an introduction to your system and how it avoids some of the challenges of the more conventional heat exchangers? 

The heat exchanging machine deals with liquid conditioning products, and in fact, it is very simple. First of all, it doesn’t allow leakages, which if allowed to occur can be harmful to the environment. It is very important to have a closed circulation environment that doesn’t allow leakages, and that is something that we are very capable of doing. It doesn’t deal with water so much and is more to do with the exchanging of different types of chemicals and liquids. Our customer’s lineup of liquids is enormous, and we are capable of introducing this kind of system that meets their precise needs.

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Are you looking for these kinds of collaborative partners in overseas markets?

We actually do this already in Taiwan and Korea, and technical benefits and incentives are given by Rasco to some local Korean companies. They follow up and adopt the same technology for local inquiries.

As a joint partner, Rasco has shared our expertise to Korean companies who are looking to implement new technology for Made-in-Korea products.

Technical and quality standards are not a simple task to uphold. Many companies worldwide are making copycat products, but often they don’t meet our strict standards and practices. To avoid situations like this it is important for us to choose very carefully which partners to work with the intention of building a very solid and fruitful relationship.

Are you looking to replicate the kind of success you’ve had with your Korean partners anywhere else? What types of companies are you looking for?

Ideally, we are looking for those in the industry of refrigeration technology, and any company we work with should have this basic knowledge and technological foundation. In order to build trust in a business relationship, you have to have a partner that understands the business, and at least the core aspects and characteristics of the industry. Having this builds a sort of core foundation on which we can both stand and rise from there. Service maintenance is also another must because our business doesn’t only stand on just selling products, but also a lot of aftercare and after sales services.

Our technology is extremely vulnerable to copycats because so many companies deal in electricity, water, and air. It comes down to how you deal with it and how you treat it. It is important to us to protect ourselves, so partners should understand this when they come in for collaboration.

We’re also considering how our expertise may be applicable to some foreign applications and markets that we have yet to acquire knowledge on, and in those cases, a partnership makes sense to us. It comes down to compensating for each other's shortfalls to present the best efforts of each company.  

When you think about the definition of a partnership, it has to be mutually beneficial for both parties. There needs to be a fundamental reason why two or more companies would come together in order to create something. Patented technology that we introduce to them needs to be handled properly and that company must have a plan to introduce it to their customers.

Are there any locations or key markets that you are focusing on in developing your international business?

China is certainly of interest to us. China is a country that in many ways is expanding in the semiconductor business and is operating at a high scale. We are looking to find a reliable partner there, and unfortunately, as you well know, that is quite the task.

North America is still very promising, no matter the odds. The overall economy isn’t looking too great, and a lot of things have slowed down, but once things get back on track, America will be a potential opportunity again. The company already has an operation in America already, so we are just waiting for things to return to normal before we continue to expand in America.

Mr. Horino, you are beginning your presidency at a very interesting time coming out of this COVID-19 pandemic. What has the impact of COVID been on your company’s operations? How have you helped guide your company through this challenging time both in terms of human resource management and logistics?

We are still feeling the impact of the COVID-19 pandemic, and especially procurement and logistics wise, we have seen industry-wide disruptions, and the procurement chain itself is overwhelmed and still has not been able to recover from the situation. You’ve probably interviewed quite a few Japanese companies for this report, and as you know a lot of Japanese companies procure parts for manufacturing outside of Japan. Many of these parts remain difficult to get ahold of.

Of course, if you don’t procure the parts, you can’t produce the final product, and that situation itself has been improving, but not to the full scale we want. Another recent issue has come about due to the conflict between Russia and Ukraine. This is causing major logistics disruptions and in particular air logistics. A lot of planes have to take detours around the conflict areas, meaning parts are more expensive and so are the final products.

With the COVID-19 pandemic, we also felt an impact on our production side, and the situation is similar to our procurement side, in that we haven’t fully recovered yet, but we are on our way.

As you have said, we have interviewed many Japanese firms facing similar problems in these quality-sensitive sectors, and many of them have been looking to diversify their procurement chain instead of just relying on parts from China. Are you also looking to diversify your procurement chain?

Not to the extent of going to some other countries to find another part maker that could compensate for the traditional or conventional supply route. One thing to note however is that we found another broker, an intermediary company that operates in the interest of both us and the part maker. They have made it faster and easier to procure these parts. It's not like the manufacturer of the parts has not been capable of producing their parts, in fact, they were, but there have been issues with shipping and putting customers on a long waiting list. A proper broker has enabled us to get in front of that line and get the parts in a timely manner. That broker has a global network that allows them to be flexible and they are excellent at what they do.

As a new president, have you set any goals or targets that you would like to achieve during your time as president?

Continued activities and inheritance are very important, because as you can guess, once the presidency is passed down there are certain promises made that must be kept and certain assignments and targets that the previous president had. I would like to continue those targets and promises as well as set up my own personal goals and challenges. Obviously, the key goals will be to continue the business we do at the highest standard possible in order to secure the long-term future of the company. Of course, there are sales targets and setting good margins, but it's equally important to create an environment that is better for the employee's satisfaction and happiness.