Eight Tool ideally placed to target international expansion

Today we wanted to start by talking about the launch of your new manufacturing facility. Can you explain to us the work you are doing there and are there any specific elements you would like to start with?

We used to have only three buildings in that plant facility but in January 2023 we constructed our fourth Tottori factory. In this new fourth factory, we reorganized our manufacturing processes and installed new equipment for manufacturing. Basically, we were able to enhance our capabilities of production, but due to the issues with semiconductors, we were not able to install all of the machines we wanted initially. Fortunately, over time, we were able to install all of the machines and now we are able to operate the plant at full scale. In the beginning, we were not able to produce all the orders we received but now we can meet the increasing customer demand. We became able to deliver more orders within customary delivery turnaround range, and also accommodate add-on orders that tend to require shorter turn around.

This new building has a centralized function for polishing and pressing. The finished products are hexagonal wrenches and the new facility has centralized processes for the polishing and pressing of these hexagonal wrenches. Having the enhanced production capacity, we are able to promote our products to countries where we had not catered to before, as well as new industries within our existing market.

What specific technologies or machines have you been able to implement in this new building?

One thing that we would like to highlight is that we don’t do all of the manufacturing processes in-house. Some process steps are outsourced and one of them is barrel polishing. We have outsourced this process step to only one vendor, which we thought there might be potential risks when that company tries to pass on that business to a successor. This is why we made a decision to establish internal capacity for barrel polishing, and now we have successfully built the means to complete this step partially in-house. It has enabled our firm to have two options; in-house and outsourcing. Since we have two options now we are able to increase the volume of production.

I would like to add a few comments about our quality improvement. We handle iron and alloy steel with most of our products and iron is quite susceptible to distortions by heat treatment. We used to manually work out those distortions and imperfections, however, we installed an automated machine that can correct these errors. This has enabled us to improve our productivity as well as strengthen our company’s ability to meet customer demands. Another strength of our company lies in our ability to respond to unique requests from customers to make specialized custom products, and this aspect sets our company apart from our competition. Since we now have much more production capacity we can cater to even more unique requests. It is this mindset that I believe will lead us to achieve even greater success in the future.

How would you evaluate the evolution of your defect rates now that you have your new facility?

The defect ratio itself remains unchanged, but where we used to detect those defects manually, we now use an automated process. With this automation, we are able to shorten the cycle time and expedite repairs.

Another element I would like to note about our new facility is the increased number of workers we now possess. Employee headcount has increased by 10% as a result of the new facility. Additionally, since we have new people coming in we are able to benefit from some fresh perspectives. New staff have helped us improve our processes, while at the same time stimulating existing employees.

From our understanding during our research, we saw that Eight Tools is currently in the planning stage for international expansion. Can you tell us more about your plans and strategies to expand overseas, and specifically, which locations would you like to expand to?

We used to place a lot of focus on East and Southeast Asia, where we have been very fortunate to enjoy on-going great partnerships over decades in many countries. In addition to those Asian countries, now we have started catering to American, African, Western and Central Asian, and Middle Eastern countries as well as Europe. In terms of the American continent, we have a subsidiary in the US and are trying to enter the Mexican and Central / Southern American market. We have visited these countries several times and so far we have received orders from these locations.

With all of the markets mentioned today, we want to place an emphasis on quality as we have done here in the domestic and Asian market. Our company is always striving to provide quality products no matter where the market is. To appeal to diverse customers and demands, we are working on improving our design aspect of our products and brand, in addition to our strength in function. 

Another interesting aspect we are seeing is an increasing number of female users of our tools. We would like to produce the kind of tool that can cater to the needs of female users. While maintaining the quality as tools, we would like to introduce products that provide features such as ease of grip and attractive design etc.

Are there any other developments, products, or advancements that you would like to showcase for us today?

To address central Asian countries we are receiving support from the Japan International Cooperation Agency (JICA), and thanks to their help we were able to identify potential markets. We are also very active in participating in virtual exhibitions online, and these are the types of exhibitions where anyone from any country can learn about our products anytime. We have had quite a few inquiries from different regions and were able to lead some of them to sales as well.