Handling with care the intricacies of Japanese monozukuri since 1942, Atom today is a specialist in the manufacturing of rubber gloves and boots.
Traditionally the Japanese manufacturing spirit known as monozukuri is about seeking product perfection through attention to detail. This perfection today encompasses quality, cost, and delivery, also known as QCD, as Japanese firms look to compete with regional competitors. In the case of your firm, Atom, you have become a specialist in gloves and boot making with more than 80 years of experience. Can you give us your take on why you think Japanese firms are still succeeding despite this regional competition?
That is a question I also ask myself. There are many perspectives towards answering this question; my understanding is to think of the characteristics of monozukuri that have been embedded in Japan and the Japanese people. For more than 1000 years Japanese people have been respecting and treasuring this spirit of craftsmanship. That has been passed down for generations, which is reflected in the Japanese monozukuri spirit. Japanese people are endlessly seeking the perfection of details in order to enrich people’s lives. That pursuit isn’t necessarily motivated by money, but rather just the idea of perfection. People are more focused on the beauty and the aesthetics of small things and the small minute details, so that has been one of the reasons why Japanese companies are able to keep their competitiveness in manufacturing fields.
If you put it in other words, the Japanese are not good at designing the grand vision or the overall big scale of a project or design. That led to the lost decades of the 90s and early 2000s. As with all things, there are good points and bad points. That is reflected in the disappearance of products such as the Walkman and the emergence of foreign products like YouTube.
Today some people believe that Japanese monozukuri is under threat thanks to the population decline taking place domestically. Not only is it declining, but it is also aging rapidly, with 30% of people already over the age of 65. This is creating a few problems. First, the domestic market is shrinking, meaning fewer people to sell products to. Secondly, in terms of recruitment, it is becoming more competitive between firms to get the most talented graduates to join their company. How is Atom reacting to these demographic changes and what opportunities or challenges are they presenting to your firm?
With the shrinking Japanese market and the harsher competition with emerging regional competitors, we have shifted our business model. Before we were making cheap, mass-produced gloves, but now we are only focused on high-end, highly functional gloves. Although the market size for high-end products is smaller than the mass production market, the price that we earn from each product has risen so much that our profitability has gone up. To compensate for the loss, we are also trying to expand into the overseas market with personal protective equipment (PPE).
There is a global movement to standardize PPE with the International Organization for Standardization (ISO), but ISO is majorly decided by Caucasians. There are physical differences between Asians and Caucasians, so we believe that there is PPE that is better suited to Asian people.
The body types of Caucasian people, Asian people, and people of African descent are all completely different. One of the challenges when expanding overseas is fitting the products to the local market. How do you ensure that your designs and your engineers understand the specifics of each local market?
In order to truly cater to different body sizes, what we are doing is measuring and gathering data. We are asking workers in factories or in the agricultural field to measure their feet and hands. We take that data and find the average, which is then converted to our production. This type of practice is quite specific to the Southeast Asian region.
In Western countries, we work with companies that can provide us with specific requests on the sizes. We produce according to their requests. In Japan, there is the Japan Industrial Standard (JIS), which can provide us with the average body size samples. We can then produce our products off of those.
In Japan it is easy, but in other countries, it is a little more difficult. Especially in Southeast Asia, we have to go out and gather that data ourselves. It is interesting to look at the data and you can see that people who live on the mainland and people that live on islands have very different-sized feet. The length of the hand and the shape of the feet are very different too.
Over the past two years, we have lived through the pandemic and now we are in the wake of the Russian invasion of Ukraine, and the one key thing I think we have all learned is how vulnerable supply chains can be. There have been huge disruptions with semiconductors, textiles, and even machinery. It hasn’t all been doom and gloom, however, as the pandemic presented many businesses with a chance to expand through alternative sales channels such as e-commerce. In the US in 2023, 94% of the population is expected to purchase their products online. How have you reacted to ensure that you have a stable supply chain, and what opportunity does e-commerce hold for your business?
The disruptions in the supply chain did have a big impact on us, the same as anybody in the industry. We had particular trouble with getting deliveries from our Chinese factory so we shifted our production to our Thai base so we could avoid the Chinese COVID lockdowns.
As for e-commerce, it is now becoming inevitable for us to expand into this online business. We have been receiving more contacts from B2C customers, especially on our Pokeboo boots website. It is very important that once you have a product you have to have a good website and a good YouTube presence. People go online to shop these days therefore without a good online presence you cannot find customers. It is important for us to always provide adequate information and make the product look attractive.
With your expansion into boots, you are targeting more consumers rather than factories. Going from B2B to B2C has many changes, there are shorter demand cycles, it is a more cyclical market, and you must develop much closer customer relationships. Can you tell us about your experience in developing B2C sales channels and what applications you found your niche in?
One of the B2C experiences that we have is with the agricultural boots that we first launched as a B2B targeting agricultural professional workers. The characteristics of this agricultural business are that it is very friendly to the ground or the earth, and therefore does not damage the ground. If you take rain boots as an example, there is a heel so if you stand on soft ground, you make a hole which is not good for the field, especially in terms of agriculture. Friendliness to the earth was something that we took and built as a feature of the product. We tried to find a B2C market for our boots in order to expand the application, and we came to the conclusion that gardening might be a good fit. Gardening is agriculture done for leisure, and we also found that those who enjoy gardening also enjoy going for walks, trekking, and camping. These were the kinds of people we started targeting for B2C so we continually attended expos on gardening. Through our activities, we were able to attract media attention and now our boots are well known amongst gardeners and are in fact one our better seller items. Despite this success, it took 10 years to get well-known in the space, so chances are that our marketing wasn’t exactly good enough. We have taken this experience on board with our further expansion into B2C.
Your Pokeboo Boots have a foldable design making them very easy to carry. Something else that is incredible is that they are super light – less than a full water bottle. How were you able to achieve this lightweight feature? What are the materials and technologies that you employ to create a product that is so light?
At the very beginning of development, the target of Pokeboo was to make it below 500g. In order to achieve this numerical target we made concerted efforts to develop our own rubber material and our own production method. Additionally, we developed our own machinery in order to achieve the lightweight properties of the product. Through trial and experimentation, we were able to achieve our target.
We are quite particular about using natural rubber. At the time of development, we foresaw a need to be environmentally friendly. Natural rubber comes from trees so of course it is capable of absorbing CO2 and this therefore makes it a sustainable product. If you use a synthetic material it is very easy to make it lightweight, but using natural rubber and achieving its lightweight properties is one of the remarkable technological advancements that we were able to achieve.
With gloves, safety and comfort are very important, but most important perhaps is the grip. Additionally, we know that many glove makers pair up with material makers such as GORE-TEX to expand their functionality and product range; are you also looking for partnerships with material makers that could help you distinguish your products even further from your competition?
As far as material providers, we partner with DuPont and we are a licensee. We constantly exchange information and send in our requests for what fiber we want. Then we take those fibers and develop new fibers from testing through our products. As for GORE-TEX, it is very expensive, so price-wise it doesn’t match our products. Saying that, if there are any other textile manufacturers that would want to work with us then we are open to partnerships
When the PPE ISO standard became the one used in Japan we started to label our products with their strength and abrasiveness. According to the standard you have to make it easier to use or increase its functionality, or even its grip capability in order to be competitive in the market. What we are doing is producing all of our products in Japan so that we can respond readily to new requests and provide new prototypes. Decreasing lead times has become key to increasing our competitiveness, especially with the depreciation of the JPY.
Japan is famous for its level of spending on R&D; 3.5% of the annual GDP goes towards this. Could you give us an insight into your R&D strategy, and what you are focusing on next?
As for the domestic market, we are currently focusing on PPE wares for the growing aged population with a particular focus on anti-slip shoes as well as lightweight boots. As for the overseas market, it is very hard for us to enter, especially in the US and Europe. We want to start by focusing on leisure and sports. We have been very active in attending exhibitions globally to understand the market needs in different localities.
In Japan, we have taken the approach of directly talking to customers at our shop in Hiroshima. The shop carries not only our products but also products from our competitors such as Shibata Industrial and Showa. If a customer chooses a competitor's product we are able to listen to them directly as to why they made that choice and how we can improve our own products. We can take those differences and reflect that directly into our R&D.
Imagine that we come back again on the very last day of your presidency and have this interview all over again. What are your goals and dreams for this company that you hope to achieve by then?
I actually started working for the company in the production line and now I’m in management. Reflecting back on my work days, what I enjoyed most was going overseas and introducing our products to overseas customers. I myself was born into a management family, and I feel fortunate that I was afforded leeway to make mistakes. I want to pass down that challenging spirit to my staff and urge them to take risks and make mistakes. My goal when I leave this company is to pass on a legacy of always challenging, pushing forward, and making Atom products that shine with Japanese quality. I want our products to be recognized worldwide and enrich the lives of global citizens.