Higher environmental standards have compelled auto makers to build more fuel-efficient vehicles, which has spurred demand for increasingly lighter parts and new lightweight materials. Manufacturers have found that the use of lightweight aluminum – and specifically aluminum die casting – can significantly improve a vehicle’s miles-per-gallon performance. This has prompted major opportunities for aluminum die casting manufacturer MINO INDUSTRY, which supplies high performing parts and components to some of the world’s leading carmakers, including Toyota, Honda, Nissan, GM, Ford and Mercedes. We speak with president Jun Sugimoto to learn more about the company, its operations and what sets it apart from its competitors.
In the past 25 years, we haveseen the rise of cheaper competitors such as China, South Korea, or Taiwan who by replicating the Japanese monozukuri process, can overcome Japan. What is the essence of monozukuri and how do you implement it in your production process?
The die casting industry started in Europe and the US and eventually, the technology reached Japan. Japan brought the industry to a new level through very advanced technology. China was next to catch on and used very similar technology. China did a ‘better’ job though as they produced at a cheaper price. We act as a tier 1 company in the way we communicate with big automobile companies. We assign one leader to each company so our communication channel is very clear. With this communication channel, we MINO INDUSTRY can produce such products which have been considered that die casting can’t produce so far, for example in terms of thinness and lightness. Such efforts concerning relationship-building with customers to produce high-quality products is called “SURIAWASE”. That is why we think “SURIAWASE” is the essence of monozukuri. Actually, we first tackle design and price flexibility through talking directly with a customer. This is our version of “SURIAWASE”.
What is the role of engineers in this high-precision industry and what other elements go into production at Mino Industry?
We start with the design and specifications dictated by the customer. This is when we can give the customer a clearer picture of what is and is not possible. Then the design undergoes production through manpower and machinery. This is often the area where we lose out to other countries and how and where other countries reduce their costs. But Japan is special for its kaizen. This is very strong at Mino Industry, this is tradition, know-how, being ‘Made in Japan’ and this is where Japanese quality is born. Included in this is trust, and the only way to attain this is to produce something worth a customer’s trust.
How do you ensure Japanese-level quality when producing abroad?
As long as there are machines and raw materials that are the same, there is an assumption that one can create the same quality as we do, and this can be true domestically. But the same cannot be said about other countries. In China, even with all the same materials and machines, the quality is very different. This comes from the management side which is lacking in its commitment or understanding of high precision know-how. In addition, the engineers who are particular about quality of products also contribute to keeping the high quality of our products when producing abroad.
What is the company doing to avoid Galapagos Syndrome and have business abroad?
Our first attempt to go abroad was in 1995 when we opened a facility in Thailand. Since we don’t use the keiretsu model, we decided to go to Thailand solo. We were very confident but had zero clients initially. We began doing sales activities around the country since we were so confident in the product and it worked very well in our favor. After this, we wanted to be in Shanghai, China. Shanghai isn’t usually where Japanese companies go in China to open a facility but we wanted to focus on new customer development and go to the areas that the US and Europe were going to. Our confidence in our products allowed us to be so bold and forced us to not be in the ‘Japanese areas’.
How did you manage to stay independently strong in Shanghai?
Life satisfaction of our employees was our first wish when they were going to have to live abroad. Therefore, they lived a very high quality of life in Shanghai as it is an advanced city. This made it a popular destination for our talent to want to be. Regarding new customer development, brisk sales activities with strong confidence in our products and acquisition of talents who have enough experience of business dealings with European and US companies brought success in Shanghai to us. Furthermore, we still had our tier 1 and tier 2 connections, and through those channels, we were able to communicate with others in the industry and understand their moves.
What is Mino Industry doing to adapt to the end of combustion engines?
The changes that the automobile industry is facing are immense, but they are not limited just to electric engines. Cars are going to become much more lightweight as well and so there is a growing focus on aluminum. Those that make home appliances are looking into the auto industry because the materials are easily transferable. Die casting serves a great role in what cars are going to become, much better and bigger than the role resin can and will play.
How are you implementing innovative technology into your production process and how will customers see these benefits?
Failing to implement AI into production and to improve productivity by making good use of IOT is what will make us lose our share of the market. Quality is also another important part. This takes a lot of effort from the managerial side, but that is how quality is sustained. This is a completely human part of the process while production is mainly machine-based. But both the humans and the machine sides are vital to our success.
What are your best-selling products overseas and can you introduce us to anything new?
We have been focusing heavily on heat dissipation products for producing automobiles, like aluminum die casting. The thinness of how we produce this product is a huge strength of ours. For this aluminum die casting, the price can be reduced with differences in molding. But this requires keeping a very close eye on temperatures and therefore requires very close management, which other less skilled companies and countries cannot do. Another aspect that requires very good management is pressure control. Sustaining these management practices are key to us providing good products. Another great advancement of ours is that we’ve also eliminated the possibility for aluminum chips after machining that allows for electricity shorts to damage electric substrates in the products. Lastly, the electrification of cars is going to be great for us because the need for our engine casing will be much greater.
Are you looking to introduce die casting to other industries and new clients?
We want to get into the aircraft industry, in many ways it feels like the next challenge. Airplanes are mainly on autopilot now, and cars are also headed this way. Mino Industry’s products will then be very necessary for airplanes. We wonder why airplanes cannot be completely automated for taking off and landing, but then we remember the difference between Japan and China lies in this answer as well. Humans have experience and knowledge that a machine sometimes cannot compete with. We see this in the production quality difference between Japan and China, and we also see it in the reason why planes cannot land and take off safely on their own. But because the world is changing so much, we need to adapt well and take our die casting into any industry it can fit into.
What is the role of international markets in your midterm strategy?
Developing a global facing vision for the future is very important. COVID will end eventually and then it is Japan’s time and need to get out to the world. We also need to invest in Japan more and improve the lives of the entire country. This is our approach to the future, to stand firmly in the areas we are in and create a great life for our employees. Also, many areas don’t have local manufacturers so this can be such a great opportunity to expand.
Do you have any strategies that you plan to employ as Mino Industry expands abroad?
There truly is no easy way to expand abroad but the people that undergo this effort are the most important to the mission’s chance of success. Wherever we go, having the right people, sharing family, government, and friendship ties are essential to creating a good business environment because without that foundation, there is no chance for smooth success. Instead, you are guaranteeing a very bumpy ride. Most companies are looking to produce in different countries to lower their costs, but for us, we want to bring our facilities to places that need higher living standards and raise the focus on quality and craftsmanship. Capital involvement is usually not an M&A or joint venture for us. We always go by ourselves and fund the effort just because we don’t want to conduct business based on another company’s values.
Before you retire, what would you like to leave this company with, what do you hope is your legacy?
In our 70-year history, we have been helped by so many. Our employees, our customers, everyone deserves our gratitude. But, first and foremost our employees deserve this gratitude. I want to leave a spirit of challenging oneself and adapting to the changing times. I want my employees to engrave the phrase, it is my motto, on their hearts “if we stay the pureness of mind, there is nothing we cannot achieve”.
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