As the global demand for manufacturing only increases, Miyama Seiko provides high-quality precision components through its deep drawing and cold forging technologies. In this interview, president Yuji Yamamoto discusses Miyama Seiko’s unique technologies that have allowed them to be successful, in addition to future plans for his family run SME.
As a manufacturer of precision metal parts could you give us your take on monozukuri, and what are the advantages of Japanese monozukuri over regional competitors?
Regional competitors such as China, Korea and Taiwan have been learning the Japanese monozukuri method and providing it at a cheaper price. Since the 1960s there has been a relationship established between the Precision Metalforming Association, the association in North America, and the Japan Metal Stamping Association, to which I belong. At the 50th anniversary of the association, we researched the history of how our technology evolved, and we learned that basically, the technology was learnt from the US and that there was a discussion to end the relationship at a certain point because they said the Japanese had learned enough and caught up with them.
However, we had established a good friendship already, so that relationship is still continuing today. A similar thing happens when there's success in one country and then other countries try to replicate that success. However, we as a Japanese company are very much focused on the building of human capacity. We believe that by training people we are able to evolve our technology.
Looking at the US, it is currently struggling from a weak blue collar workforce because many people are moving more towards white color jobs in the IT industry and blue collar workers are left somewhat less educated or not trained enough, but they have high potential so it's a matter of training. We, at our company, are focused on building this human capacity so that we can keep improving our technology.
We are a family run SME, and the good thing about a family run business is that the spirit and the technology is passed down thoroughly from previous generations. I received this company from my father and I am strictly following what his vision was and a part of that in particular is maintaining our technology and building on top of it. There may only be a slight difference compared to other countries’ products but this slight difference in the products makes a big difference when it comes to quality and reputation.
The Japanese population has the oldest average life expectancy in the world of 85 years. More than 1/3 of the population is over 65, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your company and how are you reacting to this particular challenge?
We are actually struggling with this demographic issue. It entails 2 major problems. As you mentioned, one is the lack of human resources and the other is the shrinkage of the Japanese market. With the shrinkage of the Japanese market we can compensate for that in overseas markets, and we have established our factory in Thailand which is progressing well. Therefore we can focus on selling our products in the global market in order to overcome the shrinkage of the domestic market.
The lack of human resources is posing a graver problem. In the past, university teachers or specialized engineering school teachers were able to recommend to us newly graduated students and we were able to secure fresh, young talented engineers. However, the situation has changed and there are now many similar types of engineering companies within the prefecture so the competition for new workers is harsh.
At the same time, we're trying to procure young people from outside the prefecture and we have received some from the areas of Kyushu, Nagasaki and Kagoshima, but those prefectures do not want to let their young, talented generation leave their areas and that's making it even harder for us to recruit.
As you mentioned, a company’s monozukuri – although indispensable – is actually hard to perceive just at first glance so it's very hard for us to convey how attractive it is and how enjoyable it is to work at our company in order to recruit the young generations. If they knew what they could do at our company, and how well we nurture them, they would be more attracted to us, but conveying this message is very hard and we are struggling with it. Also, it's not only Japanese workers we are focusing on, we have started considering recruiting overseas engineers as well.
Could you give us a brief overview of your main products? What kind of products have you developed a reputation for here in Japan and abroad?
Currently we have three major technologies that we provide. One is the deep drawing technology which is our company’s strength, and this technology was used to make carburetors that push fuel into engines. Originally they were mechanical but currently they are electronically controlled. Conventionally they were made using stamping, but the welding took time so we shifted the manufacturing process to deep drawing so that we can make them as one unit to reduce the production time. We were able to evolve our deep drawing technology and apply it to battery cases and other electronics related devices.
The second technology that we have is the cold forging technology. In the 1990s, carburetors shifted from being mechanical to electronically controlled, and this was first developed by Bosch, and Denso had a partnership with them, and Toyota was calling it an electronic fuel injector (EFI).
Demand for EFI’s increased and at that time they were using a conventional cutting method to make them. However, with that method, if you drill the material you have to have bulkier units, and that was wasteful. Furthermore, when you drill a hole there are usually bumps and scratches inside the hole as a result. By using the cold forging method, however, you are able to reduce the amount of material used, save time, and also make smooth surfaces which is closely related to the eventual quality of the item. The fuel injectors made using our cold forging technology were therefore highly appreciated by the industry.
The automotive industry is seeing huge shifts both from traditional engines to EV’s but also from heavier materials such as steel to lighter ones like aluminum. The average gasoline car requires 15,000 components while EV’s will are constructed of half as many. In the case of your company, how are you adapting to this new generation of cars that are being built? What products or technologies are you planning to be offering?
To answer your question, let me explain about the third technology that we have, which is the uneven thickness forging technology. Generally, it's called ‘plate forging’ or ‘coining’ technology, and this is another strength that we have acquired thorough our accumulated experience. We have been catering to the automotive industry with automotive battery related parts and we have made battery cases using our deep drawing technology, and our uneven thickness forging technology has been used to make the sealing panel for the batteries.
The sealing panel contributes to the safety of automotive batteries and prevents batteries exploding in the case of an emergency. There are many accidents caused by batteries shorting out where the battery explodes although that is not widely reported in the news. The sealing panel was used to be made as thin aluminum foil is added on to a pierced area on a metal sheet. This aluminum foil breaks and thereby prevents the battery exploding. We came up with the original product where one section of the panel is forged as thin as aluminum foil so that the sealing panel can be made as one unit.
We had actually purchased a second servo press from AIDA Engineering and we were thinking about the best way to fully utilize its functionality. At that time there was high demand for increased battery safety so we connected those two and came up with this new product. However although we were able to have a certain amount of success with this product, it has been replicated by other companies.
We're now trying to apply the technology we have accumulated to new automotive technology. So our three major competitive technologies are the deep drawing, the cold forging, and the uneven thickness forging.
Could you give us an insight into your research and development? What kind of new projects are you working on or what new products have you developed that you would like to share, besides the battery casings?
In terms of research and development, we recently had a big mind shift. Traditionally we were more focused in retaining our technology within the company and keeping the know-how so we could evolve by ourselves. However, we realize that if we try to do everything on our own, it would take time.
By partnering with other companies and combining their technology with ours, we can expedite the process of building new technology rather than focusing on just protecting the technology, which eventually would be copied by other companies.
It's better to for us to focus on developing new technology and partnering openly with other companies. We’ve recently been working closely with clients in terms of increasing investment into developing new technology. Since we’re an SME, it's a big thing for us to make an investment so by working together with clients, we are able to learn about their needs and the prevailing market trends, and sometimes they contribute to the cost of the investment so it's a very good way for us to evolve together with such clients.
Are you looking for overseas partners to collaborate with?
At the moment we are not actively looking for an overseas partner. It's ideal to have good partnerships with local companies, for example, we have a factory in Thailand and every month we send a number of tools and dies for the cold forging machine because it wears out. We make them in-house in Japan since we have a partner company which supplies us here, but in Thailand we couldn’t find an adequate tools and dies manufacturing company, so we send all of them from Japan. If we could find a good partner over there, that would be ideal but it's not a priority and we haven’t been able to find one yet.
You've been established in Thailand since 2013, where you supply cold forged parts for automobiles. Moving forward, which international locations or regions would you like to further expand into, and would you be interested in, for example, establishing bases in Europe to be closer to Continental, to Bosch and Tier 1 suppliers like that?
Personally am not very proactive about expanding overseas. Reflecting back, what triggered us to have our factory in Thailand was the Great Japanese earthquake of 2011. Due to the risks of having a centralized production system, our client requested us to have a factory elsewhere. So even if a natural disaster occurs in one area, the other factory can take over production for BCP (Business Continuity Planning) purposes.
Having a base overseas means a lot of work both for myself and the company. We have to send three experienced the employees to the factory in Thailand to train the locals for about three to five years. Human resource management in an international company is a big thing and managing the differences in culture and language is another hurdle that we have to overcome.
At the same time we also need to focus on domestic developments and investing in the trend towards new generation cars like EVs. We have to clearly foresee what the trend will be and whether or not there will be steady growth. Then we can develop the appropriate technology. In the short to mid-term, we are therefore more focused on domestic issues.
Miyama Precision (Thailand) Co.,Ltd.
Let's say we come back to interview you again on the last day of your presidency. What would you like to tell us about your goals and dreams for the company by that time, and what would you like to have achieved by then?
First of all, I'm very grateful and appreciative for the interview. Thanks to you, I was able to reflect back on myself and organize my thoughts about the company philosophy and think about what to talk about in the interview and that has been a good process for myself. As company president, I value the company philosophy, which was made by the former president, and it calls for reading the future, preparing for it, and providing products for the future. Looking back at my father, the former president, he laid the foundations. He did all the groundwork for the shift of carburetors to EFI (Electronic Fuel Injectors) and he retired after laying those foundations. At the age of 32, I took over the company so currently I am maintaining and growing the seed that was planted by the past generations.
As the current president I am trying to plant new seeds for the next generation, not only for the company but for the clients that work closely together with us. I'm currently 58 years old. My son-in-law joined the company about a year ago and I'm telling him that when I turn 70 years old he has to be ready to take over the company as president. I'm sure he has learned many things today by attending this interview, so planting seeds for the next generation, as well as building the human capacity of the next generation is an important task that I have, and when you come back for the interview, I hope to have been able to realize all these things. In my generation there weren’t so many ups and downs, but the next generation may have to face bigger shifts.
Employees in Miyama Precision(Thailand)Co.,Ltd.
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