Enhancement of overseas development functions

Nakaie: First, I’d like to ask you about the enhancement of overseas development functions. Hirose has been taking on globalization as a key challenge for several years, but production technology and product development functions are primarily concentrated in Japan and Korea. I feel that we need to create environments in which we can gather information at sites within close proximity to our customers and engage in development, but our overseas plants function purely as manufacturing sites, and do not possess development functions. Given the amount of effort required to relocate production equipment developed in Japan to overseas sites, it seems to me that we should create environments conducive to overseas development as well. What do you think?

President Ishii: I am fully aware of the need to enhance our overseas development functions, especially our production technologies. When I visited our Malaysia plant, top production technology members expressed the same opinion you did. In the past it was enough to manufacture articles in line with orders from Japan, but now, in order to meet customer needs, it is essential for them to think on their own, improve their technologies, and use these improved technologies in their manufacturing. In other words, there is recognition that enhancing engineering functions in overseas worksites is a critical issue. It has now become possible to implement assembly equipment production and quality improvements at overseas factories, but in order to meet market demands, I believe that factories will need to take their production technology and quality improvement capabilities to the next level. Because of this, it is important that we develop personnel with exceptional technical abilities and mindsets. On the head office side we are implementing various measures for improving the situation, but I keenly feel the need to further ramp these efforts up.

Nakaie: What challenges do you think we face in reinforcing production technology and technology functions?

President Ishii: One of the major challenges is to establish links with the local markets by identifying their needs. Of course, we need to consider what to do about coordination from Japan. From a Group-wide perspective we need to organize and consider how overseas factories and sales companies should handle functions such as technology, sales, manufacturing, and management functions. Simple localization would not allow us to gain a competitive position, as, in addition to language barriers, it would also not enable us to leverage Hirose’s strengths. As a Japanese component manufacturer it is important that we consider how local companies should coordinate with Japan and provide optimal value to local customers. This needs to be discussed in depth before being put into action.

Nakaie: I agree, at this stage we couldn’t achieve success by merely leaving all functions up to overseas plants. However, one of the reasons I brought up the topic of enhancing overseas production technologies is because I believe that providing overseas factories with development functions would improve their technical strengths, ultimately contributing to higher quality levels. At present, what measures do you think we should implement?

President Ishii: Of course, I think we need to improve our production technologies, but in order to achieve that I think we need the current “roles” to be handled as “functions.” Factories need to be able to manufacture well, provide technical support, and rapidly deploy new production lines. Sales needs to be able to accurately assess customers’ demands and build relationships with customers. There are many areas in which designers are being dispatched as FAEs, or field application engineers, and there needs to be careful consideration of how factories should coordinate with design departments and production technology departments. This will require the creation of opportunities and frameworks for discussions, after defining milestones, of what kind of timelines to use, which functions to deploy, which sites to deploy them in, how to deploy them, and how to coordinate between Japan and overseas sites. This is one of the topics in our medium- and long-term plan, and we need to move forward with our support for globalization.

Full-time development of elemental manufacturing technologies

Nakaie: I’d like to ask you about development of elemental manufacturing technologies. Several years ago a new manufacturing platform development section was established in the Production Techniques Department to standardize manufacturing processes. However, it is performing work on an individual product basis for entire manufacturing lines, and the number of standardized processes hasn’t increased. It is also common for technologies desired for localized use, as opposed to entire lines, to be worked on as individual members’ objectives. While we prioritize regular product development work, I also believe we need to create an environment for developing elemental technologies in order to further advance our production technologies. This would involve creating an organization structure and deciding on time usage. What are your opinions on that?

President Ishii: Creating an organization conducive to the development of elemental technologies is, of course, essential. There are assembly lines in every manufacturing industry sector. These lines include processes such as plating, die work, and press work, and we have teams and dedicated units that are engaged in further development of elemental technologies. Our development is still lacking, so we need to push further forward with these efforts in order to enhance our manufacturing capabilities. Strengthening of elemental technologies is a key part of surviving as a truly strong manufacturer. However, we need to carefully consider whether this elemental technology development should be handled by a full-time team or by our current teams. This issue is one that I want us to examine as we formulate production department strategies. Manufacturing abilities should be cultivated and not based on technologies and capabilities that can be developed in two or three years, but from a medium- and long-term perspective.

Nakaie: Techniques that can be acquired in a short period of time are also techniques which can be easily acquired by others, so they cannot be used as points of differentiation. I feel that it’s important to identify from an early stage which technologies and techniques will be necessary, gather information, and take appropriate measures. So far we have improved our production technologies with the assistance of outside skills and effort, but this approach makes it difficult for us to accrue expertise inside the company. We are working to achieve greater standardization, but in my opinion we need to quickly establish Hirose’s manufacturing specifications and acquire new techniques and technologies using them as a base.

President Ishii: As you say, when it comes to Hirose’s manufacturing strengths within the industry, in some areas we have top level capabilities, but we need to carefully evaluate whether we enjoy a top position across the board. It has been about five years since we started our efforts to reinforce our connectors for use in industrial devices, but we have competitors with over 30 years of experience as specialists in that sector, and who have built up extensive expertise during that time. They most likely have a tremendous amount of know-how when it comes to individual elemental technologies, so, needless to say, we face numerous challenges in catching up. Still, I think it is important that we maintain a forward-looking perspective. Regardless, as a manufacturer, our lifelines are our production technologies and manufacturing technologies. I believe that we need to further enhance our elemental technologies, including in our overseas factories.

Nakaie: I usually deal with immediate superiors and factory staff, and have had few opportunities to speak with you directly. With regard to manufacturing, especially, I’ve often heard discussions of quality and manufacturing improvements, but I’m very glad to have had this opportunity to hear you speak directly about what, specifically, we as a company should do.

President Ishii: Our value as a manufacturer is recognized through the value of our products, so our manufacturing must be superior to that of our competitors. Competition will continue to heat up, and skilled manufacturing is not something that can be achieved overnight. That’s why I believe that strengthening our manufacturing capabilities will be a powerful driving force for future success. “Connection business” is, in a way, more trouble than, for example, chip component manufacturing. But that, I believe, is precisely why solid manufacturing makes it a valuable business. I hope you do your utmost to help us achieve further success.

Nakaie: I will. Thank you.