Reasons why good manufacturing companies are strong-clear "vision", thorough "selection and concentration", persistent "efforts"-

Article

Date March 26, 2019

presented by Gordon Brothers Japan adviser Hisashi Fuwa
 
Good manufacturing companies are overwhelmingly superior to competitors in their "value created by things".
 
Their management's idea is not (1) "We will create such a valuable product with our technology," but (2) forecast the future market with tough eyes, "To date This is because I draw a clear vision of creating such a product value, which I did not have, and persistently work on issues with the firm will that "we will develop new technologies to realize that." In (1) and (2), the main point is that the logic of strategy is "reversed" as shown in the figure below.
 
(1) Technology (Process = P) → New Value (Value = V) "Use this P to create V!"
 
(2) New desirable value (Value = V) ← Technology (Process = P)
 
"Develop a key P to create this V!"

 
Many of the good manufacturing associates I have worked with in the past, and many competing manufacturing companies that have been shown to be overwhelmingly competitive, have their own clear “vision” in this (2) concept. And “doing and focusing” with tough eyes and steadily working on difficult tasks to achieve that.
 
They have acquired the experience of their own hardship and effort-the ability to see the "values of goods" that can not be found in other companies and the "techniques (processes) that will realize them"-and are overwhelmingly strong in the industry We will build a position.
 
Then, is there such a company actually? Here, let's look at the case of Toray Industries, Inc., which is known for creating carbon fiber into high-value "high-end materials".
 
Toray's history begins with Toyo Rayon Co., Ltd., established in 1926. Toray, which has continued to develop textiles with chemical fibers, will create a “vision” that has been heated secretly during World War II, that is, “superior touch, dyeability, cost-competitive synthetic fibers for clothing” As soon after the war, we quickly developed products such as nylon, tetron, shiluck and put them on the market. Over the course of about 20 years, it has realized "Advanced Materials" products.
 
In addition, "vision" describes completely new uses of molding resins such as plastics and chemical materials, and since 1959, they have developed molding products such as Lumilar, Toyorac and Trefan.
 
Toray recognizes itself as an "advanced material maker." At this time, the company, which began developing materials for molding resins, has developed "confidence," "Toray's growth will be realized only by the attitude of finding or finding values that almost no one imagines." I can say that I got it. They also have a strong sense of mission, "Let's create a light, strong, flexible structural material that exceeds current criticality." That in the sense of mission, "Valuable next ( world draw the required characteristics specification of advanced materials fee)", by raising the hurdle more than himself went at the.
 
This is the point of Toray's "selection and concentration" management. If, with a lot of traditional businesses, you were stuck with an abstract vision and were making prudent and conservative business decisions, you would not have been able to control the market for chemical materials that changed significantly.
 
Toray engineers were able to intuitively find out the value of carbon fiber in the late 1950s. Although it is a fiber, it is not a textile fiber for clothing that Toray has developed until now, but it was a material with a completely different property from resins such as Lumira and Trefan. Toray "judged" that it could further improve its lightness and toughness, and create "advanced materials (= carbon fibers)" that could lead to future structural materials, and "executed" development investment that causes "advanced industries" . It is a time when carbon fiber is still only known as a material for fishing rods and golf shafts. In about 30 years, they launched carbon fiber reinforced plastics of the targeted nature.
 
"It takes a certain amount of time to develop and commercialize materials," said Tochi's CTO Vice President, Keiichi Abe. "Taking carbon fiber as an example, Toray started research in 1961. Ten years later, it began commercial production in 1971, and is currently used in many aircraft such as the Boeing 787." "As many overseas chemical companies withdraw from or reduce carbon fiber development, Toray sees its value as a material," and " long-term efforts have been made in anticipation for aircraft applications in the long run ." " Materials The ability to identify the value of the company and its strong will are the strengths of Toray's research and technology development and the background for creating true innovation . "
 
Toray's sales and R & D cost ratio has been almost constant for many years. In other words, in situations where the top line (sales volume) is sluggish, R & D expenses are reduced, and R & D efficiency and methods are elaborated. In addition, it is said that the leading edge of the product group is evaluated with severe eyes, and even if the product now produces business revenue, it may stop the successor development.
 
Nylon has closed its development investment 10 years from the latest product development and Tetron about 15 years from the first commercialization.
 
Management that constantly evaluates the “vision” strictly and “selects and concentrates” on development investment has made it possible to achieve both capital profitability and sustainable growth. Abe CTO of Toray explains, "(This) proves the fact that Toray's research and technology development has been carried out with" super continuum ". Toray's return on invested capital (ROIC) in recent years has been stable at least 1.0 point above Japan's manufacturing average (5.34%). It can be said that this is the proof that "selection and concentration" is effective in resource investment.
 
The essence of the competitiveness of a manufacturing company is the overwhelmingly high product value delivered to the changing market, not the technology (process) to realize it .
 
For example, taking the legend of Kinokuniya Bunemon as having gambling death and carrying mandarins from Kishu to Edo in the midst of a storm, a storm and a storm, the voyage of the life (process) was not worth it. It is worthwhile to deliver goods to the Edo market, which was scarce and soared, and to earn huge profits (purpose).
 
It is management's "leadership" that first determines and acts on what is "value". A leader is always required to draw a "vision" clearly, and based on that, to "strike" the "selection and concentration" of a drastic investment.