Paradigm Shift in Manufacturing and Smaller Businesses

Nov. 29, 2019 [No.69-2019]

Mr. Yasuo Sando
Senior Chief Researcher
Nippon Steel Research Institute Corporation

Paradigm Shift in Manufacturing and Smaller Businesses

Small and medium enterprises in the world are desperately trying to adapt themselves to the waves of the paradigm shift in manufacturing. This is part of initiatives called digital transformation (DX). In this article, the author would like to show you some cases of smaller businesses to give you some insight tip.

Ability to adapt to a changing business environment

The environment surrounding business often changes itself radically. We underwent such changes not only during the collapse of the bubble economy, but also the Stalin break, the oil crises, the Yen appreciation shock, and the Lehman shock just to name a few. Those shocks, including much minor ones, have been frequently occurring. This leads to the view described in Hojoki, a 12th century essay, "The flowing river never stops and yet the water never stays the same."

British biologist Charles Darwin said the following. "What species have been able to survive on earth? It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

3D digital technology for business conversion

Overcoming challenges by the conversion of business with the use of 3D digital technology is the case for a company called Swany. This is a small Japanese company with 13 employees and it specializes in mechanical design work. Swany has a technical edge in 3D data processing, exemplified in "product design and 3D modeling," "3D printer modeling work consignment," and "digital mold." The company's field-experienced engineering staff undertake customer requests and quickly deliver beautiful prototypes by employing product designs that use the state-of-art 3D CAD system. During the recession years of the post-Lehman shock in 2008, the company was focused on being a company that had limited products with large quantity consumption. However, with the aggressive introduction of such recent technology, it was able to convert its business into one that has a large variety of products with smaller quantity consumption. In doing so, it was able to overcome difficult times.

Stronger competitiveness by mastering 3D data

Koiwai Casting CO. is a case of a successful conversion to a more complicated business by familiarizing itself with to 3D data and adopting additive manufacturing technology. The company has approximately 150 employees on a consolidated basis. It is a prototype manufacturer for automotive parts prototypes specializing in sand casting for aluminum-made volume production parts. A higher level of needs in cars called for more complex engine mechanisms. Therefore, there was an increase in projects where conventional mold-making craftsmanship could not be dealt with. Then, the company introduced 3D CAD in 1998 and started to make a mode for sand casts by designing casting plans from the design data of parts. Furthermore, they started to learn AM (Additive Manufacturing) and accumulated know-how on making 3D data, then they were able to master the technology by themselves. Consequently, the number of divided parts dramatically reduced, leading to a substantial reduction of man-hours while they achieved higher precision and yield. They could make delivery (time to market) shorter than before. 

For your knowledge, AM can mold what you want to create at once, by eliminating the conventional work of cutting, grinding or bonding metal blocks. In the production engineering field, too, digital transformation is progressing and is expressed in change from "processing by subtraction" to "processing by addition."

External sales of digitalized know-how

A case of successful IoT in-house development and entry to external sales of its own know-how can be found in Asahi Tekko, an automotive parts manufacturer with about 450 employees. The president of the company started its own approach to win over many competitors, as he believed "We should change faster and shorten our Kaizen cycle more." He went to electronics shopping street in Tokyo and bought a light sensor and lead switch and fixed the light sensor to a signal tower by using double-sided adhesive tape. This simple system enabled them to monitor operation status including production volume, stopping time, and cycle time measurement. This all lead to improved productivity. He succeeded in "no overtime work on weekdays while increasing production output by 69%." He told me the company could enjoy benefits of the reduction effect with "JPY 400 million in capital investment and over JPY 100 million annually, consequently."

There are two points to his success. First, he "acted quickly." Second, he "took newly acquired know-how and used it as a new business service." The company was awarded the Monozukuri Nippon Grand Prize Special Award by METI.

Yet, most important thing is not just to introduce and apply digital technology, but to identify current challenges in business administration. You can introduce and apply effective digital technology to your tasks after clarifying them. The bigger your problem is, the greater the result you will receive when you challenge that problem and succeed. Start with a small number of people on a small scale. Make results comprehensive and clear. People around your team will be surprised to see the result, then they will be motivated to try themselves. Repeating this will lead to the continued expansion of challenging things.

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