Just like caring for athletes

Roku-Roku’s microfine machining centers support production in various industries in Japan and abroad. The machines allow operators to monitor the environment of their location and situation of operation at all times. Up to 36 sensors are installed in a single machine. They collect and accumulate a wide range of information about the machine, including temperature of the room it is located in, as well as the output status of the motor, and are capable of detecting slight changes or signs of abnormality. Data from the sensors is provided to users and Roku-Roku through the company’s original internet platform on a cloud service.

“Just like athletes who need to care about managing and maintaining their health, microfine machining centers need a primary care doctor to keep them in their best condition at all times,” Mitsuru Kaitoh said of this service, called AI machine doctor.

The service was launched in 2018. It was developed as the concentration and miniaturization of metal molds was progressing at an accelerated pace. A slight fluctuation in the temperature of the operating environment can affect the precision of machining when it comes to areas where extremely fine processing of below 1 micron is required, such as in the processing of smartphone components. Problems of processing precision used to be attributed to machine issues. Nowadays, it is difficult to address problems just by automating correction functions or relying on experience or intuition of the operator. “At some point, we just decided it’s not a problem that can be resolved by single efforts,” Kaitoh said.

Pursuit of ‘niche top’

Roku-Roku, which was founded in the Meiji Era (1868 to 1912) and developed Japan’s first vertical-standing machining center, supported the economic development of the era and Japan’s modernization efforts. After surviving a fierce price war, the company began to exclusively focus on manufacturing of microfine machining centers in the second half of the 1990s. In the meantime, the company looked to become a “niche top” in this area. To accomplish this, it developed a business model in which it works closely with users to support processing work as part of its growth strategy, aiming to continue to address customer needs for ultra-high precision and high quality. The IoT technology, which enables constant monitoring, and an analysis function using AI, which enables abnormality detection and preventive maintenance, was the driving force that thrust the company to their “niche top” position.

Heat management technology

Vapor heat treatment systems use vapor and heat — rather than chemical insecticides — to terminate fruit fly eggs and larvae that contaminate tropical fruit. Such a system is needed when exporting vegetables and fruits to countries that require quarantine inspections on imports, including Japan, South Korea, China, Australia, New Zealand and European Union countries.

The technology used in the system was originally developed in the United States but failed to gain traction, and, for many years, use of chemicals remained the mainstream choice for inspection purposes. After remnants of chemicals were linked to cancer, the Okinawa prefectural government, which was studying possibilities of using the vapor heat treatment in terminating pests on green bell peppers in the 1980s, asked Sanshu to develop a system using the technique.

“They wanted vapor heat treatment to completely terminate the pests without affecting the freshness of the fruit,” Sanshu President Yukitada Takasaki said. “For that, you need to be able to control the temperature inside the chamber in units of 0.1 degree Celsius. As we were dealing in dryers used on tobacco leaves, we had by then built on this type of basic heat-management technology,” he said.

As Takasaki’s comment may suggest, Kagoshima had a geographic and historic background to produce this “global niche top” company.

The Kyushu region, including Kagoshima Prefecture, has many tobacco growers. Sanshu was established immediately after World War II on funds jointly invested by producers who formed a cooperative for tobacco production supplies.

“We’re supplying passive optical components to most of these projects,” President Futoshi Ishii, said proudly.

Reliable and durable

As it is being laid 6,000 meters below the surface and will be in service for a quarter of a century, the components that comprise the system, not to mention the cable itself, need to be high performance and reliable. Submarine cables consist of many optical components. Kohoku commands over half the global market of optical isolators and filters that are used in optical amplifiers for these submarine cables.

Its competitive edge lies in its technology and structure for production, that allows it to handle the integrated process from the manufacturing of material to the assembly of components. The company, which originally manufactured lead terminals for aluminum electrolytic capacitors, in 1986, established a technology to manufacture magneto-optic crystals (Faraday rotator). When it subsequently adapted this technology and successfully developed it to mass produce Faraday rotators, a key material that rotates the direction of polarization of light, Kohoku found a foothold to enter the market for long-haul optical commnication components.

Since then, Kohoku has developed optical isolators, attenuators and filters, among other products. Common threads tying these products together are the manufacturing technology for magneto-optic crystals referred to above and the company’s technology to assess thin films. Explaining the significance of this, Takashi Kato, director of research and development at Kohoku, said: “You need thorough knowledge of the characteristics of everything, starting with raw materials, to be able to maximize the potential of components. That allows us to design our strategies for differentiation.”

No hesitation

Kohoku is known for its integrated production system. It has unique technologies for manufacturing materials and precision assembling that give its products a competitive advantage. In the front-end process of manufacturing, the plant at its headquarters, which has a stable operational environment, handles the production and processing of crystals, which are then sent to a Sri Lankan plant. Its optic components are completed by highly skilled technicians, who make precision adjustments and assemble them.

A GNT company is one operating in a market that is not particularly large, but it holds an overwhelming share in said market, and is an important presence that supports global supply chains. The ministry previously selected 100 such companies in fiscal year 2013. Why is METI creating another list? “It’s been over six years, and the business environment surrounding Japanese companies has since changed dramatically,” Tetsuro Yamaguchi, the ministry’s chief deputy director of the aerospace and defense industry division, said.

“As they faced a changing social structure caused by factors such as the development of the digital economy, a rapidly changing global political-economic landscape, declining birthrate and aging population, it’s become more important than ever for businesses to have advantages that rivals don’t.”

The key for businesses to build a stable profit base unaffected by external factors is to build on their unique technologies and business models, while increasing market shares and competitiveness. In addition, it is ever more significant for companies to establish a singular, indispensable presence in supply chains they are a part of, in view of the current situation, where many businesses are forced to change their ways of production and procurement amid the coronavirus pandemic.

The average company of the selected 113 has a global share of 43.4 percent and an operating margin of 12.7 percent. Its overseas operation generates 45 percent of its overall revenue. The market for the products and services by each of these companies is expected to at least double over the next five to 10 years, making them promising companies that have potential for further growth. Economy, Trade and Industry Minister Hiroshi Kajiyama said these companies are “essential and indispensable to global industry, not just Japan’s.”

What is the secret of their strength or the source of their competitiveness? It can be broken down into three elements: narrow focus on a single market, indispensability of their role and difficulty in imitating their offerings.

Addressing special cases

Nikkari Co. in Okayama Prefecture manufactures the Monorack, a monorail system used by farmers to transport produce over steep slopes in mountainous regions. It is Japan’s first such farm-use monorail system. The first example of this equipment was completed over half a century ago. It has since found use overseas, such as in an Italian vineyard.

Another example of a company that has established a strong position in a very specialized market is Utsunomiya’s Rheon Automatic Machinery Co., which introduced the world’s first commercial machinery that automatically wraps fillings in dough, for bakeries. The company has adapted the machine to specific local needs and now has customers in 125 countries.

There are several companies that support manufacturing by offering devices that serve specific needs or take on specialized production processes in the manufacturing industry. These include Kanefusa Corp. in Niwa, Aichi Prefecture, that manufactures single-use cold saws, or circular saws used at ambient temperatures to cut industrial components, such as steel pipes used in automotive industries. Another is Fukui’s Takeda Machine Tools Co., a maker of duplex milling machines that produce metal plates for mold bases and mechanical parts.