Wake up call for Japanese manufacturers
Jan. 10, 2018
The second of this three-part series on the future of the Japanese economy looks at the manufacturing sector. More specifically, the struggles of what used to be one of Japan's top industries, and what it needs to do to recover its status in the global market.
Throughout last year, Newsroom Tokyo reported on Toshiba's near bankruptcy, data falsification scandals and the sale of Sharp to Taiwan's Foxconn in 2016.
These are tough times for Japanese manufacturers, and their star is definitely waning. On a list of the top 10 home appliance companies in 2015, only one Japanese brand is left, whereas at least 3 or 4 would have topped the rankings 20 years ago.
For an in-depth analysis of what lies ahead, NHK World's Yuko Fukushima interviewed a top businessman who's spearheading efforts to fight this predicament.
Yoshiaki Ito, the CMO of Japan Display, is on a mission to save his company.
"If there’s no precedent, let's set one. If it's against the rules, let's change the rules," he says.
The firm's mainstay product is screens for high-end smartphones. But it has been losing out to Chinese and South Korean rivals.
The company was established in 2012 by bringing together the display divisions of Japan's top manufacturers.
After 3 consecutive years in the red, Japan Display's CEO brought Yoshiaki Ito on board as Chief Marketing Officer, and put him in charge of turning around the company.
Fukushima: Japan Display is not a company without problems; it faces many challenges. Why did you choose this job?
Ito: Japan needs more flexible approach to compete better in the global scene. So that’s one of the reasons I decided to join Japan Display. We have right team to keep developing what is known as the world’s first, the world’s best technology so far, so that I’m not worried about. What I need to focus more now is to fix the house inside. There are lots of things that need to be fixed. The reason why it's not functioning as it should be, is, it's probably the management scheme. It's not suitable anymore in this economic environment, as well as this, this internet era. Because speed is everything, right? So, in that, what we lack is the speed.
Ito's track record includes the revival of several companies. And one of his favored tools is changing people's mindset.
As the head of Haier Asia, Ito was able to put unique products on the market by taking ideas directly from the engineers.
Among those products is the world's first pocket washing machine. The handheld device works like a piston, and removes stains in a matter of minutes.
This unprecedented concept revolutionized a market that was locked in a price battle, with manufacturers struggling to offer something different from their rivals.
Within a year, Haier Asia was back in the black after 15 consecutive years of losses.
As CMO of Japan Display, Ito is now betting on two factors--speeding up decision-making and once again changing the corporate mindset.
Ito: Japanese people are really good at coming out with excuse of not being able to do. Then how do we do it? I think it’s more like a mindset, you know? So, if we change that, that would definitely increase the speed of the decision making. What's common today may be uncommon tomorrow, alright, so if you keep trying, you keep working on trying your best with today's standard, it could be obsolete the next day. So I'm just saying, if you think it's right 60 percent, go for it. And don't wait. Because as long as you get this 60 percent direction right, you've got time to fix along the way, so uh, keep going, keep moving, don't wait for the consensus.
Since he joined the company last October, Ito has been visiting factories across Japan to spread his message.
"You all have good ideas," he says during a lecture. "Why aren't they hitting the global market? Because someone above didn't believe in them. Give me a break! Your bosses aren’t always right. Actually, you probably know better than them when it comes to technology, and that could be your chance to create a new market."
"Mr. Ito is pushing employees to open up," says one employee. "I feel the company is turning in the right direction, and his presence helps eliminate the negative opinions that would take it backwards."
Ito spends time with younger engineers to encourage them to speak out when they have a new idea.
One session is taking place in a factory that makes car displays. The discussion focuses on the not-so-distant future when electric vehicles will dominate the market.
"If the product's warranty is shorter, we’ll be able to reduce costs," says one employee during a meeting.
"You're absolutely right," Ito tells him.
Ito wants Japan Display to be a household name within two years. He wants to change it from being just a component maker to a company that delivers products and services directly to consumers.
Ito: I just want to convey message that it's okay to have, to unleash yourself, unleash the power of yourself, because everybody's got the, great ideas, right? I really think that if somebody could learn from what we’re doing here, you know, changing the scheme or trying to apply the new approaches, where multi-Japanese companies haven’t done before. If we could, if somebody could learn from us, I think Japan could be different. Again, going back to the point, I think we could awaken Japan.
NHK World's Yuko Fukushima discussed the situation facing Japanese manufacturers with Newsroom Tokyo Anchors Aki Shibuya and Hideki Nakayama. Watch the video for their talk.