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Lion Power: the innovative SME revolutionizing wire-harness processing technology
Mr Keishiro Takase, President of LION POWER
Mr Keishiro Takase
President of LION POWER
In this interview Mr. Keishiro Takase, President of LION POWER, gives us a unique insight into the history and strategy of his company, and explains how the innovative products they manufacture, such as the HI-3000, help to boost productivity and efficiency.
Despite intense price competition from lower cost manufacturers, Japanese corporations have remained market leaders in niche fields. How do you explain this phenomenon?
To illustrate the competitive advantages of Japanese manufacturing and of LION POWER in particular, let me give you an example: A client of ours recently found a made-in-china wire harness machine. In appearance, that machine was truly similar to ours. Because of its low quality however, they decided not to incorporate that machine into the production of their products. This exemplifies the advantages of "Japanese Monozukuri:" precision, high quality and reliability.
In all industries, there are different grades of price value. Back in the 2000s, users were searching for lower prices. However, those times have past. Today, enterprises are looking for a higher experience and a better quality of production. Companies want a reliable product that will serve for a substantial amount of time. To a large extent, it can be compared to choosing a Swiss watch. While the initial cost of purchase is higher, Swiss watches function for a longer amount of time and are made with higher quality.
According to certain accounts, competitors from emerging markets, such as China and Korea, approached Japanese corporations and placed orders for their products. Apparently, their intention wasn’t to use the purchased machines for their manufacturing production. On the contrary, they purchased other’s solutions to study and replicate them.
Therefore, we do not like to supply these countries with our technology. Furthermore, our products are a technological blend of highly precise parts and unique systems. Consequently, technicians will find it difficult to duplicate them.
SMEs are the backbone of the Japanese economy. They represent 70% of all employment and more than 95% of all enterprises in Japan. What is the role of Japan’s SMEs in the manufacturing chain?
I will answer your question using a metaphor. Imagine you are at a fancy bar and you have in front of you a well-designed glass. That glass is manufactured by famous Japanese brands. People from the outside witness its beauty and they can use it whenever they wish to drink. However, what people can’t see is the coaster that provides a non-slippery surface for the beautiful glass to stick to the table. That coaster exemplifies what SMEs produce.
In other words, Japanese SMEs provide products that are at the base of the end-item itself. At LION POWER, we provide integrated production services for Printed Circuit Boards(PCBs) to large companies, such as Komatsu. Originally, large companies, such as Komatsu, manufactured cheap PCBs out-house. However, those companies cannot supply complex PCBs by themselves. They approached us because they knew we could solely focus on manufacturing this specific product. Large enterprises delegate the design and manufacture of superior and special products, parts and technologies to specialized companies. It is because, like a coaster, the products we make are worth more than price consideration. The manufacturing of circuit boards is not exactly a niche field; it is not a new technology. However, our expertise in this area allows us to assist clients with special needs. Our company does not focus on mass-production. On the contrary, we focus on answering specific needs and every product is tailor-made. Consequently, customers are willing to pay an added-price to LION POWER.
SMEs in Japan have specific skills for the product they produce. A large company doesn’t knock on any door for a product; they knock on the right door for the correct product. JETRO (Japan External Trade Organization) analyzes SME companies to find their specific strengths and helps them venture abroad. However, exporting just one product is difficult and they have to understand how special that product is.
In recent years, we are seeing that many Japanese SMEs are struggling. Many companies are either merging or going bankrupt. What is your analysis of this situation and what trends do you predict for the future?
Yes, there are decreasing numbers of SMEs in Japan. Due to their limited capital, certain firms cannot engage in mergers and acquisitions, which greatly limits their capacity to remain competitive. It is not by lack of ambition that they fail, but by lack of means. This is why they need some kind of partner, such as JETRO, to drag them to a customer or merge them with a particular SME. As a matter of fact, we received an M&A consultation from a small company, but we could not judge whether the company was the right partner for us.
Right now, Japanese SME companies are in survival mode. However, it can be seen as a good opportunity for us. If you have a 100 companies producing something but the number reduces to 70, then the position of LION POWER goes up. As such, it is a good opportunity for us to outlive the other SMEs.
Your company originally started in 1971 in Kanazawa city but you reorganised into LION POWER and moved to Komatsu City in 1973. What is the founding philosophy of your company?
My father’s idea was to create an environment where engineering would combine with joy. This is the founding philosophy of the company. When my father introduced the LION POWER corporate culture, one of his key ideas was that you don’t just make one product and then move on. Once you supplied the first product to a client, you have to make the second and third one. Building long-lasting relationships with our customers has always been at the centre of our organization. When it was first implemented, this philosophy did not match the current trend. I see it as if he was forecasting the future. His ideas are the golden philosophy of the company and when I took over, I logically maintained them.
LION POWER manufacturers Printed Circuit Boards, automatic control panel production systems such as your ‘HI-3000’ and ‘HI-1100NEW,’ precision optical apparatus, medical equipment such as your LS1000 and Industrial Automation Systems. Could you give us an overview of your products and which ones are your best selling products and why?
Our most significant product is the "HI-3000," automatic wire harness assembly machine. The design is absolutely unique and we are the only ones in the world that possess the technology to make it.
30 years ago, a man with a rare medical condition came to our company. He had to undergo dialysis three times a week. At that time, the president, who is now our chairman, instructed him to think utilize his dialysis time as a tool to think about a specific product development.
After that, we joined two engineers together, and they developed the HI – 1001, which is the prototype of HI - 3000. This occurred 18 years after that man joined our company.
While it is extremely difficult for SME to keep an R&D laboratory, we were able to continue our research because our founding philosophy has penetrated the minds of our employees.
Utilizing the skills acquired by our R&D division, we increasingly participated in the development of medical equipment and completed the ‘Spinner 2000’ blood smear. This product caters for a niche segment of the medical industry. It is loved and used by medical engineering professional -and fans alike- who want advanced analysis.
It took us a long time to market this product.
Another product that we are proud of is the "Σe-Star- electronic controlled diesel engine starter," which allows to test diesel engine performance after the car has been dissembled. When we started producing it, such a device did not exist anywhere in the world.
Can you tell us more about your international strategy?
The company’s expansion began seven years ago. At the time, our knowledge of overseas business was limited and we only saw a glimpse of how to expand. Three years ago, we changed our approach and began introducing our products more effectively.
During exhibitions, such as MEDICA, many organizations approached us to purchase our "Spinner product." However, when they heard the price they were not interested. Attending exhibitions allows us to network and research potential partners or clients. Nevertheless, we like to have customers that are a perfect fit for us and our products’ value.
If we spoke to you in five years’ time, what goals or ambitions would you like to have achieved?
Our ambition is to release more original products. In 5 to 6 years’ time, we want people to have more awareness as to our company. Our objective is similar to that of a football player wanting to sign for a big club. Before joining a top club, players must work on their brand image and raise awareness as to their skills. The identity and knowledge of our brand needs to be increased. To achieve such results, we must introduce new products. Furthermore, being perceived as an innovative corporation will allow us to attract new graduates.
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