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The nuts & bolts of Japanese monozukuri
Masahiro Nakashimada, President & CEO of Nakashimada Engineering Works, Ltd.
Masahiro Nakashimada
President & CEO of Nakashimada Engineering Works, Ltd.
Established in 1911, Nakashimada Engineering Works builds cold forging machines, known as "headers" or "formers", used to make the nuts and bolts indispensable to a wide range of industries, from aerospace and automotives to construction, electronics and IT. In this interview, Masahiro Nakashimada discusses how his company has carved out a niche for itself in developing machines to produce high-precision micro metal parts and today boasts a 50% share of the global micro-forging market.
The general manufacturing sector in Japan has been threatened by increasing competition coming from other Asian countries such as China and Korea, who are able to replicate the Japanese products at a lower cost. Stability, reliability are the pride of Japanese monozukuri. Could you tell us about the essence of monozukuri?
Building quality is always up to humans. We can get the help of machines but the machines themselves are made by real people. Besides, there are still some particular processes that only humans can do. To get the technique, we need to train people and the training takes at least a couple of years, even for gifted people. For example, the "scraping" process is one of the first trainings provided to the young workers when joining Nakashimada.
In the past, the workers tended to make all their career in the same company. Today, the young generation is more flexible, and people have the choice to stay in the company if they like it or leave the company if they do not. The positive thing about it is that when new employees do decide to join, they tend to be more motivated. So, I am quite optimistic towards the future. These people still grow up and their aspirations can change, but at Nakashimada, we want to offer them as many opportunities as we can, as long as we can keep them in the company. In some other countries around us, it is true that most employees tend to be less loyal and would leave for a better salary. We also feel lucky because we are not located in a big city like Tokyo and Osaka where people tend to move up, people living in a small town like here tend to stay at one place.
The global cold heading machine market is expected to grow at an annual 5.8% over the next five years, driven by an increasing demand from automotive and construction industries. These two sectors are booming in China and the USA that are now leading the cold heading machines market as a whole. Could you give us a general overview of this parts market and its opportunities for the coming years?
Until 2018, the market was strong and the sales were very positive. We had a difficult time in 2008 and 2009 like everybody else but apart from this short period, everything was fine. The market was indeed driven by automotive and construction. Our strength at Nakashimada is that our equipment is capable of producing a range of micro metal parts. The maximum diameter of the wires that these machines can treat is 0.5 inches, whereas most competitors manufacture their machines from this diameter and bigger.
We have almost 80 different kinds of machines available, which is far more than most of our competitors. For this reason, our customers do not only work in these two sectors of automotive and construction but also in other industries that require to make micro parts. We do have competitors in other countries such as China and Europe, but we are actually competing on different segments. For example, we had one customer in China who stopped buying machines from us and turned to a Taiwanese supplier for price reasons once, but came back to us for our quality again. This kind of example makes me proud of the employees that work hard everyday to make quality machines. It also gives me confidence in our choice not to lower quality and compete on prices.
How do you explain that this customer came back to you?
I cannot disclaim the customer's name but they are working on the electronics industry. They had to make very precise screws and bolts. Machines from other brands were simply not able to make such tiny components.
We are indeed witnessing today a miniaturization of the components used to make electronic products. How does this trend affect your business?
This miniaturization definitely has a good impact on our company because the product size of parts the customers make are coming closer to the range we love. However, this is a continuous process of innovation that we are taking in order to consistently meet the customers’ needs. It is getting increasingly difficult to make parts smaller and smaller but this is also very challenging. It is sometimes painful because about 80% of our new machines fail on tests but the remaining 20% will make tomorrow’s industry. Today we can achieve a wire diameter as small as 0.5mm.
Founded in 1911, your company has now more than a century-old history. Could you please highlight the key milestones of your company?
The company was founded by my great-grandfather in 1911 and my grandfather soon took over after him in 1920. He was a great engineer. In 1948, he designed a very unique crankshaft grinder and this product became a massive hit. This made base for Nakashimada. In 1959, one Japanese company requested my grandfather to design and build a header because at that time all screw manufacturers in Japan had no other choices than buying machines from other countries like the USA, and they were very expensive. This was how we manufactured our first series called H-20, a simple machine that was able to make screws.
Until the year 2000, we sold more than one thousand units of this machine. In the 1960s, more companies entered this market because Japan needed more and more screws. We started designing a 2D3B series which was able to make a stepped shank with a very unique blank transfer system, called "Fingerless Transfer". This machine actually took our name to the world. We started exporting machines to America and Europe in the 1970s. In the 1980s, companies working in the computer industry needed smaller screws, so we came with a new machine called MH-05 in 1985. We still sell it today, 35 years later. It has been a continuous process of innovation for us and adaptation to the market since the beginning.
Your company now serves the needs in a wide range of industries including: aviation, automotive, electronics, computers and so on. What sector seems the most promising for you?
We have to say that 2019 was a difficult year for our company in terms of sales. I visited Germany last week and most of our customers working in the automotive industry froze their investments after a significant decline in car sales following recent scandals with manufacturers. However, we still think that automotive will be a promising market in the future because the sector is having a shift towards a new generation of vehicles, such as electric vehicles. As always, during history, some will win while some will lose. For example, we just received an order for 8 sets of machines from one particular company that will start producing battery terminals for EV. So, the opportunities will be there and we need to see and understand how the market will change.
Besides Germany, your company now has branches in the USA, China and a sales network covering more than 15 countries. International expansion seems to be a priority for your company in the future. Could you please tell us more about your international strategy?
Today, the Japanese monozukuri is not as strong as it used to be in the 1980s, but there are some technologies that you can still only get from Japan. We know what we've achieved and what we must improve to keep our strength for future business. In the last ten years, manufacturers and strong consuming power in China and the USA were leading world economy, and obviously our sales has heavily depended on these countries. However, the trade war between these two countries is badly affecting our business. Still, some growing industries in America represent good opportunities for us such as aerospace in which 3 major players make parts for jet engines. We supply machines for them. We assume that we can expand our business in that market in the coming years. In China, the EV market is booming and the government is even trying to regulate or reduce the number of new manufacturers. This will also be a major opportunity for our business because mass-producing EVs will require many other new parts than just batteries. The same trend will probably be happening in Germany too.
How are you planning to improve your presence and reputation in these new markets?
We do not really advertise for our business but instead, we seek for customers’ trust. When we provide our machines to new customers, the market will know it and this is how our name will expand. We do not push for a mass-market business; we aim for the top-end manufacturers. In other words, there is no future for Nakashimada without reputation from these technologically-advanced companies.
Could you tell us more about your DNA? What would you like the Nakashimada brand to stand for internationally?
Even though our company is quite small, we do everything by ourselves, from manufacturing to sales. We still get the great help of some agencies in the USA, Europe, China or India, I also go and visit our customers by myself. In our industry, everybody knows everybody. If the quality is not there, the whole market would know it and our business cannot work. This is the reason why we cannot fail in providing the best quality machines to the market.
Whenever I can, I go and meet every employee at their workstation to understand exactly what they work on, their issues and their passion. I love making machines and I think that most people at Nakashimada feel the same love for the products that they make. When some customers discuss to lower the prices down, I think about our workers sweating on their machines and I just cannot sell our products for cheap. I hope that my employees know the trust and the deep respect I have for them and their work.
If we had to take this interview again in 10 years of time, what would you like to have achieved by then?
By this time, I would like to have reached the manufacture of our 11,000th machine. We are now close to our 10,000th machine. That would mean that we will have succeeded in perpetuating our good work and passion for this industry. I hope that this 11,000th machine will have some features that I cannot even imagine now, for example a machine that would work ecologically without a motor.
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