White Paper on Manufacturing Industries in Japan.

White Paper on Manufacturing
Industries in Japan
Rethinking manufacturing and consumption,
Japanese perspective
Bio-Robotics and Human-Mechatronics Laboratory
Graduate School of Information, Production and Systems, Waseda University
http://www.waseda.jp/sem-matsumaru/
Takafumi MATSUMARU
http://www.f.waseda.jp/matsumaru/
matsumaru@waseda.jp
Graduate School of Information, Production and Systems (IPS), Waseda University
2019.09, VIU Graduate Seminar. Rethinking manufacturing, consumption and globalization in the era of automation

Outline
 White Paper on Manufacturing Industries.
 Monozukuri White Paper 2018.
 Four concerns. Two major challenges. Two major responses.
 Case study.
 Business optimization.
 Strengthen quality assurance system.
 Creating new value
 Three concerns. Four major responses.
 Manufacturing industry in Japan.
 Overseas approach.
 Strategy (1) --- Development of new business model, like providing
needs-specialized service.
 Strategy (2) --- Strategic approaches.
 Strategy (3) --- Securing skilled worker, organizing, digitalization of
technology.
Bio-robotics & Human-mechatronics Lab., Grad School of IPS, Waseda Univ., Japan Spt. 2019 2

White Paper on Manufacturing Industries
 White Paper on Manufacturing Industries (Monozukuri).
 Ministry of Economy, Trade and Industry (METI).
 Ministry of Health, Labour and Welfare (MHLW).
 Ministry of Education, Culture, Sports, Science and Technology (MEXT).
 FY2017 (2018.05).
 FY2018 (2019.06).

Monozukuri White Paper 2018 (FY2017)
[a] Ministry of Economy, Trade
and Industry (METI), Ministry of
Health, Labour and Welfare
(MHLW), Ministry of Education,
Culture, Sports, Science and
Technology (MEXT) (eds.):
"White Paper on
Manufacturing Industries
FY2017", Research Institute of
Economy, Trade and Industry,
325 pages, (2018.07). ISBN:
978-4806530190 (in
Japanese)

Monozukuri White Paper 2018 (FY2017) -1
 Monozukuri White Paper 2018 (FY2017).
 Four concerns.
Enterprise manager should know four sense of crisis as common understanding.
1. Human resources.
 Quantitative shortage and qualitative change (e.g. change in quality of human
resources, lack of digital professionals, necessary "systems thinking"), which
are difficult to cope with.
2. Advantages.
 Conventional “advantage” would cause trouble in change (e.g. emphasizing on
comparing and adjusting [すりあわせ], too much emphasizing on customer's
intention, over-confidence in quality).
3. Revolutions in economic society.
 Revolutionary period in economic society, however digitalization may not be
recognized by enterprise managers (e.g. misunderstanding as recurrence of IT
boom because of recent sufficient orders).
4. Non-consecutive change.
 Non-consecutive change is necessary (e.g. limitation of self-sufficiency [自前
主義], depending on bottom-up management), however it is not recognized by
enterprise managers.

 Two major challenges.
 Main subject of manufacturing industry in Japan.
1. On-site capabilities [現場力].
 Maintaining and strengthening these, while labor shortage is becoming serious.
 Cultivation and securing of human resource as digital professionals.
2. From object "manufacturing" to solution "service".
 "Object" manufacturing as a source of competitiveness is relativized.
 Increasing of added value is required, while adapting to environmental
changing.

 Two major responses.
 Managers should promote measures.
1. On-site capabilities, Human resource.
 Reconstruction of on-site capability, for example, by making personalistic /
expertised knowledge (depending on individual skills) into a digital asset (in
a binary format), constructing a mechanism to ensure quality, etc.
 Cultivation and securing of human resource (including IT professionals) is
relevant to increase of labor productivity.
 Digital era considering practical use and spreading AI technology:
 Cultivation of highly-skilled technical personnel and excellent young researchers.
Science and mathematics education with programming education at elementary,
junior high, and high schools.
 Promotion of advanced research and development.
2. Increase of added value while adapting to changing environment.
 Promoting "Connected Industries" with cyber-security measures and
“Systems Thinking".

Monozukuri White Paper 2018 (Technical term)
 Systems Thinking.
 Capturing events systematically.
 Focusing on the connections and interactions between the elements
that make up the overall system, and then, giving insight into the
overall behavior.
Emergence & Systems
Thinking [2017.07]
(09:12)
Systems Thinking
[2015.03] (05:40)

 Case study --- Business optimization.
 Nakazato Springs Inc. --- spring manufacturing, 21 employees.
 Unique personnel system.
 Reward system --- point-earning evaluation, and then giving right of manufacturing
product using company’s equipment and materials.
 Dream meeting --- once a month, all employees regardless of position declare what
he/she want to do.
有限会社中里スプリング製作
所 [2015.02] (04:21) <JP>

 Case study --- Strengthen quality assurance system (1).
 Hirotec Corporation --- auto parts manufacturing, 1,700 employees.
 Visualization of inspection data and automation system
 robotics.
 information technology.
国際ロボット展 iREX2015 自
動車部品外観検査システム
（株式会社ヒロテック） [2016.02]
(01:36) <JP>

 Case study --- Strengthen quality assurance system (2).
 Ahresty Corporation --- die casting manufacturing, 7,200 employees.
 Quality assurance by introducing a traceability system.
 2D code and ID number imprinted to each product in casting process.
 To manage the casting data (mold temperature, pressurized waveform, etc.) and the
quality data (of each process).
 By analyzing the manufacturing process of inferior goods, conditions for good
product manufacturing is specified.
 So the defective ratio is reduced to 1/70.

 Case study --- Creating new value (1).
 Asahi Tekko Co.,Ltd. --- auto parts manufacturing, 488 employees.
 Production line remote monitoring service --- i-smart technologies.
 Added general-purpose sensor attached to the equipment afterwards collects data
automatically.
 Main sensors (magnetic sensor, optical sensor) can be installed most existing
equipment.
 Enable to monitor "production quantity", "downtime", "cycle time" 24 hours 365 days.
 Store the data on the cloud, which can be monitored from anywhere.
i Smart Technologies English
[2017.12] (04:57)

 Miruc Optical Co.,Ltd. --- design and manufacture of microscope and optical
equipment, 24 employees.
 AI inspection system (Artificial Intelligence HAYABUSA).
Integration of knowledge and reasoning with machine learning.
 Defect misdetection.
 Recognition and judgement of shape and character of electronic parts (discrete
parts, SMT (surface-mount technology) parts, special-shaped parts, etc.) in high
precision.
 High speed (substrate) inspection.
 Various inspection from micro parts to tall parts, such as missing parts, wrong
parts, misalignment, reversal, polarity error, unsoldered, etc.
 Foreign substance removal.
 for example, food-related foreign objects (wood, stone, hair, thread, vinyl, paper,
metal, etc.).
AI搭載型外観検査ロボット
[2018.11] (00:24)

 Hilltop Corporation --- aluminum cutting, 100 employees.
 "HILLTOP system" --- production management system.
 Features.
 24-hour unattended operation.
 Multi-variety single item production (3000 types per month, 1-2 pieces),
very short delivery time (5 days for new order, 3 for reorder).
 Oved 20% profit rate by rationalization of business. .
 Approach.
 A standard method is derived from artisans’ opinion, and digitized.
 For each processing, data is acquired such as kind of machine tool, cutting tools,
and jig = position, rotational speed, feed speed, cutting depth of cutter; length of
cutter and distance to holder, etc.
 To increase machining accuracy, additional data like machine and atmosphere
temperature, vibration frequency, temperature and pollution of cutting fluids.
News Morning Satelite EN
Subtitles [2017.11] (03:29)

[b] Ministry of Economy, Trade
and Industry (METI), Ministry of
Health, Labour and Welfare
(MHLW), Ministry of Education,
Culture, Sports, Science and
Technology (MEXT) (eds.): "
White Paper on
Manufacturing Industries
FY2018", Research Institute of
Economy, Trade and Industry,
333 pages, (2019.08). ISBN:
978-4806530442 (in
Japanese)

 Three concerns.
Current status and subjects concerning manufacturing industry.
1. Fourth Industrial Revolution in progress.
 Movement of utilizing data in manufacturing line becomes active.
In near future, it will be extended to client communications.
 Further effort will be required with a view across the whole "value-chain", as
the second stage of manufacturing digitalization.
2. Development of globalization and rise of protectionism.
 Globalization is progressing year by year.
 Strategic cope with the way of global "supply-chain" would be a subject.
3. Social business accelerated.
 Accelerating trend of investing to solve social problems, to which Japanese
manufacturing industries can make use of their strengths.
 However, there is a few which think this trend as a business chance.

 Value chain.
 A set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product or service for the
market.
 Supply chain.
 A system of organizations, people, activities, information, and
resources involved in moving a product or service from supplier to
customer.
Supply Chain
Management (SCM)
[2019.06] (01:36)
Supply Chain Definition
[2019.05] (01:27)
Michael Porter's Value
Chain Analysis - What is
a product worth
[2017.09] (01:33)
What is Value Chain
Value Chain Definition,
its Management and
Analysis AIMS Lecture
[2016.06] (03:51)

 Four major responses.
Plans for enhancement of competitiveness.
1. Development of new business model making the best use of
global market share and field data.
 Accumulate good field data, to make shared knowledge.
 Provide service using global market share of own product.
 Meet the customers' new needs, such as social issues in the world.
<Example> Based on the fact that global market share of parts incorporated in
products, by collection and analysis of data from them, aim for new service
solutions.
2. Development and expansion of global market making use of
advantage of parts and materials.
 Based on the advantage of parts and materials, and the technological
capability and quality performance of manufacturing industries in Japan, make
own product de-facto "standard".
 Propose aggressively to finished product manufacturers including overseas
companies.
<Example> Develop and expand global market of parts and materials which is
important for finished products making use of own technological capability.

 Four major response. (cont.)
Plans for enhancement of competitiveness.
3. Construct field and organization where skilled workers will be
active.
 Preparation of the environment where skilled workers to combine
manufacturing and AI/IoT can be active is related to a success in digitalization.
 Create environment and do enterprise transformation, such as actively
promoting younger members, reconsidering evaluation system, newly-
establishing cross-functional department, and so on.
<Example> Organize a specialized unit in the company and accelerate one's
effort on sign detection modelling, skill transfer digitization, and so on.
4. Skill digitalization and labor saving.
 Urgent need to take measures while skilled technicians remaining in the field.
 Think serious about labor shortage from a different angle, intensive labor
saving in the field by using AI, IoT, and robot.
<Example> Measurement and digitalization of tacit/implicit knowledge of
artisan/master using (force) sensor, to make skill learning effective.

 Manufacturing industry in Japan.
 Real GDP (gross domestic products), occupation ratio by
manufacturing industry.
 Japan (22%), USA (11%), Germany (24%), China (40%).
 Global market share.
 Electronics-related final product --- declining in sales amount and market
share.
 Automobiles, Parts and Materials --- increasing.
 Export amount by manufacturing industries remains at the same level for
these10 years.

 Overseas approach.
 Platform business model rises, business style changes.
 GAFA (Google, Apple, Facebook, Amazon), BAT (Baidu, Alibaba, Tencent).
 More customer, more provider --- rapid growth in short period.
 Accumulated data at business platform leads to customized service and new
product/service.
 New value offering to customers.
 MaaS, mobility as a service.
 Siemens, solution for manufacturing companies to become digital enterprises.
 New entry from different industries (information, distribution, etc.).
 SDGs (Sustainable Development Goals) to realize sustainable,
highly-diverse, inclusive society.
 In circular economy to keep reproducing, a business model which maximizes
our use of products, parts and resources, re-produce and re-use without
declining in value is desired.
 Industrial Standard to ensure global competitiveness.
 Affected by economic downturn in China (machine tool, industrial robot).
 Strategic responses with standing in a long-term perspective.

 MaaS (mobility as a service).
 A shift away from personally-owned modes of transportation and
towards mobility solutions that are consumed as a service.
 Siemens.
 By integrating and digitalizing the entire value chain, with Digital
Enterprise Suite consisting of software-based systems and
automation technologies, it helps customers’ digital transformation.
Animation Could mobility
be viewed as a service
[2014.06] (02:10)
Siemens helps
manufacturing
companies to become
digital enterprises
[2017.09] (01:54)
The Future of Transport
is Autonomous Mobility-
as-a-Service [2017.11]
(03:35)
Enabling Smart
Manufacturing with MOM
[2018.06] (02:10)

 SDGs (Sustainable Development Goals).
 A collection of 17 global goals set by the UN General Assembly in
2015 for the year 2030. Each 169 targets for 17 goals has 1 - 3
indicators used to measure progress toward reaching the targets.
 Circular economy.
 An economic system aimed at minimizing waste and making the
most of resources.
 This can be achieved through long-lasting design, maintenance, repair, reuse,
remanufacturing, refurbishing, and recycling.
What Is Sustainable
Development [2015.09]
(02:08)
Re-thinking Progress
The Circular Economy
[2011.08] (03:48)
SDGs NOW! 17 Goals to
Transform Our World
[2018.05] (03:05)
Circular Economy
[2017.06] (02:03)

 Strategy (1/3) --- Development of new business model, like
providing needs-specialized service.
 Self-recognition by Japanese manufactures.
 Superiority = "product quality", "on-site ability to find and solve problems",
"ability to develop technology".
 Inferiority = "product planning ability and marketing ability", "automation and
labor saving of production".
1. Not only high-performance, high-quality, and expensive product, but
also the product replying to customers need with balance among
performance, quality, and price.
 Iris Ohyama Inc. --- planning, manufacturing, sales of living ware.
 Grow sales by providing value sought by customers.
アイリスオーヤマに学
ぶ、潜在ニーズの見
つけ方「アイリスがな
ければ今のホームセ
ンターはなかった」
【前編①】 [2018.02]
(07:26) <JP>

 Strategy (1/3) --- Development of new business model, like providing needs-
specialized service. (cont.)
2. Establishing platform business model to provide high-quality
service meeting customers' new needs by utilizing global market
share and high-quality on-site data.
 Komatsu Ltd. --- construction machinery.
 "Smart Construction" --- service platform = cloud + application.
SMARTCONSTRUCTIO
N [2018.09] (07:07)
Skycatch + Smart
Construction [2015.11]
(03:34)

 Yaskawa Electric Corporation. --- Electrical equipment manufacturing.
 "i-cube Mechatronics" --- three-dimensional digital data solutions.
 Integrated, intelligent, innovative data utilization.
 DriveWorksEZ --- inverter visual programming tool.
 Monitoring data  failure prediction, defect detection.
i cube Mechatronics
Products Support
YASKAWA [2000.00]
(06:07)

 Misumi Group Inc. --- wholesale trade.
 "meviy" --- web application.
 A new method for parts procurement to accelerate the manufacturing process,
which provides instant estimates with 3D-CAD and minimum 1-day shipments.
uploads.
Misumi meviy -
introducing meviy
service(ENG) [2019.07]
(02:44)
Manufacturing Platform
meviy [2017.12] (02:46)

 TRINUS, Inc. --- planning and operation
 "Open Value Chain" --- web-based community end-to-end service.
 Community --- creator, manufacturer, user.
 End-to-end service --- product planning, product development, brand
management, distribution.
1粒40分の超持続性ミ
ントチップ「TiMES」（40
分ノーカット） [2018.07]
(40:54)
花色鉛筆 [2018.07]
(01:01)

3. Proposing aggressively from manufacture of parts and materials to
manufacture of end products.
 NOK Corporation --- transportation equipment parts.
 Oil seals --- Top share in the world.
 Independent company --- not depending on specified auto manufacturer.
 Handling a wide range of product --- not necessarily affected only by trend of
automotive industry.
NOK「なかのひと」篇
TVCM15秒 [2019.05]
(00:15)

3. Proposing aggressively from manufacture of parts and materials
to manufacture of end products.
 ROKU-ROKU Co.,Ltd.--- machining.
 "AI Machine Dr." --- Cloud service for machine tools.
 Based on strengthening technolog = micromachining.
 Status monitoring --- 36 items of data every 10 ms.
 Optimization of processing condition --- diagnose with AI for good production.
 Preventive maintenance, prediction of defective machining --- diagnose with AI.
Roku-Roku the
manufacturer of high
precision micro fine
machining tools
[2013.12] (05:08)

4. Practical application of data.
 At manufacturing scene
 exact needs and issues, considering entire value chain.
 Development in new directions
 exchange with customers, making marketing efficient, etc.

Bio-robotics & Human-mechatronics Lab., Grad School of IPS, Waseda Univ., Japan
 Strategy (2/3) --- Strategic approaches.
1. Make best use of technological capability and quality performance
in growing field.
 Social problem:
 Recognition of manufacturing industries in Japan.
 "Global warming and plastic waste regulations have significant impact on their
business" --- YES more than 70%.
 "It is a business opportunity" --- YES only 30%.
 New business model following circular economy.
 Conventional --- recover cost and profit by selling off.
 New --- collect compensation based on utility value.
 Panasonic Commercial Equipment Systems Co.,Ltd. --- commercial equipment.
 "One-stop solution" --- provide not product but service.
 Solution --- supermarket, retail store, restaurant, building and office.
 Service --- remote operation, maintenance checkup.
 Recognized as making use of one’s strength
 Energy, infrastructure, industrialization.
2. Establish (industrial and technical) standard simultaneously.Spt. 2019 32
Panasonic Brand Video
2019 [2019.05] (04:23)

 Strategy (3/3) --- Securing skilled worker, organizing,
digitalization of technology.
1. Raise of skilled worker both of manufacturing and AI/IoT is
progressing, but also prepare active environment for them.
 Mitsubishi Chemical Holdings Corporation --- chemical manufacturer.
 "KAITEKI Management".
 Enhancing corporate value based on --- Management of Economics (MOE),
Management of Technology (MOT), Management of Sustainability (MOS).
 "KAITEKI Health and Productivity Management".
 Maximize the active participation of "workers" by "health support" and
"workstyle reforms" using ICT and IoT.
Spt. 2019 33
Water (English version)
[2019.05] (00:30)

 Strategy (3/3) --- Securing skilled worker, organizing, digitalization of technology.
2. From (principle of) self-sufficiency to work with others.
 Collaborator:
 Present --- client (customer), supplier, company in the same business area
(manufacturing).
 Future --- companies in different business sectors, venture company.
3. Digitalization of skills.
 Strong needs, especially of SMEs.
 Passive reason --- visualization and sharing of skills, labor shortage, skill transfer,
decrease number of experienced technician.
 Nitto Polygon Co.,Ltd. --- machining tool, 33 employees.
 Scraping work --- measuring usage of body and working force between work-piece
and scraper aiming to (1) support to be skilled, (2) excite curiosity of youths.
 Misuzu Industries Corporation --- precision machining, 200 employees.
 "Industrial Value Chain Initiative (IVI)" --- manufacturing + IT forum
 Grinding work --- measuring interaction between tool and work for (1) visualization,
(2) standardization.
Spt. 2019 34

White Paper on Manufacturing Industries in Japan.

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