SHOWA PRECISION TOOLS : Customer Needs Drive Technological Development (1/2)

High Added Value and Enthusiastic Marketing Go Hand in Hand
Huge Potential in R&D Matching Activities

Showa Precision Tools was established in 1954 in the midst of Japan’s postwar recovery years. The company, which calls itself “a comprehensive manufacturer of precision plasticity processing tools”, is based in Yokohama City and headed by president Shigeto Kida.

“Plasticity” refers to a property found in metals and other materials where they do not return to their original shape once they are deformed through the application of massive force. “Plasticity processing” is a method of applying force to these materials in order to form them into the desired shapes. Molds and dies might immediately call to mind when one thinks of the kinds of tools needed for plasticity processing, but because of its staunch commitment to collecting technology and building its applied development skills over six decades, Showa Precision Tools does not call itself a “die manufacturer”.

Interviewee
Showa Precision Tools Co., Inc.

President
Shigeto Kida

Shigeto Kida, President, Showa Precision Tools Co., Inc.

Three core technologies born from wiring tools

Showa Precision Tools got it start by manufacturing a tool for producing electric wiring called a wiredrawing die . The wiredrawing die is a doughnut-shaped tool that creates thin wire by pulling it out from a thicker wire rod placed in the center hole. These tools were then sold to electrical wiring manufacturers.

President Kida told us that his company developed three of its core in-house technologies based on its experience with the wiredrawing dies: (1) the technology to polish metal surfaces to a mirror finish, (2) the technology to process items to precision specifications, and (3) the technology to guarantee precision measurements on processed goods.

Showa Precision Tools made use of these three technologies when it moved into the die manufacturing business in the 1970s. Starting with dies as single parts, the company gradually began increasing the added value of its output, eventually moving to devices that incorporate dies, to complete systems, to full production lines. Since the year 2000, the company has been using its die and processing technology to develop new technologies and manufactured goods designed to meet customer demands for more efficient, longer-lasting products.

According to the company’s current sales portfolio, more than 45% of business is directed at the auto industry, with another 45% aimed at the food industry. Most of what Showa Precision Tools provides to the auto industry are die-related products for manufacturing the gears used in automatic transmissions via fine blanking processing. To the food industry, the company primarily sells die-related products used to create the pull-tabs used on canned beverages.

  • Showa Precision Tools president Shigeto Kida

    Showa Precision Tools president Shigeto Kida

Never be just a subcontractor” is our core philosophy

“We got steady work from wire manufacturers from the time were founded,” president Kida explained, “and I think it made things pretty easy.” “But my father [the founder of the company] always had a sense of urgency. He knew that if we kept manufacturing a single product, the competition from other companies would get increasingly fierce, and customers would demand lower costs. So he made sure to engage in as many related business activities as possible, taking orders from other industries and constantly proposing new products. That's how he expanded what Showa Precision Tools does. Refusing to be a mere subcontractor is one of our core philosophies that has been passed down from my father’s era.”

Showa Precision Tools has had to adopt several sales-focused strategies to avoid being just a subcontractor. The first of these was the creation of a Sales Division?home to ten of the company’s 88 employees.

Kida explained how the division worked. “If we only focused on the existing clients that make up 90% of our sales, we could get by with four people. The other six are there to create new business. In that sense, it’s not very efficient. But we can’t guarantee that the auto and food industry customers that those four are in charge of will still be the mainstay of our business in ten years. The other six sales reps go out and look for new work and may eventually take the place of the four. We’ve set up our sales division with this kind of long-term perspective in mind.”

  • Two of the company’s key products: a fine blanking die (left) and formed pull-tab (right)

    Two of the company’s key products: a fine blanking die (left) and formed pull-tab (right)

Collaboration and overseas expansion with other manufacturers

The second strategy was to create tie-ups with other manufacturers. Showa Precision Tools has teamed up with several companies in Kanagawa Prefecture, among them Kakio (headquartered in Atsugi City) Mifuji Chyoko (in Yamato City), and Numasho (also in Atsugi City) to develop their marketing activities by covering for each other’s weaker areas.

“The term ‘die’ covers a whole range of things,” Kida told us. Our sales representatives take requests from clients that frequently include areas that we don’t specialize in. If we turn them down because of that shortcoming, there is very little chance that the client will reach out to us again. So we listen carefully to what they need even if it’s not our forte, and if it’s too difficult for us to handle, we introduce them to one of our partner companies that does specialize in that area and move forward with the negotiations.”

Showa Precision Tools has also formed a partnership with Mori Iron Works, a press manufacturer based in Kashima City, Saga Prefecture. Because Mori Iron Works presses are highly compatible with dies, the two companies are now able to offer start-to-finish fine blanking processing services. The company has also teamed up with M.I. Molde (Fuji City, Shizuoka Prefecture) and Ikegami Mold Engineering (Kazo City, Saitama Prefecture)? companies that make plastic dies that are not in direct competition with Showa Precision Tool products?as well as Nishi Engineering (a press processor in the Ota ward of Tokyo) in order to expand into overseas operations in China, Mexico, and Thailand and contribute to an integrated process of collaboration.

The third strategy is to take advantage of various award programs and public R&D support programs to boost name recognition for the company. Showa Precision Tools has actively participated in contests such as 300 of Japan's Vibrant Monozukuri (Manufacturing) SMEs (2006), the Monozukuri (Manufacturing) Nippon Grand Award (2007), Yokohama Value Group Enterprise (2007?2009) and Yokohama Chizai Mirai Enterprise (2011) certification offered by the city Yokohama, The Kanagawa Industrial Technology Development Prize (2006, 2010) offered by the Kanagawa Industrial Technology Center.

  • Mr. Kida: “We work with other companies to handle requests outside our area of expertise”

    Mr. Kida: “We work with other companies to handle requests outside our area of expertise”

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