Interview - September 11, 2019

Take pride in products! Interview with Kenji Yamaguchi, President and CEO of FANUC (1/2)

Organizations are built upon human resources

FANUC Corporation develops its business through its three cores, FA, ROBOT and ROBOMACHINE divisions, as well as its IoT-based FIELD system (FANUC Intelligent Edge Link & Drive system). Focusing on development of the internal environment, Mr. Kenji Yamaguchi, who became president and CEO this past April, says, “I really feel that organizations are built upon human resources,” and “Only employees who take pride in your products can manufacture good products.”

– Please describe the business conditions of each business.

The FA business is mainly comprised of CNCs for machine tools, and the domestic market is declining. However, it is still strong as compared with the international market. I think that there are differences among manufacturers and markets. Overseas, the Chinese market is sluggish, and local manufactures are in a difficult situation. Taiwan has also been depressed due to the effects of Chinese business sentiment, and the domestic market in South Korea is inherently bad. Europe is not too “bad,” just like Japan. India is lackluster despite expectations thus far. It seems to have been influenced by the recent slowdown in automobile sales and the enhancement of exhaust emission regulations for automobiles.

– What about the ROBOT market?

It is solid in Japan, but it is not the same as at its peak. North America remains stagnant due to the interval between auto body projects. The next rebound is expected after autumn or in the coming year. Europe is a little sluggish. China has shown a willingness to invest, but this seems to have been postponed. The ROBOT market is less depressed overall as compared with that for FA.

– What about the ROBOMACHINE business?

Not too much can be expected for ROBODRILL compact machining centers at the moment, as the market for IT remains stagnant. The rate of decline for ROBOSHOT injection molding machines is low as compared with that for other businesses, and the business is active, especially for precision lenses. ROBOCUT electric discharge machines have also been slightly depressed.

– Please describe the medium-term market outlook.

Both the FA and ROBOT markets will recover in the medium term. However, I think it is hard to expect an upturn in a few months. Some people predict that it will take 2 to 3 years, so we are prepared to endure even if this tough period continues for that long. However, production is much more variable than 5 or 10 years ago, and it is expected that once demand recovers, it will move significantly; therefore, we have taken some measures, such as having extra stock for key parts.

– What about the IoT-based FIELD system?

While it is just beginning to be used in the factories of automobile manufacturers and others, I think that it will take time to spread fully. Our company has conventionally had the philosophy of using our own products thoroughly in our own factories, and we now have about 1,000 machines in the factories connected with FIELD systems to “visualize” them and are working on utilization of the data. In addition, the system is effective for encouraging awareness in workers in the field. While its ultimate aim is to “think and operate autonomously,” it can be used effectively even in stages before that.

– Please describe your strategy for development, production, and sales.

First of all, for sales and development, we have decided to “strengthen them regardless of the economic conditions.” An economic slowdown like now is the time to expand our market share and strengthen the competitiveness of our products. For product development, we emphasize ease of use. While I love products that are the best or fastest in the world as an engineer, products will not spread if they are hard to use. Especially in software development, diversification and segmentation may lead our way of thinking to sectionalism. Accordingly, I urge development staff to visit our factories and develop from the user’s perspective while listening to what is said in the field and using the machines on their own. We also need engineers who can cross-sectionally promote software development, so we have established a team with a small number of staff for this purpose. On the other hand, for our production strategy, it is always a challenge for a factory to manufacture high-quality products cheaply, even for one yen, and this never changes. In the last few years, we have been expanding our factory buildings, and this initiative will be completed when we finish the projects that are currently in progress. Of course, we will continue to expand and update the equipment in our factories.

………The second part of this article will be uploaded on September 13, 2019.

Click here. You can read this article in Japanese.

Source: SEISANZAI MARKETING Magazine September 2019 issue

This article was translated by “T-4OO”.

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