A Steady Course Is Best

Manufacturing Engineering, Mar 2005 by Yamazaki, Tomohisa

When business is good, everybody makes money. But to be a leader, you have to be profitable in up and down years alike to sustain growth. In 2004, Yamazaki Mazak Corp., founded by my grandfather in 1919, celebrated its 85th year in business, and our US headquarters and plant in Florence, KY, turned 30. In the cyclical machine tool business, where sales can fluctuate year-to-year an average of 30%, and such changes have reached as high as 40%, longterm success is by no means guaranteed. Amid these changing waves of fortune, we return again and again to the practice of both my father and grandfather: to plan for better times during the worst of times, and conversely, to plan for the worst of times during the best of times.

It's true that every hardship holds a valuable lesson, and our history proves it. Let me use our US plant in Kentucky as an example. In the late 1960s, we decided to establish sales offices in the United States. While developing our business, eventually we believed it necessary to manufacture machines in the US. In 1974, we established a plant in Kentucky. Many competitors thought this was a mistake. The strong dollar of the time made it considerably more expensive for a Japanese company to manufacture in the United States as opposed to manufacturing and exporting from Japan. Also, it was not the prevailing logic of the time to manufacture close to the customer.

Yet our management made the decision. We employed a US workforce, then regularly modernized and expanded this operation over the next 30 years, primarily utilizing our own machine tool and automation technology. Subsequently, both Japanese and European automotive companies followed this pattern. Toyota, Honda, Nissan, and later, BMW and Mercedes found establishing major US plants as the best way to be integrated more closely to the US market. Moreover, we have repeated this experience around the world: in the United Kingdom in 1987, in Singapore in 1992, and in China in 2001. With this philosophy, our company grew by being committed to a world strategy.

This business model combines globalization with decentralization. In our global manufacturing strategy, managers are local, so they truly understand local needs. Products are locally designed, engineered, and developed to reflect local requirements. This approach brings a combination of autonomy and global support for our manufacturing operations. Indeed, world-class product design and engineering puts us in the position today of exporting machines produced in our Kentucky manufacturing operations for consumption in Japan.

Among the world's machinetool builders, we are global in another sense. We provide a full range of technologies: CNC turning centers, horizontal and vertical machining centers, multitasking machines, laser processing equipment, material-handling automation, and the Mazatrol conversational CNC. We've found that we must constantly innovate new products, because manufacturers throughout the world are continuously searching for machines with more productivity than past models.

Selling equipment alone, however, does not equate to commitment to our customers and the manufacturing industries they serve. Manufacturing will always be the key. Even in the midst of a global recession in machine-tool sales, we continued to spend on expansion and growth. Today, a worldwide network of 24 Technology Centers and 42 technical support offices support seven manufacturing plants in North America, Europe, and Asia. Continually developing and supporting a worldwide, integrated yet decentralized complete manufacturing network is our commitment to industry.

Remaining a leader over the long term in a world market is extremely difficult. Witness the number of machine tool manufacturers worldwide who are no longer in business. Our company is in a position for the current fiscal year to have a record for worldwide sales, and that took a long time and much dedicated effort to reach. Through recessions and expansions, even through extreme year-to-year fluctuations in the marketplace, we have been able to grow globally, remain secure financially, invest in our global manufacturing operations, and contribute to the local manufacturing economy. We are strong believers that investments in local economies create strength in the total global manufacturing community.

Tomohisa Yamazaki

PRESIDENT

YAMAZAKI MAZAK CORPORATION

OGUCHI, JAPAN