Monozukuri Jit Philosophy Startles GuanajuatoThu, 09/01/2016 - 09:44
Q: How have Akebono’s production operations evolved in Mexico and which companies are you mainly targeting?
A: Akebono has facilities and customers all around the world but Akebono Mexico was established to cover the demands of new automotive companies investing in the country. Akebono Mexico’s capacity is very low, as operations here began with 20,000 vehicle parts per month, which is 5 percent of Japan’s total workload. Although we would like to do business with Toyota once their Guanajuato operations start, Nissan and General Motors remain our main clients. In terms of our growth expectations in the Mexican market, we are still trying to identify the needs of OEMs expanding into Mexico. As a result, it is not yet clear where our focus will be in the future but the state of Guanajuato offers good opportunities to Japanese companies and the country’s many free-trade agreements (FTAs) make our operation easier.
Q: Akebono is fairly new in the Mexican market. What challenges have you faced while establishing your operations and creating brand recognition in Mexico?
A: The transition has been much more challenging than we expected. Before we arrived here, we heard that it was easier to set up shop in Mexico than it was in similar countries. In China, for example, they might expect us to pay for the privilege of setting up operations. In contrast, Mexico is grateful that we support the industry and welcomed us with open arms. Having already established operations in North America, Europe and other Asian countries, we expected the move to Mexico to be fairly similar but it was surprisingly dissimilar. The culture and the mindset are vastly different to those in Japan, presenting the greatest challenge for us. For example, the core philosophy of Akebono is oriented toward the Akebono Production System (APS), requiring Just-in-Time (JIT) delivery of a minimum volume of parts. In Mexico, the idiosyncrasies behind how things work were drastically different as the country has adopted a North American style of well-stocked inventory that allows companies to sell anything at any given point. Nevertheless, labor costs in Mexico continue to decrease compared to Asian countries where employee wages increase on a yearly basis.
Q: How has the government of Guanajuato supported Akebono and to what extent has this helped your operational development?
A: The first hurdle when embarking on any expansion or startup is the capital investment, for which Guanajuato offers exceptional support to companies in the region. The state has supported us enormously already and in return we hope to provide employment opportunities to local residents, improving their quality of life. Akebono hopes to develop a welcoming environment that will incentivize our suppliers to accompany us in Mexico. This would allow both Akebono and its customers to grow in Mexico. Although most of our materials are imported, we have identified opportunities to source them from Mexican companies. Even so, it does not really matter where the supplier is based as long as they are competitive and understand our Monozukuri JIT philosophy.
Q: How is Akebono innovating in the automotive industry in terms of products and R&D operations?
A: Akebono is one of the biggest brake suppliers in the auto industry and we have a huge market share, as well as good foundation brake technologies. Our R&D centers are located in the US, China and France as well as at home in Japan. The technology development leaders in Mexico are carmakers that have local R&D operations. Usually they are followed closely by their suppliers. In Asia, there are a number of small innovative carmakers but we have not yet seen one in Mexico. From our standpoint, Mexico is still dependent on the US for innovation. This is why OEMs from other countries should open R&D centers in Mexico, promoting a collaborative development environment.
Akebono’s innovative Monozukuri JIT philosophy supported by APS, which represents a thorough elimination of waste, is based on the idea that Monozukuri is achieved by developing people. Akebono is driving education and training human talent so our workers can develop solutions through constructive thought. Akebono is not only utilizing APS as a production method but is also conducting various activities to elevate it to a management philosophy