S&M Enterprise overseas investment seminar lecture, Kanto Gakuin University S&M Enterprise Overseas Invesment Research Center

In the seminar “Expansion of small and medium enterprises entering the new stage to overseas operations from India / Indonesia to Mexico investment”, I presented the lecture titled “overseas human resources – difficulties and countermeasures for small and medium enterprises ~ Densho technology with example on molds”. The contents are of the technical strategy for reduction of cost for profitability, management of overseas factories and corporate growth from overseas factory visit / survey results of domestic manufacturing industry. I also spoke about cost reduction for profitability, overseas plant management /technology strategy for corporate growth. Since 2013, we have been engaged in corporate revitalization funds’ request for corporate acquisitions and M & A’s “diagnosis of target companies”, and “technical consultation for improvement and reform” after acquisition. I visited a Chinese, Thailand and Indonesia factories of Japanese companies, and investigated a wide range of factories, molds, production, management system, 5S, etc., and summarized the results, planning for profit and growth · actual improvement, and I am continuing to give reform guidance even now. From that experience, first of all, before making overseas expansion, make it a mechanism that profits at domestic plants. If domestic factory does not turn a profit, depending on cheap labor overseas will also fail. That is my conclusion. Also, in the case of small and medium-sized enterprises such as Tier 2 and mold manufacturers, most of the company’s profit margin is inside the company. For example, in molding factories in Thailand, China, etc., we are doing “deburring line” and “deburring work beside the molding machine”. It costs 500,000 yen to maintain the mold, and 15 million yen per year if it assumes mold holding type 30, the cost of debater is 20,000 yen a month, if there are 10 people then 200,000 yen with an annual value of 2.4 million yen. Running only on short-term goals, almost every company has almost no actual mold maintenance of overseas factories. Besides, there are many occurrences such as poorly molded parts due to deburring and poor appearance. In general, the accounting cost of damages is about 5%, but if it is 50 million yen, in actual three times as much is lost, total 150 million yen lost. In addition to losing money, the company fails in the quality audit, losing credibility from the business partner and their sales decrease. This phenomenon also has the same tendency with respect to industries such as press and casting. Before expanding overseas, it is necessary to rebuild domestic profit making, human resource development, and technology development firmly. If we do not have a system that we can depend on in factories, we cannot easily move into Mexico and other countries. Just as there is a tendency towards domestic return, I definitely would like to propose efforts to strengthen Japan as a Mother Center. Evolution from Showa ‘s manufacturing to Heisei’ s monozukuri. KMC will lend a hand to help you with it. I would like to thank Professor Kiyoshi from Gakuin University, who arranged such valuable opportunities, Ms. Kasagi (former HONDA International Director, Purchasing Manager) of the secretariat, Mr. Onna master Mr. Matsushima (Former HONDA Vice President). I pray for the continued growth of everyone who came to the venue.


By Seiki Sato, President and CEO