Nurturing Skilled Engineers Supporting Manufacturing Sites -- Mochizuki Industries Co., Ltd.

JFS Newsletter No.61 (September 2007)
Toward a Sustainable Japan--Corporations at Work Article Series No.63

Overcoming the Hollowing out of Domestic Industries

Fujinomiya City, Shizuoka Prefecture, located at the foot of Mt. Fuji, is blessed with abundant spring water that flows into the Fuji River. Taking advantage of its affluent water resources, the city used to flourish with the pulp and paper industry. These days, however, many factories of the pulp and paper industry have been relocated overseas, and these days transport equipment, chemical and medical equipment account for a major part of the city's industries.

Mochizuki Industries Co., established in 1965 in Fujinomiya, supplies, installs and maintains a variety of production-related equipment (pipes, tanks and air conditioning units, etc.), mainly for factories in the medical, chemical and food industries. With its three major products--precision piping systems, tanks, and air conditioning systems for factories--the company has established a good reputation and earned the trust of customers for its advanced skills and know-how.

After the late 1980s, many factories have been relocated to lower-cost countries due to the rapid appreciation of the yen, causing growing concern about the "hollowing-out" of domestic manufacturing industries and employment. In the past few years, however, domestic manufacturing has been revitalized, particularly for high-value-added products, while overseas manufacturing sites have been used mainly for mass production. In this context, increasingly advanced technologies are needed for factories in Japan. Pharmaceutical and food processing plants in Fujinomiya also need advanced technologies, such as for hygienic controls and clean rooms.

Growing Need for Eco-Friendly Methods, Driven by Client Demand

With changes in Japan's industrial structure, the work of Mochizuki Industries has changed greatly during its more than 40-year history. Current work at Mochizuki Industries all involves manufacturing processes that demand special care. But the company realizes that simply offering quality installation work will not ensure a good reputation. "Providing quality facilities through close communication with clients is important, of course, but helping to ensure environmental protection in their production processes is also one of our important tasks," says President Tatsuya Mochizuki.

Clients include many major Japanese companies that devote significant financial and human resources into their production lines in order to meet strict environmental standards. Mochizuki says, "We have to pay careful attention to our work, because some clients have alarm systems that will go off throughout the factory if even a small amount of contaminated water is discharged during equipment installation."

After receiving a request from a client to install equipment, Mochizuki Industries checks the worksite before the actual work begins. The staff is required to take one-day courses regarding safety and environmental conservation, ahead of checking the worksite, and the company needs to determine which employees will work at the site at least three weeks before the work starts. Some clients have strict rules even on the cleaning of tools the company brings in the worksite. Through these requirements from clients, Mochizuki Industries' staff realized that many companies' environmental efforts have significantly changed over the past decade or so.

Most of Mochizuki Industries' clients have already introduced ISO 14001 environmental management standards, so the company Mochizuki was concerned that without knowledge about these management systems, it would be unable to communicate well with clients. The company therefore acquired certification for ISO 9001 quality management standards in 2002 and ISO 14001 standards in 2005. Factories that support advanced industries require highly advanced management practices.

In effect, these efforts help Mochizuki Industries distinguish itself from competitors and win the confidence of clients. Observing the clients' ever-changing environmental efforts and trying to respond to their diverse needs, Mochizuki Industries noticed that companies' environmental efforts have a direct impact on their financial statements. Until several years ago, recycling was not regarded as importantly as it is now, but soaring resource prices completely changed this situation. Mochizuki Industries believes that recycling and waste reduction are necessary not only for the environment but also for good corporate management, and they boost profitability. The company says that production lines in the manufacturing industry today prove that environmental efforts are a key to profitability.

Need for Skilled Workers

Currently, 28 employees work for Mochizuki Industries, with 53 different types of certification in all, including first-class architects, safety managers for air-conditioning and refrigeration work, chlorofluorocarbon refrigerant recovery experts, and managers of specially controlled industrial waste. This is a company of specialists. Mochizuki's vision of his company is one that develops highly-skilled workers.

Ironically, during Japan's prolonged recession, many civil engineering and equipment companies released their own specialized employees due to pressure to cut costs. As a result, many no longer have highly skilled workers and often outsource their work except for supervisory functions. Inexperienced field supervisors often cannot make decisions when things do not go as planned, even though they may be able to prepare drawings and manage processes.

There is today a general concern in Japan that after post-war baby boomers (now in their 50s or 60s) retire there will be a lack of experienced and skilled workers. Mochizuki shares this concern: "Japan's future manufacturing base cannot be supported unless we convince society of the importance of skilled workers."

That's why Mochizuki Industries attaches importance to employee training. Since many new young employees may not have received a higher education or vocational training before joining, the company trains them diligently, helps them to acquire licenses and certifications, and provides in-house training. The aim is to offer a system in which employees will stay with the company for a long time and develop into precious human resources that will create value for the company. "Our employees have to have not only technical but also communication skills to accurately understand client needs, and the persistence to pursue precision and quality. We hope to nurture employees who can perform their jobs to a high standard in their thirties or forties as they advance in their careers," says Mochizuki.

Expanding into Business-to-Consumer Market to Protect Environment

Having established the technology and trust by supporting manufacturing processes in industry, Mochizuki Industries is now exploring new environmental business opportunities. As a part of these efforts, it became a contractor to distribute and install residential photovoltaic systems. Upon request from Sharp Corporation, a major Japanese electronics and photovoltaic systems manufacturer, it started distribution and installation services in 2006 for a Sharp system called Sunvista. With its experience in construction of production line equipment for major manufacturers, Mochizuki Industries had no problem expanding to the installation of solar power systems on residential rooftops.

In addition to the economic merits of home power generation, residential photovoltaic systems have environmental benefits since they can help prevent global warming by reducing CO2 emissions. They can also reduce the vulnerability to disasters since they can provide off-grid power for household appliances of up to 1500 watts during power blackouts.

Mochizuki has a photovoltaic system installed on his own home and knows its benefits. The sales of these systems are stagnant, however, due to unresolved issues with power utilities. Meanwhile, the previous long-time leader in the number of installed photovoltaic systems, Japan was surpassed by Germany in 2005. Undaunted, Mochizuki Industries will continue in the business-to-consumer environmental business by promoting residential photovoltaic systems, taking advantage of the technologies and connections it has developed over many years of business.

(Written by Kazuko Kojima)