nterview with Miida Takashi, President & CEO, Max Co., Ltd.

(From Journal of Japanese Trade & Industry (JJTI))

Byline: Interviewer: Takamasu Kanji

You have been moving into the field of housing environmental units for last few years. Do they have a connection with fastening technologies? Miida: This is based on a concept of environmental conservation and our contribution to it. We are taking it up as a new challenge. In the middle of the 1990's, new housing starts in Japan fell quickly from around 1.6 million to less than 1.2 million dwellings per year. The population is also expected to fall, so it was imperative to find new business fields as alternatives to the nailer, which is currently responsible for 50% of our total domestic sales. Housing environmental equipment is type of product for which we could expect synergy with our sales strength and brand name as a leading nailer manufacturer. The business got under way through the acquisition of a manufacturer to secure the underlying technologies. In the year of acquisition in 2000, the manufacturer had annual sales of \3.7 billion, and we were able to expand this to \7.9 billion by 2004. We expect that sales will reach \11 billion within two more years.

Can you explain about your product development management that have allow you to continue producing such a varied range of products? Miida: We have a total of 1,600 employees in our consolidated operations and there are 170 in the development divisions. I would like to tell you about our "special order prototype design team," which has come up with a new approach to development - probably something that does not exist in other companies.

This team cuts across the development divisions. It dispenses with all the usual formalities involved in an ordinary development process, such as estimating the size of the demand, the scale of the market, market introduction costs and other such calculations. It is a task force that attempts to make a product in response to a client request that is conveyed by the sales division staff. Specifically, it has four weeks to do this, no matter what the request, and regardless of the costs. The team started with five members, but there are now 10 doing this work.

Of course, we cannot anticipate a profit from such a project, but we intend to continue with this system. I recently heard about a carpenter who had a nailer compressor stolen, not once, but twice. This product costs \130,000. Hearing his lament that if it had been a car, it would have had a lock and so could not have been moved, both the sales agent and we were very sympathetic. Normally, something like this goes no further than a few words of consolation about the misfortune suffered. However, our sales staff brought this story back to the special order prototype design team. Four weeks later, we had built a compressor with a lock, and when we showed it to the customer, both he and the sales agent were surprised and deeply impressed. Seeing this, our salesperson was even more astonished, saying "Amazing... such a thing can make our customer so happy!" Under a normal development system, reflecting customer requests to the next generation model would be the most positive response. I believe that even if we ignore costs, there will be a positive contribution to our product development processes. If customer relationships become closer, we will be able to understand a market need that we had not previously known about, and we may even have the chance to commercialize a product based on an idea that had never made it as far as production. Did the decision to set up a "special order design team" have any connection with MAX's historical traditions as a manufacturer? Miida: Not very many of our products have been built from scratch with nothing at all as an antecedent. Rather, the vast majority have been prompted by a basic concept that already exists, or a fuzzy idea that came to us from a user.

Therefore, while producing unique products, MAX is not so strong when it comes to high-volume, low-cost ...