Fukai MFG Co., Ltd.

The 70 Year History of Fukai

Company Developments

(1) Starting Off from the Yamabe Plant [From October 1938 To September 1965] - Company Developments -

 It has been said that businesses continue developing if they can successfully ride the trends of the times.
 While Ashikaga flourished before the war as a textile town producing Ashikaga Meisen that was known nationwide, there are now hardly any sawtooth roofs that are emblematic of textile factories.
 In 1938 under the military regime, the company commenced operations in Yamabe (Yamabe town, Ashikaga county) as a manufacturing plant for airplane jigs and parts. With the shift to peacetime industry following the war, we started out with the production of goods such as household sundries.
We then found the means to expand our business through scooters and bicycle parts, and we expanded from a molds and jigs manufacturing plant to a production plant focused on pressed parts while the conflict was ongoing in Korea.
Around 1959, auto manufactures successively entered the market with small cars, marking the beginning of motorization.
 Trade with Fuji Heavy Industries Ltd. and other automobile manufacturers grew steadily, and due to space limitations we had to move from the Yamabe Plant to the Mikuriya Plant.
[For more details on this period, please see the previously published "The 50 Year History of Fukai."]

(2) Expansion of Mikuriya Plant [From October 1965] - Company Developments -

 Founding President Yoshinobu Fukai, anticipating the trends of the automobile industry, moved the head office and plant from Yamabe where we had operated and grown familiar with the environment for a period of 27 years since foundation to Mikuriya (Fukutomishincho, Ashikaga city) in 1965 in order to launch the first plant in the Mikuriya Industrial Park developed in Ashikaga City in response to these upcoming trends.
 Dramatic growth was experienced as a result of this move to Mikuriya, as in addition to automotive components, business was commenced with Kubota Iron Works (currently KUBOTA Corporation) for agricultural machinery parts in 1969 during the era of agricultural modernization.
 Founding President Yoshinobu Fukai passed away after a ten-month struggle with hypopharyngeal cancer in 1981. Subsequently, Tomi Fukai was appointed as President and Takeshi Fukai was appointed as Representative Director.
Although the company's economic environment was strong due to post-war reconstruction and subsequent high growth, following the rice acreage-reduction program commenced in 1970, the oil shock in 1973, and the automobile export controls for the US in 1981, the future looked uncertain as the company marked its fiftieth year.
[For more details on this period, please see the previously published "The 50 Year History of Fukai."]

(3) Achievement of Long-Awaited Goal of Sales of 10 Billion Yen [From 1988] - Company Developments -

1) Together with Legacy
 Fukai held its fiftieth anniversary ceremony in 1988 when Fuji Heavy Industries Ltd. commenced production of the first generation sports wagon called the Legacy. The economy was also very strong during this year, as evidenced by the opening of the Great Seto Bridge and the completion of the Tokyo Dome.
 The product release meeting where the birth of the Legacy was announced was held on January 23, 1989, and the Legacy series was subsequently released on February 1.
 At Fukai, the Legacy accounts for over 20% of sales as the main model, and it has affected company management in many ways as it has maintained its position as the main model for a period of 18 years since release.
 As mentioned in the "The 50 Year History of Fukai," self-regulation on exports to the US were carried out over a three year period from 1981 to 1983, and Fuji Heavy Industries Ltd. adopted local production in the US. SIA (Subaru Isuzu Automotive Inc.) was founded and commenced operations in September 1989, and initially sales were grown by sending Legacy parts from Japan by ship and freight cars over a period of approximately 40 days.
 The Legacy went through several model changes, and the fourth generation Legacy that was released in 2003 won Car of the Year, in recognition of it being one of Japan's most renowned cars in both name and reality.
First generation Legacy

2) Launch of the Ota Plant and Nitta Plant
 Excluding the war period, it is no exaggeration to say that Fukai has grown together with automotive components and agricultural machinery components for a period of fifty years since its foundation.
 Following the war, we received orders for scooter components from Fuji Kogyo Ltd. (forerunner of Fuji Heavy Industries Ltd.), and we subsequently commenced business with Prince Motor Company Ltd. (subsequently merged with NISSAN MOTOR CO., LTD. in 1966). We then received orders for agricultural machinery parts from Kubota Iron Works Co., Ltd. in 1969 and conducted business activities based on these three pillars.
 The company's sales grew steadily as strong performance in agricultural machinery parts compensated for the deterioration in business performance cause by the first and second oil shocks until 1980.
 However, in the automotive industry, automotive exports to the US grew dramatically, and as a result export controls on Japanese cars to the US were agreed to in 1981 and an export quota of 1.68 million units was set (export controls on Japanese cars to the US were continued for a period of three years from 1981). Meanwhile, in the agricultural machinery industry, following the implementation of the rice acreage-reduction program in 1970, rice acreage decreased year by year and a recovery in demand for agricultural machinery did not appear likely. In terms of sales, while there were temporary increases in sales due in part to orders received from Kanai Sharin Kogyo Co., Ltd. (currently Ring Techs Co., Ltd.) for disk wheels and orders received from Kubota Iron Works Co., Ltd. for grain tanks in 1985, this did not lead to a steady increase in sales every year.
 Against this backdrop, it became necessary to cover for the slump in sales and it was decided to expand into industrial machinery including construction machinery and large-scale air-conditioning equipment.
 Because there are differences between development methods, facilities used, the timing for work proficiency development, and management methods for automotive parts and agricultural machinery parts compared to industrial machinery, and also for the purpose of ensuring that profit and loss management would be clarified, the Ota Plant (Ota city, Gunma prefecture) and Nitta Plant (Nitta town, Gunma prefecture) were acquired in addition to the Mikuriya Head Office Plant from 1988 to 1989. Operations were launched and a three plant system was adopted.
Ota PlantNitta Plant

3) Achievement of the long-awaited goal of past presidents
 Achievement of sales of 10 billion yen had long been the company's goal. This was mentioned in "The 50 Year History of Fukai," in which Founding President Yoshinobu Fukai stated that "the 100 strategy aimed annual sales of 10 billion yen has been deployed" in 1974. As it also states that sales for the 35th fiscal year (April 1972 to September 1973) were approximately 2.5 billion yen, setting such a goal must have taken extraordinary determination.
 Based on a growth strategy consisting of three plants including the Ota Plant and Nitta Plant that had been added, business was recommenced with Hitachi Construction Machinery Co., Ltd., Komatsu MEC Corp. (business commenced in 1978 with our affiliate Hand Work Kogyo), the Omiya Plant of Fuji Heavy Industries Ltd., and Sanyo Electric Co., Ltd. for industrial machinery from 1988 to 1991 as the number of clients grew considerably.
 On the other hand, sales grew considerably in our mainstay automotive components, thanks to strong sales of the Legacy model released in 1989 and orders received from Subaru Logistics Co., Ltd. for containers (crates) for sending Legacy parts to SIA.
 In business with Yamakawa Industrial Co., Ltd. (currently Unipres Corporation), new orders were received for G50 (luxury car) torque converter covers and component orders were received for F31 (transfer from the Oppama Plant to the Tochigi Plant), Y32 (main car model ordered by Nissan), and H41 (a small truck) as full model change from 1989 to 1990.
 Thanks to the hard work of all of our employees over the long years in this manner, and supported by the strong economy in 1989 when the Nikkei Stock Average reached 38,915.871 yen in December, we were able to achieve our long-awaited goal for two consecutive years as we recorded sales of 10.2 billion yen in 1990 and 10.6 billion yen in 1991.
 The long-awaited goal of sales of 10 billion yen was achieved 16 years following the announcement of the 10 billion strategy and nine years following the death of Founding President Yoshinobu Fukai.

(4) Construction of the Otsuki Plant in an Aim for Order Expansion and Even Further Growth [From 1989] - Company Developments -

1) Rush to increase ordered parts
 A three plant system aimed at even further growth was established in 1989 following the passing away of Emperor Hirohito, and the plant launching proceeded according to plans. The Ota Plant was used for agricultural machinery parts, while Nitta Plant was used mainly for industrial machinery parts, and after not long there was nearly no workspace at both plants.
 At that time, the agricultural machinery parts for Kubota that had taken up one corner of the west side of the assembly area at our core Mikuriya Head Office Plant were moved to the Ota Plant and the assembly workspace became free. As a matter of course we were actively working to get orders for automotive components, and as a result we received orders from Fuji Heavy Industries Ltd. for the Alcyone and Impreza as new vehicles and from Yamakawa Industrial Co., Ltd. for the Nissan car Infiniti (Q45) that was the talk of the times. At the same time there was a launch rush as many orders were received for large-scale full model changes or transfer of control for models including the Vivio, Cedric, Atlus, and March in this period.
 Note that in 1990 the development period until the launch of mass production was about 23 to 24 months for standard passenger vehicles and 20 months for minicars. The product drawings had been provided by clients and apparently clients were in the process of holding CAD/CAM training.

2) Construction and launch of the Otsuki Plant
 From 1989 when 3% consumption tax was introduced to 1990 when minicar regulations were revised (displacement of 660cc or less), a line was established for the succession of new orders and full model changes in the open workspace at the Mikuriya Head Office Plant accompanying the transfer of agricultural machinery parts to the Ota Plant. As the assembly workspace became smaller and smaller, the completed parts storage space at the north side of the assembly area was gradually converted into an assembly workspace.
 Assembly workspace was still insufficient, so a lean-to roof was added for crate production and a prefabrication warehouse was installed to the south of the Mikuriya Head Office Plant in order to support shipments to SIA.
 At this time, the Uekino Warehouse was also being rented by the Asakura Warehouse (Fukuicho) and Ota Plant. Of course, the increase in assembly workspace also meant an increase in the number of employees and the need for parking spaces for these employees. In response, the parking lot was expanded south of the Mikuriya Head Office Plant and service molds were discarded for the second time for the south parking lot in July 1991, although this was done after the decision to acquire land in Otsuki. There was also a shortage in rest areas, so the second floor of the cafeteria that had also been used for storing equipment had to be opened during lunch break.
 Against this backdrop, after giving consideration to converting the Mikuriya Head Office Plant into two floors and the introduction of other industrial parks during the location selection process, due to the lack of the site area desired, the final decision was made in April 1991 to acquire a former mine site in Otsuki town, Ashikaga city being brokered by Ashikaga city.
 Plant Manager Kimishima was the person responsible for the construction to the launch of the Otsuki Plant. Senior Managing Director and Plant Manager Kimishima originally worked for Honda Motor Co., Ltd. and was invited from Ogiwara Ironworks Co., Ltd. for appointment at the same time as the acquisition of land for the Otsuki Plant in 1991. Plant Manager Kimishima nearly news-worthy guidance consisted of management meetings from 7:00 every morning and immediate thorough improvements through 5S management.
Plant Manager Kimishima's concepts for the construction of the Otsuki Plant included unmanned operations, using of robots for the tandem press, and direct conveyors for the assembly line. The plant was completed during the summer vacation of 1993 based on these concepts, and the inauguration ceremony was later held in October of that year.
Otsuki Plant (under construction)
Press 500 tons robot line

3) Struggles with hiring difficulties
 Although we had secured sufficient work during the first half of the 1990s, it was difficult to secure workers during this economic boom period. According to a statement by the General Affairs Manager at a morning management meeting in March 1992 that was a regular meeting at that time, the jobs-to-applicants ratio was 1.9 times in Tochigi prefecture, 2.03 times in Ashikaga, and 6.79 times among technical occupations.
At that time the buzzword the "3Ks" (kitsui, kitanai, kiken, or hard, dirty, dangerous) was popular among young people, reflecting an inclination to stay away from manufacturing jobs that were deemed as unfavorable.
 This meant that of course midcareer hiring and the hiring of new graduates was difficult and the company had to rely on outsourcing. We naturally came to rely on people of Japanese ancestry from Latin America from companies such as Kyowa Parts (formerly Jaburasu) and Yamato, and signs written in both Japanese and Portuguese were displayed at the workplace.
 Under these circumstances, efforts were made to secure regular employees through periodic recruitment. Efforts included the issuing of an in-house publication named Quest, the launch of the Appealing Company Establishment Committee, and a shift from the long-familiar gray uniforms to new green-based uniforms in 1991.
Old uniforms
New uniforms

(5) Sales Reductions Due to the Collapse of the Bubble Economy and the RE Plan [From 1991 To 1999] - Company Developments -

1) Acceptance of secondees from clients
 The number of staff members was low due to preparation for the construction of the Otsuki Plant and business expansion, so five secondees from Fuji Heavy Industries Ltd. were accepted for the period of three years from 1991 to 1993. Subsequently, there have been replacement secondees up until the present day, as these secondees have fulfilled a central role at Fukai.

2) Sales reductions
 The collapse of the bubble of high economic growth became a reality for Fukai with the fall of the scrap price (6 to 7 yen/kg) from November 1991.
 During September of that year, work was being conducted during lunch breaks due to increased production for the Legacy by Fuji Heavy Industries Ltd. and the Cedric and Gloria by NISSAN MOTOR CO., LTD. Although the Economic Planning Agency announced also in that September that the economic expansion lasting for a period of 58 months since December 1986 had exceeded the Izanagi boom (a period of rapid economic development from 1965 to 1970), Fukai began to suffer from the economic slowdown two months later.
 The collapse of the bubble economy led to a decrease in production of the Legacy and Leone by Fuji Heavy Industries Ltd in February 1992. Annual sales were also sluggish for NISSAN MOTOR CO., LTD. during this year, as holidays were increased in October and November and work 9days were transferred to February and March.
Amidst this increasingly difficult environment, return use was adopted from February 1992 for crates that had been delivered to Subaru Logistics Co., Ltd. due to environmental problems, causing a drastic decrease in a business that had accounted for at least 7% of total sales. The full model change of the second generation Legacy was conducted in 1993, and as calls were made for export control on automotive components to improve trade frictions between Japan and the United States, local procurement was adopted for SIA production parts and it became no longer necessary for the company to send parts to the United States.
 Due to a change in production responsibilities at NISSAN MOTOR CO., LTD., production of the Pulsar at the Tochigi Plant was transferred to the Kyushu Plant in March 1995, and the company's line was transferred to Katsuyama Press Kogyo (currently Unipres Kyushu Corporation).
Although under this background the entire company worked together to expand sales as can be seen in the appendix "New Business Partners List," Fukai could not compensate for the decline in automotive component sales, and sales decreased as seen in the appendix "Sales Trends".
This was one of the most difficult period of Fukai's history of a little over fifty years.

3) The RE Plan and creation of profitable structure capable of sales of 7 billion yen
 Operations commenced at Otsuki Plant in August 1993. The plant started off with approximately 250,000 square meters of land and a plant building with a size of 18,560 square meters (116m x 160m). Because the plant is located on the side of a mountain, when operations were initially launched there were many rhinoceros beetles when going to the company in the morning as well as mushrooms that could be harvested in the fall as it was a plant with a rich natural environment.
However, the construction funds for the Otsuki Plant were bank loans. The interest on the large amounts of construction funds was a considerable burden for the company.
 As noted earlier, in terms of earnings, there had been a reduction in the number of units sold by automobile manufacturers due to the collapse of the bubble economy and a decease in sales due to the adoption of local procurement by Fuji Heavy Industries Ltd. and SIA, combining to put the company in an extremely difficult position in terms of both earnings and sales.
 In order to overcome this situation, the first streamlining plan call the RE (Re-engineering) Plan was launched as a management plan. As described in the appendix "Overview of the RE Plan," the RE Plan was composed of parts I through V for implementation as a medium-to long -term management plan over a period of 5.5 years. The basic aims and goals of the plan were to create a profitable company capable of sales of 7 billion yen and implement activities to prevent losses through large sacrifices such as wage cuts and employment adjustments.
 The successes of the RE Plan were later leveraged in the medium-term management plan and were no doubt thanks in part to the efforts of all employees.

4) Integration with Otsuki Plant and head office relocation
 One of the measures of the RE Plan was the consolidation of plants, which in turn had three major objectives. The first was to empty out plants and sell them to reduce debt and the second was to reduce wasteful expenses required for transporting parts between plants. The third was to reduce the wastefulness that occurred due to managers at the top of the organization working at multiple plants, causing a significant waste of time for movement between plants.
 As the first step aimed at improving this situation, Fukai consolidated the Ota Plant and Nitta Plant into the Mikuriya Head Office Plant, which had open space due to the transfer to the Otsuki Plant, from 1994 to the following year. The workplace layout consisted of Kubota parts such as tractor rotary covers that had been moved from the Ota Plant to the east assembly area of the Mikuriya Head Office Plant and parts for Ogihara Corporation (US) such as OAC that had been transferred from the Nitta Plant to the west assembly area.
 At this time the Mikuriya Head Office Plant press workplace still had TRF160t, 600t, and tandem A, B, and C lines in operation, as well as B6 blanking and PRG300t equipment, and machined parts were mainly sent to the Otsuki Plant.
In terms of social trends, after the 1955 System collapsed in 1994, the Hata Cabinet (Shinseito) and Murayama Cabinet (Social Democratic Party of Japan) got their start.
 While a buyer was being sought for the Mikuriya Head Office Plant in order to reduce debt, Achilles Corporation that was located just across the road commenced talks on the purchase of the Mikuriya Head Office Plant a few months following the integration of the Nitta Plant with the Mikuriya Head Office Plant. The talks went smoothly, and in June 1996 it was decided to vacate the plant by March of the following year. While the initial transfer of control of Otsuki during summer vacation of 1993 had been a transfer of the assembly workplace, this transfer of control would constitute the closure of Mikuriya Head Office Plant, consisting of the relocation of the previously mentioned Ota Plant and Nitta Plant and the transfer of large-scale machinery such as the transfer press for the press worksite and all machinery for machining worksites. A very tightly-scheduled transfer project was commenced and the work was finished without any major issues while holding regular meetings with Achilles Corporation.
 The headquarters was relocated from the Mikuriya Plant to the Otsuki Plant on January 1, 1997.
 All of the company's employees began to work together again at the same workplace for the first time in twenty years or since 1977 when Hand Work Kogyo was spun off as a specialized factory for non-mass produced parts.
Overview of Otsuki Plant

(6) From Defensive Management to Offensive Management (From 1999 To 2004) - Company Developments -

1) The A21 Plan and profitability improvements
 The Japanese economy experienced a slowdown from the collapse of the bubble economy at the beginning of the 1990s, and even after ten years had passed in 2000 the economy had yet to recover, as land prices fell and the overall unemployment rate hovered between 5.5% to 5.9%.  
 In terms of interest rates, an unprecedented zero interest rate policy was launched, and bank problems materialized as a result. Our main bank Ashikaga Bank underwent bankruptcy in November 2003 and was nationalized.
 In this operating environment, our business performance began to gradually improve in the second half of the first streamlining plan (the RE Plan) as the second streamlining plan (the A21 Plan) took over. While sales continued to decrease from the 54th fiscal year (year ended September 1996), sales stopped at 7.1 billion yen in the 58th fiscal year (year ended September 1996) in the middle of the RE Plan and began to gradually improve as the various efforts of the A21 Plan (see the appendix "Overview of the A21 Plan") led to strong results in the 66th fiscal year (year ended March 2003), the final year of the A21 Plan, when profitability was improved sufficiently and sales of 13.6 billion yen were achieved.
A21 Plan emblem

 The positive results of the A21 Plan appeared in various areas.
 One area in which these results were seen was the receipt of Comfortable Workplace Certification from the Prefectural Labor Bureau, the receipt of a Contribution Award and Quality Excellence Award from Fuji Heavy Industries Ltd., and the receipt of a Special Award from Unipres Corporation.
 In addition, President Fukai was asked by Fuji Heavy Industries Ltd. to serve as chairman of the Materials Press Components Boards, a duty which he devoted himself to fully. The company was visited in November 2002 by Chairman Tanaka of Fuji Heavy Industries Ltd. and in May 2003 by Chairman Terada and President Toriumi of Unipres Corporation, during which we received strong words of encouragement.
Chairman Tanaka of Fuji Heavy Industries Ltd. (center)Chairman Terada (third from the right) and President Toriumi of Unipres Corporation (second from the right)

2) Being a technology-based company
 "Being a technology-based company" was expressed as the management activities slogan by the President in April 1998, marking the final year of the RE Plan.
 It has been said that our manufacturing is based on our origins. Although origins contain a variety of things in a broad sense, they can be narrowly defined as product design, process design, and production equipment. The base of our origins is composed of various technical capabilities, and everything depends on whether aspects such as our quality, cost, and productivity are good or bad.
 Meanwhile, sheet metal parts companies in our automotive components industry get orders by receiving diagrams from manufacturers and using technology to make components according to these diagrams. Marketing activities depended on how many more diagrams you could get compared to competitors.
 Amidst these industry trends, automobile manufacturers began to submit product design requests to components manufacturers likes us due to a lack of man-hours as result of an increase in cars developed and cost reductions. With this development, parts manufacturer engineers called guest engineers would be seconded to automobile manufacturers and conduct product design. The first guest engineer was sent to Fuji Heavy Industries Ltd. in 1994 for new vehicle model support. Subsequently, from 1996 guest engineers became essential for getting orders for components, and a period began in which marketing activities were conducted by stationing engineers at automobile manufacturers and components manufacturers such as Fuji Heavy Industries Ltd. and Unipres Corporation.
 In addition, we began to actively conduct presentations on new technologies, new methodologies, and new products as a proposing company.
Against this backdrop, we continually hired around eight science and engineering graduates every year starting from 1992 when performance was suffering. We steadily developed these human resources, and as a result we archived strong results in the CAD Inspection Department of the Skills Olympics of Fuji Heavy Industries Ltd. from 2001.
Being a technology-based company

3) SPS Activities and FPS Activities
 SPS (Subaru Production System) Activities are activities of Fuji Heavy Industries Ltd. aimed at supporting improvements to the productivity of local companies and strengthening their business structure. The activities that were started in January 1991 began with initiatives focused on productivity improvements, quality improvements, and inventory reductions.
 During the year that SPS Activities were started, Fuji Heavy Industries Ltd. had been commissioned with the production of the Pulsar by NISSAN MOTOR CO., LTD., and we were delivering Pulsar components to Fuji Heavy Industries Ltd..
 Our participation in SPS Activities was delayed by about one and a half year, and our participation started from the third year report meeting. While concrete activities initially covered factory tours and cell unit workplace improvement guidance, this was gradually expanded to include business management.
 On the other hand, FPS Activities is a naming for the company's activities adopted in response to SPS Activities, referring to the Fukai Production System based on the Toyota Production System. FPS Activities were established at the same time as participation in SPS Activities, and we strongly promoted these FPS Activities as one of the three pillars for our medium-to long term management plan, the A21 Plan.
SPS Activities provided us with the opportunity to study words we had never heard before such as the money-making 5Ss, three actuals + principles approach (gogen shugi), 5 form management, LCA, and moving equipment closer to workers for better efficiency. and to also study process design and process control.
 These results of these activities were not only extremely useful for productivity improvements, but also quality improvements, inventory reductions, logistics, and standardization, which in turn made a significant contribution to increased sales and improved productivity.

(7) Efforts to Strengthen the Business Structure and Achieve Sales of 15 billion Yen [From 2004 To 2007] - Company Developments -

1) The S-5 Plan and strengthening the business structure
 Looking back at the company's past two medium-term management plans, first there was the RE Plan that aimed to improve the business structure to a profitable one, and we achieved this goal by producing profits during the final year. The A21 Plan that followed consisted of a shift from defensive management to offensive management, and the company was able to advance considerably as technology development resulted in new technologies being adopted by clients and contributed significantly to sales and quality improvements, productivity improvements, and inventory reductions were made through FPS Activities. The business results for these measures were profits that always exceeded the targets.
 Against this backdrop, the next medium-term management plan called the S-5 Plan was launched in April 2004 in an aim to further strengthen the business structure. There were several large earthquakes during this year including the Niigata Chuetsu Earthquake in October, and the Great Sumatra Earthquake and the Indian Ocean Tsunami in December, resulting in over 230,000 deaths.
 The good news was the winning of the Nagoya International Women's Marathon in March of the following year by Yumiko, the second daughter of Yoshio Hara of the Assembly Section, which brought excitement and joy into the company.
 In addition, as part of the aim of the S-5 Plan to achieve highly efficient management and become an industry leader, executive training was held for a period of six months and the completely new sales goal of 15 billion yen was deployed.
S-5 Plan board

2) Organization of idle assets
 When the S-5 Plan began in 2004, the global economic situation had changed considerably. As previously stated, while Fukai MFG Co., Ltd. recognized the collapse of the bubble economy by the fall of the scrap price to 6 to 7 yen/kg, there were talks of prices of 20 yen/kg in March 2004, and in May the company could also have talks of increases in raw materials prices. The reason for this is that the high growth of the Chinese economy lead to the revitalization of the global economy including Japan.
 With this improvement of the Japanese economy, there was some response to the idle assets we had offered for sale. First, a former single dormitory site along Japan National Route 50 that was offered for sale during the RE Plan was sold through a major real estate company in September 2005 and became a housing display site. After this, the sale of idle assets continued, as sale of a recreation facility in Gochi, Niigata prefecture was decided on in November 2005 and sale of the building and land of a recreation facility in Sarugakyo, Gunma prefecture was decided on in November 2006. As a result, we were able to sell three idle assets in a period of about a year. Furthermore, our affiliate Sun Transport sold an office and land at the Noda Truck Lot in Ashikaga city in February 2006.
 While the disposal of idle assets had been a management issue from the RE Plan, the achievement of disposal ten years later during the S-5 Plan through the various efforts of everyone involved and the changes in the economic environment ten years made a significant contribution to the improvement of our financial position.
Single dormitorySarugakyo Recreation Facility

3) Initiatives for the future
 The company's performance stabilized at the end of the A21 Plan and sales hovered at around 13 billion yen. However, we continued to receive requests from clients to reduce costs, and as we struggled to respond we needed initiatives aimed at achieving future growth.
 First, as a human resources initiative, an executive officer system was introduced in October 2006. The purpose of the introduction was to foster the development of the next director candidates. In education, the Education Committee was established based on the idea that human resources are what make companies possible, and after a little over two years of studies, major revisions were made to the internal education system in 2007.
 Furthermore, from October 2004 we started holding in-house English courses that continue to this day in response to the globalization of the business environment and the increase in overseas business trips. In addition, as a measure to improve the level of work-site operations, we commenced initiatives aimed at increasing the number of national skills test certifications, and there were employees that became certified in the following year as a result.
 In terms of facilities, a 2700t transfer press was installed in December 2005 as additional equipment for high tensile steel in line with the further reduction in vehicle body weight that is anticipated in the future. As it was a high-priced investment, it was necessary for all employees to work to achieve full-scale operations as soon as possible.
 In addition, in response to the lack of assembly workspace, in October 2005 the Komaba Plant was acquired, and at the same time the assembly workspace for equipment and jigs that was at the west side of the Otsuki Plant was transferred to the Komaba Plan where operations were subsequently launched.
In the future we must continue to work to achieve business management that takes the initiative to address issues from every angle, including both tangible and intangible aspects.
English courseKomaba Plant (Komaba-cho, Ashikaga city)

4) Strengthening of the business management system through the introduction of a quality management system
 With the ongoing culling of redundant companies and the contraction of secondary industry, we would like to first thank our customers for allowing us to have reached our 70th year as a manufacturer. Valuing customers is not only reflected in the company policy of Fukai of "3 Highs and 3 Joys," it is also the starting point of our quality management system.
 The company's first quality management system was ISO9000. In response to the spread of global standards, Fuji Heavy Industries Ltd. requested that we introduce such a system at the time of the briefing for 1995, and activities aimed at acquiring certification were started from the following year.
 Guidance began with studying inputs and outputs with a consultant. In our struggles to adopt, maintain, and improve ISO9000 compliance we made efforts to achieve QS9000 as a first step, but QS9000 was subsequently abolished, forcing us to take on the further challenge of TS16949 adoption. It was through these efforts that the company's business management systems were steadily improved. Our current business management system remains one that is based on the quality management system TS16949.
 However, the fact that there are always many suggestions in the external audit by the certification body TUV Rheinland Japan Ltd. indicates that there are still many issues. Our current aims include the prompt achievement of the further pursuit of studies by each and every employee involved in system operation and a system in which operations are implemented by all employees without over reliance on only some employees.
Ashikaga Chamber of Commerce News

(8) Towards New Goals [2008] - Company Developments -

 With the passing of time, our company became 70 years old in 2008.
 A space base that was thought to be something from the world of science fiction 70 years ago became a reality, and Japan established its first manned space facilities called Kibo.
 In the same month, the newspapers reported that our main bank Ashikaga Bank that had been temporary nationalized had been transferred to Nomura's management.
 During this 70th year, the fourth year of the medium-term management plan called the S-5 Plan was underway. While the main management goal for the S-5 Plan was securing sales of 15 billion yen, as a result of efforts during this fourth year including technology development, sales promotion activities, and new vehicle launches (Impreza, Forester, Accord, etc.), sales of 16.8 billion yen were achieved one year ahead of schedule. At the same time, our business structure became improved through knowledge accumulation and diligent efforts, and it became possible to steadily generate profits.
 In terms of global developments, the global economy that had been strong until around the mid-point of the previous year began to slowdown due to the subprime mortgage problem in the US, and there was the strong sense that the global economy was beginning to become integrated.
 In addition, the world was becoming more complex both overseas and Japan as a result of global environmental issues, falling birth rates, and the rise of the BRICs (Brazil, Russia, India, and China).

 It is difficult to predict the future during any era. However, it is necessary to accurately identify global trends, prioritize customer satisfaction, and for the entire company to move forward towards our goals. [Going concern]

Human Resources, Safety, the Environment

(1) The 50 Years Following the Company's Foundation [From 1938 To Around 1987]

1) Foundation period (from 1938 to around 1964)
 When the Company was initially founded (Hachiman, Yamabe town, Ashikaga county) in October 1938, there were 11 employees and it was during the war. Subsequently, in response to order volumes from Nakajima Aircraft Co., Ltd. as part of the military industry, Fukai increased the number of employees to 25 in 1941, to 33 in 1942, to 46 in 1943, and to 64 in 1944. During the period of economic recession after post-war inflation, the number of employees was reduced to 16 in 1949. In an aim to get started off on a clean slate, we took our first trip for rest and relaxation to Shima Hot Spring in May of that year.
At that time the plant was still surrounded by rice fields and the roads were still gravel roads. Because most of the people commuting to work were from the area, they either walked or came by bicycle. Deliveries were also made by auto three-wheelers.
 Following the trend of motorization in the mid 1950's and 1960's, rapid growth was achieved thanks to the strong performance of Fuji Rabbit scooter and the Nissan Skyline, and sales reached the 100 million yen level for the first time in 1960. The number of employees exceeded 100 in 1961.

2) Move from the Yamabe Plant to the Mikuriya Plant (from 1965 to 1967)
 The Company subsequently continued to grow, and in 1965 the Mikuriya Plant in Fukutomishincho, Ashikaga city was established to replace the Yamabe Plant were the Company was established that had become too small, and the number of employees also exceeded 200. In terms of the commuting situation during that time, because only very few people used their own car at that time, most people used motorcycles or bicycles to go to work, while some people living in the direction of Ota commuted by train. While the previous plant was close to Yamabe Station on the Tobu Isesaki Line making it easy for people to commute by train, after the move to the new Mikuriya Plant the nearest station was the Tobu Izumi Station, which was too far to walk from.
 In response, we provided large buses and microbuses in an aim to make commuting more convenient. So that employees would not have to walk, the large bus covered Kokutetsu Ashikaga Station and Tobu Ashikaga Station, and the microbus went between back and forth between Tobu Izumi Station and the plant. These buses kept running until around the late 1970s. However, it seems that getting started in this new environment posed several challenges, as is described in the "The 50 Year History of Fukai" as follows: "The road from Tobu Izumi Station was full of holes and would transform into pools of water whenever it rained, and there was nobody who would repair it, meaning that our products on two-ton trucks would constantly become delayed, dented, and deformed. In order to get electricity, we had to put up electric poles at our own expense, and there were no waterworks, so we had to use well water that was of poor quality. This underground water from a well that was dug 100 meter deep had a high manganese content that made tea turn black and caused incrustation in cool pipes that made them thinner and cooling difficult, along with causing partial peeling. "

3) Increase in the number of employees and new social welfare system (from 1968 to 1977)
 The number of employees reached 300 when we celebrated our 30th anniversary in 1968. In response to the need to strengthen our management system as the number of employees exceeded 300, we established a qualification system in January of that year. At that time, the names of the qualifications were advisor for the executive and department manager level, director for section manager level, and technician for the subsection manager level.
 At the end of the same year, the 1st Employee Award Ceremony was held for employees with long service and good health in order to encourage motivation towards work based on the suggestion of the former president, who valued employees more than anything else.
 Further progress was made in terms of the social welfare system in 1970 as a family dormitory and single dormitory were newly built. 1973 was packed with company functions and events. Events included a bowling tournament (January, March, and June), a table tennis tournament (February), shellfish gathering (April), overseas training (April), a trip for rest and relaxation (April), arbor exhibition and exchange meeting (June), the establishment of a scholarship program (regular students, July), and a rubber-ball baseball tournament (July). Events like these were frequently conducted during this period. While Fukai was able to avoid the direct impact of the oil shock in October 1973, there were concerns over declines in profitability due to the rise in personnel expenses as a result of the increase in the number of employees.  
 As of 1977, there were 419 employees. (There were 71 new employees in 1975 (the highest number of new hires since foundation), 15 in 1976, and 40 in 1977.)
1st Employee Award Ceremony being presented by the Founding President Yoshinobu Fukai
1st Employee Award Ceremony being presented by the Founding President Yoshinobu Fukai

4) Dawn of the human resources management system (from 1978 to 1986)
 As a result of skyrocketing oil prices from 1978 to the second oil crisis, the economy suddenly dropped into a recession following repeated inflation. Performance remained sluggish at Fukai until 1983, and in response streamlining efforts were launched. From 1980, concrete steps were taken to establish a new competence-based human resources management system, and by 1982 the Work Grade Regulations, Wage Regulations, and Qualification Regulations were formulated and deployed through the Company. Management system reform and management education were also focused on with much enthusiasm. As economic conditions finally began to recover in 1984 and 1985, Fukai also began to grow.
 With the subsequent assistance of specialists, the human resources management system was renamed as the vocational qualification system in April 1986 and a new system was born. This has served as the foundation for the current human resources management system.

(2) Construction of the Otsuki Plant, Human Resources Growth Activities, and Human Resources Exchange

1) Human resources growth plan to support orders growth and the construction of the Otsuki Plant (from 1990 to 1993)
 Many big events occurred during 1989.
 Emperor Showa passed away on January 17, and the Japanese era name changed from Showa to Heisei.
 In the United States, the Bush administration started in January 21. Consumption tax (3%) was enforced in April, and in June a popular Japanese singer from the Showa era named Hibari Misora passed away. In November, the Berlin Wall came down and Germany took a step towards reunification. The Nikkei Stock Average recorded a record-high of 38,915.87 yen on December 29. Following this stock prices took a dive, and the bubble economy was on the verge of collapse.
 However, at this time Fukai decided to increase the number of human resources to lead it into the future to support the increase in new customers for industrial machinery components with the adoption of the three plant system (Mikuriya Plant, Ota Plant, and Nitta Plant) and the increase in orders for new automotive components. The plan was to increase the number of human resources by 1.5 times.
 In other words, the number of employees would be increased from 300 employees to 450 employees. However, as was noted in [Company developments], at that time manufacturing was seen as one of the "3Ks" (kitsui, kitanai, kiken, or hard, dirty, dangerous) and it was avoided by young people as a result. For this time, hiring was quite difficult and a special strategy needed to be thought of in order to increase the number of young employees. It was decided to establish the Appealing Company Establishment Committee to study what could be done to encourage young people to enter the company and to establish the Recruitment Headquarters as a project team to encourage recruitment at universities and high schools.

1. The establishment of the Appealing Company Establishment Committee and its activities (from 1990 to 1991)
 The Appealing Company Establishment Committee was established in May 1990.
 Managing Director Kakimura (at that time) served as chairman of the committee, and two members from each generation were selected from all parts of the organization for a total of ten committee members. The committee was also joined by the chairman of the labor union. Lively debates were held on topics including improvements to new uniforms, internal rental cars, partial company payment for travel by employees, annual box seat contracts for the J League, car purchase loans, and even the new plant concept.
 These initiatives gradually became realized after further study. Various proposals for winter and summer uniforms were realized starting from 1991. There was the idea of having several different types of uniforms available so that people could select one depending on their personal taste. The winter jacket was changed from a light beige one to one with a green tone. There was an interesting episode in which employees that visited supermarkets and home improvement centers with their winter jackets still on were often mistaken to be staff members of those stores. With the many types of uniforms, management was also quite a hassle. The types were subsequently improved and they have been continued to the present day.
 The internal rental car program was launched from April 1992. We selected the eight-seater caravan Furaibo and the sports car SVX so that employees could use them together with their family and friends. The Forrester (an outdoor SUV) was subsequently added to the program for a total of three vehicles. The program was so popular among employees that there were always reservations for the cars over the weekends.

 A system was also developed in which the Company would make partial payments for accommodation for travel by employees.
 When Japan's soccer league called J League was established in 1991, soccer's popularity was somewhat limited, as about the only major sports in Japan at that time were professional baseball, professional golf, and sumo. Then in 1993, J League won the grand prize in a buzzwords contest.
 There were ten teams when J League was established. The use of the annual box seats for the J League Yokohama Marinos that was sponsored by our import client Nissan on Wednesday and Saturday was so popular that a draw had to be conducted for the seats.
 The car purchase loan program was aimed at enabling employees to purchase cars at favorable interest rates. This program was adopted in December 1991, and it was subsequently expanded to include new employees before entering the company in addition to current employees. The program continues to be widely used today.
While these were all new programs for the Company, one of the most revolutionary developments was the release of the corporate PR magazine, which was named "QUEST" (B5 size). We decided to make it a quarterly publication.

 The magazine was a joint production based on mutual proposals contributed by six Fukai employees and a design company. 800 copies were published and sent by direct mail to university and high schools students in the area. QUEST was an planned with ingenuity to include information on every page covering an introduction of employees and the workplace, a description of production, events, and the initiatives of the Appealing Company Establishment Committee. The parents of high school students found it to be interesting, and it was also well regarded by other companies. The activities of the Appealing Company Establishment Committee were broadcast on NHK's Metropolitan Area Network program at 18:10 on June 13, 1991 (Thursday).
Appealing Company Establishment Committee

2. The establishment of the Recruitment Headquarters and its activities (from 1991 to 1993)
 The Recruitment Headquarters was a project team for directly encouraging recruitment at universities and high schools. While there had been one to two people in general affairs responsible for hiring new graduates up until that point, the Recruitment Headquarters was a dedicated team composed of five members including executives.
 It was active from 1991 to September 1993. It was entrusted with the mission of hiring 150 new graduates over a period of three years. The Nissan Silvia was used for school visits in order to appeal to young people. The previously described QUEST was also utilized.
 The number of new employees in 1991 was 1. Thanks to the activities of the Appealing Company Establishment Committee and this Recruitment Headquarters, 31 new graduates were hired in 1992, followed by 39 in 1993 and 20 in 1994.
 Although the target of 150 was not reached, the results of these efforts were unmistakable.

2) Human resources exchange after construction of the Otsuki Plant (from 1991 to 2008)
 While recruiting activities were actively carried out to increase the number of new graduate hires, the Company had to look outside for human resources in response to the lack of management staff that resulted from preparation for the construction of the Otsuki Plant coupled with an increase in orders.
 On February 1, 1991, Yukio Kimishima (formerly served at Honda Motor Company) was appointed as the Otsuki Plant Manager (Senior Managing Director), as the person responsible from the construction to the launch of the Otsuki Plant. Following that, many external workers focused on the development of Fukai, to a degree that was almost unprecedented in the period of approximately twenty years up until now.
 Employees from client companies including Fuji Heavy Industries Ltd., the Tochigi Plant of Nissan Motor Co., Ltd., Nissan Diesel Motor Co., Ltd., Sanyo Electric Co., Ltd., and Ashikaga Bank have dedicated themselves to tasks including the strengthening, enhancement, development, and education of successors in areas including plant construction, press assembly and construction, press maintenance, production management improvement and FPS, mold and jig machines and equipment, technology development, quality assurance, and management and finance. In doing so they have made important contributions to Fukai's foundation building and development, and some remain active at Fukai even today.

(3) The Evolution of Human Resources Management Systems

1) The shift from seniority-based human resources management to competence-based human resources management
 For many years, human resources management at companies in Japan has had a seniority-based focus. However, the advance of economic activities triggered by technological innovation and other factors brought about significant changes in the production process and the nature of labor itself. It became necessary to use not age and years of service as the criteria for promotions and salary increases, but actual working capacities.
 In other words, it was necessary to make a shift from seniority-based human resources management to competence-based human resources management.

2) Introduction of the vocational qualification system (from 1985 to 1992)
 At Fukai, concrete steps were taken to establish a new competence-based human resources management system from 1980, and by 1982 three related regulations, namely the Work Grade Regulations, Wage Regulations, and Qualification Regulations, were formulated and deployed through the Company.
 However, several issues arose in the implementation of this system.
 One issue which made the system difficult to implement was the phenomenon of "level-jumping," in which the level of salary increases was too big at the time of promotions. In response to this, the guidance of an external specialist was sought in November 1985, based on which the vocational qualification level system was newly adopted in April 1986. This system introduced the spirit of only getting rewarded for your actual accomplishments. At the core of this system was a Vocational Requirements Document that was completed in September and indicated the levels and details of capabilities required for each job type and job level. This system aimed to indicate what capabilities employees should have and guide and develop employees so that employees could achieve these capabilities.
 This system has survived over twenty years until today. The wage system was also renewed in April 1986. At this time, a booklet called the Vocational Qualification System was published and distributed to all employees by the Human Resources Management Committee and explanatory meetings on the new human resources management system were also held in order to encourage understanding. In October 1986, a human resources performance rating system based on the vocational qualification system was also introduced. In April 1987, the retirement benefits system that had been linked with wages up until that time was changed to a point-based retirement benefits system. This made it possible for anyone to calculate their own retirement benefit and make future predictions. In June, the first promotion test based on the vocational qualification system was conducted. In this manner, human resources systems were energetically revised.
Welding work

3) Instilling the vocational qualification system (from 1993 to 1996)
 After several years had passed following the introduction of the vocational qualification system, gaps began to develop between actual work and the work described in the Vocational Requirements Document.
 In response to this, an overall revision of the Vocational Requirements Document was conducted in April 1993. Then in June, the human resources performance rating method was renewed incorporating the difficulty of targets in order to be more equitable and fair. In February 1994 after eight years had passed since the introduction of the vocational qualification system, a questionnaire was conducted with employees for the first time on the vocational qualification system in order to ensure the instilling of the system and study how it should be revised going forward. It was discovered that there was a tendency for older workers to prefer seniority-based management and for younger workers to prefer the vocational qualification system.
Welding line work

4) Revision of the vocational qualification system (from 1997 to 2002)
 Economic conditions became increasingly difficult after the bubble economy burst in 1990, and by around 1993 many large companies began to undergo a period of restructuring. In April 1995, the overall unemployment rate fell to 3.2% (2.14 million people), the worst level since 1953. Job scarcity was at unprecedented levels.
 According to the White Paper on the Labor Economy, the number of part-time workers, or young people who take a succession of casual jobs in preference to steady full-time employment, was 1.51 million, or 2.3% of university graduates in 1997.
In addition, the wage increase following annual spring wage offensive for 2000 was a record-low level of 1.94%. These indicators reflect the difficulty of the economic situation at that time.
Fukai also had to review various aspects of its operations. The human resources system was no exception. The performance-based pay or role system used up until then had to be reviewed.
 One of these revisions in October 1997 consisted of a change to management allowance and the introduction of executive pay. Furthermore, in April 2002 the age-based pay that had tints of a seniority-based system was abolished and the former vocation-based pay system was changed to a new vocation-based pay system (capacity-base pay and duty-based pay).
Employees that passed skills qualification tests

(4) Efforts to Improve the Workplace Environment

1) Integration with the Otsuki Head Office Plant (from 1993 to 1998)
 While the Otsuki Plant had been completed and launched in August 1993, at that time only some functions had been transfered from the Mikuriya Plant. Following this the Ota Plant was closed in November 1994, the Nitta Plant was closed in November 1995, and facilities were integrated at the Otsuki Plant. It was then decided to transfer all of the functions of the Mikuriya Plant by March 1997 so that all of Fukai's functions would be fully integrated at the Otsuki Plant.
 The company premises both indoors and outdoors of approximately 165,000 square meters were completely new for the employees. The commuting routes of all employees were changed to converge on the Otsuki Plant.
 During this time, a donation of 100 cherry saplings was received from the Ashikaga Institute of Technology in 1995. They have now grown into thick-trunked trees, and the area around the plant is vibrant with cherry blossoms in full bloom in April every year.
 New rules were gradually established and developed in line with the plant's external environment and the work environment.
Otsuki Plant

2) From workplace improvements to environmental management (introduction of an environmental management system) (from 1999 to 2008)

 We acquired ISO9001 certification in April 1998. In July of the following year, the Environmental Issue Study Group sponsored by our client Fuji Heavy Industries Ltd. was commenced. It was a study group for section 1 companies based on the assumption of ISO14001 acquisition. It was mainly participated in by members of the general affairs departments of the participating companies. At that time, only one of the eleven section 1 companies had acquired ISO14001 certification. Reduction targets were established for copy paper and industrial waste, and each company implemented reduction activities based on research at the study group.
 The study group was continued until March of the following year. The majority of participating companies commenced activities aimed at acquiring ISO14001 certification.
 However, because we had to conduct preparations for switching from ISO9001 that was already acquired to QS9000, we decided to commence efforts after acquisition of QS9000 certification.
 In the end, it wasn't until April 1, 2004 that we had the kick-off for ISO14001 certification acquisition at a company-wide meeting.
 The Otsuki Plant was a plant located within an abundant natural environment, and it was around this time that we commenced environmental management aimed at environmental improvements.
 We started waste sorting along with the suspension of the waste incinerator that was located within the plant premises (January 2000). At this time, plastic containers were installed throughout the company for flammable waste. In addition, an industrial waste sorting station called the Eco Terminal was newly established on the north side of the plant. Fukai formulated an environmental policy, and based on this environmental policy each department established environmental improvement targets and commenced improvement activities aimed at achieving these targets.
 ISO14001 certification was acquired on February 22, 2005.
 Since the beginning, we have worked resolutely to reduce the consumption of metal raw materials and electricity that can be considered as the foundation of production plants.

3) Introduction of a safety and sanitation management system (from 2004 to 2008)
 Since operations were launched at the new Otsuki Plant, we have worked to develop and expand safety and sanitation management systems and fire prevention systems to ensure that employees can engage in production activities in a safe and secure manner.
 Safety and sanitation activities and fire prevention activities have been led by the Safety and Sanitation Committee composed of labor and management through the implementation of appropriate measures while keeping a constant watch on every corner of the plant and responding to the requests of supervisory agencies and the fire department as necessary.
Throughout these efforts, in November 2000 we had the honor of being certified as a Comfortable Workplace Promoting Business by the Tochigi Labor Bureau.
 In December 2004, a supervisory agency requested the company to introduce a safety and sanitation management system.
 With the partial revision of the Industrial Safety and Health Act in 1999, the Guidelines on Occupational Safety and Health Management Systems (April 30, 1999) were announced.
 After the collapse of the bubble economy, there were also changes in health and safety management amidst transformations in social and economic conditions. While there was a reduction in work-related accidents, there was also a reduction in safety and sanitation management personnel due to the streamlining of human resources, outsourcing, and corporate reorganization, making it more difficult for safety-related knowledge and skills to be smoothly passed down to the next generation. In response to this situation, safety and sanitation management systems arose as a new means of ensuring safety and sanitation management.
 It was within this environment that the adoption of such a system was requested.
 While our company had not streamlined employees or reduced the number of personnel like other companies, we decided to introduce a safety and sanitation management system. While this was due in part to the request made by a supervisory agency, it was also due to our company's strong desire to reduce the number of work-related accidents of four to six cases per year through the adoption of such a system. The introduction of the safety and sanitation management system was commenced in April 2006.
 Workplace environments at plants were improved through day-to-day safety and sanitation activities. However, perhaps due to the plant structure, we have struggled and faced issues concerning air-conditioning and anti-smoke measures for welding. While we have conducted various measures in response, these are still important issues that need to be addressed today.

4) Progress and transformation of 5S activities (from 1997 to 2008)
 5S activities are the basis for safety and sanitation activities and all other activities.
 5S activities were conducted once during the Mikuriya Plant era based on this awareness. After transferring to the Otsuki Plant, 5S activities have been conducted since 1997 as part of SPS Activities under the guidance of Fuji Heavy Industries Ltd. These activities were primarily conducted in one section of the plant (the assembly line).
 As part of these activities, standards were created for the plant, line, and facilities (rule creation). The stance towards standardization at this time was later applied to FPS Activities, and continues to affect the present through application in various activities including safety and sanitation activities.
It was during 1999 that company-wide 5S activities including plants and offices were commenced. A fun competition system was introduced for 5S activities at each workplace just like the sumo rankings, based on which assessments were conducted and commendations were given. We became keenly aware of the difficulty of such assessments at this time.
 New 5S activities were commenced in 2002. These activities were referred to as money-making 5Ss. The 5S Promotion Committee led by Senior Managing Director Kakimura (at that time) was formed and activities were launched. The objectives were to identify abnormalities, visualize wastes, and for the company to make money. While a top-down approach was adopted, activities were led by the section manager of each workplace. While the initial period of the activities was one year, they continued until October 2007. 5S activities that were conducted included the uses of photos when touring the factories of other companies and the adoption of a commendation system. The results of these activities became apparent in various places within the plant, and the number of visitors increased as the activities became well received by other companies as well.
 Following that a new leader was adopted for 5S activities, the structure of the 5S Promotion Committee was changed in November of that year, and new activities led by the committee were deployed. The largest scale 5S activities since the launch of the Otsuki Plant consisting of initiatives such as activities on Saturdays (a holiday) every month by section managers and above were commenced in order to get rid of 15 years of accumulated dirt at the plant.
5S guidance meeting

At the same time, guidance by Professor Haruhiko Kimura and Professor Yukio Echizen of the Kimura 5S JISSENSHA (Kimura 5S Workshop) was commenced. The reasonable guidance and improvement suggestions provide by these instructors were easy to understand and allowed improvements to be made by everyone. The goals of visualization, improved convenience, and doing things for yourself were pursued day to day through these activities.
 "We can and will change together with everyone! " (5S Catchphrase)
  This is the winning catchphrase from submissions invited from all employees. We hope that it will be possible to transform employees and the company for the better someday soon based on this catchphrase.
Workplace organized through 5S activities

(5) Deployment of Advanced Labor Management Measures

1) Revision of the hiring system (from 2005 to 2006)
 The hiring system that had been used up until that point was also revised. A mandatory retirement age system was introduced in April 2005 in an effort to adopt younger managers and supervisors (system abolished in April 2008).
 In addition, an executive officer system to foster the development of the next director candidates was started in October 2006.
 Due to issues concerning the public pension system, companies were called on to establish systems for the re-employment of employees that have reached retirement age. Fukai revised its Retirement Age Employee Re-employment Regulations in March 2006 and gradually adopted means for employment up to age 65.

2) New internal training initiatives in line with the times (from 2005 to 2008)
 While education for human resource development had been enthusiastically conducted up until that time, it was in January 1983 that internal training was first conducted in a systematic manner.
 As described above, the Work Grade Regulations, Wage Regulations, and Qualification Regulations were established and deployed as part of developments aimed at establishing a new human resources management system in 1982. Qualification tests were conducted in accordance with the Qualification Regulations, and internal education was provided in advance of these tests. There were also education programs for QC, IE, costs, JST, and MTP. These education programs were mainly for employees in the field or managers and supervisors Under the vocational qualification system ten years later in 1992, the number of subjects for back-office divisions and subjects for each job type in the plant division were increased. In addition, so that QC and IE could be understood by lower grade 1 employees, the original subjects were reorganized for each grade.
 Internal training was linked with vocational qualification system, and the training participation rate became a prerequisite for receiving promotion tests. However, it cannot be denied if the same thing is done for a long period of time, it may no longer be in line with the times.
 The Education Committee was established in 2005 in order to respond to the changes in the times and diversification required of corporate activities including the revision of internal training by creating a new internal training system based on theory and principles in an aim to transform the quality of employees and improve their skill levels.
Internal training

 New forms of training were provided regarding the most vital issues of safety, cost, and quality from April 2007. Department head prepared the textbooks and served as instructors for each subject covering every job type. The textbooks were all easy to understand and highly accurate.
 As the company began to do more business with the US, the UK, and other countries, various departments took business trips with increased frequency, and as a result English conversation abilities (English fluency) became necessary.
 In response to this, internal English classes were held from October 2004. Teachers from the US and the UK were invited to serve as instructors, and the TOEIC test was received by all employees that completed a set number of lessons.
 Graduates from this program are currently working in the US and the UK.
Management trainingSupervisor training

3) Reduction of working hours (from 1981 to 2008)
 Following the war in Japan, working hours were drastically reduced as a result of the Labor Standards Act (48 hours per week working system) in 1947.
 While working hours became longer with the increase in the operating rate due to economic recovery, working hours became shorter in the 1960s as a result of productivity improvements.
 After the Izanagi boom in the late 1960s had passed and following the oil shock in the 1970s, working hours became even shorter.
 In 1981, the number of the company's annual prescribed working hours was 2,121 hours and 40 minutes, the number of working days per year was 268 days, the number of holidays was 97 days, and the number of prescribed working hours per day was 7 hours and 55 minutes.
 Because production volumes at that time were approximately twice what they are now and time reductions were viewed by some as an increase in real wages, it can be presumed that there was some resistance to shortening the number of prescribed working hours.
 However, we used the request made by the labor union to improve working conditions at this time as an opportunity to shift to shorter working hours.
 As Japan was subject to much global criticism for working too much during the 1980s, the reformed Labor Standards Act was established in 1988, shortening the legal working week from 48 hours to 40 hours (46 hours at that time), and in 1993 an actual shift to 40 hours per week was decided on. In accordance with this Labor Standards Act, our company also adopted a 40 hour working week in the following year.
 Furthermore, as the result of studies by the Work Shortening Committee (*) concerning the paid leave acquisition system in 1992, a refresh holiday system was adopted (formulated on October 1). This system made it possible to acquire a holiday of three consecutive days once a year or a holiday of five consecutive days when used together with a weekend. At this time the system was revised so that paid holidays arbitrarily acquired during the month could be acquired in a planned manner during the previous month through application (planned leave). This made it easier to acquire paid holidays.

*Note: The Work Shortening Committee is a committee composed of both labor and management representatives aimed at shorter total working hours that was formed in 1989.

Subsequently, prescribed working hours have been shortened as follows.

In 1984, the number of working hours was 2,090 hours, the number of working days per year was 264 days, the number of holidays was 101 days, and the number of prescribed working hours per day was 7 hours and 55 minutes.
In 1988, the number of working hours was 2,066 hours and 15 minutes, the number of working days per year was 261 days, and the number of holidays was 104 days
In 1993, the number of working hours was 2,026 hours and 40 minutes, the number of working days per year was 256 days, and the number of holidays was 109 days
In 1994, the number of prescribed working hours per day was 8 hours
In 1995, the number of working hours was 1,992 hours, falling below 2,000 hours
In 1998, the number of working hours was 1,976 hours, the number of working days per year was 247, and the number of holidays was 118 days
In 2000, the number of working hours was 1,952 hours, the number of working days per year was 244, and the number of holidays was 121 days

 The number of holidays became the same as the major company Fuji Heavy Industries Ltd., which was also a major client.
 Subsequently, and up to this day (2008), the prescribed working hours per year has been 1,952 hours.

 While the number of prescribed working hours continued to decrease, this does not mean that total working hours including overtime have decreased. Decreasing the number of total working hours is problematic in consideration of the production volumes that have to be handled.
 The Act on Advancement of Measures to Support Raising Next-Generation Children was enacted in 2005 for the purpose of achieving a balance between work and home life.
 In our company's action plan we have adopted the stance of reducing the average number of overtime hours per year so that they are within 240 hours by 2007.
 In addition, we aim to increase the current paid holiday acquisition rate of 41% to 60% by 2007.
 We are currently working resolutely to achieve appropriate labor management.

Sales Activities

(1) History of 50 Years Since Establishment [From 1938 to 1989]

 "A sales volume of 10 billion yen", which was the desire of the first president, Mr. Yoshinobu Fukai, could be accomplished by realizing a sales volume of 10.2 billion yen in 1989, the 52nd year of establishment of Fukai MFG Co., Ltd. Although it was a road that was traveled for half a century in order to reach till the current position, the target was realized as a result of the strong leadership of the first president, the aggressive developments by the second president, and the efforts of various persons who joined the company, and the journey from a small-to-mid size company to a medium-sized company began.

1) Army aerospace industries since the establishment of the company
 The first year of establishment of the company, when the sales volume was 133,000 yen, started with the manufacturing of fixtures and components of the then Nakajima aircraft. Since the beginning of establishment, reception of orders and manufacturing of components were performed with the focus on the ammunition industry.

2) Receiving orders for "scooters" from Fuji Kogyo Ltd., and for "home electric appliances" from Hitachi Ltd.
 In the year 1951, an order was received for scooter components from Fuji Kogyo Ltd., because of which there was a shift to a manufacturing plant mainly for press components. In addition, with the beginning of business transactions with the Gunma Plant of Fuji Heavy Industries Ltd. as a stepping stone, orders were also received for window frame components from the company's Isesaki Plant. At the same time, orders were received for folding type containers from its Utsunomiya Plant. In the decade following the year 1955, as activities progressed in the industry, an order was received for components of electric refrigerators from Hitachi Ltd. manufacturing home electric appliances. Starting with scooter components, the order-received components were diversified and ranged over several quantities.

3) Conformance with shift to four-wheeled vehicles by Fuji Heavy Industries Ltd.
 The year 1958 saw the reception of orders and manufacture of components of Subaru 360. The center pillar and rear skirt were the main components.
Subaru 360

4) Receiving orders from Fuji Precision Industries Co., Ltd. (Prince Motor Company, Ltd.)
 During the time Subaru 360 was showing a smooth growth, orders were received for the instrument panel of Skyline, and for truck components of Prince Homer, Mylar, and Clipper from the then Fuji Precision Industries Co., Ltd. (Prince Motor Company, Ltd.) and NISSAN MOTOR CO., LTD.

5) Business transactions with Honda Motor Co., Ltd. and Daihatsu Motor Co., Ltd.
 In the decade following the year 1965, upon the completion of the Sayama Plant of Honda Motor Co., Ltd., orders were received for the body components of light trucks, which were transfered from the Suzuka Plant. Thereafter, orders were received for light truck components from the Maebashi Plant (Daihatsu Auto Body Co., Ltd.) of Daihatsu Motor Co., Ltd.

6) Merger of Prince Motor Company, Ltd. and NISSAN MOTOR CO., LTD. and business alliance with Yamakawa Industrial Co., Ltd.
 May 1966 saw the merger of Prince Motor Company, Ltd. and NISSAN MOTOR CO., LTD. In 1969, a business alliance was established with Yamakawa Industrial Co., Ltd. (currently, Unipres Corporation), and new business transactions were started with NISSAN MOTOR CO., LTD.

7) Receiving orders for agricultural machinery parts from Kubota Iron Works Co., Ltd.
 In 1969, Fukai MFG Co., Ltd. became a plant affiliated with Kubota Iron Works Co., Ltd. (currently, KUBOTA Corporation) and received huge orders for components of the binder, combine, and rice transplanter. In 1975, orders were received for the rotary cover of tractors from the Tsukuba Plant. Thereafter, the sales of agricultural equipment rose year after year, and touched the 5.5 billion mark in the year 1977. The sales ratio at that time was 39% for Kubota Iron Works Co., Ltd., 30% for Yamakawa Industrial Co., Ltd. , and 28% for Fuji Heavy Industries Ltd. In 1983, an order was received for the grain tank, the much desired finished product. Since this was the first finished product, it was a successful enforcement work.
Grain tank

8) Realization of the desired sales volume of 10 billion yen
 Sales too continued to expand steadily, reaching 8.3 billion yen in 1987 (50th year of establishment of the company), and 10.2 billion yen in 1989 (52nd year of establishment of the company). In the following year, that is, in 1990 (53rd year of establishment of the company), the highest ever sales volume of 10.6 billion yen was recorded. In addition to the automotive components and agricultural machinery components manufactured until then, business transactions started with Hitachi Construction Machinery Japan Co., Ltd., Komatsu MEC Corp., Omiya Plant of Fuji Heavy Industries Ltd., SANYO Electric Co., Ltd., and Subaru Logistics Co. Ltd., who were manufacturing industrial machinery components, whereby the desired target of 10 billion yen was realized.

(2) Difficulties Following the Collapse of the Bubble Economy [From 1991 to 1995]

1) Big pinch since the establishment of the company due to a decrease in sales volume
 The economic bubble burst in the year 1991, the year after the sales were increasing smoothly and the highest ever sales volume was recorded. This year was the period when the concept of setting up a new plant was put in place, and the decision to set up the plant was taken. After the collapse of the bubble, the production volume declined slowly with the sales volume of 10.6 billion yen in the year 1990 as the peak, and alongside, the sales volume too started dropping.
 The sales volume dropped down to as low as 9.3 billion yen in the year 1992. Thus, in the year 1993, the second year post the collapse of the bubble, an RE plan was formulated, and each workplace started making efforts toward the achievement of the objectives. However, in the year 1995, the fourth year post the collapse of the bubble, the sales volume dropped down to 7.1 billion yen.
 Upon experiencing the big pinch since the establishment of the company, activities that gave the highest priority to expansion of new customers were taken up as a means for increasing the sales volume.

2) Start of acquisition of new customers
 In order to perform sales promotion activities for new customers other than the existing customers for increasing the sales volume as a policy of the RE plan, a new development section was set up in the year 1993, and sales promotion activities were started. After repeatedly examining how to promote sales in the global economic slump, it was decided to first promote sales only to those customers who could effectively use the press machines of Fukai MFG Co., Ltd.
 First of all, in March of the same year, an order was received from Ogihara Bussan Co., Ltd. for automotive components of press and assembly, and export to North America was started. Thereafter, although new customers could not be acquired as planned, an order of 46 molds for the rear part components of Legacy manufactured by SIA was received from F-TECH Inc. in January 1994. Fukai MFG Co., Ltd. was truly grateful for this order because during that time, there were very few new developments by every automobile manufacturer, and the manufacturing load of all mold sellers was insufficient. In February of the same year, four orders were received from Hitachi Chemical Co., Ltd. for automotive components, which were produced on the B6 blanking line. Moreover, in May of the same year, an order was received from ALINCO INCORPORATED that used to sell stepladders for joints of stepladders, and these were delivered after commuting for 2.5 hours one way up to the industrial park in Motegi town, Tochigi prefecture.
 Thereafter, the sales promotion activities gained impetus, and new customers were acquired one after the other. In July of the same year, an order was received from TIGER KAWASHIMA Co., Ltd. for hoppers of the rice automatic metering machine, which were produced by the C-line press. In October of the same year, an order was received from Ogihara Bussan Co., Ltd. for the shredder box, and production started at the Nitta Plant. In November of the same year, an order was received from KATO WORKS CO., LTD, which was engaged in manufacturing and sales of mainly construction equipment, for covers of shovel cars and covers of cranes, and at that time, production was carried out by vendors of the Nitta Plant equipment and the turret punch machine. In December of the same year, an order was received for the frame assembly of golf cart from Daihatsu Auto Body Co., Ltd., and production was started at the Otsuki Plant.
 Moreover, expansion of customers continued, and orders were received for expandable conveyors from Fukuda Engineering Co.,Ltd., guard rail bracket components from NKK LIGHT STEEL Co.,Ltd., stands for bicycle parking area from Tokyo Kohtetsu Co., Ltd., cubicles from Sansuisha Co., Ltd., and tractors from Sun Automobile Co., Ltd. In January 1997, with the receipt of orders for the equipment of Accord from F-TECH Inc. as the starting point, manufacture of components was undertaken, and production was started. As a result, sales could be expanded to 11 new customers, because of which the sales volume could be expanded by approx. 8 hundred million yen annually. Currently, business transactions with F-TECH Inc. have been increasing every year, and sales of about 1 billion yen are being appropriated based on the annual turnover.
 However, the speed of expansion of the sales volume did not increase. Therefore, in order to quickly return to the 10 billion yen mark attained in 1989, a new development technology group was set up in the department of technology in April 1998.
 Fukai took its first step from a "passive business" toward a "rapidly growing business" so that the technical strength of Fukai was further refined, and customers were made to feel satisfied with the new technologies, quality, price, and delivery schedule.
Shredder boxGolf cart frameGuard rail bracket

3) Dispatch of engineers due to reception of orders for molds and equipment for overseas usage (from 1998 onward)
 In February 1998, when Japan was showcasing its upsurge in the 18th Olympic Winter Games at Nagano, Yamakawa Industrial Co., Ltd. and Yamato Kogyo Co., Ltd. were merged to give birth to Unipres Corporation. During this year, when the sales volume of Fukai MFG Co., Ltd. had started to show the signs of slight increase, an order was received for molds and equipment for overseas usage from Unipres Corporation, and engineers were dispatched for the first time to Unipres North America, Inc. in Tennessee, USA. This was an order that was received for the full model change Legacy car manufactured by Fuji Heavy Industries ltd. in the USA (SIA), which included manufacture of molds and equipment of frame side FF/BRKT F SUS components for which orders had been placed with Fukai MFG Co., Ltd., and also installation at local site and quality control, and three engineers were dispatched for this purpose.
 In the year 2002, orders were received for molds and equipment of the next-generation Legacy (21Z) from Unipres Corporation and Kikuchi Press Industry, Ltd., and two engineers each were sent to America to these companies. During that time, in order to collect information with the future overseas production plant planning in mind, the top management from Japan visited the USA several times.
 In the year 2004, in order to plan the time, number of personnel, location, equipment, and investment for the establishment of a production plant in North America, a North America Advance Preparation Unit was set up, and one resident officer was dispatched to Unipres North America, Inc. In this way, various overseas issues were investigated and compiled over a period of one year. However, as a result, the North America plan was put on hold due to the decision of the management based on the production environment in Japan and the USA, and the instructions of customers.
 Thereafter, orders were received for production of molds in England by Unipres Corporation, and officials were dispatched one after the other. Traveling to countries that were far from Japan until then was becoming same as going on a business trip within Japan, and the work related to molds and equipment after the bubble economic depression continued to increase every year with the sales volume reaching 9.4 billion yen in the year 2002, and the sales volume during the bubble period could be realized again.
Dispatched engineersAt SIA

(3) Transformation to a Rapidly Growing Business [From 1999]

1) "First presentation of Fukai MFG Co., Ltd." for customers
 Following the collapse of the bubble economy in 1991, activities for developing new customers through the RE plan, and expanding the amount of received orders of existing customers continued, but the demand of customers was the purchase of components with optimum quality, price, and delivery schedule. Thus, in October 1999, through a joint venture with Unipres Corporation, the "First presentation of Fukai MFG Co., Ltd." was held at Fuji Heavy Industries Co., Ltd., and several persons attended the presentation. The total number of persons who attended the presentation was 316, including 157 from the development department of Fuji Heavy Industries Ltd., 79 from the manufacturing department, and 80 from companies including local customers.
 Several products were exhibited including tailored blank components, high-tensile materials and modules, and precision press components. Particularly, the attention was fastened on components concerning reduction in the weight of automobiles, and this area was extraordinarily popular. As a result, the technical strength of Fukai MFG Co., Ltd. could be sufficiently unveiled, enabling Fukai to take the first step of transformation from a "passive business" to a "rapidly growing business", and thus, the first presentation ended with great success.
Presentation 1Presentation 2

2) Sales activities brought about by installation of large-sized press machines
 At the 3rd Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change held at the Kyoto International Conference Hall in Tokyo in December 1997, a reduction in CO2 (Japan 6%) brought about by the Kyoto Protocol of United Nations Framework Convention on Climate Change was included, by which the reduction in weight of automobiles gained more prominent attention.
 The reason the reduction in weight was focused upon even during the first presentation of Fukai MFG Co., Ltd. is because of this protocol.
Every automobile manufacturer was expediting the efforts to adopt high-tensile material for reducing the weight of the next-generation models of vehicles. The high-tensile material has a grade of 590 Mpa, which means it has double the strength of general material, and it was anticipated that producing the FRAME SIDE REAR LOWRE FRAME of the main components of Fukai MFG Co., Ltd. would not be possible by a 1600 TRF press. Therefore, Fukai too started examining the installation of a large-sized press machine.
 However, the sales volume started showing an increasing trend from the year 1997, which was the fifth year post the collapse of the bubble economy, but the after effects of the burst bubble lingered on. And while the situation in Japan improved a little bit, it could still not be considered as having improved in regional and medium and small companies, and therefore large amounts of investments had to be avoided.
 Under these circumstances, Fuji Heavy Industries Ltd. informed that they had a secondhand press. Discussions were held repeatedly to decide whether the press should be installed, and the management took the decision that it was absolutely essential to buy the press, and in December 2005, a 2700 TRF press machine was installed and set up from the Fujisawa Plant of Isuzu Motors Limited.
 Currently, full production is under way with the focus on FRAME SIDE REAR LOWRE FRAME components made of high-tensile material having a grade of 590 Mpa, and center pillars (980 Mpa grade).
Moreover, as a result of installation of this TRF press, it became possible to receive orders for several components.

3) Setup and expansion of the Molds and Equipment Division
 From around the year 2000, every automobile manufacturer geared up toward sharing of the platform. As a result, it was estimated that the amount of orders received for the equipment for which Fukai MFG Co., Ltd. had been receiving orders would reduce, and therefore, Kanto Giken Co. Ltd. that had designed and manufactured equipment by deploying robots was integrated with Fukai MFG Co., Ltd. in March 2003, and an increase in the amount of received orders was thus aimed at by associating with the sales department. This resulted in the formation of the Equipment and Fixtures Division of Fukai MFG Co., Ltd., and the organizational structure changed from five departments to five departments and one division.
 Thereafter, since the space within the Otsuki Plant of the headquarters became scarce, the Equipment and Fixtures Division set up a new plant in Komaba-cho, Ashikaga city in July 2005, and aggressively started sales activities of equipment and fixtures through the unique technology built until then, without leaning toward automobile components. In October 2006, the division name was changed to Equipment Division.
 Moreover, in the same month of the same year, the Press Engineering Section of the Engineering Department was split up, and the Molds Division having a setup characterized by production and order placing activities of only molds was newly established. Thus, the organizational structure changed from five departments and one division to five departments and two divisions.
 This was the start of aiming at an increase in the sales volume through more effective work performance and sales promotion activities, as a means of realizing the sales volume of 15 billion yen in future.
Komaba Plant

(4) Sales Target of 15 Billion Yen Achieved One Year Ahead of Schedule [From 2007]

 Fukai MFG Co., Ltd. listed the target sales volume of 15 billion yen for the year 2008, and the whole company geared up together to realize the target. As a result, through a favorable production number, Fukai MFG Co., Ltd. realized a sales volume of 16.8 billion yen in the year 2007. This meant that the target was achieved one year ahead of schedule. In the year 1995, the fourth year post the collapse of the bubble economy, the sales volume dropped down to 7.1 billion yen, but moved up to 9.5 billion yen in 1998, and to 13.6 billion yen in 2003, indicating that the sales volume could be doubled up in these eight years.
 While this was naturally a result of the daily activities, the following factors also contributed immensely:
 • Technical changes in the new technology proposed approach due to the establishment of the developed technologies department
 • Inheritance of the technical strength and management capabilities built by senior employees
 • Timely sales activities based on the sales technology
 • Conformance of customer needs with the timing of holding and continuing the initial presentation

 Thereafter, the presentation is held twice every year.
 As a result, the infrastructure was established for a medium-sized company.
 Based on this, Fukai MFG Co., Ltd. aims at effectively utilizing the existing equipment to the maximum extent, continuing with component development by incorporating new technologies, and realizing a sales volume of 20 billion yen in the year 2012.

Rationalization Activities

(1) Transition of Rationalization Activities

 From early Showa period until the postwar rapid revival and high economic growth period, excluding the time during war, the period when anything that was manufactured could be sold continued, and everybody was progressing in life. However, in the middle of 1965, the high growth period was at its peak, the competition between companies had intensified, and industrial reorganization started.
 On top of that, the Middle East war broke out in 1973, which led to an oil crisis and the so-called "oil shock", resulting in a recession across the globe. Particularly, the blow to the Japanese economy, which did not have resources, was to an unmatched extent. In addition, the oil shock was a difficult situation for the automotive industry, and it was forced to change its course from quantity to quality.
 Fukai MFG Co., Ltd. was also shaken by this oil shock, and saw a drop in sales of automobile components to Fuji Heavy Industries Ltd. by 23%, and also a drop in sales to NISSAN MOTOR CO., LTD. by 11% However, on a happier note, as a result of an increase in business with Kubota Iron Works Co., Ltd., the sales volume swam against the tide of the times, and increased by 20% as compared to the previous year.
 Under these circumstances, the "P3 Movement" and corporate culture improvement activities were started by NISSAN MOTOR CO., LTD. in 1977. As a result of this, the "P3TATE Movement" was started in our company, which became a rationalization activity of Fukai MFG Co., Ltd.
The history of the rationalization activities thereafter is described below, and the details of SPS and FPS activities shall be described later in continuation.

• History of rationalization activities
October 1977    P3TATE Movement
April 1981         New production method
October 1982    3F activities (R plan)
April 1984         Q-UP strategy (included in 3F activity)
September 1984  Toyota production system workshop (IQ project)
January 1985    5S activities, SU project (old IQ), KG project started
October 1993    Practice of eliminating waste through SPS "Five Gen" philosophy
January 1994    SPS activity, JMAC guidance ended and changed to guidance by Kyosan Electric Mfg. Co., Ltd.
April                Poor evaluation due to inactive SPS activity
July                Indirect staff rationalization VFP development
November        Promotion of in-house production by rationalized staff
July 1996         SPS cyclic guidance by Kyosan Electric Mfg. Co., Ltd.
June 1997        SPS improvement guidance session held at Fukai (Mr. Yamashita and 50 others)

September       Minimum evaluation received through SPS activity

November        Towards three main concepts of the SPS activity of Fuji Heavy Industries Ltd. (production, quality, and development)

January 1998   Japan Management Association Consultation acceptance decision (from March)

April               JMAC consultant guidance acceptance

October          Inventory reduction activity approach through FPS activity

March 1999     Development of FPS activity basic policy

May               SPS Yamashita guidance session held at Fukai

December        Standard time setting based on MOST

October 2001   Assembly efficiency management started, "Productivity index management instructions" issued

November        Fuji Heavy Industries Ltd. SPS, Team guidance session (November 06)

Improvement in physical distribution due to AGV use

May 2002        Fuji Heavy Industries Ltd. SPS progress report meeting (May 23)

September       Fuji Heavy Industries Ltd. SPS Yamashita diagnosis guidance session held at Fukai (September 18)

October          Fuji Heavy Industries Ltd. SPS progress report meeting (October 23)

November        Fuji Heavy Industries Ltd., YL training seminar (training of Kaizen personnel) at Fukai MFG Co., Ltd. (November 19)

April 2003       SPS result presentation (May 22) Toge Learning Center

November       Introduction of consultants through physical distribution reforms (Chusanren) November 26 Kickoff meeting

August 2007    Started Mr. Asano's guidance session for physical distribution and on-site manpower saving

October 2007   New 5S activity, Started guidance by Mr. Kimura and Mr. Echizen

Improvement example: Unmanned pillar line
Improvement example: Unmanned pillar line

(2) SPS (Subaru Production System)

 The SPS (Subaru Production System) activity was started by Fuji Heavy Industries Ltd. in January 1991 as an activity to support productivity improvement of local companies, and strengthen the corporate culture, and it began with an approach based on the concepts of "Productivity improvement", "Quality level improvement", and "Inventory reduction".
 The origin of this activity lay in the formulation of concrete activities through Mr. Furuhata's lecture, followed by Mr. Yamashita's guidance session, and "Fundamentals of production" and "Creation of a business management infrastructure" were learned. Moreover, the SPS activity progress report meeting was held twice a year at the Toge Learning Center, and the presentations of Fukai MFG Co., Ltd., which were held as many as 28 times up to the year 2005 are as described below.

Term Date of meeting Presentation theme Presenter
16 May 25, 1999 Changing FPS Director, Mr. Fukuda
19 November 08, 2000 From improvement-based FPS to management-based FPS activity Vice Chairman, Mr. Kakimura
Section Head, Mr. (Hiroshi) Sudo
23 October 23, 2002 Integration of FPS, and P66L activities Managing Director, Mr. Saito
26 May 20, 2004 Reconciliation of the top President, Mr. Takeshi Fukai
27 October 27, 2004 Inventory reduction and profitable 5S Department Head, Mr. (Hiroshi) Sudo
Department Head, Mr. Shibata
SPS presentation SPS presentation October 27, 2004

(3) FPS (Fukai Production System)

 The FPS (Fukai Production System) activity was started in April 1999 on the basis of that included both "Cost reduction activities" and "Quality assurance activities" in the A21 plan, with the Vice Chairman, Mr. Kakimura as the promotion chairperson, and according to this activity, a promotion committee was established, which was divided into the following four groups.
1. Process improvement activity group
2. Task improvement activity group
3. Quality assurance improvement group
4. Plant environment reform group

 [Meaning and soul of terms] FPS is an activity started by Fukai MFG Co., Ltd. for constructing the most effective production system in order to overcome the difficult business environment that prevailed earlier, and further elevate stability and progress in the 21st century on the basis of an immovable management infrastructure, and also to strengthen the unique technologies and management practices that preceded the period.

Attainment level accomplished by the FPS activity
Ascertaining the position recognized by both Fukai MFG Co., Ltd. and other companies as the highest position in the QCD of business partners from the same industry as our customers

These were the concepts that started under the strong leadership of the Vice Chairman, Mr. Kakimura.
The foundation of the FPS activity lay in the Toyota production system, and this activity was started actively by closely sharing information with the other local companies from the same industry while receiving the guidance of the SPS activity of Fuji Heavy Industries Ltd.
First of all, at the beginning of the activity, the aim was to accomplish "zero startup loss" during target accomplishment of QCD in the development stage starting from the waste elimination activity at the job site.
In addition, in order to fully develop the FPS activity, a mechanism was created for the improvement activities, APQP was introduced, and a quality assurance system with a quality system such as QS9000 as the main component was prepared.
As a part of this, the reform of sense through 5S activities was measured, and human resources development was also undertaken. What particularly helped achieve big results in the FPS activity was the inventory reduction activity.
FPS: Press production instruction management board
FPS: Press production instruction management board

1) Inventory reduction

 In the 70 years of Fukai MFG Co., Ltd., efforts were made innumerable times to reduce the inventory. Since the installation of the "New production system" in April 1981, "Create only the required quantity of the required product at the required time", which was preached by the Toyota production system was being followed, however, after 1998, as a result of the integration of the Mikuriya Plant, Ota Plant, and Nitta Plant, the components of each plant got accumulated at the Otsuki Plant, causing the inventory to pile up.

 Inventory reduction again became an important concept in the FPS activity. At that time, an objective of increasing the turnover of inventory from 27 times to 40 times was posted, and was thrown as a challenge. As one of the activities, the proposal to introduce "Kanban", which is a tool of the Toyota production system, to the press plan was taken up, and its prompt introduction was decided. First of all, "Kanban" was introduced to TRF 1600 as the model line, following which the concept was expanded to all presses, and was finally completed in December 2000 after a period of one year.

At present, the turnover of inventory has exceeded 60 times, production management utilizing "Kanban" from the product to material procurement is performed, and even today, the "Kanban" cards originally installed in the presses are still flying about as a homing pigeon of the job site.

2) Profitable 5S activities
 The 5S activities of Fukai MFG Co., Ltd. handled "Sorting and Setting in order" based on the slogan "Fixed position fixed quantity strategy" in the year 1961, however, in comparison to other companies in the same industry, the delay was quite remarkable.
In 1985, they were again recognized as a major premise of 3F (corporate culture strengthening activities), and were developed extensively.
 At that time, the Moka Plant of Yamakawa Kogyo K.K., which was also a customer that largely led the 5S activities, was visited in a body, the field trips were carried out in great detail, and valuable teachings were received.
In the year 2004, activities were started three times under "Profitable 5S activities". These included activities under which each department assumed and decided what exactly were the 5S activities that were used to weave together the basis of TPS and make a profit.
In addition, the old molds and fixtures were arranged, and as a representation of the achievements of 5S, "5S Grand" was completed in October 2004, and the activities started from the sports festival of that year.

 A fresh approach called "New 5S activities" was kicked off in October 2007, according to which everything had to be performed thoroughly. This approach started under the leadership of the then Managing Director, Mr.Osawa with the slogan being "let us indulge in work, fun, and even 5S". It was decided to set Ashikaga city as the "Town of 5S" for consultations, and to take the help of Mr. Kimura who was handling the consultation of the entire city.

3) Physical distribution reforms
 The physical distribution reforms started in the year 1999 with the establishment of assembly and a roller conveyor chute between shipment warehouses, and during FPS activity part III, activities concerning how to eliminate waste of physical distribution were started from January 2001. During inventory reduction, the mechanism of production was handled, and the inventory was reduced to the minimum extent to enable the flow of objects. Physical distribution reforms constituted activities for reducing the distribution management points between production processes, and shortening the overall lead time by eliminating the unnecessary distribution man-hours. They were planned to be incorporated in the start of development of Legacy (21Z) of Fuji Heavy Industries Ltd.
 At the time there were 100 distribution management points, and it was AGV that greatly contributed to reducing the person hours required for distribution by considering how to reduce this number and where person hours could be saved. Moreover, AGV was developed by Fukai, and efforts were made to reduce cost.

4) Productivity improvement activities
 In the FPS activity, the index of the productivity improvement activity was set as efficiency control. The productivity of the operators was evaluated based on the efficiency, and the evaluation of the workplace was performed based on the direct rate. To realize "zero startup loss", which is also an objective of FPS, a spiraled up approach is always taken in the respective department from the development stage so as to be able to carry out production at a 100% efficiency right from the first production machine, and the outcome is thus improved. Moreover, simultaneously at the assembly site, continuous efforts are put into "short-time breakdown reduction activity" and "manpower reduction activity" that would lead to quality improvement, and a steady progress is made.
 On the other hand, the press site worked toward "SPM improvement" and "setup time reduction", and as the capacity of 70 years since its establishment, an average SPM of 20 times or more, and a setup time of up to five minutes were realized in the TRF 1600-ton press that represents Fukai MFG Co., Ltd.

5) Future issues and challenge goals
 Fukai MFG Co., Ltd. will continue to work diligently to realize 100 years of its establishment, put in honest efforts in everything, and aim to secure the top position in the manufacturing industry. We also hope to continue with our corporate mission of "Sanko Sanki" to make our customers, company, and self happy by aiming at high efficiency, high profits, and high wages.
View of the sports festival during 5S Grand
View of the sports festival during 5S Grand

History of Seven Expanded and Enhanced Plants

(1) Starting Out - Yamabe Plant [From 1938]

 Fukai MFG Co., Ltd. was established in Yamabe, Ashikaga city in the year 1938 as a plant affiliated with Nakajima Aircraft Industries Ltd., and it's been 70 years since it was started out.
Yamabe Plant site layout

 The company was initially engaged in the manufacture of molds, fixtures, and components for aircrafts with 11 employees working in a site area of 879 m2, and a plant area of 469 m2.
The equipment at that time included three small presses called the C-press, one lathe, two shapers, one milling machine, and one drilling machine.

 Thereafter, Japan entered the Pacific War, and in 1941, Nakajima Aircraft Industries Ltd. got accredited as a munitions company, and Fukai MFG Co., Ltd. too became the "Mikuni No. 4666 Plant" specified by the aircraft components manufacturing plants, the machinery and equipment also increased in number, reaching six presses, the other machines too reached a total number of 26 from 18, and the number of employees increased from 25 to 103, at a stroke, within three years.

(2) Utsunomiya Plant [From 1944]

 The production volume increased, and in the year 1944, Fukai MFG Co., Ltd. established its second plant, the Utsunomiya Plant, together with the Utsunomiya Plant of Nakajima Aircraft Industries Ltd., thus resulting in an increase in the number of orders received. The company was initially engaged in the manufacture of molds, fixtures, and components for aircrafts with nine machines and 15 employees working in a site area of 562 m2, and a plant area of 377 m2.
 Then, after the end of the war, the Utsunomiya Plant was shut down in the year 1954.

(3) End of the War [From 1945]

 The company grew rapidly in merely six years since its foundation, and while everything seemed to move along smoothly, the situation changed abruptly in the year 1945.
 During the end of the war, the parent company of Fukai MFG Co., Ltd., that is, Nakajima Aircraft Industries Ltd., stopped production as soon as the war ended, and thereafter, changed its name to Fujisangyo Co., Ltd. and started over again.
 Similarly, after stopping production, Fukai MFG Co., Ltd. received approval for production of goods for private use and started over again. The products that Fukai manufactured after the war included household products, kitchen utensils, frying pans, tiffin boxes, etc., but Fukai continued to use its mold manufacturing technology that was built before the war, and was successful in manufacturing commercial products in a short period of time.
 Moreover, people's lives were very tough, the shortage of food continued, and companies were not in a condition to make profit. The Yamabe Plant of Fukai MFG Co., Ltd. too saw a drop in the number of employees to a record low of seven persons.

(4) The Saviour Rabbit Scooter [1951]

 In 1951, Fukai started receiving orders for work related to the rabbit scooter from Fuji Kogyo Ltd. (split-up from Fujisangyo Co., Ltd.), and established consistent production from mold manufacturing up to press processing, welding, and assembly. At that time, the number of employees in Fukai was 22.
 In 1953, five companies, namely Fuji Kogyo, Fuji Jidosha Kogyo, Omiya Fuji Kogyo, Tokyo Fuji Sangyo, and Utsunomiya Sharyo merged together to form Fuji Heavy Industries Ltd. Thereafter, the production volume of the rabbit scooter increased rapidly, and a monthly production of 5,000 units was recorded. The plant site was expanded to 1,639 m2, the plant area to 928 m2, the number of employees reached 32, and the number of machines increased to 13. Among them, the installation of a 750-ton hydraulic press was a major breakthrough for Fukai MFG Co., Ltd. Thereafter, the hydraulic press was expanded to 200 and 300 tons, and Fukai took its first step as a first class press processing site upon the earnest request of the previous president, Mr. Yoshinobu Fukai, and the net sales of 1959 reached 120,000,000 yen, which was three times that of the previous year, thus surpassing the barrier of the first 100,000,000 yen. The number of employees also reached 71.
 The rabbit scooter that was developed continuously from the year 1947 was shadowed by the emergence of the Miwa truck and Subaru 360 later on, and its production was ended in 1968.
Inside Yamabe Plant No. 2

(5) Foray into Four-wheeled Vehicles [From 1960]

 In 1960, Fukai MFG Co., Ltd. was able to start transactions with Fuji Precision Industries Co., Ltd. (became Prince Motor Company, Ltd. in 1961), which opened the way for Fukai to foray into the four-wheeled vehicle department, and thereafter, Fukai was riding the waves of motorization, which was a significant leap forward.
 Fukai MFG Co., Ltd. also established a second plant, and the number of employees reached a breakthrough figure of 100 for the first time.
 Site area of the first plant: 1,754 m2, Plant area: 1,147 m2
 Site area of the second plant: 3,316 m2, Plant area: 2,251 m2

 Four lathes, five shapers, four milling machines, one planar, one radial, 11 spot welding machines, one seam welding machine, one 1000-ton hydraulic press, and one 500-ton, 300-ton, 200-ton, and 150-ton mechanical press, respectively. 18 other small presses.

(6) Foray into the Mikuriya Plant [From 1965]

 As the production capacity of the Yamabe Plant reached its limit, Fukai decided to foray into the Mikuriya Industrial Park developed in Ashikaga city, and in 1965, Fukai moved its headquarters, and set up the Mikuriya Plant.
Mikuriya Plant at the time of starting operations
 With a site area of 34,000 m2, plant area of 10,000 m2, and the number of employees as 257, the Mikuriya Plant was 20 times bigger than the Yamabe Plant, and was an excellent plant for revealing the developments of Fukai MFG Co., Ltd. The work was additionally implemented across three terms, and completed in 1968.

Press A/B line
Press A/B line

Press plant
A line: Two 500-ton, two 300-ton, and one 200-ton presses
B line: Three 300-ton, one 200-ton, one 150-ton presses, 14 small presses, two shirring machines

Assembly plant
24 spot welding machines, six arc welding machines, four portable spot welding machines, two seam welding machines, and 26 other machines

Jigs and tools plant
Three lathes, four shapers, four milling machines, two planar machines, two radial machines, 13 other machines

(7) Expansion of C-line [From 1973]

 In the press plant, the C-line was expanded as a line configured by a total of four presses including one 400-ton, and three 350-ton presses. A shuttle feeder that was a breakthrough machine at that time was installed to realize automation.

(8) From Quantity to Quality [From 1972]

 The high-growth era peaked in the 1970s, competition between companies intensified, and reorganization of the industry was also promoted. Such an action naturally swept toward Fukai MFG Co., Ltd. as well, and promotion of QC/IE training, strengthening of the quality control system, and implementation of efficiency control and cost control were called for.
 Naturally, changes occurred in components as well, and the level of quality precision improved significantly as compared to the past, thus paving the way toward quality from quantity.
 What made matters worse was the oil crisis (in the year 1972, Showa 47-48), which was received as a huge shock across the globe, and Japan received a heavy blow, in particular. Particularly, even in the automotive industry, the difficulty in procuring gasoline, and the increase in prices drew near the user thus reducing the desire to purchase, and making it difficult to sell automobiles, and this resulted in a decrease in income and profits of customers like NISSAN MOTOR CO., LTD. and Fuji Heavy Industries Ltd. as well.
 However, as a result of the progress made in agricultural mechanization, Fukai MFG Co., Ltd. saw an increase in the work received from Kubota Iron Works Co., Ltd., which easily made up for the losses related to vehicles, and moreover, our company recovered to the extent of an additional profit of several times.
Kubota Iron Works Co., Ltd. : Sheave Case
Kubota Iron Works Co., Ltd. : Sheave Case

 At that time, the 10 billion strategy was raised by the previous president, Mr. Yoshinobu Fukai, and our company broke into a full-out sprint toward its dream.
 Following the oil crisis, Fukai MFG Co., Ltd. received the guidance concerning the "P3 Movement" from Nissan Motors as a corporate activity for surviving the low-growth era, and developed its own "P3TATE Movement". Thereafter, Fukai developed and introduced activities related to the start of the QC cycle, proposal system, objective management, and small group activities, one after the other, and thereby realized "Reinforcement of the essential corporate qualities".
 The world-wide oil crisis also brought some happiness to the automotive industry. It brought to focus the small size and favorable fuel consumption of Japanese cars, and particularly increased exports to the U.S. by a significant amount. Among these, the expansion of Fuji Heavy Industries Ltd. was remarkable, and Fukai MFG Co., Ltd. also benefited from this and saw an increase in sales, but the increase in the number of employees pressed the management, and the profit did not rise along with an increase in sales.
 Thereafter, each automobile company began developing new vehicles in a fierce manner, and the development of new vehicles that our company handled in 10 years from the year 1977 totaled 43 vehicle types, indicating the development of four vehicle types every year.

(9) Installation of Industrial Robots [From 1982]

 Upon being pushed to develop new vehicles, each automobile manufacturer simultaneously installed welding robots and automated their production lines.
In 1982, upon receiving an order for Nissan Pulsar, Fukai MFG Co., Ltd. too installed its first industrial robot. Fukai installed three industrial robots manufactured by Kawasaki Heavy Industries Ltd., publicly sought their names, and decided on "Yochan", "Tomichan", and "Takechan", and set them as mascots (?) of the assembly line. Thereafter, Fukai continued to install robots in new lines, and currently, it has more than 250 robots.
 Moreover, Fukai MFG Co., Ltd. acquired the goodwill of the production fixtures department of Kawasaki Heavy Industries Ltd., and started handling the production and sales of the robot peripheral fixtures and equipment, and by making use of not only the fixtures and equipment manufactured and used internally but also their know-how, Fukai aimed at expansion of sales as an enterprise.
Robot manufactured by Kawasaki Heavy Industries Ltd.
First installation of robot manufactured by Kawasaki Heavy Industries Ltd.

(10) Equipment Enhancement and Rationalization Activities [From 1979]

 Due to an increase in the investment cost of equipment because of successive new vehicle developments, and rationalization activities that did not progress, the business performance of Fukai MFG Co., LTD. followed the path of deterioration.
 In such a situation, four project teams (KPT cost curtailment, GPT outsourced components cost reduction, SPT production man-hours reduction, and ZPT material cost reduction) were formed to achieve rationalization, and activities aiming at the objectives were started.
In addition, a "New production system" was introduced, the past theories, concepts and thoughts with customized methods, and fixed presumptions and preconceived ideas were removed, and conversion of ideas and reform of senses were nurtured.
 Such activities were rewarded, and the highest profit since the establishment of the company was achieved after three years, and in the year 1980, a 600-ton transfer press was installed, and automation of the press was promoted continuously.
 In the machine and tool plant too, an NC vertical boring machine was installed in the year 1982, and activities were started to promote introduction of NC and automation of mold manufacturing.
 In addition, a 300-ton progressive press was installed in 1983, and next year, in 1984, a 1600-ton transfer press was installed.
 These equipment enhancements naturally put pressure on the revenue in a big way, and thereafter, Fukai MFG Co., Ltd. saw extremely touch times over a few terms, and further rationalization measures were proposed.
 Finally, the tough times were over, and the revenue improved in the year 1986.

(11) Acquisition of Ota Plant [From 1988]

 The site and building of Ishii Kogyo Co., Ltd. in Ota-city, Gunma prefecture were acquired. The Ota Plant was started as a plant dedicated to agricultural machinery components and having a site area of 3,305 m2, and a plant area of 2,366 m2. As far as components were concerned, high-mix low-volume production was the strong point, and this plant contributed to sales as a plant specializing in assembly, with KUBOTA Corporation (earlier Kubota Iron Works Co., Ltd.) as the main customer. Thereafter, business was started (in 1990) with the Air Conditioning Division of SANYO Electric Co., Ltd., the number of orders received for smoke pipes used in heat exchanger for air conditioning increased, and the plant was being used to its full capacity within no time.
Ota Plant assembly line
Ota Plant assembly line

(12) Start of the Nitta Plant [From 1988] - History of Seven Expanded and Enhanced Plants

 Thereafter, the subsidiary company Fukai Kogyo Kabushiki Kaisha in Nitta town, Gunma prefecture was started as the Nitta Plant. The Nitta Plant was started as a plant dedicated to components of civil engineering and building equipment and having a site area of 5,183 m2, and a plant area of 1,240 m2.
 This concept amazingly contributed to the expansion of sales at a later stage, and we were able to establish a plant network unparalleled by any other company, which can comply with any volume of monthly production, with the Nitta Plant handling up to 100 units, the Ota Plant boasting of 100 to 1,000 units, and the Mikuriya Plant that can produce a few thousand units.
Nitta Plant turret punch line
Nitta Plant turret punch line

(13) Construction of the Otsuki Plant [From 1989]

 As a result of an increase in the number of received orders, the workplaces were becoming narrower, Fukai MFG Co., LTD. proceeded with the construction of the Otsuki Plant, which was completed in the year 1993.
The concept behind the construction of the Otsuki Plant was automation, and the installation of robots for the tandem press was examined for the Otsuki Plant as well. Robots were adopted in press transportation as well, and in the Mikuriya Plant, the installation of robots was tried on the C-line (line configured by four presses including a 400-ton press), while in the Otsuki Plant, robots were adopted in two lines. Normally, where five operators were needed on one line, a line where production could be carried out with four operators on two such lines was created, and at that time, this was a breakthrough system, and some patent applications were also submitted. This system was even sold to a few companies.
 In the assembly line, a straight conveyor was set, and product packaging constituted the end of the conveyor line, and as a result of this setup, the packaging task and fork transportation task reduced significantly. Moreover, an underground pit was provided wherein the control panel and distribution panel of the robot were stored, which made it possible to secure ceiling space. A workplace, which was not thought of until now, was thus realized.
Otsuki Plant conveyor line
Otsuki Plant conveyor line

(14) Dissolution of Customer Alliance Partnership and Start of a New Alliance Partnership [From 1996]

 The point that must not be forgotten in terms of the developments made by Fukai MFG Co., Ltd. is the immense cooperation of several customers. Starting with 23 customers in the year 1968, each plant had its unique customers during the times of the Ota Plant, Nitta Plant, and Mikuriya Plant, but when these plants were consolidated into the Otsuki Plant, the 43 customers at that time were dissolved in the year 1996 for the sake of reform, and in the year 1999, the customers of the three plants were consolidated as a new alliance partnership and reorganized into a total of 63 companies.
Alliance partnership
Alliance partnership "Shinwa partnership" assembly

(15) Progress Made in Computerization [From 1992]

 The connection between Fukai MFG Co., Ltd. and computers dates back to the year 1980. Initially installed for salary and financial matters calculation, the computer was later used for sales and purchase activities in the year 1984, thereafter, in the year 1985, distribution of delivery instructions data through electronic transmission with NISSAN MOTOR CO., LTD. was started, and then in the year 1987, computers were introduced in production planning, and were used mainly for rationalization of office work.
 Thereafter, in the year 1992, CAD was introduced in mold designing, which resulted in an exponential reduction in the time taken for mold designing, and then in the year 1995, CAD and machine tools were combined to introduce CAM, and in addition, conversion of drawings received from customers, including Fuji Heavy Industries Ltd., to data via a network was promoted, and finally, in the year 1996, designs too were converted to 3D.
 Personal computers too continued to become dramatically popular as a result of emergence of Microsoft Windows, and soon it was an era of one computer for one person in indirect departments. The "New production management system PCLS" was launched in the production management department, which facilitated planning on a daily basis rather than monthly basis for complying with kaleidoscopic changes in the environment, and even placement of orders with customers was performed as a daily request method, which resulted in a significant reduction in inventory.
Computer room
Computer room

(16) Installation of the Laser and Plasma Welding Machine [From 1999]

 The automotive industry was forced to aim at the production of vehicles that were easy on the global environment, and help improve fuel consumption through a reduction in the weight of vehicles. As a measure in this regard, Fukai MFG Co., Ltd., together with Fuji Heavy Industries Ltd., researched a technique of joining two materials with different thickness and pressing them together (TWB: Tailer Welded Blank technique) in the year 1998. This technique was implemented in the following year of 1999, and operation was started. Initially, this technique was used for improvement in the material yield.
 Moreover, in the year 2001, a plasma welding technique that was cheaper than laser welding, featured easy maintenance, and had a high productivity was researched, and thereafter proposed and adopted, and eventually, its implementation was started. Currently, in 2008, the technique based on plasma welding is more prevalent, and six machines have installed and operated in this regard.
Laser welding machine TWB technique
Laser welding machine TWB technique

(17) Sales Enhancement and Rationalization Activities [From 2003]

 As for the development of Legacy (21Z), which was the main model of Fuji Heavy Industries Ltd., active cost reduction presentations were made right from the stage of receiving an order, which led to an increase in the number of received orders, and during preparatory works for development, the entire company came together as one to overcome the items of FPS (FUKAI PRODUCTION SYSTEM), one by one, thereby resulting in mass production, and because of this car, the sales of Fukai MFG Co., Ltd. also changed immensely. Even from the viewpoint of physical distribution, an AGV (Auto Guided Vehicle) manufactured by Fukai MFG Co., Ltd. was introduced, which led to a significant reduction in the physical distribution cost.
AGV developed by Fukai MFG Co., Ltd.
AGV developed by Fukai MFG Co., Ltd.

(18) Outsourcing of Production Capacity [From 2003]

 Upon being outsourced the rear frame assembly by Fuji Heavy Industries Ltd. in 2003, revisions were performed across the entire plant due to an immense increase in the number of orders received, and next year, in 2004, outsourcing of the industrial machinery department was implemented. Thus, the Otsuki Plant became a plant specializing only in automobile components, thereby complying with the increased number of received orders.

(19) Installation of the TRF 2700 [From 2005]

 As mentioned earlier, the automotive industry had been performing research to reduce the weight of vehicles, and had also been adopting high-tension material for vehicles. Therefore, the machine capacity became insufficient when conventional press machines were used, and from the viewpoint of securing orders, the installation of a press machine having a higher capacity was being examined. This led to the installation of the TRF 2700 ton press in 2005. Although it was a secondhand machine, it proved to be effective in cost reduction, and could also satisfy the order receiving conditions.
 While the initial work volume was less, after business transactions were started with Mitsubishi Motors in 2006, the machine reached its full capacity in no time due to the launch of new vehicles (such as Skyline, Impreza, and Forester).
Installation of the TRF 2700 ton press
Installation of the TRF 2700 ton press

(20) Supporting Mass Production Components

1) Mold Division - Managing the Start of Manufacturing
 The mold division is a department that manufactures and procures press molds, and is a workplace with a tradition that has continued since the establishment of our company.
 In the history of seven years, it has occupied a large share of more than 90% of the sales volume, but on the other hand, more than 90% of the quality and productivity is decided through the performance of the mold. The importance of the mold manufacturing department has been increasing in conjunction with the production technology capability, regardless of the sales ratio.
 20% to 30% of the overall received orders of molds, including molds for manufacturing components and order-received molds, are handled within the company. Fukai handles molds referred to as difficult components, and is even highly trusted by its customers.
 Of late, Fukai has been putting efforts into the expansion of sales of order-received molds, and has also been expanding its transactions with Ogihara Corporation and Miyazu Seisakusho Co., Ltd., and increasing procurement from Korea to reduce the production cost.
Metallic Mold Division	Machine and Tool Plant
Mold Division Machine and Tool Plant

2) Equipment Division - Promoting the Assembly Plant
 The roots of the Equipment Division date back to the year 1982, when "Kanto Giken" was established. Although this was the period when robots were still being introduced, the company participated in the creation of the assembly line at Fukai, including robot peripheral devices.
 Thereafter, in 2003, Kanto Giken was integrated with Fukai MFG Co., Ltd. to form the Equipment Division, but during that period too, the production technology of Fukai and the core technology of Kanto Giken continued to fuse and promote the development of the assembly plant. 
 Currently, in 2008, we are conducting external sales activities of equipment fixtures through a total of 27 staff members at the Komaba Plant as the base by using the know-how built through the creation of our mass production lines, with the ease-of-use as a selling point.

3) Maintenance System - Supporting Reduced Inventory
 While a reduction in inventory was achieved through the introduction of "Kanban" (signboards), we must describe the maintenance system that was incorporated alongside. Broadly classified, the maintenance system includes maintenance of machinery and equipment, and maintenance of press molds, but for both these, the activities for the introduction of ISO9001 were primarily the beginning of an improvement in their level.
 Conventionally, maintenance of the press machine included mainly statutory inspection, and voluntary routine inspection was almost not performed. Activities for fulfilling the requirements of ISO9001 started from around 1996, a maintenance section was organized in April 2000, which helped improve the results steadily, and the machine failure rate has also reduced by almost 70% in the last three years.
 On the other hand, maintenance of press molds has been performed by a person in charge of machine and tools repair and affiliated plant However, in order to increase the number of molds for which maintenance was performed, and reduce the number of hours of mold maintenance, even the OB staff of Fuji Heavy Industries Ltd. was asked to join in April 2000, and the workplace at the mold maintenance department was started with three staff members. In 2007, the inventory of finished products was reduced from quantity held for one day, which was the case until then, to quantity held for half a day, and mold maintenance was switched to two shifts, thus supporting the production system.

4) Trial Manufacturing Department - Managing Pre-components for Mass Production
 There is a stage called the development period in the case of automobile components. During this stage, the mass production equipment must manufacture the pre-components that are to be developed. The department that manages the manufacturing of components in this stage is called the trial manufacturing department, which is a technical group engaged in manufacturing. 
 In the past, each time a new vehicle was developed, the manufacturing veterans were selected from each workplace, who then got engaged in component manufacturing, and some of them were even outsourced. In these circumstances, a reduction in the development cost becomes a managerial issue, and in the year 1997, a trial production group was organized within the tool room. In the recent years, when the operational load easily influences the amount of development, only important components having a small production quantity are manufactured even during mass production.
Trial production plant

Global standards

(1) Historical Background of Global Standardization [From 1993]

 JIS (Japan Industrial Standard) is a standard for use within Japan, and is believed to be sufficient by itself as long as products are manufactured for use within Japan. However, this standard is not applicable when products are manufactured overseas, or when products are exported to foreign countries. The trend of incorporating a global standard (world standard) with particular emphasis on a standard that could be applied anywhere across the globe was becoming prominent.
 Requests from customers had been changing from those urging that inferior products be not delivered, to those that lay particular emphasis on the creation of a mechanism for quality assurance. PPM management was introduced for shipped defects, and in order to maintain Rank A, a score of 10 PPM or below was necessary. In order to comply with the requests of customers, it was necessary for Fukai MFG Co., Ltd. too to improve customer satisfaction by constructing its own quality assurance system (creating good products and creating a mechanism of quality assurance).
 Therefore, in April 1996, the company decided to introduce ISO.

(2) Construction of a Quality Insurance System based on ISO [From 1996]

 The ISO quality assurance system, which is a world standard, documents (P) particularly the objective of quality management, and the method by which quality management must be performed, evaluates the implementation (D), checks (C) the results, and acts (A) as a relatively effective system. In other words, the ISO quality assurance system goes through a PDCA cycle called the management cycle.
The company-wide ISO installation kick-off meeting was held in August 1996 at the company's refreshment room in the presence of the customers, and was ended with all participants' chorus of "Ganbaro" (work together toward the goal)". In addition, installation training was provided, and a "Quality policy" ("gain customer satisfaction and trust of society by putting quality first") was formulated. 
 Everybody showed rejection and was perplexed upon being faced with words and Western language heard for the first time. The text on ISO standards was difficult to understand, and it took a long time in comprehending it. Documents concerning ISO were prepared by allocating PCs to administrators, such as department heads and section heads, and making them understand the method of using these PCs that they were not used to. It was possible to prepare each necessary rule (five files and almost 340 documents). The audit was conducted by a German certification body called TUV Rheinland Japan Ltd. as recommended by customers.
 The preliminary audit was conducted in November 1997, and the certification audit was conducted in February 1998. The certification was acquired in April 1998, one year and eight months since the kickoff meeting.

(3) Selection of automobile industry standards [From 1998]

 The ISO9001 quality assurance system had finally started.
 It was at that time that a shift was made from percent to PPM indication in order to record the number of defects delivered to customers. While individual defects had been reduced, it was not seen as satisfactory as a quality assurance system. This was due to the fact that ISO focused on creating a general-purpose quality assurance system that could be used for various industries, which was not sufficient for the automobile industry.
 More specifically, it was insufficient because it lacked standards for indicating product quality planning guidelines (APQP) and procedures for customer approval of the first mass production lot (PPAP).
 Accompanying the capital and business alliance of our client Fuji Heavy Industries with GM (Unites States) in December 1999, a shift was made to requirements based on QS-9000 (*1, hereinafter "QS"). It was decided to make a shift from the general-purpose ISO quality assurance system to QS in April 2001 based on client recommendations.
 QS was spreading throughout the entire industry centered around the US automobile industry, and we believed that it would be the best quality assurance system for us. We held a kickoff ceremony for the introduction at our company cafeteria in August of that year, and everyone in attendance expressed a commitment towards this system. We pledged to acquire certification in line with the mass production of Fuji Heavy Industries' next generation vehicle, the Subaru Legacy (launch scheduled for May 2003).
 While we had established a quality assurance system before, there were requirements so difficult to comprehend that they could not be compared with ISO. The certification body was the same as that for ISO and QS (TUV Rheinland Japan Ltd.), and a German named Mr. Fisher served as the chief auditor. The audit was conducted while an interpreter interpreted the auditor's English. While we did feel some anxiety and bewilderment towards this English that we were unfamiliar with, the preliminary audit was completed in September 2002 and the certification audit was completed in November 2002. Certification was acquired in January 2003.

Business management

(1) The issue of QS customer requirements [From 2003]

 Quality has improved remarkably compared to the 1990s. The reason for this is that two quality assurance systems (ISO and QS) have been established, effectively creating a framework that doesn't produce defects. There have been significant changes in the operating environments of customers, and while companies were not considered to be among the worst manufacturers if ten defects were delivered per month ten years ago, since around 2003 two to three defects per month have been sufficient to be considered among the worst manufacturers.
 It was determined that the QS standard would be terminated by December 2004, and it would be necessary to migrate to another system as an upgrade at that point. In order to meet the needs of customers, meticulous support was necessary, including consistent quality and just-in-time delivery management.
Number of defects delivered to customers

(2) Business Management System migration

 There was a pressing need to migrate to ISO 9001 version 2000 as a QS standard upgrade. TS16949 (*2, hereinafter "TS") was considered to be the successor to QS, and in the initial migration plan we aimed to adopt this standard after migrating to ISO. We held talks with a consultant that had been hired as an instructor for ISO introduction training for members of management from division managers and upward. The consultant suggested that we make a sudden transition to TS. This suggestion was immediately communicated to top management, and the approval of top management was gained. In the end, the only difference is whether the migration to TS is made sooner or later.
 The TS introduction master plan was formulated in August 2003, following which activities to prepare for audits were steadily commenced, including the establishment of quality manuals and procedure documents and the planning and implementation of internal quality audits and management reviews. The certification body was the same as that for ISO and QS (TUV Rheinland Japan Ltd.), and the chief auditor was the same as for QS (Mr. Fisher). After a preliminary audit in March 2005 and a certification audit in July 2004, certification was received in September 2004.
As we were able to leverage our experience of establishing the two ISO and QS systems, this was achieved in a little over a year from the start.
ISO/TS16949 certificate
TS introduction training
TS audit, plasma welding site
TS audit, closing meeting

(3) Spreading and instilling of the Fukai Business Management System [from 2005]

 With the commencement of the application of TS as a tool for day-to-day operations, the Fukai Business Management System was launched. It is a framework for conducting all of the company's operations in accordance with TS and evaluating the results every year. All operations are conducted based on TS. The company's operations as a whole can be summarized as follows.
 1. The medium-term management plan (draft) is prepared based on the business policy and quality policy, and approved by the executive committee after a department manager meeting is held.
 2. Each department makes single fiscal year department targets and policies based on the medium-term management plan that is approved.
 3. Targets and policies for each division are prepared and deployed among division employees based on the department targets and policies after an internal department meeting is held.
 4. The supervising executive confirms the implementation status and progress of the targets and policies by each group and section and evaluates the results reports.
 5. Each department and division conducts analysis of the differences between targets and results.
 6. Each department and group/section reflects on the past fiscal year and incorporates the results in the following fiscal year.

  Process 1 through 6 are repeated every year in an aim for continuous improvement.
*The results of 5 serve as feed-back for the department targets and policies for the next fiscal year.
*The results of 6 serve as feed-back for the business policy and quality policy.
 With this becoming possible, there has been not only an improvement in manufacturing quality, but also a remarkable improvement in business management.