The Growth Model of Japanese Industrial Machinery Suppliers

Abstract

This study investigates the growth of Japanese manufacturing companies operating as suppliers for precision industrial machinery production. This study intends to identify the critical factors influencing their growth and management and understand how these factors interact with each other and present a competitive advantage for sustaining their growth.

To fulfil the research purpose, this study has developed the Elemental Composition Model （EC model）, a hypothetical model consisting of six elements, which attempts to describe the growth of the suppliers. Field research was conducted to verify the validity of the EC model by choosing twelve manufacturing companies working on mechanical component production for leading Japanese printing and paper-converting machinery companies. The manufacturing of these products involves highly advanced technology to lead the global market, thereby demanding a high level of manufacturing engineering and skills from their suppliers.

The field research involved a series of visits to the chosen companies and interviews with the top management. A detailed field research analysis indicated how the strategies were chosen and executed, and what changes were made in customer relations and manufacturing technology. Most notably, the analysis identified three significant focus areas for growth, namely technology, product, and market. Further investigation of these processes considering the EC model showed the validity and effectiveness of the EC model in understanding the growth and management process of the suppliers under the study.