Osaka - Sunday, May 15, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy, reported on May 14 that parties throughout the industries are to take actions to meet the request of cutting energy use by 15% from the Japanese government and Tokyo/Tohoku Electric Power Co., Inc. The request has been discussed to reach a consensus and was officially announced on May 13.
Actions range from shift in operation days/hours and location to production transfer to implementation of energy saving equipments and systems, with the objective of fulfilling both business continuity and energy saving.
1. What request is made to companies?
With Fukushima nuclear plant issue triggered by the earthquake and tsunami that occurred on March 11, Fukushima nuclear plant has stopped its operation. This made Tokyo Electric Power Co., Inc. unable to sufficiently supply electricity to its responsibility area including key cities of economy such as Tokyo.
1) Request made to companies operating in the area responsible by Tokyo and Tohoku Electric Power
All companies operating in the area that use electricity supplied by Tokyo and Tohoku Electric Power, i.e. eastern Japan, are requested to cut electricity use by 15%.
Plants that produce electronic components used in wide a range of fields including automotive and electronics are concentrated in the area so the request has much meaning.
2) Exceptions
The Japanese government has been studying fields that are to be exceptions because electricity cut is extremely difficult in some cases, such as medical devices. There are some industries that request to be handled as exceptions and the government is currently studying what can be exceptions with extreme care and is to make final decision and announcement by the end of this month.
Examples of the cases/fields that are studied whether to be included as exceptions or not at present are as follows, all of which are those that could severely impact lives of citizens and economic activities. Related ministries and industries are requesting exceptions such as easing the target.
- hospitals
- railway during commuting hours (mornings, evenings)
- sewerage facilities
- refrigerator warehouses
- data centres
2. What actions are planned or studied by companies?
There are mainly 3 kinds of actions and initiatives planned and studied by companies.
1) Shift/change of operating days and hours, and location
(1) Shift some operating days from summer to spring and autumn and winter by Toshiba, Hitachi and Mitsubishi Heavy Industries.
(2) Change plant shut down days by nationwide automobile plants based on the policy by JAMA (Japan Automobile Manufacturers Association, Inc.) to change plant shut down days from weekends to Thursday and Friday.
(3) Operate during the Golden Week Holidays (April 29 – May 8) and instead increase number of days that plants are shut down in summer by Nikon.
(4) Implement summer time by Sony, Sumitomo Metal Industries and Aeon.
(5) Implement work from home system to cut electricity use in offices by NTT Data and Teijin.
2) Transfer of production, equipments and facilities
(1) Transfer production from eastern Japan to western Japan or overseas by Honda, Toray and JFE Steel.
(2) Transfer 30% of servers for development from eastern Japan (around Tokyo) to multiple locations in western and other parts of Japan.
3) Implement energy saving equipments and systems
(1) Replace lights to energy saving ones such as LED by JX Nippon Oil & Energy Corporation, Marubeni and Seven Eleven.
(2) Rotate showing hours of movies at cinema by Shochiku.
(3) Terminate refrigerating hours of vending machines for 5 or 6 hours a day in turn by Coca Cola and other beverage companies.
3. What action is to be taken by Panasonic that enables achieving 15% electricity cut target without changing operation days/hours or transferring production?
1) Solution: installment of sensors to monitor and control electricity use
Panasonic is to install sensors in plants in the area to monitor and control electricity use to obtain data which will be used to streamline electricity use, with the objective of maintaining productivity while achieving the electricity cut target.
2) Benefit from the solution
The solution enable the company to avoid decrease in operating days and hours and transfer of plants so the company can avoid stagnation in its economic activities. This is amazing and can be a best practice when it is estimated that with 15% electricity cut initiative 50,000 jobs will be lost and wage of employees will be cut by 0.2%, leading to reduction of GDP growth by 0.3% in 2011.
It would require total of over 100 million yen investment for this initiative but the company estimates that it can earn back the investment in 3 years. The initiative for the upcoming summer focuses on those of immediate results and improvements will be added continuously next year onwards.
3) Upcoming actions
The sensors will be installed in all 30 plants in the area that produce products such as LCD panels and LCD flat panel TVs. 20 staff members are to start installation one after the other from the week starting May 16. The company is to add analysis and simulation with their unique software to establish a system in which they can continue lean, streamlined production by plants by the end of June.
When the sensors are installed, the company will be able to monitor use of electricity, gas and water, and temperature and humidity by production lines and equipments. The company is to initiate reviewing humidity control in clean rooms, reduction in compressors and short time operation halts in addition to reduction in lights and frequent termination in power.
As a result, the company is confident that it can achieve 15% reduction in electricity use at the peak this summer from last summer and has made agreement with Tokyo and Tohoku Electric Power to be provided with total of 160,000 kW. The company has tried using the sensor in multiple plants in other parts of Japan such as Wakayama.
Resources:-
To fulfill the request from the Japanese government of cutting electricity use by 15%, companies are taking measures to achieve the target such as shift/change of working days/hours and locations, production transfer and implementation of energy saving equipments and systems. An interesting solution by Panasonic is installing sensors in plants to monitor and control electricity use that enable achieving target while avoiding economic activity stagnation by change/shift of working days/hours and production transfer.
2010年3月13日土曜日
Why Production Shift from Japan to Overseas?
Osaka – Saturday, March 13, 2010
From recent reports of March 10 and 11 from Nikkei, specialized in economy/business and politics, production of electronics component and investment by non-Japanese capitals are shifting from Japan to overseas. This reflects worldwide trend of global competition getting more and more severe, and of companies focusing on business in emerging countries, attributing to expected growth in market and business opportunity of emerging countries.
In this article, how electronic component production of Japanese companies is shifting from Japan to overseas is explained.
1. How is electronic component production by Japanese companies shifting from Japan to overseas?
According to Nikkei’s article issued on March 11, Japanese electronic component makers are to accelerate transfer of their production from Japan to overseas. Japan’s production of electronic equipments has been drastically shifting to overseas, and already 90% of PCs and 70% of AV equipments such as TV sets have been manufactured overseas. In line with this, electronic components production of each company will be transferred to overseas with the objective of absorbing rapidly growing demand of emerging market.
Overseas Production of Electronics Component Manufacturers
(Source: Nikkei, edited and translated by the author)
Company Name / Transfer To / Overseas Production (Current, %) / Overseas Production (Target, %) / Timing of Achieving Target / Products
Konika Minolta Holdings / Malaysia / 67 / 81 / Oct. 2010 / Glass base material for HDD
Nippon Chemi-Con / Asia / 40 / 60 / FY* 2010 / Aluminum electrolysis condenser
Murata Manufacturing / China, Malaysia / 15 / 30 / FY* 2012 / Ceramic condenser
Fuji Electric Holdings / Malaysia / 50* / 70 / March 2010 / Electric disc for HDD
* FY = Fiscal Year
** Current overseas production of Fuji is of April – June 2009
Konika Minolta will construct a new plant in Malaysia that manufactures glass base material for HDD, investing 11 billion yen. Operation is to start in October 2010. This is because of their assumption that glass demand will steadily grow in emerging countries with promising growth of PC demand in emerging countries. Their production in Malaysia will double to 1.3 million (volume base) per month, and their overseas production will increase from current 67% to 81%.
HOYA, the global leader of glass base material for HDD is investing approximately 15 billion yen to construct their fifth plant in Philippines. The new plant is to start its operation in August 2010 and the production capacity is assumed to increase by 30% to 33 million (volume base). HOYA already manufactures all its products overseas.
Fuji Electric Holdings, a manufacturer of electric discs for HDD, will increase its production capacity of Malaysia in March 2010, to increase their overseas production from 50% to 70%. HDD makers to which Fuji Electric Holdings supply glass base materials has already located their strategic plants in Asia; for example, Toshiba in Philippines and Hitachi Global Storage Technologies in China.
Production transfer of other electronics components will also be driven. Murata Manufacturing will re-locate equipments used in Japan to China and Malaysia where their volume zone products such as condensers will be produced. As a result, their overseas production will be increased from 15% to 30%.
2. Why is electronic component production transfer ongoing?
With global competition getting more and more severe, Japanese electronic makers are shifting their production to overseas drastically. According to JEITA (Japan Electronics and Information Technology Industries Association), overseas production of AV equipments such as TV sets has reached 72% in 2009. Japanese PC makers produce approximately 90% of their PCs overseas.
It is quite logical and rationale for electronic component makers, the suppliers of electronic makers, to also shift their production to overseas. Electronic component overseas production is already 63% in 2009. It is quite possible that production shift from Japan to overseas will be further driven by high yen.
In the next article, how investment of major foreign capitals is shifting from Japan to emerging countries is explained.
From recent reports of March 10 and 11 from Nikkei, specialized in economy/business and politics, production of electronics component and investment by non-Japanese capitals are shifting from Japan to overseas. This reflects worldwide trend of global competition getting more and more severe, and of companies focusing on business in emerging countries, attributing to expected growth in market and business opportunity of emerging countries.
In this article, how electronic component production of Japanese companies is shifting from Japan to overseas is explained.
1. How is electronic component production by Japanese companies shifting from Japan to overseas?
According to Nikkei’s article issued on March 11, Japanese electronic component makers are to accelerate transfer of their production from Japan to overseas. Japan’s production of electronic equipments has been drastically shifting to overseas, and already 90% of PCs and 70% of AV equipments such as TV sets have been manufactured overseas. In line with this, electronic components production of each company will be transferred to overseas with the objective of absorbing rapidly growing demand of emerging market.
Overseas Production of Electronics Component Manufacturers
(Source: Nikkei, edited and translated by the author)
Company Name / Transfer To / Overseas Production (Current, %) / Overseas Production (Target, %) / Timing of Achieving Target / Products
Konika Minolta Holdings / Malaysia / 67 / 81 / Oct. 2010 / Glass base material for HDD
Nippon Chemi-Con / Asia / 40 / 60 / FY* 2010 / Aluminum electrolysis condenser
Murata Manufacturing / China, Malaysia / 15 / 30 / FY* 2012 / Ceramic condenser
Fuji Electric Holdings / Malaysia / 50* / 70 / March 2010 / Electric disc for HDD
* FY = Fiscal Year
** Current overseas production of Fuji is of April – June 2009
Konika Minolta will construct a new plant in Malaysia that manufactures glass base material for HDD, investing 11 billion yen. Operation is to start in October 2010. This is because of their assumption that glass demand will steadily grow in emerging countries with promising growth of PC demand in emerging countries. Their production in Malaysia will double to 1.3 million (volume base) per month, and their overseas production will increase from current 67% to 81%.
HOYA, the global leader of glass base material for HDD is investing approximately 15 billion yen to construct their fifth plant in Philippines. The new plant is to start its operation in August 2010 and the production capacity is assumed to increase by 30% to 33 million (volume base). HOYA already manufactures all its products overseas.
Fuji Electric Holdings, a manufacturer of electric discs for HDD, will increase its production capacity of Malaysia in March 2010, to increase their overseas production from 50% to 70%. HDD makers to which Fuji Electric Holdings supply glass base materials has already located their strategic plants in Asia; for example, Toshiba in Philippines and Hitachi Global Storage Technologies in China.
Production transfer of other electronics components will also be driven. Murata Manufacturing will re-locate equipments used in Japan to China and Malaysia where their volume zone products such as condensers will be produced. As a result, their overseas production will be increased from 15% to 30%.
2. Why is electronic component production transfer ongoing?
With global competition getting more and more severe, Japanese electronic makers are shifting their production to overseas drastically. According to JEITA (Japan Electronics and Information Technology Industries Association), overseas production of AV equipments such as TV sets has reached 72% in 2009. Japanese PC makers produce approximately 90% of their PCs overseas.
It is quite logical and rationale for electronic component makers, the suppliers of electronic makers, to also shift their production to overseas. Electronic component overseas production is already 63% in 2009. It is quite possible that production shift from Japan to overseas will be further driven by high yen.
In the next article, how investment of major foreign capitals is shifting from Japan to emerging countries is explained.
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