Timothy Paul Kennedy and Kaz Shibata, Edmund Optics Japan Co. Ltd.
Small and medium-size enterprises around
the world continue to focus on cost-cutting activities, including moving labor-intensive
operations to lower-cost regions such as China, Thailand, Vietnam, India, Russia
or Brazil. Even Japanese companies have been increasing overseas manufacturing activities
in search of cost reductions. Industries that require precision manufacturing and
a highly skilled workforce, however, are better served by staying in Japan, despite
the lure of lowered costs abroad.
The optics industry presents a great example of why Japan still
is a relevant manufacturing center. The sources of promised cost reductions are
increased automation and lower-priced labor. However, unlike many electronics sectors,
where the end product is highly dependent upon machines to manufacture the product,
a vast majority of precision optics still require the added touch of skilled workers.
Further, those workers need the support of a vast knowledge base and supply infrastructure
around them. Machinery and low-priced labor cannot replace them without compromising
quality and productivity.
In Japan, the infrastructure and skilled labor force are highly
developed, and the government continues to support development of that infrastructure
through funding of new manufacturing and developing technologies. The extent of
that infrastructure is exemplified by the so-called “business castle towns”
of Japan, which exist primarily because of the technology and growth of many companies,
including Panasonic, Toyota, Hamamatsu and Sharp. Each one of these companies developed
highly skilled labor forces and built a huge supply chain specifically for its own
technology advancement. Today, castle towns are the primary contributors to Japan’s
economy, and the strength of the local supply chain continues to support these major
companies to develop next-generation products faster while maintaining high quality
The optics industry in Japan has been established for more than
100 years, beginning with an optical research lab in Tokyo in 1906. It also saw
the production of rangefinders during World War I. Since then, the nation has
continued to develop pockets of excellence for research and manufacturing of precision
glass, filters, coatings, aspheres, precision optical assemblies, electro-optics
and many more supporting products. These same pockets have supported industries
including precision zoom lenses, photolithography, dense wavelength division multiplexing
filters for the telecom boom, cover glass for flat panel displays and laser-based
One example of Japan’s excellence in precision optics engineering
and manufacturing is its asphere (Figure 1) production capabilities, which originated
from initial developments in the camera lens industry. As market demand for camera
lenses continued to increase, so did its technology and capabilities.
Figure 1. The Aspherized Achromat is a great example of how using Japan’s highly
developed precision asphere technologies helps develop innovative next-generation
Although the manufacturing of many high-volume asphere lenses
has since moved to Taiwan and China, Japan still retains the skill and precision
needed in both the high-end consumer and industrial markets as the direct result
of the market for today’s large-format high-resolution cameras. Furthermore,
markets including flat panel displays, solar panels and microscopes have benefited
from Japan’s asphere capabilities.
A key to the viability of the country’s precision optics
industry is that vertical integration is less common in Japan than it is in many
US and European factories. Rather, companies are likely to specialize in a specific
process of the manufacturing line while using partners with an equally skilled labor
force to support the other processes needed for creating the end product. Through
these partnerships, the Japanese optics industry can react quickly to its customers’
Although an optics maker in Japan may be vertically integrated,
oftentimes it will have three or four partners for each process stage to support
its needs. Some partners are used for fast and low-cost processing, while others,
for expansion of capabilities. For example, when one supplier is holding up delivery
because of factory loading capacity, another can support those processing needs
and maintain fast end-product delivery. Also, if an optics company doesn’t
have the skill or the machine needed to meet a particular specification, it is likely
that one of its partners can assist.
Along with cost, a second primary factor that companies should
use for deciding the location of their manufacturing operations is an evaluation
of local customer needs and market potential. A substantial local market means revenue
without incurring substantial shipping costs.
Having the second largest gross domestic product in the world
and an industry filled with high-end products, Japan’s domestic market for
precision optics is thus another key reason to maintain operations in the country.
The large market size, the skilled work force and the nature of customers within
the Japanese market lead to great potential for specific precision optics. To meet
customer expectations, Japanese manufacturers continue to have a strong commitment
to quality, on-time delivery, short lead times, small-batch production and long-term
Next-generation products are hitting production lines every three
to six months, depending on the market. This market demand requires taking the steps
from design to prototype to production equally fast. To meet these demands, design
and production engineers must work seamlessly together. However, many foreign companies
have struggled to meet the needs of Japanese customers because of breakdowns in
communication. For many of the reasons stated above, Edmund Optics Inc. and other
foreign companies have added production and engineering support in Japan to support
local customers (Figure 2) while expanding their capabilities to support their global
customers’ product needs.
Figure 2. The glass molded multilens array
is an example of precision optical components that require precision machine fabrication
and highly skilled labor, such as exist in Japan, for effective production.
With its highly skilled labor force, reliable network of manufacturing
connections and support from both the government and local markets, Japan still
provides an excellent home for precision engineering and manufacturing activities.
Combined with the high quality, reliability and fast prototype-to-production requirements
from many industries today, this means that Japan will continue to be a leader in
the precision optics markets.
Meet the authors
Timothy Paul Kennedy is president and Kaz Shibata is senior sales
manager, both at Edmund Optics Japan Co. Ltd.; e-mail: email@example.com