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Standardization and High-Mix Low-Volume Production in the Rapidly Growing Module Business
Murata Manufacturing Co., Ltd. is one of the world’s leading manufacturers specializing in electronic parts such as multilayer ceramic capacitors, communication modules, and sensors. It recorded its highest consolidated sales of over one trillion yen in FY2014. Its production technology and product development capabilities are the sources of its continued high-level business results.
The production technology realizes low cost, high quality, and a stable product supply, while the product development capabilities allow advanced solutions to market needs to constantly be offered as well as the introduction of products matching such needs. The communication module business for smartphones is the most prominent example of their product development capabilities. For this issue’s “Executive Guest” Hisaharu Obinata, President and CEO of ULVAC, Inc., visited Mr. Norio Sakai, Fellow, Communication and Sensor Business Unit, from Murata Manufacturing Co., Ltd. and asked him about the roles of production technology and process development as contributing factors for these good business results.
- Guest [Left]
Mr. Norio Sakai
Fellow, Communication and Sensor Business Unit
Murata Manufacturing Co., Ltd.
- Interviewer [Right]
Mr. Hisaharu Obinata
President and CEO, ULVAC, Inc.
*All product trademark notices are omitted in this document.
*This article was released in “PR Magazine No.65 published in July, 2015”
Production Engineering Division as a Part of the Research and Development Division
Obinata: Before we start, I would like to take this opportunity to express our sincere gratitude to Murata Manufacturing (“Murata”) for our long-term business partnership. Thank you.
Now, Murata is a manufacturer specialized in multilayer ceramic capacitors and piezoelectric materials. Many of your products dominate the global market. Meanwhile, your smartphone modules and fine electronic parts, using advanced materials technology, are further expanding your business. Mr. Sakai, you are responsible for the module technology, so let me ask about the module-related process development and production technology. For our readers, Kazuya Saito (Executive Director and the head of the Research and Development Planning Department), Directing Manager of our Research and Development Department, is also joining us today.
Which divisions are involved in production?
Sakai: For the most part, the same divisions as in any other company—general administration divisions such as the Human Resources and Accounting Divisions, business divisions such as the Component, Device, and Module Divisions, the New Business Division in charge of new businesses, divisions in charge of new products, and the Sales Division.
What makes our production unique is the Research and Development Division. While most research and development divisions focus on fundamental research on materials and such, ours has a Production Engineering Division. The Production Engineering Division has approximately 1,000 employees.
Obinata: That’s a lot! When did the Production Engineering Division become the part of the Research and Development Division?
Sakai: About 15 years ago.
Murata is originally an electronic parts manufacturer that processes materials, so it used to place importance on electronics and chemistry but not as much on machinery.
This changed when Akira Murata, the founder became the president. He placed the highest importance on production engineering and positioned it as a type of research and development. He said, “We are making our own materials now. In order to differentiate us from competitors, we should also make our own production equipment.” The production engineers now support production from the Yasu Office.
Obinata: Mr. Murata was far-sighted.
Sakai: Since the semiconductor business is a major business, many manufacturers like your company sell production equipment. While thin films are produced in the semiconductor business, we produce thick films. Since thick film production is such a small market, there was almost no production equipment on sale. A manufacturer in the Chukyo region used to produce it for a while, but the company was gone before we knew it.
What it came down to is that we had to make it ourselves. This is the background of in-house development as I know it.The Production Engineering Division is now a part of the Research and Development Division, and we all understand that it is the combination of materials and production equipment that constitutes the essential part of manufacturing. This understanding drives Murata’s development.
Emergence of Smartphones and Rapid Module Business Expansion
Obinata: As I said at the beginning, your sales are increasing in both the material and module businesses. Recent module sales are as high as the sales for multilayer capacitors, which are Murata’s signature products.
Sakai: Communication module sales are increasing rapidly with the spread of smartphone use. Capacitors account for 32.8% and communication modules account for 30.8% of recent sales.
We were always told that modules were not profitable and left the module business untouched for a long time.
Around 2000, mobile phone motherboards were made with single-chip components known as discrete components.
Modules were hardly used. At one point an assembly manufacturer said to us, “We will not use your modules” and “We would go out of business if we used your modules.”
The situation changed as mobile phones became multifunctional and smartphones emerged. The use of modules started because discrete component designers could not meet the requests for super-fine, multifunctional, and highly functional single-chip components. Market needs for integrating these features into a module arose.
The “Customer Needs First” Development Policy
Obinata: As represented by the corporate philosophy “Enhance technologies and skills, apply a scientific approach, and create innovative products and solutions,”
Murata’s development is far-sighted and is based on the corporate spirit carried on since its foundation. Would you tell us what makes your development unique?
Sakai: As a ceramics manufacturer, we created new products through materials engineering. As time passed and our operation spread to electronic and communication technologies, however, we started to develop new products for these fields. Our strength is creation of new products through integration of all these technologies.
Obinata: And so you’re able to produce such successful products because the new products come into being when technology seeds meet technology needs. Whereas focusing only on the seeds tends to result in development that is nothing more than self-gratification.
Saito: I heard that you make technology roadmaps to develop products systematically. How does making these roadmaps translate into viable business?
Sakai: Development does not always go as planned. A few years ago, our current president Tsuneo Murata defined the most important business philosophy as “continued provision of value which leads to customer satisfaction.” What customers want is more important than what we want to provide. I believe that meeting customer needs is the key to the Development Division creating products that contribute to our business.
Obinata: I have been saying the same thing to my employees. I am now proposing regular technical exchanges with our customers to discover their needs.
Sakai: The purpose of a technical exchange is to understand customers’ concerns and learn new ways to do things instead of simply going over a technical roadmap with them. Faceto-face conversations should allow issues that did not get solved at events like an exhibition to be identified.
Obinata: That’s why it is so important to exchange opinions in person.