Sustainability Nippon Thompson's Value Creation: Business Strategy

Our Group's business is growing worldwide through the supply of machine components that are indispensable to all industries, from electronics-related industries to machine tools and transportation equipment. The core of our value creation is that we provide high-quality products that quickly meet the challenges and demands of our customers.

The IKO brand is highly credible and trusted due to the accumulation of value creation through our sincere activity to solve customers' problems in collaboration with external partners, as well as the business units responsible for the value chain.

At the same time, global society is undergoing a period of historic change, including a digital shift, the evolution of AI and IoT, and social demand for sustainability, including the SDGs. We will address issues that could be potential risks, while continuing to take on the challenge of new growth opportunities where we could leverage the Group's strengths to achieve sustainable value creation.

SWOT Analysis

SWOT Analysis

Direction of Company-wide Strategies

Under Medium-Term Business Plan 2023, in addition to further deepening the strengths developed by each business segment, we will continue with the balanced implementation of expanding and embracing change to respond to medium- and long-term social changes, with the aim of realizing our vision, IKO VISION 2030.

Balanced Management to Continue Creating Future Value

Sales Department

The source of our value creation is our ability to address our customers' needs and then propose solutions that focus on those needs. We want to expand our global niche strengths into new areas.

Toshinao Kimura

Managing Director

In Charge of Sales Department

Environmental Awareness and Issues

The Needle series is the legacy of the IKO brand, and the driving force behind our group growth as a profit generating sources since the Company's establishment. The Linear series and Mechatronics series are expected to grow significantly in the future as we address technological innovations, such as state-of-the-art semiconductor manufacturing equipment and advanced medical equipment. Our broad, well-balanced product lineup, geared toward sustainable growth, is the result of our Sales Department's attentive management of customer feedback, which changes over time, as well as our ability to develop products while foreseeing market trends.

In recent years, the downsizing of machinery and equipment and the reduction of environmental loads have been increasingly emphasized, and our Group compact and maintenance-free products have grown to become our mainstream products. We believe it is essential to continue to identify high value segments that only IKO can provide, while keeping up with the latest market trends, and to develop solution proposals that capture the essence of issues on a global scale.

Features and Strengths

The IKO Group has 50 domestic and overseas sales offices (22 in Japan and 28 overseas), and we are implementing customer-oriented sales proposals by expanding direct sales. We are also strengthening partnerships with highly specialized trading companies dedicated to specific customers and industries, and creating a structure that enables us to provide more extensive and attentive support.

With our legacy as a bearing trading company founded in 1950, the DNA of our Company has been firmly inherited by our current Sales Department. With a strong belief in proposal-based sales activities, and the customer's perspective, we have earned a high level of trust by constantly seeking to add value for our customers, not only by selling our own products, but also by providing sales and services for complete sets of products and equipment in collaboration with our alliance partners.

Policy and Future Initiatives

Under Medium-Term Business Plan 2023, the IKO Group is launching sales initiatives that make the most of the management resources being developed as our assets, including the strength of our product lines, supply capabilities, and human resource skills. First, we are introducing strategic products that aim to become global niche leader products by accurately grasping the needs of each country, industry, and customer, as well as by concentrating resources into prioritized regions and strengthening our business structure. At the same time, to create resources for global expansion, we are also working on human resource development, strengthening cooperation with each business partner, and improving services and marketing strengths through DX (digital transformation).

The Sales Department will use and develop IKO's unique legacy and strengths, which have been inherited and refined, to their full extent, in order to secure profits for investing in growth. Further, the Company will take on the challenges of developing new technologies and entering into new markets, and in this way we realize the sustainable creation of value.

Substantial room for growth in emerging countries and other global markets
Global deployment of the niche leader concept to achieve sustainable growth

Global deployment of the niche leader concept to achieve sustainable growth

Technology Development Department

The source of our value creation is the unique and advanced technological strengths supporting the IKO brand. We hope to grow together with society and our customers by creating “new value” by facing their challenges sincerely.

Shin Kasahara

Managing Director

In Charge of Technology

Environmental Awareness and Issues

As the digital shift accelerates throughout the world, next-generation technologies such as IoT, AI, and smart factories are developing significantly, demand for our products is expected to grow continuously. In particular, the miniaturization of semiconductors and advancements in medical equipment have increased the need for bearings and components with superior specifications, such as “small size, high functionality, and high accuracy,” and the needs for each application are becoming far more subdivided, making the technical issues more diverse and complex.

Our product policy for compactness and high accuracy, which IKO's technical developers have persistently pursued, is in line with current industry trends and is increasing the value proposition of our products in the market. At the same time, in the low-end market, price competition is becoming the main factor, partly due to the rise of emerging countries' companies. Going forward, we will continue to pursue high quality, transform our human resources, and transform our organizational capabilities to take on the challenge of developing new products and services that will drive growth.

Features and Strengths

In the Technology Development Department, we always care about our customers' feedback and place the highest importance on our integrity for solving issues.

We were the first company in Japan to develop needle roller bearings, and have expanded our business domain to include linear motion rolling guides and the Mechatronics series since then.

Our high technological strengths that support the development of the IKO brand of high-quality, highprecision products are the result of the multiple years of experience and knowhow that we have accumulated by working closely with the Production Department to fulfill customers' requirements and overcome challenges one by one.

While the main functions expected of bearing mechanisms are extremely simple—lightweight, smooth, and long-lasting—customers recognize the unique characteristics of the IKO brand, which leads us to where we stand today. The Technology Development Department is taking on the challenge of creating new de facto standards that start with building relationships of trust with customers.

Development of products and services that continue to make a difference for the IKO brand, and the direction of technological innovation

Development of products and services

Policy and Future Initiatives

In our Medium-Term Business Plan 2023, we have set strengthening developers' marketing perspectives as a priority. It is important for developers to visit customers to deepen the dialogue in order to gain a deeper understanding of the value that customers need. For this reason, we are also reviewing our organizational structure and development process flow. We have begun to review our on-the-job training and education programs to help developers to transform their behavior and improve their professionalism.

We will strive to differentiate ourselves by achieving a balance between improvement (market in) development that accurately identifies needs and issues through dialogue and proposal (product out) development that identifies latent needs that customers are not yet aware of, with prototypes of technology-driven products.

Policy and Future Initiatives

Production Department

Pride in manufacturing excellence is the source of our value creation. We aspire to evolve IKO's unique knowhow globally to create high-quality products.

Nobuya Hideshima

Senior Managing Director

In Charge of Production Department

Tooru Okajima

Managing Director

Deputy in Charge of Production Department

Environmental Awareness and Issues

Traditionally, the bearing industry's structure has centered on mass production, mainly for the automotive industry. However, this is changing with the recent shift to EVs. Under these changes, we expect steady demand for the Needle series in the areas we have been focusing on, and upgrading the multi-product manufacturing system we have established will be a challenge for strengthening our competitiveness. In the linear motion rolling guide series, the main challenge is to enhance supply capacity to respond to significant market growth, particularly in the semiconductor industry, as well as to provide “instantaneous power” to respond to the rapidly fluctuating business cycle.

To establish a sustainable supply chain, it is necessary to have production and purchasing that consider the environment and human rights. A healthy, safe, and rewarding work environment is another inevitable challenge. We are committed to our mission of “contributing to the global community through local-based manufacturing.”

Features and Strengths

Our greatest strength in manufacturing is inevitably quality, and our thorough commitment to high quality has earned us the trust of our customers. Our product line can be broadly classified into the Needle roller bearing series and the Linear motion rolling guide series, each with very different characteristics for every business model. Given the differences in markets and business cycles, it is necessary for the Production Department to establish a system that meets these requirements.

The majority of the Needle roller bearing series is for the MRO* market, and the Company responds to orders from all over the world for a wide range of products and lot sizes. On the other hand, we offer the Linear motion rolling guide series with individually customized product sizes and specifications, such as those for semiconductor manufacturing and medical equipment.

The strengths of IKO that support the IKO brand are our commitment to high quality and our unique manufacturing knowhow, including equipment development, process design, production and inventory planning, and collaboration with suppliers, which enables us to optimally respond to requirements for a wide array of products and customization.

* maintenance, repair, and operations

Policy and Future Initiatives

To establish a production system that can respond to customer needs flexibly and quickly, we have set strengthening Q, C, and D, including reducing lead times and strengthening production technology capabilities to achieve these goals as key themes of our Medium-Term Business Plan 2023. More automation and the use of digital technology are also key to refining IKO's unique production model and further improving productivity. In particular, the integrated core ERP system (SAP) introduced in 2016 has improved information sharing and collaboration throughout the value chain, which has been a major force in promoting the current medium-term business plan.

In addition, as global warming gains strength around the world, environmentally friendly manufacturing is a top priority that is increasingly demanded by society. We will not only continue to steadily save energy at our production sites, but we will also actively promote environmentally friendly manufacturing that uses renewable energy sources, such as solar power.

Strengthening the production system throughout the entire value chain

Integrated Core ERP System (SAP)

Strengthening the production system throughout the entire value chain