Innovation for Global Business: Meeting the Ever-Increasing Demands of Clients - A Case Study

I have been working in the global eyeglasscan, as always."For my business, this often killed the
manufacturing industry, supplying raw materials, partschances of finding a non-Japanese source for
and accessories to distributors and manufacturerssupplying my clients in the Chinese market. This way
around the world, since 1999. When I first began, thereof dealing with a request is a dead end because it
were manufacturer pockets around the globe indoes not meet the customer's needs. Here are the
various countries. As time went by, like many industries,reasons why:1) Optical customers have no way of
the demand for cheaper products consistently borecutting huge standard sheets down to size. They need
weight on the drive to decrease cost, which led tothe smaller cut sizes from the beginning.2) Their
manufacturing in China. The economies of scale asmachinery is much smaller in scale than automotive,
well as the very low cost of manual labor helped tobuilding, aerospace industries, therefore need smaller
drive the exodus to China. Difficult products are stillcut sizes of material.3) Factory loading and receiving is
being manufactured in small clusters around the world,much smaller in scale therefore huge pallets cause
however the "meat and potatoes", the "grunt work"major problems. Hand-carry-able sizes of material are
has moved offshore to China.Titanium (pure or alloyed)essential.4) Scratches on the surface of the hard
wire and sheet is the preferred material to maketitanium cannot be removed through polishing of parts
frames of these days. The unit cost is very expensiveto get the gloss finish that is required for eyeglasses;
compared to ferrous metals, however the propertiestherefore best quality surface and proper international
are far superior. It is much more difficult to work thanpacking is critical.5) Eyeglasses are fashion. The
regular metals during the 200 step process to make afashion industry is critically volatile and changing
pair of frames. Because of this, technology was oftenextremely quickly. The optical industry gets orders for
limited to countries like Germany and Japan whoglasses and must deliver in the shortest possible time. It
invested a long time ago in developing processes totakes three months to make one order. Manufacturers
work this material. Japan has been selling a lot of itscannot be waiting three months for material before
technology to China in the past decade so that now,they start to produce. They choose the vendors that
standard titanium eyewear is usually made in China atcan supply from ready stock or in the shortest time
a lower cost than Japan which has led to a lot ofpossible.6) One pair of glasses usually uses about
"restructuring" in the Japanese optical industry. Those10-20 grams of titanium so even 20 kg of one size is a
companies that have a competitive advantage havelarge amount for a manufacturer. They need suppliers
survived (i.e. a specialty), however the "plane Janewho will provide smaller quantities.7) Quantities ordered
Vanilla" types are, to a great degree, gone.People dothese days for eyeglasses have gone from tens of
not know this but it takes approximately 3 months andthousands, to thousands, and now are at minimum
200 steps to make a pair of eyeglasses. There is aquantities of hundreds. Those hundreds are further
huge amount of outsourcing done to specialists whodivided into dozens of colors making the SKU delivery
do various parts of the process. The titanium used inextremely small. Eyeglass manufacturers NEED
eyeglass manufacturing must have a very goodaccess to small quantities of materials relative to the
surface quality. Because titanium is so hard (and yetbig industries. Even in China, everyone is producing
so soft at the same time), it is easy to make deepnow very small runs to meet the needs of the clients
scratches, but very difficult to polish it out. Here, not Iwho must provide a huge variety of product SKUs to
did not say "grinding" because grinding connotesthe market.8) The shipping is also critical so being able
"making smaller", but instead use the term "polishing"to cut down to sizes that will be carried by the post
which results in a smoother, shinier surface with lessoffice, or a very cheap courier is essential. Sending
blemishes. The end result is different, therefore thesmall quantities via Air Cargo, or Sea Cargo is
terminology is different.Because removing scratchesprohibitively expensive. The buyers/the market forces
from titanium is difficult, the manufacturers demand theare driving the selling price down of the eyeglasses.
highest surface quality. Eyeglasses are a fashion, theyBecause eyeglasses from the manufacturer do not
are painted, plated or coated and then worn on thehave a large profit margin, the manufacturers need
face. When you meet someone the first thing you seehelp cutting their costs; expensive shipping is something
is their eyes, and if they are wearing glasses you seepeople are always trying to do away with.9) Most
those. Because of this, the finished surface needs toeyeglass manufacturing of standard (non-niche)
be as blemish-free as possible. Without a smootheyewear (and all metal eyeglasses) is done now in
surface, the paint/plating will not apply evenly and youChina for the reason that China makes it MUCH
will end up with defective product that will not beCHEAPER than anyone else. Most ALL manufacturing
purchased by the wholesalers and distributors to putis done in China these days for the same reason.
on the market. In reality, most end-users may not evenPeople make product in China to DECREASE THEIR
notice the level of perfection that the wholesalers areCOSTS. For the vendors selling raw materials to
demanding. After all, how do you choose a pair ofChina, it is not possible to take 20%, 30%, 40% profit
glasses? You find a color and shape you like, put themmargins unless you have an extremely specialized
on your face, look in a mirror to see if they suit yourmaterial or product. And titanium, even the special
image of yourself, then scan your friend/familymemory alloys have become a commodity therefore
member/store clerk's face and response to see if theirunfortunately though they are expensive to begin with,
impression of the frames on your face seem suitablea high profit margin is no longer a choice. It simply
to them. If so, you buy. If not, you keep looking. Most ofcannot be done.10) Many suppliers do not really do the
the scratches and blemishes that the manufacturers"best they can". They think that mistakes caused by
are required to prevent would not be noticed by the"human error" are unavoidable. This simply is not true.
end user, quite possibly allowing manufacturers toAll factories make defective product but that
decrease their defective count allow them to purchasedefective product should never leave the factory to
lower-priced material and maybe make glasses eventhe customer. This means that proper safeguards
cheaper; however the companies that order theshould be put in place in order to prevent that from
frames go far beyond that in detail.Because of this, thegetting out. This can be done. Guaranteed. But the
manufacturers must have the best material available.question is do the people working the factory floor
This means a very high price compared to otherreally care? This is an issue. It is even MORE critical in
titanium used in non-eyewear industries. There is athis day and age to find a partner that DOES care and
constant drive to find a lower priced titanium materialis willing to improve and take responsibility for products
for eyeglass manufacturing, but to date, the onlythat slip through their net and make it to the customer
material suitable is that which is made by thecausing them inconvenience. We are always looking
Japanese. I have tried supplying US material, Russianfor partners that are continually working to improve
and Chinese but all fail for their various reasons. Thetheir capabilities in all aspects of the project.Even
U.S. material surface is not up to quality because it isthough the eyeglass industry is very small compared
used mainly for "rougher" industrial purposes. Theto the jumbo jet aircraft industry, there is a huge
Chinese and Russian is still unstable in terms ofpopulation in the world who need eyeglasses as a
content.The manufacturers also demand tight"medical tool" (lower income bracket), and those who
tolerances in the material diameter or thickness. Usuallywant the tool to be a fashion statement (higher income
tolerances for titanium in the optical industry are +/-bracket). Because of this, overall, the industry is quite
0.02 or 0.0.3 mm.We have two levels of quality forlarge and the market is definitely there.Since things
titanium sheet here in Japan. One is like a "mirror finish".have changed so dramatically in the past 15 years, and
Obviously it doesn't reflect like a mirror, but it is smooth.the markets have truly become global, it is even more
This is what the manufacturers need. The other oneessential for companies and individuals wishing to
looks like someone slathered a thin layer of epoxy onimprove their market share to be always looking for
the surface and then sprinkled sand over it. Thisnew innovative ways to improve their competitive
CANNOT be used to make eyeglasses.For titaniumadvantage in the market. Those that struggle to find a
sheet, usually anything under 3 mm thickness by Kobe,way to break down the barriers are the ones that
Sumitomo, Shin Nittetsu are usable as is. For thickersucceed. This is why competition is so important and
sizes, the surface gets too rough and we have to usewhy monopolies actually hamper the market. Without
a cold rolled sheet. This meaning I would order 4 mm,competitors there is no need to innovate, offer more
my supplier would have his supplier roll 5 mm down toto the consumer, improve your abilities, increase your
4 mm so the surface was smooth. Again, this processknowledge-base and develop the market in new and
drives the price up on titanium that has already beenunique ways. Without competition none of the
increasing dramatically in the past year.Eyeglassaffordable luxuries we have would ever have been
factories are "small" compared to other industrialavailable at prices the average consumer could
processing plants. The machines are small, handafford.Competition, innovation, education, a demanding
operated, and so forth. The size of the sheets thatmarket of educated users and a burning desire to find
feed into the machines are limited. This means that"the next edge" are essential to a successful
standard sheets (usually 1m x 2m) need to be cut intobusiness.Any companies who are willing to take those
about four pieces in order to be used by mostchallenges and try their luck at the market will likely
manufacturers.The manufacturers of the titanium willsucceed if they keep at it and do not give up, in spite
not cut the standard sizes sheets, however theof the challenges and head-banging they will inevitably
wholesalers who buy bulk and stock in Japan will. Theyface. Any companies like that out there, interested in
know this is necessary for the industry. I have yet toentering the Japanese market with an unique service
find a company outside of Japan that is willing to door product are welcome to contact me any
this; making the sale of sheet extremely difficult to thetime!Cameron has lived and worked in Japan for over
optical industry from non-Japanese sources.My advice15 years. Originally a researcher and educator he has
to suppliers outside Japan is this: This process may bea penchant for details and a natural born flair for
different from what you or your manufacturers arecommunication "soul to soul".His extensive experience
used to doing, but in this global age, we constantlyin the culture, coupled with language fluency and a
have to be innovating and finding NEW ways to dodeep understanding of Japanese ethics, morals and
business. We need to meet the ever-increasingthought processes has allowed him to develop a
demands of our clients and gain a competitivespecial niche market in the business world.While
advantage over the other rivals looking for business.working to develop a global presence for a titanium
The old established ways that worked so well for soraw material / parts & accessories distributor for the
long no longer apply.Here is an example of a situationeyeglass manufacturing world for 5 years, Cameron
that occurred many times over the past sixsaw the difficulties small/medium sized manufacturers
years:Customer: "I need 20 kg of Beta titanium sheetwere having themselves trying to expand their
0.8mm thickness, cut sizes of about 1m x 0.3m. Courierbusinesses outside of Japan. He decided to assist
is too expensive so please send via Post. We urgentlythose kinds of businesses get started
need this material and we need it in goodsuccessfully.Currently Cameron owns and operates a
condition."Supplier: " The minimum quantity 200 kg, andone-man (one dog) SOHO business designed to help
dimensions are 2m x 1m. Delivery is 3 months. WeJapanese and foreign companies come together in
don't pack for international shipping. We don't cut downbusiness in a very efficient, effective, and
to size. We only ship by courier. We send the best wecost-effective successful manner.