Why Optics Manufacturing in Japan Is Still Relevant

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 standards.

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 materials processing.

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 optics.

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’ needs.

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 support.

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: tkennedy@edmundoptics.jp or kshibata@edmundoptics.jp.