Abstract

Innovation required to production goods companies is solution proposal that brings great value for their customer companies. If a company can make proposal to increase sales and profit and reduce cost for its customer by combining own products with proposals made at customer’s job site, the customer will gladly pay large price according to the cost-effectiveness they realized.

The book, from this perspective, explains both logic and practice of innovation taking KEYENCE, Japan’s most successful company managing production goods business for example.

KEYENCE sells and manufactures automatic control equipment and measuring instruments. With the corporate policy “maximum added value with minimum capital and human resources”, the company have achieved average over 40% operating profit margin, the highest level of business performance among Japanese manufacturers, for over 30 years until FY2020. In FY 2021, it achieved operating profit of JPY418 bil to be one of the leading manufacturers in Japan.

The key to value-creation for KEYENCE is to explore “potential needs yet to be actualized” with “products that do not exist in the world”. The company contributes to the expansion of customer profits by freshly recognizing that customers “needed something like this” and offering what they are really happy with, instead of just offering what customers wanted.

This is a first book written with the corporation of KEYENCE that had never accepted surveys or interviews by researchers. It logically explains why KEYENCE keeps on growing.

Author’s Information

Born in Hiroshima Prefecture in 1959. After graduation from School of Engineering at Osaka University, joined Mazda Motor in 1981.
MBA graduate at Massachusetts Institute of Technology in 1988. Received PhD of Business Administration at Massachusetts Institute of Technology in 1993. His teachership includes Associate Professor at Research Institute for Economics and Business Administration of Kobe University in 1994, Professor at Research Institute for Economics and Business Administration of Kobe University in 1999, Professor at Institute of Innovation Research of Hitotsubashi University in 2008, and Professor at Osaka University Graduate School of Economics in 2018. His key books include “Multi-project Strategy” (Nikkei Economic Book Culture Award, Yuhikaku, 1996), “Thinking Beyond Lean” (Co-authorship, translated in Chinese, Korean, and French, Free Press, 1998), “Knowledge on Product Development” (Nikkei Bunko, 2002), “Management Text MOT Introduction to Technology Management” (Nikkei Publishing Inc., 2006), “Management Theory for Value Creation” (Nikkei Publishing Inc., 2011), and “Manufacturing with Art Thinking” (Nikkei Publishing Inc., 2021).