Venturing into Global Market
Multidrill sales promotion strategy based in Changzhou and Shanghai
Global Multidrill manufacturing sites deployed
in Europe, America, China and Southeast Asia
Multidrill production began with the establishment of the drill manufacturing company Tokai Sumiden Precision Co., Ltd. Subsequently, Multidrill production sites expanded to Europe, America, Southeast Asia and China.
“Our mission is to offer a total solution to drilling by providing the Multidrill, that is, to deliver sound high-quality products to users in a reliable manner, while meeting diverse needs that change with time. My wish is to constantly pursue the provision of Sumitomo quality on a global scale at the mother factory of the globally expanding network of drill bit manufacturing sites. For this purpose, Tokai Sumiden Precision is vigorously holding workshops for engineers at overseas manufacturing sites and sending technical instructors to them.” (Toshiaki Ito, President, Tokai Sumiden Precision Co., Ltd.)
As described earlier, the overseas production of the Multidrill began in Germany in 1989 and expanded to the United States, Southeast Asia and China. Due to the globally growing demand for automobiles and construction machines, the production and sales performance of the Multidrill is currently very favorable both in Japan and abroad. In Europe, it has shown a stable trend, while in the United States, demand for the Multidrill is rapidly growing because automakers are establishing new plants. Southeast Asia is expected to experience an explosion in demand for automobiles as a result of improving standards of living along with economic development in the future. It has been pointed out that this will lead to growing demand for the Multidrill. Finally, the remarkable area is the huge market in China, which is expanding every year.
Committed to delivering Sumitomo quality based
on local production and consumption
In 2011, Sumitomo Electric Hardmetal Manufacturing (Changzhou) Co., Ltd. (SHMC) was founded as a Multidrill manufacturing base in Changzhou, China, which is rapidly growing as a model industrial city. In 2012, SHMC started to operate in full.
“With the basic policy of local production and consumption not only in Changzhou, but also at other overseas manufacturing bases, we aim to manufacture products locally and supply them to local manufacturers and service providers. The production has been successful due to the growing Chinese market, working in our favor due to its favorable economic conditions. However, China’s local cutting tool manufacturers are becoming prominent in the area of drilling. Thus, the competition has become increasingly tight,” says Koji Yoneoka, President, SHMC.
Under these circumstances, SHMC adheres to the following principle: “For a manufacturing base, the first priority is to deliver products with stable quality, which is a source of competitive advantage.”
“The Multidrill is used under various settings. We are the manufacturer of the Multidrill. We believe that our greatest mission is to enable drilling with stable quality under all kinds of conditions, that is, to provide and maintain the Sumitomo quality. It is also important that the employees share the Sumitomo Philosophy and the Sumitomo Spirit, which is considered to lead to quality maintenance or improvement and also to worksite improvement,” says Yoneoka.
Exploring new and enhanced services
with sales network throughout China
With its office established in Shanghai, China, Sumitomo Electric Hardmetal Trading (Shanghai) Co., Ltd. (SHMS) distributes the Multidrill and other cutting tools. The company operates 15 sales branches throughout China and sells products to some 7,000 end user companies through about 50 sales agencies. In this business, technical support is critical.
“The job of the technical staff is to troubleshoot problems. They go to every part of China. They are required to identify the cause of the problem, make an unerring judgment, and solve the problem as soon as possible. Their appropriate and sincere responses help gain trust from users,” says Tetsu Fukumori, General Manager, Engineering Dept., SHMS). This business strategy is possible thanks to the support of tool engineering center.
The annual sales growth rate of SHMS has been 10% to 15%, which however, does not mean an increase in market share. The point is how to be successful in fierce competition with China’s local manufacturers. Masayuki Ido, President of SHMS, aims to provide enhanced services unavailable from China’s local manufacturers, taking the current opportunity to meet the demand for highly versatile next-generation Multidrills.
“The manufacturing industry is entering the age of Industry 4.0, making the most effective use of IoT. Our next challenge is to introduce IoT and other cutting-edge technologies to our business. This includes data on how our products are used and in what conditions they are, which can be analyzed and used to improve our customers’ worksites. Providing these new services to our customers, we will differentiate ourselves from our competitors and make the presence of Sumitomo Electric’s drills outstanding in the Chinese market,” hopes Ido.
Atsushi Murayama, General Manager, Hardmetal Div., says, “We are unable to be competitive in the current price wars. To secure further market share, it is critical for us to offer better services. Specifically in China, the key point is to strengthen the system for providing tool re-sharpening services. Re-sharpening extends the service life of high-quality drills, thereby improving their cost-effectiveness. I believe that, for our customers to understand this and be convinced, it is necessary to plow ahead in providing relevant educational programs.”
Tool Engineering Centers (TECs)
Tool engineering centers, annexed to 12 manufacturing bases in Japan and abroad, support manufacturing conducted at our customers by providing training programs and technical consultations on cutting work that uses the Multidrill and other tools. These TECs offer services extending to manufacturing process improvement, as well as the provision of various lectures by identifying challenges and suggesting ideal solutions for customers’ production processes.
The TEC located in Germany is named the European Design & Engineering Center. This TEC is unique in that it has a support system not only for machining, but also for design and development.
Feedback from customers participating in lectures
Mr. Xiaoming Zhu (auto parts manufacturer)
“Since we began to use Sumitomo Electric’s drills, our capacity utilization rate has increased, enabling cost reduction. The lectures were very meaningful for me in terms of taking suitable action to deal with problems.”
Mr. Hongyin Liu (mold manufacturer)
“Sumitomo Electric’s drills are four times more efficient than high-speed steel drills. They are revolutionary tools at manufacturing sites. The lectures featuring a variety of topics provided me with beneficial information.”
From left
Zheng Cai
General Manager, Market Dept.
Sumitomo Electric Hardmetal Trading (Shanghai) Co., Ltd.
He manages Tier 2 distributers and plans exhibitions, campaign projects and other sales promotions.
Xinbo Yu
Manager, Engineering Group, Engineering Dept.
Sumitomo Electric Hardmetal Trading (Shanghai) Co., Ltd.
He is in charge of workshops and troubleshooting. His service area covers all of China.
Qihui Zeng
Manager, Shanghai Sales Group 2
Sumitomo Electric Hardmetal Trading (Shanghai) Co., Ltd.
As a sales staff member, he primarily works on providing support to sales agencies.