July 28, 2009,09:01 +0900(JST) Completion of new company dormitories

At Sumitomo Electric, we approach personnel education from a long-term perspective, believing that human resources are the source of corporate competitiveness. Accordingly, we make maximum efforts towards training our young employees who will lead the company's future, including providing them with a good living environment so that they can devote themselves fully to their work with a sense of peace and security. Recently, four new dormitories for our young employees have been completed in Osaka, Itami, Takarazuka and Utsunomiya.

We had made the bold decision to have these dormitories built for the growth and development of future generations. These facilities will mainly accommodate female employees whose number is expected to increase in the future, technical employees who are indispensable for sustaining the company's manufacturing abilities and their accumulation and transmission, and trainees from outside Japan who are also expected to increase amid growing globalization. The timing was also good for this decision: existing dormitories built during the period of Japan's rapid economic growth were already in deteriorated condition and required the rebuilding. The other day I visited the brand-new dormitories in Osaka, Itami and Takarazuka. So I'd like to tell you about them here.

Cafeteria in one of the new dormitoriesThe conceptual slogans of the new dormitories are "Refreshing & Communicative," "Green & Clean," "Open & Secure" and "Diversity & Privacy." The results of all the intensive planning and hard work by those concerned were so remarkable that I even felt sorry for older employees who can't live in them. As these slogans suggest, our new dormitories feature a good balance of private and common spaces, green spots, high-level security systems, women-only areas and special arrangements in consideration of overseas trainees with different daily customs.

Personally, I find the dormitory in Itami particularly attractive. It is located next to Sumitomo Multi-purpose Sports Field, with a commanding view of Koya Pond from its windows. I recall nostalgically how I used to jog around the pond every day when I was working at Itami Works. In such an ideal living environment, I think I could live here (the people there may not like having me around, though...).

Exterior view of the dormitory in Itami with Koya PondIt was a very long time ago that I lived in the dormitory for single men. Yet, I still see my former fellow dormitory residents with whom I had meals and enjoyed drinks together. Moreover, personal ties I developed while living in the dormitory have proven useful for pursuing my work on several occasions.

Now that we have a dormitory for women, applicable female employees will live there at least during their first year at the company. I hope that living under the same roof with other Sumitomo Electric employees will enable them to interact actively with those from the same and other classes regardless of their ages, years of service and working divisions so as to expand their networks and improve their interpersonal skills.

My calligraphy The dormitory in Osaka is called Koki Ryo. The two Chinese characters for Ko and Ki are taken from the phrase "Kozen-no-ki" found in “Mencius (Meng Tzu),” the first volume of the collection of dialogues between the Chinese philosopher Mencius (372-289 B.C.) and one of his disciples, Gongsun Chou. The phrase signifies spiritual tranquility, generosity and strength undisturbed by circumstances. This name was originally conceived by Mr. Genichiro Shikata, who used to be Sumitomo Electric's human resources manager and who passed away while serving as director. This name has been given a new life after being unused for a while as the number of company dormitories has diminished. The calligraphy of the name in the photo below is mine. I do hope that living in this dormitory will somehow inspire its young residents to cultivate kozen-no-ki in themselves.

July 22, 2009,09:46 +0900(JST) Presentations of kaizen activities

Kaizen, or continuous improvement, has constituted the foundation of competitiveness of the Japanese manufacturing industry. At Sumitomo Electric, we conduct our kaizen activities on a global Group-wide scale. Recently, I served as the chairman of Sumitomo Electric Group "G-katsu" Presentations for FY 2008 held at Itami Works. Prior to this event, some 700 teams had gone through screening within the Business Units, the R&D Group or regional conventions in Huadong or Huanan areas in China. The eight best teams that had won out in this process presented their activities.

The presentations reported a wide range of activities designed to make improvements in the S-E-Q-C-D-D (Safety, Environment, Quality, Cost, Delivery and Development) aspects of manufacturing, including routinization of complex manual tasks, stock reduction of parts and components, prevention of intrusion of unrelated materials, reuse of raw materials, creation of foolproof methods, and thorough application of working standards. In the workplaces represented, members had set up management criteria to quantify and standardize their tasks, thereby repeating the process of “decide-do-correct-redo,” with ingenious ideas for firmly establishing their control systems.

This year, from outside Japan we had two Chinese teams and another from the Philippines, reminding us of the rapidly progressing globalization of the Group. Unfortunately, however, the Philippine team had to cancel their trip to Japan at the last moment due to the outbreak of H1N1 flu in a nearby area. Instead, they took part through a video presentation prepared over there. Overall, it turned out to be a lively cosmopolitan event, with presentations given in Japanese, English and Chinese.

It was extremely difficult to decide which team was the best, but in the end, the President's Award went to the team representing Sumiden Electronics, Ltd. (Tsu City, Mie Prefecture) for its proactive approach to improvement involving upstream processes and its presenter's impressive enthusiasm.

Commemorative photo of participantsThe winning team (Sumiden Electronics, Ltd.), including Ms. Seko (left), the presenter

I was quite satisfied with the presentations at the event, which demonstrated concrete positive results of Sumitomo Electric Group people's efforts toward formularization of unwritten knowledge and quantification of the qualitative, which I have been asking for on various occasions. I was also pleased to listen to reports of various success stories in which workplaces learned to do something better through improvement activities carried out with everyone’s participation, thereby removing wastefulness or enhancing the workplace's teamwork.

Amid the ongoing crisis triggered by the collapse of Lehman Brothers, we are now undergoing a paradigm shift, with drastically decreased demand. I believe that in a period of such a major change, "non-conformists with a solid backbone" can skillfully find ways out. We are being put to the test, to demonstrate the vitality with which we break through the walls of difficulty, and the originality that keeps us from being submerged in the stream of the times, in other words, the "Ingenious Dynamics" that has always been alive and present at Sumitomo Electric. A manufacturing company’s factories and industrial sites represent its treasure houses. The accumulation of steady efforts in these places brings profit to the manufacturing company. I was very much satisfied with the presentations of the kaizen activities since they suggested full-scale deployment of "Ingenious Dynamics."

July 6, 2009,09:01 +0900(JST) Thanking people for their fire-prevention activities

Since olden times, the Japanese have had this famous list of the most frightening things in life: earthquake, thunder, fire and father (oyaji). Originally, the latter word on the list was oyamaji, which means typhoon. So the original list contained only natural disasters. Speaking of natural disasters, an aphorism by the scientist Torahiko Terada (1878 - 1935), well-known as a protégé of the novelist Soseki Natsume (1867 - 1916), comes to my mind: “Natural disasters occur just when we have forgotten about them.” Therefore, as you know very well, the best basic defense against natural disasters is preparedness. A natural disaster occurring to an unprepared site leads to human-caused disaster, multiplying the damage. Among human-caused disasters, fires can be particularly devastating, with damage, inconvenience and fears spreading to neighbors and surrounding areas. This is why Sumitomo Electric’s respective workplaces carry out regular fire-prevention training and activities as one of their top priorities.

Last week, our Osaka Works held a two-day firefighting skill competition as part of its fire-prevention training. Several teams represented different workplaces of Osaka Works: 11 three-person teams competed in the handling of fire extinguishers and 9 four-person teams competed in the operation of fire hydrants. In the presence of the Plant Manager and section chiefs, who came to cheer for all the contenders, the teams were graded for the exactitude of their basic movements and the time required for the firefighting they performed under their respective leader’s instructions. Victory was determined only by a narrow margin, for all the participants were determined to do well as representatives of their workplaces, and had repeatedly practiced their moves coached by the Works’ fire-prevention staff. I’m impressed by the great work demonstrated by the competing participants, and really appreciate the generous support offered by the Safety & Environment Group and the fire-prevention staff. Let me show you a bit of their performance.

As for the competition results, the Osaka Research Group won the fire extinguisher category, and the Superconducting Manufacturing Group won the fire hydrant category. The four winning and runner-up teams are expected to participate in the Konohana Ward firefighting skills competition to be held in September. I hope they will do their best to achieve victory as Sumitomo Electric representatives.

Presentation of Osaka City Fire Department letter of appreciationWhile we carry out such activities on a regular basis to raise the firefighting consciousness among our employees and improve our sites’ fire preparedness, I recently received encouraging news that one of Osaka Works staff received a letter of appreciation from the Chief of the Osaka City Fire Department for his life-saving action in a fire.

Although the person concerned asked that we not make a big deal out of this, I made arrangements so that he’d also be presented with a letter of appreciation from the General Manager of Osaka Works, on behalf of the Company. I’d like to send him my personal words of thanks for his apt and courageous action: Good job, and thank you!

I hope that all of Sumitomo Electric will continue its fire-prevention activities, with a firm determination never to cause a fire, but to try to minimize the damage in the event of fire.

July 1, 2009,11:49 +0900(JST) Agribusiness

Do you know Japan’s food self-sufficiency rate? According to the latest data, it’s about 40% in terms of calories. While few Japanese need be concerned about food shortage on a daily basis, I suppose many would feel uneasy on hearing this figure.

Back in the 1970s, Japan’s food self-sufficiency rate was 60%. In those days, Mr. Kazue Kitagawa, Chairman of Sumitomo Electric, was already trying to spotlight the issue in his lectures. The company entered into agribusiness, drawing on the quality control and industrial engineering expertise it had developed in industrial production. For about 30 years, we worked on commercializing sand culture, advocated by Professor Emeritus Fukushima at Kyushu University.

In 1974, the company constructed an experimental facility of 10,000 m2 on the premises of the former Kanto Works (in Kanuma City, Tochigi Prefecture, north of Tokyo), to begin cultivating fruits and vegetables using a method called “Sandponics,” a coinage combining “sand” and “hydroponics (soil-less culture).” In 1977, the company relocated its agribusiness base to Yokohama Works, expanding its fruit and vegetable cultivation on a scale corresponding to 10 ha in total area. This was done in collaboration with, at one point in time, some 150 contracted farming families throughout Japan. In the meanwhile, between 1982 and 1984, the company dispatched engineers to Abu Dhabi in the United Arab Emirates to provide instruction in experimental cultivation on desert land, with an eye to realizing desert agriculture in anticipation of a worldwide food shortage. Unfortunately, we withdrew from this project in 2003, due to problems relating to price competitiveness and unstable output and unpredictable purchasers.

The other day I learned that some farming families are still growing fruits and vegetables by the Sandponics method and that their tomatoes were exceptionally delicious, having a distinctive flavor without being watery. I was touched by the fact that our expertise was still in active use, even though we have discontinued the project.

Food shortage is becoming a major problem for all forms of life on earth, against the backdrop of such factors as population increase, economic progress in developing countries and global climate change in recent years. In view of this situation, general interest in agriculture and related issues is growing in Japan. The Ministries of Economy, Trade and Industry, and Agriculture, Forestry and Fisheries are promoting collaboration of the country’s agricultural, commercial and industrial communities. In March 2009, Nippon Keidanren (Federation of Economic Organizations) published its proposal concerning the reinforcement of Japan’s overall food supply capabilities. The general public is becoming increasingly interested in more effective use of farmland, possible revision of the Agricultural Land Act, international collaboration based on the WTO-EPA (Economic Partnership Agreement) and food safety and security.

In the face of the worldwide environmental and resource problems, some technological explorations of 100 years ago have come back to life, giving rise to development races in the auto industry, in which cutting-edge hybrid cars are already expected to be surpassed by electric cars before too long. I have heard that some of the farming families still practicing Sandponics urged Sumitomo Electric to get back into agribusiness. In fact, there have been some news stories recently of companies venturing into agribusiness. The waves of globalization are largely influencing not only industry, but also agriculture, which is undergoing major changes because of diverse technological advances. Forty years ago, Sumitomo Electric was perhaps a little too far-sighted regarding agribusiness. Today, it seems to me that it’s worth seriously considering how our group’s technological prowess can be put to effective use in agribusiness, including plants and flowers -- and this is not simply because I’m a great admirer of natural beauty.

SUMITOMO ELECTRIC President CEO Masayoshi Matsumoto

Born in 1944 in Hyogo Prefecture, Masayoshi Matsumoto joined Sumitomo Electric in 1967. After serving as General Manager of Chubu District Office, Managing Director and Senior Managing Director, he assumed office of President and CEO in June 2004.

His leisure activities include jogging, reading and art appreciation. Also a seasoned athlete, he played baseball in junior high school and practiced judo in senior high school. In university, he threw the javelin competitively and participated in all-Japan inter-university competitions.

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