Message from the Chief Monozukuri Officer

Pursuing the Next Generation of Monozukuri by Combining Human Ingenuity, Technology, and Digital Innovation

Jiro Ebihara
Senior Executive Officer
Chief Monozukuri Officer (CMzO)

DENSO’s strength lies in manufacturing foundations that the Company continuously evolves through production technology innovation and on-site improvements. We have accumulated an abundance of excellent manufacturing capital that includes a network of production bases throughout the world and organizations and employees with the expertise and skills needed to implement and realize initiatives from development to mass production. Drawing on this capital, we will build a global production and supply system that can both adapt to uncertain external conditions and keep pace with the operational changes accompanying the revolution resulting from the increased production of connected, autonomous, shared & service, and electric (CASE) vehicles. At the same time, we will pursue ambitious, new-era manufacturing initiatives that address such social issues as environmental regulations and population decline.

DENSO’s Unwavering Commitment to Monozukuri

Since its establishment, DENSO has maintained the philosophy of creating things that do not yet exist in order to meet the needs of its customers. Guided by this philosophy, we have developed and created various materials, processing methods, and production lines, all through the use of our own technologies. To win out against intense competition, it is crucial that we innovate our Monozukuri activities by advancing individual technologies in materials, processing, assembly, and production systems; strengthening the skills that support the production front lines; and accelerating the utilization of data acquired from production processes through the use of digital and AI technologies. Innovation is driven by human ingenuity. We believe it is important that our people, who support Monozukuri activities, have a clear understanding of their role in creating new value and consistently engage in their work with a sense of purpose.

As the external operating environment continues to undergo significant changes across the world, we will continue to refine the Monozukuri values that we have cherished since our establishment. At the same time, by establishing links between our manufacturing strategy, business and management strategies, and human resource strategy, we will further reinforce our manufacturing capital.

Manufacturing Capital Strengths and Strategies

To continue to meet the expectations of its diverse stakeholders, DENSO must achieve sustainable business growth by responding to changes in the operating environment, expanding its business domains, and keeping pace with rapidly evolving technologies, all while working to resolve social issues that are becoming more complex and sophisticated. To that end, it is essential that we further strengthen the manufacturing capital that we have accumulated to date. Specifically, we will do so by combining our global production and supply capabilities, which are the result of a basic policy of manufacturing close to markets and customers; our resilient supply chains, which connect our suppliers, global production bases, and customers; and DENSO-style Monozukuri, which continuously creates value by using advanced technologies and production sites to realize appealing products.

With respect to our global production and supply capabilities, we will replace portfolio businesses in line with the progress of the CASE revolution while optimizing production and supply capabilities in each region by shifting to growth businesses and consolidating production globally and within regions. In conjunction with these efforts, DENSO will bolster business continuity capabilities through bridge production, the maintenance of high-risk inventories at appropriate levels, and other measures. These measures will ensure stable production even in volatile conditions, thereby minimizing costs. To bolster the resilience of supply chains, we will lead industry-wide efforts to promote fairer business practices across the automobile components sector while addressing supply–demand imbalances and shortages of semiconductors and electronic components. At the same time, we will tackle related challenges by streamlining our own logistics operations and engaging with the entire supply chain through digitalization and other innovations. In addition, we will work with our customers and suppliers to build a resilient supply chain, taking on the challenge of addressing social issues, such as a declining and aging workforce and, more recently, a shortage of truck drivers.

Meanwhile, for DENSO-style Monozukuri, we are accelerating initiatives aimed at strengthening concurrent engineering, which enables the simultaneous development of production technologies from the product planning stage, and promoting carbon neutrality and productivity improvement initiatives that are based on data analysis and product production line automation. At the same time, we are conducting strategic investments involving the incorporation of innovative technologies in the growth domain of CASE. Also, with our sights set on the period from 2030 to 2035, we will boost engineering and the development of production technologies in relation to the hydrogen business and other new business fields and the manufacturing circular economy (utilization of recycled materials) by employing original technologies and advanced skills developed for internal combustion engine products.

Global Production and Supply Capabilities

DENSO has built highly competitive production structures in five countries and regions: Japan, North America, Europe, Asia, and South America. At our production bases worldwide, we aim to achieve leading levels of quality, cost, and delivery in each region. As well as reweighting our business portfolio to accommodate the CASE revolution, we are currently building a production and supply system with a resilience to change and fluctuation that enables stable delivery of products to customers even in an environment where various geopolitical risks are emerging. For growth businesses, we aim to build a worldwide production system and raise production capacity. As part of these efforts, we will step up the manufacture of inverters—a key product for vehicle electrification—by seeking an early transition from internal combustion engine plants to electric vehicle component plants and by pursuing a plan to supplement existing production capabilities in Japan, North America, China, and Europe through the establishment of inverter production in India and countries within the ASEAN region.

Bolstering the Resilience of Supply Chains with a Focus on Addressing Social Issues

Recently, there has been an increase in disruptions to logistics activities due to factors such as climate change-driven natural disasters and pandemics. Under these circumstances, there is a growing need to bolster the resilience of supply chains that connect suppliers, global production sites, and customers to ensure sustainable growth, while working to address social issues such as driver and other logistics worker shortages brought about by population decline as well as the need to reduce CO₂ emissions resulting from the transport of materials and products.

As a key player in the logistics industry, DENSO is striving to realize attractive logistics environments where all employees involved in the supply chain, from truck drivers to cargo handlers, can work safely, securely, and with a sense of fulfillment. To that end, we are taking on the challenge of streamlining and digitalizing logistics operations in collaboration with both internal and external partners.

On the front lines of truck transport, we have introduced route-based rotation schedules for drivers to eliminate extended distance driving over long periods of time. In addition, we are proceeding with the introduction and trial verification of automated forklifts in order to simplify the work environment and eliminate non-driving-related tasks. We are developing automation technologies for work involving the handling of cargo to eliminate repetitive and physically demanding tasks.

We are striving to expand the reach of these initiatives across all of society and bolster the resilience of supply chains through logistics in such ways as promoting collaborative transportation with other Toyota Group companies on a trial basis as well as spearheading efforts to formulate guidelines for logistics efficiency as a key company in the Japan Auto Parts Industries Association and promoting their adoption among 446 member companies.

Trial Verification of Collaborative Logistics with Other Companies

DENSO-style Monozukuri

DENSO aims to strike a balance between promoting extensive automation and creating attractive plants in order to resolve such issues as the declining workforce and the lack of young workers in manufacturing. To that end, we aim to establish attractive Monozukuri environments that maximize human potential. By freeing people from repetitive tasks on the front lines, we will enable them to focus on creative work—generating new ideas and engaging in tasks that only humans can do. At the same time, we will continue to pursue the Just-in-Time philosophy of producing only what is needed, when it is needed.

As part of these efforts, we are constructing the new Zenmyo Minami Plant, which will serve as a flagship for DENSO’s next- generation plants. At the new plant, we are working to realize 24-hour unmanned operation to enhance responsiveness to fluctuations in demand and new workstyles that leverage digital technologies in order to maximize creative work and tasks that only humans can do. To accomplish these goals, we will automate simple tasks within logistics and inspection work that take up people’s time while flexibly making use of small teams of workers when needed to conduct maintenance work such as repairs and equipment condition monitoring. By doing so, we will help workers balance creativity with efficiency while also making it possible to operate production lines freely and at any time of day, thereby enabling a new production system that is both highly competitive and able to respond flexibly to demand fluctuations.

In terms of workstyles, we will draw on globally connected data from plants that is constantly monitored and analyzed to facilitate environments where strategic decision-making and expert-led initiatives can be carried out swiftly and without geographical constraints. We have already begun to conduct these types of initiatives at existing plants, targeting specific production lines and tasks. In these ways, we are striving to realize more advanced DENSO-style Monozukuri.

Example of Value Creation
Pursuing the Next Generation of Monozukuri by Combining Digital and Physical Technologies

DENSO is utilizing “digital plants,” which are plants with built-in virtual spaces, with the aim of realizing global production operations as if all plants were under one roof.

In frontline divisions, we are working to nurture multi-skilled personnel who can handle various tasks such as machine operation, transport, and maintenance. As we do so, we are making use of digital plants so that such personnel can pool together their expertise and swiftly test and implement their analysis and improvement ideas. By making it possible for employees to promptly reflect their ideas in their work, we can enhance their motivation and sense of growth. Furthermore, we aim to create new forms of job satisfaction and value by combining the craftsmanship of skilled workers with digital technologies.

For departments that are indirectly involved in production activities, such as the production technology and production management departments, we make use of our digital plants to run simulations and make optimizations before we introduce new equipment or make changes to processes. By doing so, we are able to maximize the effectiveness of changes while avoiding doovers, thereby helping our employees enhance their level of expertise. Moreover, we are making it possible to conduct operations at multiple plants on a remote basis, which in turn expands the scope of our production activities and enables more diverse workstyles.

At the Anjo and Daian plants, we have established our first production control rooms that are able to assess the real-time conditions within plants using video and data. These rooms allow a single operator to quickly detect delays or monitor progress in production, identify bottlenecks in the process, and respond accordingly across multiple lines. Through these efforts, we are conducting trials for model production lines with the aim of halving the number of operators needed for overall plant operations. Furthermore, at the Zenmyo Plant, we have put in place an environment that enables discussion on maintenance operations in real time with overseas locations that produce the same products, making use of live video feeds to collaboratively identify issues and examine solutions. Looking ahead, we will work to expand these initiatives to other plants as we pursue sustainable improvements in productivity through mutual growth and support across our global operations.