New Value 1000
Strengthen collaborations and commercialize new products to achieve net sales of 100 billion yen

Senior Vice President Group Executive, Corporate Manufacturing Engineering Atsushi Miyajima, Executive Vice President Group Executive, Corporate NV Creation Ryohei Iwasaki, Senior Vice President Group Executive, Corporate R&D Tsutomu Nanataki

In the NGK Group Vision: Road to 2050, we outline our core strategy for business structure transformation as “strengthening collaborations and commercializing new products to create new value and achieve net sales of 100 billion yen (NV1000).” We spoke with the leaders of the Corporate NV Creation, the Corporate R&D, and the Corporate Manufacturing Engineering, driving forces behind strategy implementation and promotion.

NV1000 is a declaration of our commitment to transformation

- NV1000 initiatives are fully underway at the company.

Executive Vice President Group Executive, Corporate NV Creation Ryohei Iwasaki

Iwasaki:The operating environment influencing the NGK Group is entering a paradigm shift. The shift to electrified vehicles (EV) represents an avoidable situation in which we will see a decline in medium-term demand in products for purifying automobile exhaust. Despite projections for growth in products for semiconductor manufacturing equipment, ensuring sustainable growth for the NGK Group will require that we develop businesses that will become the next pillars of growth for the Group. The NGK Group Vision: Road to 2050, recognizes this situation and outlines the direction we must head to contribute to society by solving the issues facing modern society. NV1000 represents our medium-term goals for R&D, one of the Five Transformations we must engage in to achieve this vision. This goal involves aiming for 100 billion yen or more from newly commercialized products by 2030. Reaching this goal will require that we increase R&D expenses to 300 billion yen over a 10-year period. Of that amount, we are planning to allocate 80 percent to R&D related to carbon neutrality and a digital society. This is a challenging goal the company has outlined towards achieving transformation for the NGK Group. But through collaboration between the Corporate NV Creation, the Corporate R&D, and the Corporate Manufacturing Engineering Group, we will promote and work to accelerate product commercialization, another one of the Five Transformations.

Nanataki:NV1000 is a very lofty goal, and I have a healthy awareness of the fact that this is not something we can achieve without being fully committed. As the Corporate R&D, we must focus more than ever on creating new, distinctive technology that can serve as a source of competitiveness. We will also need to continuously create promising R&D themes while also accelerating our efforts. In the past, some products took 10 years or more to develop. However, in times of dramatic change, we must link R&D to commercialization more effectively and more rapidly. Also important to increasing the rate of success for our R&D themes will be our ability to thoroughly engage in basic marketing. This refers to our ability to identify promising markets, measure our probability of success on those markets, and determine what we need to win on those markets.

Miyajima:As the group in charge of prototypes, mass production technology and mass production quality, the ability to commercialize newly developed products and quickly convert them into a format that can generate revenue comes down to the Corporate Manufacturing Engineering Group. The company’s ability to commercialize newly developed products and make them profitability depends on us. The highest priority issue in the manufacturing process is achieving greater speed. I believe that we must work to close collaboration to reduce time losses in every phase. Thus far, our main role has been the expansion of existing business but, moving forward, we will demonstrate the power of engineering through our manufacturing technology development for new products.

Cooperation between Marketing, Our Unique Technologies, and Manufacturing

The figure illustrates the ties that link NGK marketing, unique proprietary technologies, and manufacturing. Marketing is overseen by the NV Corporate Division, unique proprietary technologies by Corporate R&D, and manufacturing by Corporate Manufacturing Engineering.

Focusing on marketing while increasing the speed of new product commercialization and new business development

- Tell us about the initiatives being undertaken by each headquarters.

Iwasaki:The Corporate NV Creation was established as a new organization to lead marketing with the goal of dramatically increasing our new market development capabilities to promote early realization of NV1000. Gathering a diverse range of personnel from each operating division and the head office, we launched activities this spring as a group with 100 members, an unprecedented scale for the NGK Group. Staff with sufficient sales experience and staff with deep technical knowledge work together to gather high value information towards increasing global recognition of our products and technology. While the NGK Group has a strong foundation in technology, we have had cases of not achieving returns in line with expectations due to progressing with development without conducting sufficient marketability validation. Moving forward, the Corporate NV Creation and the Corporate R&D will engage in close-knit information sharing from the point of development theme conceptualization. We will improve theme success rates by thoroughly identifying markets and customers, and analyzing competition. Through mechanisms such as Business Development Promotion Meetings (NV Gate Promotion Meetings), which we began from this fiscal year, we will also make judgments on the investment of management resources. How we choose themes in which we engage in the dynamic and focused allocation of management resources is an issue that will influence the failure or success of the NGK Group. We will thoroughly discuss this issue and make decisions based on practical and highly transparent decision-making.

Nanataki:As I mentioned earlier, R&D will dedicate ourselves to creating new distinctive technology. Over the years, NGK has used ceramic crystal orientation technology, hydrothermal synthesis technology, and precision bonding and compounding technology for dissimilar materials to manufacture proprietary products including bonded wafers for surface acoustic wave (SAW) filters, the lithium-ion rechargeable battery EnerCera, and sub-nano ceramic membranes. Moving forward, we will fulfill our mission of creating even more distinctive technology at an even greater development speed. We will accomplish this by collaborating with the Corporate Manufacturing Engineering Group from the early phase, in other words, we will engage in concurrent development. Additionally, we will incorporate next-generation DX (digital transformation) technology such as materials informatics (MI)*1 to take advantage of accumulated data and link our efforts to faster business development.

*1 Materials informatics (MI): Applying informatics (information science) such as machine learning and big data, the core technology of AI, towards new materials and new component development.

Senior Vice President Group Executive, Corporate Manufacturing Engineering Atsushi Miyajima

Miyajima:The Corporate Manufacturing Engineering will need to change our mindset related to conventional manufacturing processes. In the past, our conventional process involved the Corporate R&D completing a prototype, after which our division would then start work on a pilot plant design and conduct validation to confirm product feasibility before finally moving into mass production. However, moving forward, we will strive to dramatically accelerate our methods by engaging in concurrent development that advances multiple processes simultaneously. Specifically, we will get involved in projects from the upstream phase of development. This will enable us to begin evaluating mass production facilities from the early stages of development and create the manufacturing processes necessary for mass production. We will incorporate 3D printers and other technology that will help us optimize the prototype creation process. We will also rapidly provide feedback to the Corporate R&D to promote the simultaneous resolution of the various issues that occur at each stage of development.

Iwasaki: I think it will be important to proactively incorporate external knowledge. Thus far, our company has largely practiced a philosophy of finding solutions through internal efforts but moving forward it will be difficult to win by embracing such a philosophy. As global manufacturers work towards technological innovation related to carbon neutrality and a digital society, ensuring that our technology is adopted by society will require that we utilize external knowledge from various resources. This includes not only academia and dedicated research organizations, but also means incorporating technology from global startups. With this in mind, we have begun investing in venture capital and startup companies.

Nanataki:To increase the speed of R&D while focusing on new distinctive technology, in addition to increasing the number of development personnel and upgrading our facilities, more than ever we must actively engage in open innovation. Our scope of innovation can be expanded by utilizing external resources such as seeds from universities and public institutions, and by engaging in joint research. Collaborating with researchers with different perspectives can lead to unexpected new ideas. We will continue to collaborate with a wide range of partners towards advancing our R&D.

Iwasaki:As another new approach, this spring we opened the ID-Room TOKYO Satellite. Located in the Marunouchi Building in Tokyo, this innovation room will serve as a space for promoting collaboration with partners. The space features various elements, including using projection mapping to introduce impactful companies, remote conferencing that uses several large liquid crystal panels for an augmented experience, and an exhibition corner where visitors can actually interact with the products that interest them. My hope is that the entire company, including the business divisions, makes use of this space as a place for creating opportunities that lead to new collaborations.

Corporate NV Creation taking the lead in accelerating initiatives

- Please comment on future actions towards achieving NV1000.

Iwasaki:The Corporate NV Creation will be involved in every process from new product creation to commercialization, and I think this will speed up our actions towards achieving NV1000. We will increase our marketing strengths with the conviction of doing whatever we think is necessary to rapidly advance development themes to a point where they can be passed on to a business division. This will also mean increase our numbers of talented staff so we also plan on enhancing our recruitment activities. I feel a huge sense of responsibility, but it is also very motivating.

Senior Vice President Group Executive, Corporate R&D Tsutomu Nanataki

Nanataki:I am very encouraged about having the Corporate NV Creation, which will enable collaborations from an early stage and pursue both commercial feasibility and benefits for our customers. Taking an R&D theme to commercialization involves for phases: (1) Concept creation, (2) Feasibility study, (3) Commercial feasibility verification, (4) Commercial feasibility validation. The Corporate NV Creation will utilize internal and external networks to promote the smooth advancement of promising themes to the next step. At the same time, the knowledge of the Corporate NV Creation will be central in deciding on commercial feasibility, which will make it easier to make decisions regarding stopping R&D. Knowing when to stop R&D can be very difficult, but it is sometimes necessary to downsize or withdraw in order to concentrate resources on promising themes.

Miyajima:By evaluating mass production from the R&D phase, I think that we can build a system that will enable the efficient transition to mass production without having to redo certain work. For example, costs are an important issue when it comes to mass production. This type of method will reduce the chances of having to redo evaluations from the beginning due to costs considerations. I also think such close-knit collaborations will increase transparency and create a more positive development cycle. Collaboration between the three groups will be a key point to achieving NV1000. I want to engage in frank communication and create a framework that functions organically towards realizing our common goal.

Iwasaki:While there is an element of a sense of urgency in response to changes in our environment, both NV1000 and the Corporate NV Creation are the result of policies originating from positive ideas. They represent our commitment to using our existing core technology and working with domestic and overseas Group partners to take on new challenges without a fear of failure. The Corporate NV Creation is an organization comprised of a diverse range of personnel and every member of this group is excited about the opportunity to contribute to the creation of new value. We will apply our collective knowledge towards taking on challenges in various fields. I believe actions based on this commitment represent our path to realizing NV1000, and will lead to the type of transformation the NGK Group aims to achieve.

Chart of NV1000 sales outlook. NGK is targeting sales of 30 billion yen for products related to carbon neutrality and 50 billion yen for products related to digital society in fiscal 2030.

Note: This interview was conducted in May 2022.