Canon aims to secure top rank in the inkjet printer market

By Zatni Arbi

BANGKOK (JP): "What do people think of your previous government?," I casually asked the guide that was taking a group of IT journalists from Indonesia -- including myself -- from the airport to our hotel in Bangkok.

We were there on the invitation of Canon, one of three top inkjet printer makers in the world, for a factory visit and a press event in Thailand. To my surprise, the guide, Simon, responded that he himself was unhappy with former prime minister Chuan Leekpai's administration. He thought the modest PM was OK, but the biggest problems were caused by the people around him in the government.

Well, Simon should be given a chance to visit Jakarta, I thought. He would then be able to see the stark contrast between his country and mine. During the trips to Ayuthaya and subsequently to Canon's high-tech factory the following day, not far from this historical place, I became so deeply envious of the Thais. Well-built and well-maintained toll roads were everywhere, and signs of prosperity were clear even hundreds of kilometers outside Bangkok. Inside the capital city, I did not see people loitering on the sidewalks and street corners as we see every day in Jakarta.

And the presence of Canon inkjet factory in Thailand is again testimony to how well the country is doing. While we do have Epson's biggest manufacturing facility in Cikarang, we have time and time again driven other investors away by our failure to create a really supportive and conducive environment for investment. Hewlett Packard, for instance, is reportedly planning to build a manufacturing facility in Malaysia, not in this country.

Moving away

Canon has been present in Thailand since the beginning of the 1990s. Just within 18 months of its operation here, it began shipping the first "made in Thailand" copier.

Today, Canon High-Tech (Thailand) Ltd. has a paid-in capital investment of 1,300 million baht. The manufacturing plant that we visited produced personal copiers, low-end Bubble Jet printers and Bubble Jet fax machines. Bubble Jet is the name that Canon uses for its inkjet technology. High-end printers, such as the BJC 8200 and 8500, are still made in Japan, though.

Support from the Thai government was evident in the various awards that the company has received since November 1994, which included honors for the company's efforts in environmental conservation, safety, quality management as well as export performance. While these could certainly be viewed as part of PR campaign from the company side, it nonetheless shows how much attention the Thai government has paid to its industrial sector.

During the presentations made by company executives at the Canon High-Tech manufacturing facility, we also learned that they were able to increase production more than 100 percent by abandoning the conveyor belt system and adopting the cell-based production system. So, today, you will not see people sitting along tracks of moving trays that carry individual products from start to finish inside the manufacturing plant. Instead, the factory floor is divided into cells in which a group of workers work on the assembly process until the finished products are sealed in their boxes, ready for shipment.

Increasing productivity by moving from the familiar conveyor system typical of mass production to a cellular system on the factory floor sounded counterintuitive, but Canon's executives convinced us that, indeed, they had been successful in increasing production from less than 400,000 units per year to over 800,000 units. The current target is to manufacture 1.3 million printers, copiers and fax machines in a year.

I suspect that the relatively low productivity in the conveyor system might have been related to worker' discipline. In the belt model, every worker should work with the same efficiency and speed as the one next to him, as the belt would likely have very little tolerance for lags. By dividing the production line into cells, there would be more flexibility and the faster workers could compensate for the slower ones. Unfortunately, due to the language barrier, I was unable to verify this with them.

Yet, it was a plausible answer, because at the factory every worker had the right and opportunity to voice his or her opinion. "We listen to them," said the Canon executive that showed us around the factory. "And frequently they come up with brilliant ideas such as this one," he added, pointing out a round loading palette that was designed by the people in the cell using materials provided by the company. Canon Thailand also touted the company's "Kyosei" philosophy, which puts emphasis on "contributing to the world's prosperity through corporate development". As of March this year, the manufacturer has around 4,600 employees, and approximately 80 percent are female workers.

Market leader

In all ASEAN countries, including Malaysia, the Philippines, Thailand, Singapore and Indonesia, Canon did very well last year and occupied the No. 1 position in the inkjet printer market.

In Malaysia, for example, Canon controls 64 percent of the market, -- its largest market worldwide. Last year in Indonesia, with a 45 percent market share in 2000, up from 40 percent in 1999, Canon was also No. 1 in terms of unit sales of inkjet printers. The company was able to achieve this through its low- end Bubble Jet printers, particularly the BJC 1000SP and BJC 2100SP as well as the very popular Rp 1.3 million BJC 3000. In this market, where consumers are still very price-sensitive, these printers, which deliver decent quality print results plus the capability to print on various print media, meet their needs.

Canon has been aggressively establishing itself as a serious imaging solution provider. Last year, for example, it launched seven new models of scanners, most of which had very sleek designs. In the next few months, new models of printers and scanners and a new projector will emerge with improved technologies. Canon aims to secure the top position through these products. The target is to sell one million Bubble Jet printers in the region alone.

As I came home with a better impression of this Japanese company, there was, however, a sad feeling and a stronger wish that our leaders would seriously start working on rebuilding the country. They do not have to go far to find a good example of how economies can come out of the crisis relatively quickly -- with the help of foreign investment and the right investment policies. (zatni@cbn.net.id)