The Impact of Aizu 10 Years Ago

“What a system you have here!”

That’s what I said to myself in the spring of 2005. I still cannot forget the shock I experienced at the time I reported on the SIGMA factory in Bandai, Aizu, Fukushima Prefecture. To see a lens production site for the first time, it was one surprise after another. As a technology journalist, I have been fortunate enough to visit many production sites over the years. Out of those, this was the one that destroyed what previous notions I had about them and made me rethink the way I thought of manufacturing companies.

In Japan’s post-war journey where it underwent a period of exceptional growth and the bubble period in the process, there was reform towards a practical American structure of manufacturing to go alongside the IT-based systems of Japanese companies. This was particularly true in the remarkable growth in the IT industry that emerged through PCs and to a degree computer and internet, and the home appliance industry with its meeting of culture and industry.

The reason for the progress made in these fields was the idea of a horizontal division of labor where the delicate arrangements between departments that were essential to analogue technology were simplified. What made it simplified was because a horizontal division of labor that looked to efficiency made it easier to get great results in many areas, not just getting better value than from vertical integration. Digital forms of media had become more advanced where computer and network technology could be universally installed in products.

A Business Approach That Defies Convention

It is said that lenses are the embodiment of analogue technology, being at the other end of the spectrum to the horizontal industry system. Although that is clear, the practicality in designing and producing low-priced products made many manufacturers go ahead with technology transfer to overseas to reduce costs despite an increase in outsourced components. There were manufacturers in Japan who only had the early pilot production lines at the time.

Within all this change, SIGMA’s business approach was seen as going against the tide.

The whole manufacturing process takes place in the Aizu factory. From the molding and mounting of each aperture blade, each lens barrel and the rubber parts, whilst not forgetting the polishing of the lens in addition to processing and coating the aspheric surface. Also the mounting process and metal development of electrical parts, even to the development of the jigs and tools required for assembly.

If you want to make a change in a stage of the design, the person that can make that happen is nearby. To solve a problem on the ground, even to talk about the design, the person to talk to is close by. Even if you took the camera and lens out of the picture, there is no factory that has this level of integration.

More than a decade has passed since that experience. Upon revisiting Bandai as the end of 2015 was approaching, the integrated production has made yet further strides, and what’s more, a larger factory was standing before me.

It is the usual practice these days to take advantage of outsourcing, to minimize the use of capital and resources with the aim to maximize profits. SIGMA carries a great operational risk to cover each and every aspect on their own.

When operation drops due to business fluctuations, there is a risk of being in the red before you know it. In spite of this, to be the only manufacturer to devote them to integrated production is the reason to survive for SIGMA and with it to push through to manufacture great products. This is why they are able to gather excellent talent according to CEO Kazuto Yamaki.

As they carry every element in-house, they attempt to reconcile analogue technology in every aspect from design to production. Their base, where development and production takes place, is SIGMA’s strong point, and you could say to refine these points is the SIGMA style.

To be a General Optics Manufacturer.

I am of the same generation as Mr. Yamaki. For camera enthusiasts a generation slightly above us, there was a prejudice against interchangeable lens makers such as SIGMA.

It was around the time that I entered junior high school, cameras had gone down in price, automatic exposure and size had stepped up a level, and by the time I entered high school was when the auto-focus feature was installed in cameras. After working like a dog in my 20’s, it was my 30’s when digital cameras started making leaps and bounds.

For camera enthusiasts living in that period, SIGMA was the go-to brand for those on a limited budget who had already spent it on a good camera body and wanted cheap lenses. It was price over quality. The difference in nuance could be felt between being called a “camera manufacturer” and an “interchangeable lens manufacturer”.

The Turning Point of the ‘Brand’

However, the dawn of the millennium brought about great change with cameras moving toward digital and with it new expectations placed on lenses. For the major lens manufacturers who could rest on their laurels with the line-up of lenses they had, SIGMA sensed a conservative air had taken hold in the market and was the quickest to take action.

By planning ahead on what optical performance was required and what customers enjoyed in the digital age, SIGMA who was a minor player in the interchangeable lens camera market, gradually began to take center stage by way of offering attractive products.

Of course, the label that had stuck to them does not come off so easily. Despite the praise received as SIGMA took on each new challenge, what changed the way people viewed SIGMA once and for all was the penetration of interchangeable lenses in the markets of developing countries, places where the image of established brands had not existed.

To the Heart of Standard Lenses

It was the autumn photokina of 2010, and there was a greater presence of Chinese journalists at the event. I remember one of those gathered who spoke Japanese praised SIGMA to the skies, remarking that “for SIGMA to have such a wonderful interchange lens at a reasonable price is truly wonderful”.

When picture tests were undertaken with any lens known to be a 50mm F1.4, what we like to call the “heart of the standard lens”, the ’50mm F1.4 EX DG HSM’ by SIGMA came out on top.

Released in 2008, there was surprise among journalists that SIGMA could deliver such specs in their new product. Later, SIGMA raised the stakes in the picture department with the ’50mm F1.4 DG HSM | Art’ and what I had come to expect from lenses was turned upside-down again.

It was the time when lens manufacturers competed on picture quality, not on specs and functions. Though that thinking was representative of its time, it had yet to penetrate the general consumers.

Yet SIGMA was one step ahead and steadily established a “strong picture quality SIGMA lens” brand in the Chinese market. The reason why is that the long-held view of SIGMA of my generation was not embedded in these developing nations which had no previous interchangeable lens market.

From the budget camera sets sold by the cheaper lens manufacturers, to the performance-based, value-added brands. The outcome of this determination to change business strategy was that consumers who did not have any preconceived feelings regarding “lens manufacturers” genuinely took these lenses to their hearts.

A New Road.

Though this major shift in business strategy was a road that was inevitable.

In the 1990’s, the rate for the Japanese yen to the US dollar was for a time 78 yen. For SIGMA with their local integrated production, it was the most testing of times. With the rate of exchange having soared to around 240 yen to the dollar, it advanced to around the 140 yen mark, falling to 80 yen in 1995 after the end of the bubble period.

The rate of production abroad increased and with it an increase in outsourced parts. For many companies in every kind of industry that moved toward a horizontal industry system, the change was clear in their manufacturing during this time. However, SIGMA did not ride this wave. To maintain the current size and workforce of the Aizu Bandai factory on the one hand, it made the choice to move in the direction of adding value to their products by making use of the trademark integrated production of SIGMA, and the reliable, high quality employees that are representative of the region.

What came out of this shift in strategy was the beginning of production of the ‘EX’ series in 1995. This move was a glimpse of what was to come, and would prove to be the source that would revitalize SIGMA in the DSLR age.

Creating Dreams

SIGMA was different to their contemporaries by not having camera lenses made for business’ sake. The desire to make lenses aimed at consumers is the reason why many employees were willing to commit themselves with SIGMA. From a reputation as a cheap brand toward greater and more enjoyable lenses, as the focus of the business changed, the atmosphere within the company also changed accordingly, Mr. Yamaki tells me.

There are many products by SIGMA today where you can strongly feel it was a product the engineers dreamed of owning. This is not just with the interchangeable lens but it also encompasses their original digital cameras installed with the Foveon sensor. SIGMA’s products are willing to show the joy in photography. It could be said that it is a different quality to that of companies whose mission is in pursuit of profit.

However, it is because it has become this kind of manufacturer is why the people that SIGMA has gathered give their utmost effort. When you take a walk around the Aizu Bandai factory, you can sense that the workers have strong motivation to get down to production. There is also little distance between the top of the company and those on the ground in a good way. It is this setting where the honesty shows through in the way they aim to make great things.

Honesty is the Best Approach.

But this honest approach is to SIGMA’s strength. To look after the more than 1,500 workers who work at the factory (besides, the majority are direct employees), there has to be an increase in the rate of operation to make profits.

So what is profit according to SIGMA? The only source of this is the power of the product to grab the hearts of consumers. However much the practical side has advanced, to allow the power of the product to wane impacts the ability to be a viable business. To find what kind of product can grab a camera fans heart. What product can strengthen the SIGMA brand. It is not to improve the management index but to reform management by increasing the power of the product.

As Mr. Yamaki explains, “it is normal to perform a market analysis, see what type of products are selling, to see information as to what extent there is a potential market, then decide on and develop a product that could sell. But in our case we first ask ourselves what kind of product people want and that is directly reflected in our product planning”.

It is because they want to use new products and enjoy taking photographs with it that they take the initiative to think outside the box, where ideas then flow out. To understand from development to production the hobby field why people enjoy ‘photographing’, they design products that they believe they want to have. The managers then agree and give the go-ahead. It is that kind of atmosphere at the workplace that brings out the best from them.

The ‘Romance’ With Foveon

This may be possible because of the corporate image of SIGMA, that of a private company that has not gone public. For example, in 2008, SIGMA acquired Foveon, a company who had the imaging sensor technology that could fully understand color, but this was news that raised quite a few eyebrows in the industry.

The major manufacturers had attempted to develop” an imaging sensor that could feel colors” but ultimately it was Foveon who were able to bring it out as a product. It was a high technological hurdle, as image handling hardware different to the industry standard was required, placing an extra burden on workload and costs.

Acquiring Foveon would have been unlikely had SIGMA been a company that was judged solely on the management index or was beholden to shareholders. However on the other side, there is a deep attraction that exudes from Foveon that satisfies those who love photography. With the uniquely deep color reproduction and sense of resolution from Foveon, you also sense the aspect that “feels color” and which holds the same romance as that from gelatin color film.

For the Customer, For the Business

The products the Foveon is installed in (SD series, DP series) have never made a profit by my estimates. But the fact that SIGMA is continuing to deliver the unique Foveon to the market sends a strong message to every camera fan, and also motivates those who work at SIGMA.

There may be people reading this who may get the impression this is being “too romantic”, but this is important for manufacturing companies, moreover for manufacturers who handle specialized consumer products like interchangeable lens. It is evidence of strong business judgment to emphasize that the business is looking to the future more than to short-term profits.

“The majority of commercial enterprises aim to maximize short-term profits. In contrast, what we prioritize above all is great products and to provide great value to customers”. To make that happen, it is necessary we continue to build good relationships with the community and employees, and bring together exceptional talent. Of course we also must seek profit as a company, but above all, it is also important we share a basic vision to do it for great photography.” (Kazuto Yamaki, CEO of SIGMA)

Toward Great, Enjoyable Products

If the commercial value is unable to be raised, operations would decrease and subsequently endanger the future of the business, whereas increasing the commercial value provides the freedom to continue to do the work of your choosing. To have the employees be aware that they also have a stake in the business creates the determination to face up to any hurdles. Great products can be delivered to customers as a result. It is no exaggeration to say that the outcome of this company policy is supporting the SIGMA of today.

SIGMA overcame the days of the super high yen to develop a brand for the digital age. To revisit the Aizu Bandai factory in a now full-fledged camera market, I was able to reaffirm the source of power that solidified the brand in a short space of time.

I wonder what they will come up with next to please camera fans. As someone who loves to take photographs, I await their next step while enjoying what they have already brought us.