Message from the President Mar.2008

a monthly magazine for our employee Mar.2008

Crying Over Spilt Milk Before It Has Spilled

Although the possibility of an economic slowdown has been looming since the turn of the year, as of February 8, at the time this message was written, Meitec maintains a high engineer utilization rate, with the number of orders for both new-graduate engineer and general engineer dispatches rising steadily. As I stated in the previous issue of SHORYU, underlying this situation is the fact that leading manufacturers, Meitec’s customers, have been making vigorous efforts to refrain from curbing technological development, because they know that continued investment in technological development, regardless of the economic trends, is imperative for their medium- and long-term growth. I’ve sensed this acutely when meeting our clients at recent roundtable meetings.

Nevertheless, as often happens in life, if we become so “stuck up” as to think we’re safe from danger, then we’ll get hurt. It’s dangerous to be lulled into a false sense of assurance that customers will continue to persevere no matter how bad the situation may become. We should be prepared to accept that some of our clients, who are currently managing to “hang in there” with all their might, will simply give in when the business climate really deteriorates and their earnings begin to be affected. Should this happen, Meitec’s order receipts as well as contract renewals would inevitably be impaired.

Deterioration of business conditions is undesirable and gives cause for concern. But let’s adopt a different perspective. Acknowledge, for example, the fact that economic conditions always have a bull phase and a bear phase, and that business conditions can’t keep deteriorating indefinitely but will eventually bottom out and bounce back. (By the way, it’s said that one of the major reasons why the drop in stock prices triggered by the U.S. subprime loan problem continues with no end in sight is because the depth of the problem--the extent of losses incurred by financial institutions--still remains unclear.) Viewed from this standpoint, it’s an extraordinary situation that Meitec has maintained an average annual engineer utilization rate above 97% for more than four years (or five years, if the current year’s included). In fact, this is the first time in the 34-year history of Meitec that the utilization rate has remained at such a high level for so long.

When an unusual situation like this has continued for as long as four years, chances are that we grow used to it. Among our sales representatives, receiving orders and sustaining a high utilization rate are taken for granted. Among our engineers, it’s taken for granted that contracts with clients will be renewed and a smooth rotation to the next job assignment is ensured. I’m well aware, of course, that many engineers are making sincere efforts to boost their market value and that most of the engineers are responding to the issue of contract renewal with vigilance. In addition, many EO coordinators are working all-out to cultivate new clients or are engaged in sales activities organized through the collaboration of various groups. Having said that, I should point out that it’s always the case that any human organization, when viewed as a whole, necessarily contains some part that’s become lax in the wake of the continuing high utilization rates.

An examination of long-range trends in order receipts at Meitec shows that orders increase with a gentle upward curve, whereas when orders decrease the downturn is steep. Thus, the more the situation deteriorates, the more confused we become by the sheer speed at which the circumstances change. A client who we unreasonably assume will renew a contract might decide against it without warning, or anticipated orders received for new-graduate engineers might be cancelled suddenly. In such a case, even engineers who can achieve matching with dozens of jobs at a time when new order receipts are strong, and more than 1,000 orders are registered in our Best Matching System, could face a sudden drop in matched jobs because of a decrease in the absolute number of registered orders in the system.

However, as long as Japanese manufacturers continue investing in technological development, the number of orders can’t drop to zero. Therefore, engineers who, for example, utilize the Best Matching System continuously and strive to improve their skills and abilities, keeping an eye on market trends, need not worry even in a severe situation for order receipts. And conversely, engineers who do nothing, firmly convinced there’s no need for them to use the Best Matching System because their current clients will remain for the time being, could find themselves in a situation in which they face a hard time getting the next job assignment rotation when the crunch arrives.

We don’t act until we’re driven into a critical situation--a weakness, or laxity, which is inherent in human nature. Then we regret the past with should-haves, thinking “I should’ve done something at the time.” Therefore, since our order receipts at present are still brisk, why not cry over spilt milk before it has spilled? Envision yourself a year from now. Do you think you might regret in the future what you didn’t do today? If so, I urge you to access the Best Matching System and take stock of your market value.

March, 2008