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(No.34) Only Fresh Brains Sustain Business (1)

A society is sustained by the economy. Included are software and industrial products alike. If we look at the historical events surrounding Ricoh products, we can see what has contributed to Ricoh’s business and success.

Figure 1 shows the major Ricoh product lines since the company was established, together with the number of employees. It shows the elapsed time from when the new product was made possible by new technologies and the many years that elapsed before it contributed to business. The contributions of many are required before profits come about. Here are some examples.

Figure 1: Major product lines and the number of employees in Ricoh

Figure 1: Major product lines and the number of employees in Ricoh

Positive Photosensitive Paper

In 1934, Ricoh started a new business after introducing positive photosensitive paper, which was invented by Riken, the parent organization. Before Ricoh’s introduction, people used blue-print paper to copy design sketches, which were negative prints. Why were positive prints welcomed so warmly, even though they contained the same information as the negative prints? Let’s consider an actual document that is less than 10% black area over 90% white area. If the copied document is negative, more than 90% of the area is black or dark blue, making it difficult to write notes in black ink. Positive paper seems a small improvement, but actual benefits are as great as the difference between black and white. Ricoh was destined to make a profit for Riken, thereby validating its R&D activities.

Copier using Diazo-type Photopaper

In 1955, 21 years after the first positive paper was introduced, Diazo-type positive paper was applied to print transluscent originals. The process to make a latent image using a strong light on a document overlaid on the positive paper is simple and fast. The positive copy is available immediately after exposure. Ricoh made this process easy for anybody in the office through the use of what were often called blue print copiers. The main improvements were a small-size light source, automatic development after exposure and high speed development and drying of the developed copying paper. The Ricopy 101 triggered office innovation in Japan. The main job of most local government offices in Japan was to issue certificate documents. Residency certificates, for example, used to be copied by hand, hand-copying the householder’s name as well as each member’s name based on the original. This kind of work required employees to spell each word correctly and to copy in a beautiful hand, much like the monks of old. Errors, of course, were inevitable. If you have a chance, check certificates of 100 years ago; they often include many misspellings.

This process became simple copying work, with efficiency increased by a factor of ten. The photosensitive paper was inexpensive, because it was already available in the market. The blue-print copier at government offices was thus established. In 1965, Ricoh invented another copier that put a reflected image onto paper. It was called an electronic copier. This machine, BS-1, cost only 1/10 that of competitor copiers from the X company of the U.S.A. The innovative technologies were zinc oxide paper and liquid toner, which formed copied images on the paper. These two types of copying paper continued to support Ricoh business until 1980.

Office Computers

In 1971, Ricoh started its office computer business. The RICOM8 computer used newly developed high speed core memory by TDK, and most circuits were ICs, which were also very new. Its main memory was expandable in 500-word units. As this system was well suited to business processing or scientific computation, its market share quickly shot up to 25%. This machine was modified to expand functions for information retrieval, word processing and database management, focusing mainly on personal use for business.

Ricoh’s main business field was copiers. Although the copying process was changing to digital at that time, there was no reason to push this innovation to the customer. Many obstacles stood in the way of combining image-based copier machines with code-based computers, which focused mainly on deskwork. Only after the network came available were those two functions merged into a unified function provided by Ridoc in 2000 (mentioned later).

Word Processors

In the 1970s, a one-chip computer came available for high spec calculators in the U.S.A. As this proved extraordinarily powerful, many companies worked actively to develop something new. At the same time, the floppy disk was invented to provide external memory for computers, which accelerated computerization in the office. If the target is merely numbers, the application is limited. People realized that words are the main media in the office rather than numbers. So it is natural that words became the next target after numerical data. In 1977, Ricoh introduced its first alphabetic word processor with a flat CRT and the newly developed daisy wheel printer. However, the market was extremely competitive and Ricoh soon pulled back, changing from alphabetic to Japanese words, which attracted Japanese customers. In this market, a copier, a computer and a word processor were regarded as key components to promote productivity in the office. As a result, a new concept, “Office Automation,” or OA, was introduced as a buzzword in contrast with FA, Factory Automation. This term was used for the first time at the Hanover Messe in 1977.

A word processor itself has few innovative technologies, but it had a strong impact on the Japanese, to whom it was thought not to apply. But even the Japanese were flexible enough to use alphabetic keys for word processing. The largest credit goes to the new term, OA, which established the future direction, even for non technical people. Digital technologies soon prevailed in every corner of our lives – the Internet -- and the information world became global, which would have been difficult to achieve without the keyboard. And now, even mobile phone users prefer to use the keyboard, mostly with thumbs, which nobody could have predicted way back when. Many companies benefit from this IT world.

Twin-Lens Cameras

In the 1950s, a camera cost about 20,000 yen in Japan, an amount several times more than the average monthly salary at the time. Ricoh reduced the number of parts and increased the durability of each part, achieving a retail price of 7,000 yen. It is easy to predict the popularity. This camera became the first mass production camera in Japan, and was awarded the Okochi Prize after achieving 20,000 units/month of production by belt conveyer in 1957. This concept of providing a popular camera for the masses has continued, as an Auto-Half Camera or a Digital Camera. The Ricoh camera business has declined since then, but at the early stages, this business, together with diazo copiers, pushed Ricoh to hire several times more employees. These two examples show the importance of attractive products.

Digital Facsimiles

The digital facsimile and digital copier did not apply to the previous success story. This digital facsimile, fax for short, differs completely from the previous photo transmitting machines based on analog technology. Here are four major differences:

  • (1)The target document is only black and white,
  • (2)Image transmitting technologies are based on digital coding, which reduces the effects of telephone line noise dramatically,
  • (3) Digital image data is compressed by more than 9/10, which allows 10 times faster transmission than previous models.
  • (4) Long distance transmission is possible, where it may be night at the receiver side when the document is transmitted to the other side of globe. That means the receiver must be reliable enough to operate without human intervention.

Many of the technologies needed to complete the system did not exist in Ricoh or in the world. Many engineers were hired and studied on their own for more than five years until they finally completed the system in 1974. The first machine, called Rifax 600S, retailed for 4 million yen, and nobody entered the market for another five years. After a competitor successfully developed a competitive machine, the fax gradually came down in price and became a commercial product. Jump ahead 20 more years and the fax has become a commodity in every home as an added function of the telephone. This fax machine did not contribute very much to Ricoh’s business; however, it did have a great impact on society itself by providing both-side communications for documents.

Digital Copiers

When we started to develop digital copiers in 1976, we faced great difficulty. There were no experts in the world, but we finally developed our first digital copier called the Ricore 3000 in 1982. This first product was expensive and had poor image quality, resulting in little interest. It survived only as a special product for a niche market. Although we developed new machines with more functions, they still had lower image quality than analog copiers. Nevertheless, because of its digital solution, we still believed the method to have high potential as an integrated system comprising a printer, copier, fax and even a scanner. Around 1990, offices began to install networks. Communication volume increased yearly, and digital copiers could be used in the networked office. In this new office, the term “digital copier” does not reflect the function correctly. It should be called something different. So, we called it MFP, multi-functional peripheral, or multi-functional printer. Eventually it took 20 years for it to be accepted in the market. But that’s not the end of the story.

Another important feature of digital copiers is software controllability. This means that a standard MFP can be adapted to a special application by changing its software. This is an attractive feature to make it applicable to a wide range of customers.

In 2000, Ricoh announced Ridoc, which could scan files and retrieve them as needed. It provides the image and text file seamlessly on demand using the MFP as a key peripheral. This is an emerging, fast-growing field. (To be continued)

(Ej, 2010.5)

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