Saturday, Sep 22, 2018
Industry & Trade | Asia-Pacific | Japan

Sanwa Denki Kogyo

The power behind the Web


4 weeks ago

Mr. Yasuo Ishii, President & CEO of Sanwa Denki Kogyo Co., Ltd.
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Mr. Yasuo Ishii

President & CEO of Sanwa Denki Kogyo Co., Ltd.

Sanwa has serviced the industry for over 70 years as an innovative electrical and optical connectors manufacturer. Yasuo Ishii gives his insight into his company and explains how it was one of the “pioneers of the Web.”

 

When we think about Japan, we think about quality. Unfortunately in recent times, data falsification has been widely talked about due to the Kobe steel scandal and it has had a huge impact not only in the steel industry but also in the manufacturing industry in general. As a Japanese manufacturer what is your opinion about the Kobe steel scandal?

Many Japanese companies have created excess burden for themselves, sometimes by setting excessive proprietary quality standards. Since high-quality standards have long been a key value proposition for “Made in Japan” products, companies continue to push the envelope for delivering quality standards with EXTRA attention to detail.

The main issue with the scandal is linked to those elevated promises, setting excessively high expectations for their customers. Their quality standards were already high and delivering excellent results.  Boosting the customer expectation even higher could have been avoided, nor was it demanded by the market. They were delivering quality products, and no incidents were being reported in relation to their reliability. However, they didn’t match the standards they had promised to deliver, knowing that those requirements were excessive compared to the industry standards. It is very unfortunate this happened, but once a promise is made, one must deliver contractually.  Companies should keep in mind that actions must be taken by any business to deliver on its promises, but all contracts can be negotiated to bring more realistic deliverables.

 

Could you explain to us what the essence of the “Made by Japan” means to you?

Because of its strong pyramid structure, Japanese companies have acquired numerous manufacturing advantages. In Japan, there is tier One, Two and Three companies. The base of this pyramid is the third tier, which is extremely strong, and its members work on an extremely high level of technology, reliability and incremental innovation. Competitors in other countries do not have the benefit to rely on such a technically advanced and sophisticated Tier Three suppliers.  The reasoning behind the fact that the third tier supports the entire structure of the manufacturing pyramid is derived from the spirituality of Japan.

Japanese logical and religious thinking is influenced by Shintoism. Shintoism has more than eight million gods. It is completely different from Western Christianism as it assumes that everything around us has a divine spirit, a god. When Sanwa Denki Kogyo manufacturers its connectors, the Japanese spirit of Monozokuri is present. Whether it is for a tiny connector or a much larger network connectivity solution, this belief of putting your entire soul into the creation is sacred.

It is not easy to put your entire heart into something; it takes a lot of time and commitment. This can be seen in all kind of Japanese fields. Some of these examples is found with the likes of Japanese sushi chefs. To create sushi, one needs to be a master in rice-making, and it takes years for chefs to learn how to acquire the skills to master this technique alone.

Why does it take so much time?  In the case of Japanese sushi industry, the artistry cannot be automated. The point isn’t to have the ingredients ready by preparing a formula of mixing water and rice, it is beyond that; it is about Shuhari. The Shuhari concept describes the three stages of learning until mastery is attained: “Follow the master, break the structure, and then do it your own way”.

The core of the Monozokuri spirit is reflected in the concept of Shuhari. While it is simple to automate something and it can be more efficient,in Japanese manufacturing, the craftsman spirit in many of those Tier Three suppliers that fundamentally support those industrial advancements. The strength of Japanese products is based on mastering a technique. Mastery is often more than just achieving efficiency. It is about the way you successfully achieve high quality.

The bottom of the manufacturing pyramid, the tier three organizations, have mastered this philosophy. By doing so, they have attained a level of expertise that successfully sustains the entire structure of “Monozukuri.”

There is another fundamental aspect to Japan’s long history, which has provided the time to develop and nurture a unique and unshakable spirit that lives on today in “Made by Japan” products.

 

SANWA DENKI KOGYO was founded in April 1947, last year you celebrated your 70th anniversary. Could you please highlight the key milestones of your company in recent years? Can you tell us more about the corporate philosophy of SANWA DENKI KOGYO?

We must first look at the meaning of our brand. “San” means three and “wa” means harmony. The three elements that we intend to keep in harmony are: management, employees and customers. Our philosophy is focused on how we can respond to our customer’s needs, and that is what our employees work on. As the management team, our role is to provide the appropriate investments and make the necessary decisions to allow these needs to be met.

Regarding our key milestones, I would like to refer to one of our best-selling products in the last years. It is an outlet that allows for FTTH Fiber Connectivity. These outlets can be found in every room across the nation, and we hold the majority of domestic market share for this product. These outlets often show the name of telecommunication companies, such as NTT, but our product is necessary to allow for a successful connection. Even if some people are unaware of it, we are present in everyone’s home.  

What allows us to hold that important share of the market is our high level of quality. We provide reliable products as a result of our experience in the manufacturing of this product.

 

At the eve of the 4th Industrial Revolution, many industries are experiencing tremendous changes due to innovative technologies, such as digitalization, IoT, cloud computing and miniaturization. From your perspective what are the main drivers that are going to be driving this market? How are you adapting to the ever-changingrequirements on this field?

With the rise of IoT and big data, everything will be network-related. The 4th industrial revolution presents a massive opportunity for us.

We have continued to working with telecommunications firms such as NTT. Nowadays, our market is moving to data communications and we have to analyze to what extent we can move into the data market. 35 years ago,in 1983, we created one of our most popular products, the fiber optic connectors. At the time, the world was entering the Internet era,and we can therefore be considered as pioneers of the Web. Consequently, we have acquired extensive technological experience in the field. There is an important market share for us to acquire by providing solutions to data centers and supporting IoT.

 

Throughout the years, your company has expanded beyond the Japanese border. With its subsidiaries in Taiwan, Thailand and the USA, your corporation is present throughout the world. Can you tell us more about your international strategy? What will be your midterm strategy to pursue corporate growth?

We are proactively entering other markets. Our business has been focused on the communications field, and we are currently expanding by introducing our products to new markets. In Japan, we provide FTTH connectivity to many homeswith the optical outlets that we manufacture. We have been providing this service in partnership with NTT and we are working to launch the same service in the U.S. in partnership with various network operators. In terms of fiber optic network penetration, Japan is far beyond other nations and we expect drastic growth in this field.

Since the beginning of the fiber optic network, we have provided optical components, like our optical adapters and connectors, and technical services to Data Centers all over the world for decades. Beyond these components, we have begun expanding our offerings to include assembled solutions. One of these examples is our patch panels which provide flexible 4 or 6-port sub-assemblies that can easily be inter-changed or removed to significantly reduce the labor and potential errors in installation and servicing of data center cabinets. We have originally sold these products only in the Japanese domestic market to mature our assembled solution products and services, and we will continue to expand into other markets worldwide.

A lot of these panels are offered by many manufacturers and utilized in data centers all over the world, but our solution offers the users with significant labor savings and more accurate installations. In amusement parks and event venues for example, surveillance cameras and related devices generate massive amounts of data to manage the system and the attractions. Consequently, they employ an extensive data center. Predominantly, those panels used in such facility were mostly overseas products, but our solutions are making significant progress in gradually replacing those current systems, helping users save more installation, operation and maintenance costs.

As we are present in a variety of sectors and countries, we are frequently met with needs to customize our products according to the individual requirements of our customers. Adapting to different requirements while delivering high-quality products has always been our objective, and time has proven our success.

 

You have mentioned your expansion plans in the U.S, as of today what percentage of sales come from the overseas market? And what are your plans for the future? Are you planning to increase that percentage in the long-term objective?

At the moment, 20% of our sales come from the overseas markets. Our long-term objective is to reach 50%. While the population in Japan reached 120 million, today it is inevitably shrinking. In comparison, the rest of the world keeps getting bigger. In the United States alone, the population reaches 320 million people. For Sanwa Denki Kogyo, expansion opportunities are endless.

In the upcoming years, we intend to keep on providing high-quality products while accurately responding to our customers’ needs by customizing our solutions to their requirements.

As our firm is expanding into new markets, we will become a company that will adapt to local areas. In our different factories, you will find Japanese employees next to local workers, and different nationalities from all around the world. We are moving from Sanwa Japan to International Sanwa! We intend to embrace the opportunities the world has to offer while maintaining the solid foundation built through our unique Japanese Monozokuri spirit.

 


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