Automation is increasingly empowering health providers to offer better services, including increased efficiency and better patient management. We spoke to Tosho president Yoshihito Omura to learn more about how the Japanese manufacturer is leading the way in Japan with its range of automated solutions while seeking to break into international markets.
Japanese manufacturing is famous for the highest manufacturing standards in the world. We have companies such as Toray Industries creating CFRP materials for aerospace or semiconductor equipment maker Tokyo Electron, both with dominant market shares. This type of manufacturing requires the highest standards and quality, why are Japanese manufacturers so successful in such fields?
Japanese people pay too much attention to details every time and this is true for both manufacturing processes and services. It is part of Japanese culture to obtain the highest quality with products and I think Japan is a good environment to develop new products because there are many excellent companies – both small and huge – that can work together and establish synergies. Japan is a good place to start a new business.
Japanese manufacturing has been subject to intense regional competition in recent years. Chinese, Korean, and Taiwanese manufacturers have replicated the Japanese monozukuri but at a lower labor cost, providing the world with cheaper yet often inferior products. What do you think Japan must do now to overcome this competition?
I think one weak point of the Japanese companies is that we focus too much on the domestic market. Another reason is Japanese people do not take huge risks and are quite conservative. If we take huge risks we get big returns, but the Japanese are always very careful. In the case of Samsung and Chinese companies they took big risks ten years ago, and that is the reason why they have now achieved this kind of success.
Tosho’s medicine dispensing machines are critical to the healthcare industry because if a patient gets the wrong medicine or wrong dosage, it could severely affect their health. You propose solutions and ideas to prevent this from happening, can you tell us more about the philosophy and the motto that you have developed?
Our first client was a hospital pharmacy and they required a secure and safe environment. We have more than 30 years of relationship with this hospital pharmacy even though their requirements are very high.
One example of a typical high requirement is in oncology. When the pharmacists are preparing for the medicine to be administered to the patient, if they put a higher dosage than what is required it would be detrimental to the patient and they could die. Furthermore, the pharmacists have to consider the age and weight of the patient in their assessment. The hospital pharmacy must adhere to the schedule of medications as well as the appropriate dosage of the medicine. Our company has a number of automated machines and we have developed a software to monitor and check all schedules and procedures. We have a system that could be customized for every patient’s needs. In other words, we offer a total pharmacy solution with the machines that we provide. Lastly, we are a company that provides hardware and software solutions.
When we interviewed the president of Yuyama he spoke about the comparison between the Japanese and western pharmacists in terms of giving advice to patients. He spoke of how Japanese pharmacists didn’t get enough patient time. What do you think is the best combination there?
I agree that the pharmacists here in Japan do not have enough time to spend with the patient. Perhaps the Japanese government could allow the pharmacists to have personal conversations with the patients and to give more care. Everyone wants to work in a ward to be closer to the patients and more automation would mean more interactions with patients. More and more Japanese healthcare services are now using automation for dispensing medicine so that pharmacists, nurses, and other healthcare professionals have more time for patient care.
Japan is an aging country and is one of the super-aged societies in the world. By 2050 there will be less than a hundred million people and a third of them will be over 65. But Japan is not the only aging country, we have Greece, Germany, Italy, and even South Korea following suit. What opportunities does this aging population have for your business knowing that there will be more drugs demanded?
There is more opportunity for us in this aging society. Our core business is a dose dispensing machine called “Xana”. Our machine automatically prints out the name of the patient, QR code, and the medicine to be administered on the pouch. This is a very convenient way of dispensing and caters to the older people and to those with disabilities. This pouch can also be used for healthy people, for example, currently we have a customer from a supplement-drug company, and we allow them to provide a more personalized supplement service. There is one US medical dispensing company that focuses on dispensing with this kind of pouch and other local pharmacies realized that this is a good way of dispensing. Both the healthy and sick people would find this pouch more convenient.
In the US we see a huge push for outpatient treatment. People do not want to go to the clinics or hospitals, they want to be treated at home instead, they want to reduce the cost that is involved in healthcare. Do you see this outpatient model and customized medicine as a chance for growth in the US market?
That would be a big market for us, that is why we entered in the US more than ten years ago. Ten years ago, there were some misconceptions regarding the use of these tiny pouches, the field was dominated by pill vials or blister sheets. With our pouches we can put plenty of information, anybody who has a smartphone can use the QR code for obtaining information about how the drugs work in the body as well as specific instructions for medications. I think there is big potential here with pouch compared to the old technology.
The Xana Series is one of your most famous product ranges. This is a fully automatic tablet machine, and the Xana 4001 U2 is one of the most famous. It is being used in community pharmacies, hospital pharmacies, dose dispensing centers, nursing homes and corrective facilities in more than 20 countries. In terms of this Xana Series, where next will you be launching it? Where do you see potential growth in the overseas market?
We are developing new machines which we will launch in the future, but we cannot disclose the details now. We are marketing and looking to assess how much potential there is for this product. Due to covid situation, nurses need to do medicine preparation in a shorter period of time because they want to provide more care to the patients. As of now we offer only pouch dispensing machines for our international business but have other products such as our injection dispensers for hospitals that we are looking into launching in the future. In Japan and Asia, we also cater to hospitals. We are looking to target more hospitals internationally, basically targeting healthcare in general for everyone across all ages. By taking medications properly it would help the people maintain good health. In terms of our international healthcare business, each country has their own regulations. For example, in some countries you need to obtain permission to conduct this kind of business. Denmark, Sweden, and Finland, though they belong to Europe, but each country has its own set of regulations. We have to be appropriately flexible to each of these markets in order for us to achieve the target sales.
In order to cater to country specific regulations, collaboration with the local companies is often pursued. Looking towards the future, are you looking to collaborate with the local companies?
We need to be flexible enough in terms of our software, products, handling negotiations, and cooperation. As a company we have been very flexible in this industry. Having business overseas can be very difficult and although we need to be flexible, sometimes we need to stick to our proposal. Are you familiar with the Japanese word “kodawari”? It is a soul where we Japanese people are really into. We know that Japanese people are very specific, and we are able to pay attention to every specific detail, and this is the reason why the quality of the Japanese products is topnotch. During proposals it is not easy for the Japanese to say, “that is not going to work” or “I do not think so”. We must communicate effectively and respectfully. One disadvantage of the Japanese products is they are more customized as opposed to iPhones, as an example, that use the same platform and produce similar products all over the world. With customization Japanese companies could only produce a small volume for each country.
“UF-Universal Feeder unit”
Product development is the key to Japan’s success. Japanese companies always innovate and are always ahead in meeting the demands in the market that they foresee. What are you focusing on in terms of your R&D? Are you looking for collaboration partners?
I believe that developing new products is not really something special, what is more important is the connection and the relationship between the customers and ourselves. We use direct communication with the end-users even though we have distributors in the overseas market, and this is very important for us. To develop new products is something ordinary in Japan because in this country we could easily find many excellent manufacturing partners. Our machines are a combination of parts that are developed in Japan and for this reason we have a good relationship with parts manufacturers. The ideas and feedback for the products are essential.
You have already expanded to Europe, Asia and North America. Which regions or countries are you looking to tackle for further international expansion?
We started penetrating the US market five years ago and it would be beneficial for us if we could expand even further. We must promote our machines to have a better way of dispensing drugs. We are hoping to establish our facilities there.
How would you continue to go to the US? Would you be interested in joint-ventures or M&As?
We have distributors as well as OEM partner companies. Our market is growing actually, China is our number one, but I think the US will be our base. Actually, the US is the number one market in terms of the healthcare industry.
This year your company is celebrating its 51st anniversary. Imagine we come back to interview you again in four years, what would you like to tell us? What are your dreams for the company and what would you like to have accomplished by then?
Ambition. Tosho Incorporated is more like a family business company, not an IPO company. We would like to hire good people and reliable partners for our business. Our focus as a family business is the happiness of our workers as well as the happiness of our partners. We would like to contribute more to the end-users such as the patients, hospitals, and pharmacies. The meaning of the companies’ existence is not on profits.