Since 1957, Sekisui Kinzoku, better known as KATO, has been providing high-quality and accurate model trains for collectors and enthusiasts spanning multiple generations. In this interview, CEO Hiroshi Kato discusses KATO’s long history of bringing joy to hobbyists, how it is able to create such high-quality railroad models and the company’s successes, stemming from a dedication to ‘precision’, ‘reliability’ and ‘durability’.
In recent decades, Japan has seen the rise of regional competitors, who have replicated Japan’s monozukuri philosophy, but at a cheaper cost. Yet, we still see many Japanese firms maintain a large global market share, especially when it comes to high quality-consumer products. As a specialised manufacturer of model railroads and auxiliary products, what does monozukuri mean to you and your firm?
Our company philosophy is “the pursuit of physical and spiritual happiness for all employees, as well as the contribution to enhance customer’s hearts towards the improvement and development of model railroads hobbies”, and this is our core. On the other hand, the definition of a hobby is that anyone has the ability to enjoy it and to continue it. This is a must. We truly believe that this is part of our social contribution, as a company that develops products such as N-gauge and HO-gauge railroads models. Beyond that, what is also important to outline is the happiness brought to customers through creating beautiful dioramas, not through just the railroads, but through the environments too. This creates a good bridge between us as a manufacturer and the end user who enjoys this hobby on an everyday basis.
For the customers who are able to enjoy model railroads, either as a collector or someone who makes dioramas, we want to enhance that experience. We are committed to meeting the enthusiastic expectations of model railroad fans. This is the spirit and philosophy of our company, and we share it with all of our employees. We run the business under three pillars: ‘precision’, ‘reliability’ and ‘durability’, creating a safe and fun experience when customers utilise our products. We also go beyond our expected boundaries and try to attract those who may have an interest in railroads or model trains.
We want to warm up the hearts of people who enjoy their hobby so much and share that with their loved ones. To be more precise, there are no age limits for our products. The boxes may say 10 years old, but the reality is that it can be used by children younger than that. We even have model train dioramas targeted for young children, which we released last year. There is a proverb in Japanese, “if you like something, you tend to do it as good as possible”. We try to bring our best techniques and knowledge that have been accumulated by the company over many years and transfer our passion, because we also love model railroads, to the end user.
There is a distinction between a toy and a model, with the form, design and accurate reproduction being extremely important. How do you ensure the quality of your products in your production and what steps you take to prevent defects?
I think we need to look at what is the definition of a toy, because adults also enjoy toys, but generally, toys are meant for those under the ages of 8. Our models are for 8 years old and above in Japan, 14 in other countries.
Under our company philosophy, the quality is due to our personnel in the factory. Each person mutually shares their accumulated knowledge and techniques of manufacturing. We are a company that releases the final product, and we are responsible for delivering it to customers and it’s crucial to have a good impression with high-quality products.
The love and passion of our employees also contributes to the quality, because without their attitude, it is impossible to create products to a high standard. The love and devotion someone has to a product is the definition of monozukuri. If you translate monozukuri, it means ‘making things’, and to do that, you must have a passion for it.
Because model railroads need to be realistic as possible, the quality is crucial, and without the added value in our products, it is impossible to replicate real-life trains. When we begin the design process, we can envision what the end product will look like, so we can understand the criteria in order to finalise it. The engineers who work on future model train designs have a standardised level of quality.
How are you able to create accurate replicas when it comes to your model train sets?
We gather the information in many ways. Sometimes a railway company will provide us with the information, but sometimes they won’t. Others will have an open day for model railroad companies to look at their trains, so we can also see our competitors. One thing to keep in mind is “deformation” – you can’t just scale down the information a railroad company has provided us. If you scale it down, the model won’t look the same.
Most of our products are made with plastic, which are made through injection moulding, and these moulds are then cut by edged tools, and the size of those edged tools cannot downsize to match the actual scale size. The plastic itself is also limited by the material, so we have to understand how to utilise plastics and get the best features from it in order to assure accurate replicas.
OO9 gauge Small England steam locomotive models are distributed by PECO in UK. Actual locomotive runs at Ffestiniog & Welsh Highland Railway in Wales.
In 15 years, one in every three Japanese people will be over the age of 65. This has two major repercussions from a manufacturing standpoint in our view: the first is a labour crisis and the second is a shrinking of the Japanese consumer market. What strategy are you taking to overcome these challenges?
What we can do for our local community and workers in the factory is, for example, offer housework for those with children. When their children begin kindergarten or school, we offer flexible working hours, so the parents can work at the factory while their children are learning. We also offer flexible hours for those workers with special circumstances, like taking care of their elderly parents. Lots of hand work is needed in our factory, with some parts of the process unable to be replicated by automation.
Regarding the population decline, I can’t stop it, but I think Japanese people still appreciate models, and our mission is to continue the longevity of the product. Nowadays, many elementary school students have an iPod or a Nintendo Switch, but monozukuri doesn’t have a ‘game over’. If you make a model, you can hold it and constantly improve upon it, and I believe this way of thinking can help solve these social issues.
In a Worldfolio interview, the president of Kawada Toys stressed the importance of collaboration and co-creation for his firm, allowing them to penetrate the North American market. What role does collaboration play in your business? Are you looking for new partners domestically or overseas?
Since I established KATO USA, I have learned a lot. We have our own plans for our model products, and lots of opportunities to meet not only customers, but manufacturers too, allowing us to build our reputation in America. As a result, it has become easier to work with other manufacturers, especially for dioramas, control units, and electrical components. In the US, a company from Missouri, Woodland Scenics collaborates with us to make Japanese scenery, and in Germany, Noch, who specialise in dioramas, also helps us and we have a close relationship with them. Even DCC (Digital Command Control) manufacturers, such as SoundTraxx in Colorado and Digitrax in Florida, along with a German company, ESU, an Austrian company, ZIMO, all collaborate with us.
How do you plan to further develop your overseas business?
After I came back to Japan, the first thing that I had to do was hold a convention so that other modellers could meet each other. Until then, Japan only had industry shows or brand manufacturers showing their products to the consumers, not a convention, and we began organising them in 2000. In 2015, we also established a model rail contest as a non-profit organisation, with the goal to help high schools. Now we have about 130 participants, even with COVID. Since many high school students are graduating, we want to give them an opportunity to do what they love, even if they cannot attend physically, but they can do so digitally using our application, the “Rail Navi”.
I think we can invite other countries to participate in this. We used to take winning students to foreign countries but obviously, we are unable to do so currently, given the global COVID situation. When we were able to, for example, one winning student went to the US, and we also invited one teacher and nine students from a girls school to a convention in Germany and now one of the students studies in Germany. A Taiwanese school also participated in our event and would love for it to expand to other countries.
Imagine we come back in 5 years and have this interview all over again: what would you like to tell us? What are dreams for this company and what goals would you have liked to have achieved by then?
The first is to have our new factory completed. Of course, we must shift our production to this new factory without any interruptions and that is our challenge. Once we have moved, we will still keep our current location. Less than 50% of our parts are made by other companies, so we have to increase our in-house manufacturing capabilities and not rely as much on other firms.
Another target is to develop new products – thanks to Japanese technology, we have been working on a project utilising 3D colour printing. We have been collaborating with a company in Nagano, Mimaki, for that. So, in 5 years, I’m sure we will have many collaborative products released with them.
But more importantly, I want to help local hobby stores around Japan and support their unique business. When we make something of high-quality, a modeller and collector want to purchase it at a cheaper price, so they go online and buy it from a discount store – they will not go to their local hobby shop. An advanced modeller and collector on the other hand, will buy it regardless of the price, and they will go directly to their local hobby shop. Since 2007, I have been meeting every month with hobby shops in Tokyo and Kyoto, looking for solutions to help them compete against discount stores by enhancing customer’s hearts.