With Japan’s highest skilled engineers in the field of analog circuits, Sankyosha can successfully support cutting-edge technologies reaching their highest potential. Founded in 1958, Sankyosha prides itself on not only providing distribution for its customers, but also offering technical advice and support across a wide range of industries, as explained by company president, Toshiaki Kawanabe.
In recent decades, manufacturers located in countries with a cheap labor force have replicated Japanese products and processes. As a reaction, Nippon manufacturers gradually moved their operations to tackle niche industrial fields often characterized by high-mix low-volume production. As an engineering and trading firm specialized in providing solutions for analog circuit design, how do you analyze the evolution of the Japanese manufacturing and electronics industry?
Our corporate spirit and the intention with which we do our job is best understood through the Japanese principle of sampo yoshi. Under this principle, we believe that every entity involved in our business should prosper. This includes our clients and our corporation, as well as the surrounding community itself.
As an engineering and trading firm specialized in analog circuits, it is interesting to see how Japan attempted to enter the world of digital devices. Producing digital circuit products means that companies must compete on cost performance. As such, we believe this strategy to be similar to throwing oneself into a saturated ocean. In the realm of digital devices, cost effectiveness is paramount and the ones that survive are the ones who can offer the lowest prices.
With this in mind, it should not come as a surprise that Japanese digital home appliance companies that were once proud of the world, eventually declined. Digital products are about mass production, which is easily replicable. Furthermore, Japan was built on a culture of craftsmanship, and this unique culture allowed our country to acquire manufacturing strongholds throughout the supply chain.
True craftsmanship is conducted at the analog level. Thanks to Japan’s corporate structure that promotes cooperation between companies and workers, Japanese engineers have historically excelled at analog manufacturing. Regardless of this strength, Japanese companies tried to develop digital products. However, as the market is all about cost, eventually, they were not able to survive.
Our company realized this fact 30 years ago. For decades, we believed that for Japanese companies to survive, they must stick to their strength and remain leaders in the analog world. It was at that time that we decided to expand the scope of our analog solutions. A great example of the relevance of analog devices is capacitors from Murata, Taiyo Yuden, Kyocera and etc., which are utilized in all modern electronic devices.
Today, the products that represent Japan’s manufacturing edge are capacitors, crystalline devices and robotic systems. All these companies provide solutions on the analog level. To this day, Japan remains a leader in the provision of analog solutions for electronic devices.
In the semiconductor industry, Japanese firms used to be dominant players in the production of DRAM and other flash memories. Today, this business has been taken over by South-Korean and American manufacturers. The same situation that I previously explained occurred in the semiconductor field: many companies began prioritizing digital circuits when they should have played to their strengths - which is to stick to the analog elements of the semiconductor industry.
Because the semiconductor industry is capital intensive, Japanese firms were unable to maintain their dominant positions. To a large extent, only one Japanese company survived and continues to win: SONY. Unsurprisingly so, SONY’s success in the semiconductor sector comes from its sensors; an analog technology.
The Japanese manufacturing industry is currently full of new ideas and startups, and lots of new things are happening here in Japan. However, too much focus is being placed on software development and not enough on analog circuitry and circuit systems.
This trend can be observed in larger corporations where most IT engineers are moving into software solutions, causing a lack of designers for analog circuit systems. Today, there is a deficit of analog circuit engineers and a lack of support for analog design; and that is exactly where we come in.
Our company seeks to support the startups and SMEs that require analog circuit design to launch their products successfully. To team up with these companies, we promote an open innovation platform where we offer both engineering solutions and the supply of analog devices.
Complex analog circuits require a high level of expertise that is often difficult for start-ups to access. What solutions are you offering these companies?
In contrast to digital circuits, which can be designed by using a specialized software, analog circuits have a much greater level of complexity.
While the layout of the circuit and the assembling of the components may look similar to digital circuits, analog solutions are completely different. Analog circuits require complex qualities, features and specifications that younger software engineers are unable to fully grasp; and this is where we come in.
When our clients have a question, they can contact our engineers directly and we will answer their questions extremely thoroughly. We also provide engineering support and advise completely free of charge.
This line of work supports the development of our industry. To a large extent, we train our client’s engineers by offering educational support. As we do so, we witness that the number of complaints regarding defective products goes down to nearly zero. I believe that all the people who work at Sankyosha, especially our analog engineers, are Japan's finest. They have a huge amount of experience.
Furthermore, our sales people are highly qualified. Our sales representatives receive so much training that they are able to look at a client’s website and automatically diagnose the critical problems and challenges our client is facing in analog solutions. This allows them to provide solutions to a problem that our client company is not yet aware of. At Sankyosha, we excel at identifying problems ahead of time, at articulating effective proposals, and at supporting our clients where they need it most.
Through such efforts, we have developed a solid network of partnerships that is composed of relationships nurtured by trust. These ties allow us to grow and to maintain a local customer base. Even though the market itself may be subject to shrinkage, the players that still remain within the Japanese market, as well as the foreign based major analog semiconductor manufacturers that we work with, have highly praised and evaluated our engineering capabilities, which is why they continue to work with us and to trust us.
Interestingly, analog engineering is currently considered as a relatively boring field to get into. Because our field is not a ‘flashy’ one, not many young people want to get involved at first. They would rather get into the digital world, the cutting edge technology in digitalization, DX, and virtual reality. That is why most of our engineers are mature individuals.
We are currently investing time and capital into digitizing our past data and making it easily accessible. Our objective is to make the information and experience that we have accumulated over the years more easily identifiable and accessible for younger generations of engineers.
Through the training sessions and seminars that we organize, our engineers are working hard to pass on their wealth of experience to the younger generation. Our staff engages in these training activities basically on a non-profit level.
For us, it is very frustrating to see that Japan - being a culture of craftsmanship – is currently so weak when it comes to analog circuitry and design. As such, we believe it is our mission to address this issue. Thanks to such a steady accumulation of efforts, we have been able to grow as a company. While we are not famous yet, I am confident that Sankyosha is, and will continue to be, a front runner in the provision of analog solutions.
In the past, the Japanese economy was based on the keiretsu structure, whereby larger corporations would request services from smaller companies. Today, however, this corporate structure is about to be completely flipped as specialized companies are the ones actively seeking to provide their solutions to larger corporations.
In 2016 you received an award as the best distributor of the year for Linear Technology, which was bought in 2017 by Analog Devices. Why were you given this award?
This award was given to us for many different reasons. One of the reasons was for our business performance. The other distributors of Linear Technology often target larger corporations. Because their clients are of a larger scale, their sales and performance is subject to fluctuations dependent on a variety of macro-economic and industrial factors. In contrast, Sankyosha targets a multitude of startups and SMEs. Our sales strategy focuses on acquiring new clients constantly, which allows us to limit the amount of fluctuations and to never be dependent on a certain client.
Furthermore, our company goes beyond distributing products and offers engineering, support and design services. Offering these integrated solutions boosts our marketing power and makes us more appealing to new clients.
Another reason is that we have the best engineers in terms of knowledge and skill set. This observation is not only limited to our engineers, but also to our sales staff.
Sankyosha has collaborated with a variety of companies across sectors, including a project with Riverfield Inc., a startup developing Surgical Assist Robots. Amongst all your projects, is there one that you are most excited about?
Our collaborations follow a precise framework. First, we sign non-disclosure agreements. Secondly, we provide the analog circuitry solutions, together with technical advisory services for circuits and layouts designed by customers.
The reason we decided to engage in that form of collaboration is that it enables us to continually support a large range of projects and to ensure that we have enough staff to provide the kind of varied solutions required. If we were to collaborate in a more in-depth way, committing all our staff to the project from start to finish, we would not be able to take on as many projects as we do now.
We have 50 new projects that we are currently working on, and they are all secret. One project that we just finished working on is a ring-type IoT device, “SOXAI Ring” developed by SOXAI Inc., a Japanese start-up company. SOXAI's IoT Wearable Ring device that detects various bio mechanisms, including the wearer’s sleep situation, heart rate and more. The ring functions for 24 hours a day and can even be worn in the shower. That project was very exciting and we look forward to seeing how the product launch will unfold. They have already distributed 2,500 of these products, and they sold out within 6 days. Looking at the future, I am convinced that this device will have great success for our client.
Looking at the future, what applications do you foresee having the greatest growth potential?
Medical and healthcare are our number one priorities. Second to that is security and disaster prevention-related products. Companies involved in safety and security tend to be mid-size enterprises, neither large nor small, and are therefore a good fit for our firm.
Your suppliers include both Japanese and foreign companies. Looking at the future, are you looking to further diversify your list of suppliers, and if so are there any particular technologies that you are interested in?
Our goal is to become Japan’s first solution provider for analog circuit design.Considering the various challenges that Japan faces, especially the aging population and the risk of natural disasters, we believe that the Japanese market provides us with many areas for growth. Our goal here is simple: to support the Japanese economy and society with analog solutions.
If we are successful in Japan and we can find innovative applications for our solutions, foreign companies will replicate our services and the products of our clients; which would be a great pride for us! For the future, we will continue to target SMEs and to offer our services to the multitude of Japanese startups developing innovative products.
For a company to truly support innovation, engineers must broaden their horizons. Mr. Shibuya, honorary adviser of Sankyosha, used to be the CTO of this company, and this philosophy guided me through that experience. Engineers are often evaluated by their know-how and level of experience, but that is not enough. I believe that the strength of Sankyosha’s engineers lies in their theoretical knowledge and critical thinking ability in areas such as physics, biology, mathematics and economics. This open-mindedness and diversity in knowledge successfully drive innovative processes, and that is of crucial importance.
If we came back to interview you again on the last day of your presidency, what would you like to have achieved by then?
My dream is actually a small one. What motivates me is the development of my country. Over the past 20 years, I have felt sincerely saddened by Japan’s diminishing skill set in analog solutions. As such, my ambition is to promote analog circuit design and the development of analog technologies.
Japan used to be a world leader in analog circuit design, and I believe that we can still make a comeback. To that end, my ambition is to support the Japanese industry with the technologies required for that comeback to become a reality.
Supporting the revival of the Japanese industry would be such a source of pride and honor for me. The level of fulfillment I would experience if we could be successful in doing so would know no bounds and I would like to devote the rest of my life to the fulfillment of that task.
Building on that goal, my objective is also to create a business model that will continue to prosper in the future. Strengthening Sankyosha’s business model and partnership network to the extent that the company’s success in the future is ensured would be a superb accomplishment.