As a factory automation (FA) solution provider, Sanmei proposes not only the best products but system integration based on customers’ needs and President Shigeru Kasai explains their unique position in the market.
Can you give us a quick introduction to your firm and what role you play in Japan's factory automation supply chain?
Right now Sanmei is famous as a system integrator but to be frank, there was a long path before getting to this point. All the way back in 1928 the first generation of Sanmei began business through coal sales. Coal is a traditional way of generating energy and this raw material was a crucial part of electricity production for Japan. Our company operated in a business of selling coal that was extracted by other mining companies, but since then our business has made big changes. The big turning point came when we shifted from energy to electrical machinery, and in many ways, Japan was also making this same change.
Many of our customers have been moving towards robotics and motorization. Of course, you cannot introduce this without proper human resources, such as skilled engineers and motivated sales staff. Currently, we stand as a system integrator that combines sales with original product manufacturing as well as service packages with human resources. We have expanded all over, starting off with sales, and moving into services, maintenance, after-service, electronics, and mechanics. These combined efforts are created through the synergies of our three group companies and allow Sanmei to stand ahead of many of our competitors here in Japan. In fact, very few companies in Japan are able to combine such a wide range of not only products, but services and aftercare too. To sum it up, integration is key.
We have strived to be different over many years of existence, and our ability to introduce original products has sharpened the blade of our competitive edge. This would all be impossible without our flexibility to meet customer needs and the chance for customers to tailor the solutions we provide for them. It would be useless to provide a fixed product lineup for our customers, as without the option of customization, we wouldn’t be able to meet their sophisticated needs. R&D and available adjustments are really required by customers nowadays, and with that comes a unique position that we hold in the market.
In my opinion, it is impossible to create one tailor-made solution for all companies in a particular field, every client is different, and at the same time, every client has value. It is this ethos that system integrators live by.
Is there a particular industry or sector that you consider a specialty of yours in terms of providing tailor-made solutions?
Basically, there are two kinds of approaches to describe our client's portfolios. The biggest and number one pillar of the company we refer to as traditional, and these are the customer portfolios we have been working with since our company’s foundation, which is nearing 94 years. The first generation was related to coal selling and pulp manufacturing, through automatization. Over the course of time, not only have our customers changed but Japan as a whole has transformed. We have customers in the automotive field, which itself has been described as a traditional pillar of business. We have worked tirelessly to optimize solutions for car manufacturers and component manufacturers. Moving forward, even industries such as liquid crystal and semiconductor wafers all fall under what we consider traditional and make up the core of our business.
Food is another part of our business, but I wouldn’t say it is a firm pillar. We are looking very optimistically at this as a source for the next generation of customers for our company. These are coming not only from the food sector, but the medical sector and even the cosmetic sector. These are the businesses that are seeing the most expansion and growth in the times we live in, and obviously, in the not-so-distant future, these will be the customers that will look to us for customized tailor-made solutions for their firms.
Can you provide an overview of the motivation or expectation of why you designed the AGBOT and how it helps drive the balance between human labor and automation?
First of all, the AGBOT is a mobile human collaborative robot that helps people in production sites. I think it has helped engineers understand how the robot can be embedded into their production sites, and the goal of the AGBOT is to continue to introduce new iterations with further helpful functions. There are so many needs for automated help at a production site, and it isn’t just limited to logistics and transportation. We can see the AGBOT helping with the inspection of products or even the manufacturing of products itself. This idea was the starting point of the AGBOT and the key driving force behind its development.
Furthermore, it hasn’t been limited to just the hardware, but I think the real strength lies in the combination of both the hardware and the software. The software side is equally important for customers. There are so many companies in Japan that produce things, but very few actually optimize those solutions for the customers, especially when it comes to solutions for the replacement of human resources. The AGBOT allows for flexibility and with the added bonus of the software, allows firms to customize and tailor the AGBOT to their needs.
Currently, this is a challenge that we are setting ourselves; to introduce this kind of robot that can be changed and customized to fit any kind of industry and any kind of need. In essence, we are trying to help our clients diversify their own portfolios and in turn their reach. Despite this, we are cautious and must be careful not to stretch ourselves too thin. For Sanmei it isn’t necessarily about volume, but more about providing our customers with the flexibility for them to succeed. I guess you could say that our goal is to provide customers with the ultimate solution to their needs.
Is Sanmei looking for partners to collaborate with in the development stage of your products?
No, currently the company doesn’t have any of these kinds of collaborations with local key players. We are more focused on the domestic market right now. It is true that we have expanded into Thailand and China, but that was not a solo endeavor, and as with many Japanese companies, that has been at the request of a customer. I cannot reveal the customer's name right now, but I will say that some Japanese companies related to manufacturing controllers and machinery equipment have expanded their business to these countries, and respectively our company has followed. You could say that we are blessed to have these different kinds of customers that all originate from different industries. The opportunity to go abroad only came about because of our excellent customers.
Earlier you mentioned how your challenge right now is to diversify the types of clients you service. How are you catering to these new sectors?
Hard to say, because obviously this has been a very challenging point, but what is true is that we can utilize the same principles that we applied to traditional businesses that I mentioned earlier. We do have a very good track record and have a wealth of experience working with these types of companies. That experience and success can be brought in as an approach to new challenges. The food, medicine, pharmaceutical, and cosmetics markets are booming right now, and we have had several inquiries from those fields, however sales-wise, those are just a small notch in comparison to the more traditional businesses we deal with. New challenges present new opportunities, and the challenges will be beaten by our excellent track record and our dedication to quality solutions for all of our customers.
The Japanese economy is dictating to us that the food, medicine, pharmaceutical, and cosmetics industries are the ones to keep an eye on right now, and people related to those fields are saying that these industries show great promise.
Overall, when you look at the economy, it is not in good shape, but we do see some positives, and as long as the Japanese GDP is in a downward trend, companies are looking for new solutions and approaches to strengthen that GDP and bring that back up to normal levels. It is very widely known that some Japanese companies are struggling to find their footing in overseas markets, and even though they make good products and good solutions domestically, that doesn’t always translate well abroad. We tend to believe our efforts and contributions will help us find customers all across the board and not just in Japan.
With Japanese firms, often the problem isn’t innovation, but rather communication. An interesting role that a trader can take is the role of a middleman and bridge the gap between smaller, more specialized companies in Japan with interesting technology, and the overseas market. Can you tell us how you’ve helped your clients in Japan communicate their technologies to potential customers?
It is just the process of selling, and it is no different than way back in the day when we were selling coal. By definition, we are system integrators and therefore someone who mediates, and we understand the importance of good communication skills when deals are done. We believe that Japanese firms are actually very good at building good, reliable and trustful business relationships.
The products we sell, the automation and robot servers, we believe moving forward will be essential to many manufacturing firms, and with that in mind, we believe that in order to further expand and communicate our mission to customers, human relations and communication skills are a must.
Many Japanese companies are exporting their monozukuri and setting up factories in Southeast Asia and China. When we talk about your international development you’ve mentioned China and Thailand, as well as the fact that you’ve followed many Japanese manufacturers into the region. How do you foresee the evolution of your international business and what is your strategy to bolster your overseas capacity?
Right now we don’t have this kind of strategy in place, and we are not looking to go by ourselves to capture any kinds of foreign markets. Obviously, if any businesses in Japan would like to expand further abroad and would like us to follow, we are open to ideas, but right now we have no definitive country or region that we would like to go to. We like to think of ourselves as operating hand-in-hand with the customers, and right now we are very focused on the domestic market. To that end, it is very difficult to introduce our solutions by ourselves to new regions and countries abroad.
There are needs, however, and as you know both the population is shrinking and the impact on the labor force is devastating. That is why as a producer of automated solutions we see the domestic market as having great future potential.
In comparison, there are no companies domestically that we consider a competitor and no companies that can provide the same level of solutions that we can. Software and different steps of production can be very complicated, and we see that there are still many things for our company to learn. We haven’t reached the pinnacle of robotics yet, and it feels good to have an ultimate goal in mind.
Factory automation as we know it right now is not a confined structure and there are always factors to consider. Companies like ourselves need to constantly adapt and develop different kinds of solutions for customers. Sanmei is always vigilant to the happenings in the world, and we find it crucial to adapt our tailor-made products and services.
Even though we see very promising growth from emerging countries, it is very hard to comply with those market needs. We are seeing Korea and China booming in these industries, but with that being said, if a company in that region were to call on us to provide solutions, it might be difficult to comply. Factory automated solutions originating from Japan still have a way to go, and even our company has many things to brush up on.
System integration is a worldwide business. We see companies all across the globe providing solutions, and in fact, Germany is producing a lot of these solutions. We take the approach of assisting manufacturing in the locality, which I believe is the German approach too.
Could you elaborate on your path to developing the software side of your business?
Product development is developed independently by Sanmei. AGBOT is one of them. In development, everything is from scratch, and it is not developed at the request of a third party, such as thinking about the performance and functions that are considered necessary one by one from the initial idea, implementing the functions, repeatedly testing, and marketing to reflect the actual voice of the customer. Naturally, a lot of development expenses were required. It was definitely risky, especially when you consider the human capital required to develop a completely in-house embedded software solution. It requires some serious expertise, time, and of course money. Not so many companies are willing to put all this in to develop their own tailor-made solution, and we are looking optimistically that this will be a lucrative venture.
Imagine that we come back in six years and have this interview all over again. What are your dreams for Sanmei and what would you like to have achieved by then?
During this interview, you’ve probably noticed that the term solution provider has come up again and again, and that is not without its reasons. Traditionally we have introduced our company as a trading house, however, these days it feels less and less relevant as a title. In a recent interview with a local newspaper on the AGBOT, a journalist suggested that perhaps we should be using the term solution provider instead of a trading house when describing our company’s business. This idea has caught on, and it really hits home with what we do as system integrators.
In terms of goals or dreams for the next six years, the obvious answer would be to strengthen the company’s core business and establish new relationships with new customers. The future plans for Sanmei are to continue our work as an ultimate solutions provider and provide excellent solutions to all of our clients.