In 2004, Kono Seisakusho Co. developed the world's smallest suture needle with thread. With a diameter of 30 microns (0.03mm), the product makes it possible to apply sutures to blood vessels with diameters as small as 50 to 500 microns. Kono Seisakusho now boasts a 60% share of the Japanese market for microsurgery suture needles with thread.
According to the company's president, Kono Junichi, "We are probably the only company in Japan that both develops and manufactures microsurgery suture needles with thread in-house. Other companies simply assemble needles and threads which they have purchased."
When Kono became president in 1997, the market for medical devices was contracting and prices were falling, with the start of the national government's policies to reduce medical costs. Kono Seisakusho was no exception, and business suffered as a result, forcing the company to restructure. Kono was the son of the company founder and, at the age of thirty-four, he took over as the fourth president in his sixth year in the company on the condition that all of the company directors were replaced.
Kono says, "A real revolution was required in order to get the company back on track. We started by reducing the remuneration of the directors, including myself, so that we could hire new talent, In order to try to regenerate the workforce and let some fresh air into the company. We also introduced the latest equipment in an attempt to strengthen our quality control systems, in order to ensure the continued survival of the company. And we changed the entire organization and lay out of the company, and completely replaced all of the rooms, desks and fixtures with new items, in order to overhaul our past bad habits. There was quite a lot of internal resistance to these changes, but I didn't think that the company would survive without pushing through these kinds of substantial business reforms."
The changes also involved mechanization and automation.
"The process of manufacturing needles and sutures included quite a few steps that relied on hand-crafting by skilled craftsmen. I asked the employees who were only a few years away from retirement to pass on their skills, but they told me that they were craftsmen, that they were not very good at teaching other people, and that there was no one who was able to take over these skills. Unless something was done, this meant that these skills would be lost if these people left the company. "
Kono made an effort to create mechanisms where by this kind of skilled craft work could be passed on systematically, New production equipment was introduced, and an environment was established so that anyone with good eyesight and a certain degree of dexterity would be able to take over the work.
Kono also worked to establish a development structure where by two or more new products could be brought to the market each year. The company devoted more than five percent of revenue to research and development in order to complete the switch to a management style that did not rely on existing products and technologies.
"The company might have been able to survive just with our existing products. However, Venture companies like ours would not develop unless they continuously discovered hidden needs for products and technologies and then developed these products and brought them to market.
"However, large markets will always attract the big companies. With small markets, this is not a concern, and there are still a lot of things that doctors, nurses and patients need, even though the scale might be small, By identifying each of these small needs and developing a market for each one, even if the market for one product is only worth about 100 million yen, if we develop a hundred such markets then that will be worth 10 billion yen, "says Kono.
"I tell our employees, ' Patients and doctors have needs, so if you can identify any consumable products where we can produce a diverse range of products in small volumes with high quality and high added-Value--then make them!'"
The fruits of this approach started to appear in 1999; just two years after Kono had taken over as president.
The market for cardiovascular surgery had been completely dominated by sutures made from polypropylene. However, Kono Seisakusho developed sutures made from polyvinylidene fluoride (PVDF). Clinical trials showed that PVDF sutures are much better suited to cardiovascular surgery, because there is less chance of a tissue reaction-taking place with in the body after surgery.
Kono Seisakusho also developed specialized needles to go with these sutures, and managed to enter the market for needles and sutures for cardiovascular surgery, The development costs ran to tens of millions of yen.
"Medical fields that handle the heart are dealing with something that has a significant impact on their patients' lives, and so it wasn't easy to persuade surgeons to use a product from a new manufacturer. Not only that, the new product was quite expensive at about double the price of polypropylene products. However, now major manufacturers such as Johnson&Johnson and leading Japanese manufacturers are developing their own products, in the cardiovascular surgery market, we are highly regarded as pioneers in developing PVDF sutures.”
Following this pioneering work, Kono Seisakusho eventually succeeded in developing the world's smallest suture needles with threads. The manufacturing process for this product involves dozens of steps, Such as shaping stainless steel 30 microns wide into the shape of a needle, and then polishing it to a sharp point and coating it. The part where the thread is attached to the needle also requires special technical skill in order to create an opening in the needle and then close the opening after the suture thread has been inserted through it−all the while peering through a microscope. Even more remarkable is that the manufacturing equipment required to develop this product did not exist initially, requiring Kono Seisakusho to develop each individual piece of equipment by themselves. In this way, Kono Seisakusho has been able to develop niche markets by creating products that are difficult for other companies to imitate.
Also, in the process of developing a new product, One technician is responsible for cooperating with the relevant departments to keep track of everything-from understanding the needs of the medical field through to designing, developing and manufacturing a new product.
Kono says, "We train our young employees in a way to help them to gain the ability to discern the true nature of products and manufacturing, rather than simply making judgments based on common sense and the knowledge that they have acquired until now. They learn how to use the machines in a way that is creative and Original. We want to foster technical specialists who are aware of the issues and can think about problems for themselves, rather than simply being' yes men.'"
This spring, Kono Seisakusho established a sales company in Shanghai, providing all the funding, while working with the support of local Chinese doctors and other stakeholders. The plan is that the Shanghai sales company will sell products made in Japan.
One key issue is to secure sales channels, but the medical industry is a unique market, and personal connections are an effective way of securing sales channels. The sales company is in the process of creating sales channels by utilizing a network of Chinese doctors that have known one another since they were exchange students in Japan.
Incidentally, Kono Seisakusho's staff of just over 100 people includes about twenty sales staff. Of these, Six people are responsible for overseas sales, and four of these originally came to Japan as exchange students from China.
"In future, we want to transmit the latest medical technology to the world by developing and manufacturing products in China. in China, there are many talented people with a keen awareness that they are going to be world leaders. I am confident that by cooperating with such people we will be able to create products that have not existed until now, ”says Kono.
Kono Seisakusho has also started to sell products in Southeast Asian countries such as Thailand and Malaysia. Sales channels are also being developed in Europe, and expansion into India and the MiddleEast is also being considered,
"The company' s most important mission is to contribute to society−to make things for people, not for profit. We Will keep on making things that are regarded as necessary, even if the market is only small or the efficiency of production is not particularly-good. The fact that we can do this is because of our strengths as a medium-sized enterprise. In order for Kono Seisakusho to be a truly valuable company we must become a presence that is recognized internationally. ”
Kono Seisakusho aims to double its revenue to two billion yen in the next five years. Surely the keys to reaching this goal are consistent sales activities and product development. Kono Seisakusho intends to continue to develop niche markets, slowly and steadily.