Category:
NIHON KOHDEN (日本光電) Life Scope monitoring history from the 1990s, Life
Scope monitors networking; Nihon Kohden Life Scope BSM-8000
series bedside monitors, Life Scope S (BSS-9800) bedside station, Life Scope M (BSM-9501)
modular monitor, Life Scope J (BSM-9101) bedside monitor, Life Scope TR (BSM-6000 series) bedside monitor, Life Scope G5 (CSM-1500 series) bedside monitor, Life Scope
G7 (CSM-1700 series) bedside monitor, Life Scope G9 (CSM-1901) bedside monitor.
It is recorded and shared so that true history shall always be remembered as it was.In
this record we traced the reasons for the perpetual struggle by NIHON
KOHDEN with the disruptive digital revolution since the 1990s, and this is current ongoing undesirable situation! The incompetence to adopt the total completion
of real-time digital communication networks by the Life Scope Patient
Monitors led to denial and taking risks in exporting new-type biphasic defibrillators in November 2002, loss of overseas credibility and a ticking time bomb waiting to explode with many key issues unaddressed.
The
detailed chronological events that led to NIHON KOHDEN giving up the development work to make digital modular monitors should surprise many, given
the great efforts put in to hide this poor state of affairs; to move forward positively, the absurdity highlighted in this article must be first set
right.
(I)
Back To The Future In The 1990s
The longer you can look back, the farther you can look forward - Winston Churchill
| A profitable and comfortable position was taken away from NIHON KOHDEN by the disruptive Digital Revolution |
|---|
First, for perspective: The highest revenue for NIHON KOHDEN CORPORATION from exports comes from patient monitors, followed by defibrillators, together they formed about 70% of the company's sales in foreign markets. All other equipment only make up a small part of the export business.
The disruptive digital revolution brutally pushed back by decades the technological progress of NIHON KOHDEN, whose strength is mainly in traditional analog electronics; many of you will be stunned to learn what is the company's current digital capability for patient monitoring. The details are available in this article for your critical evaluation.
During the 1990s, the company was seen grappling with a huge technological gap to catch up with International players; the overall situation was so bad that an overhaul of the entire product range was needed. Speed and intense investment were the two critical elements to make up for the lost time but the company relented after encountering the first failures. NIHON KOHDEN had lost the opportunity to catch up, and the company is way far behind international competitors today.
When digital Ethernet networking had become the norm in foreign markets, Nihon Kohden
Corporation
in Japan was still helplessly struggling with the outdated analog type signal
exchangers. The company could survive to today because the Japanese domestic market is a protective one, and domestic companies are insulated from competition by foreign high-tech companies.
NIHON KOHDEN patient monitoring products were shunned in foreign markets
The problem faced by the company in foreign markets is how to create value using outdated technology! The absence of know-how to offer even basic level of digital networking (LAN) in
Patient Monitors in the 1990s meant
the collapse of NIHON KOHDEN export sales for Life Scope Patient
Monitors; the only exception was export sales linked to Japanese Government ODA projects. As seen in the USA
market, sales recovery was so gradual and hardly noticeable that many
from the
younger generation had erroneously mistaken it as a new
emerging brand in the market!
For a
good SUMMARY of the Patient Monitoring market up to the late 1980s,
Michael E. Porter had one in his book The Competitive Advantage of Nations (1990; Republished with a new introduction, 1998).
From the early 1990s the Life Scope Patient Monitoring Systems had already shown rapid technological irrelevance. In August 1998, Nihon Kohden finally launched the first Life Scope modular monitor using digital interface between monitor main unit and modules, but this turned out to be a failure and the company lost the determination to continue.
From the early 1990s the Life Scope Patient Monitoring Systems had already shown rapid technological irrelevance. In August 1998, Nihon Kohden finally launched the first Life Scope modular monitor using digital interface between monitor main unit and modules, but this turned out to be a failure and the company lost the determination to continue.
By
September 2002 it had become obvious to most observers the poorly-designed network platform for digital
measurement data was already abandoned. Instead of confronting it squarely as a representative patient-monitoring brand from Japan, the
company kept herself busy with all means to hide the inability to do digital modular monitoring. The analog yellow
MULTI-parameter sockets
are still currently being passed off absurdly as digital nodes connecting to a non-existent measurement data network platform.
| How can we know what types of patient monitoring products were Nihon Kohden exporting in 1997? |
|---|
Take a look at this scanned copy of the Nihon Kohden 1997 Product Guide (click for PDF),
the booklet contained the details of CardioLife TEC-2200 series
defibrillators which were officially launched in May 1997, thus May 1997
sets the earliest possible publication date of this product guide beyond the
slightest doubt.
The patient monitors in the said guide show product details of Life Scope 9, Life Scope 14, Life Scope LC etc. linking to CNS-8300 Central Monitors via bulky analog signal exchangers instead of compact digital network hubs.
Information about USA
FDA registrations during this period for Nihon Kohden patient monitoring products are readily accessible on the Internet.
 |
| The legacy analog signal exchange network was the only type available for sales in 1997 |
| The 1997 patient monitoring product range lacked digital era displays, connectivity and storage |
|---|
The
CNS-8311 Central Monitors
(released in mid-1995) shown in the network diagram was developed in a US software workshop (Nihon Kohden USLab)
using a proprietary GUI (graphical user interface) running on top of
Microsoft MS-DOS operating system.
This PC-based Central
Monitor, however, could not enjoy the benefit of an Ethernet link because there was no place to
connect to. The Ethernet factor was something prospects were so
keen to first inspect for networking but prominently missing in NIHON KOHDEN portfolio. This was the year there was a big surge in
Ethernet networking knowledge after Microsoft released the Windows 95
operating system which kick-started the mass adoption of the Internet
and Ethernet. In 1995, the Ethernet card was still expensive and sold as an option to the basic PC; Internet IP was not common knowledge yet but an Ethernet LAN setup allowed
multiple PCs to share internet access using only a single dial-up router (via a telephone line) to a service
provider.
 |
| The outdated analog signal exchanger on roller wheels (left) offered by NIHON KOHDEN in 1997 |
The
analog signal exchanger for linking bedside monitors to the Central
Monitor used by NIHON KOHDEN was heavy, bulky and outdated. It stood out
prominently as highly crude against international competitors like
SpaceLabs or Marquette patient monitors who were using state of the art
digital Ethernet
LAN for communication as standard.
Each cable running between
bedside monitor and said signal exchanger was loaded with 37 strands of thick wires
in it and was
heavy, making it clear the installation cost was also very high; there could
not be any profit for system sales even if customers could be found.
The chances to find buyers were very low for the outdated analog type exchange network and if it was not for the fact information search was not yet well-developed, there would not even have any prospect from less advanced economies (that were not well-informed enough). In the USA market for example, sales plunged from tens of millions US dollars in annual turnover to practically nothing! That was the reality the company had to face.
The chances to find buyers were very low for the outdated analog type exchange network and if it was not for the fact information search was not yet well-developed, there would not even have any prospect from less advanced economies (that were not well-informed enough). In the USA market for example, sales plunged from tens of millions US dollars in annual turnover to practically nothing! That was the reality the company had to face.
Imagine the Life Scope 8 bedside monitor launched in August 1993 was still using a 7-inch monochrome analog CRT
as display when digital type Electroluminescent Displays (EL flat
panels) was already
the default standard in ex-Japan market for this product class.
 |
| Customers outside of Japan were no longer looking for bedside monitors using CRT display |
There
was no demand for such export from Japan and Life Scope 8 bedside monitor was of course short-lived for the export business, how could it be
otherwise?
The patient monitoring products are grouped together in the image below to give
a
better visualization of the Life Scope product range at the time. The
Life Scope LC was the first and only model with a digital display
released in
October 1996 but it had a color LCD screen. This Life Scope LC monitor
was not relevant
for
the export market since color display was still expensive and a niche
segment for brand loyalty; it was a product targeting the Japanese
domestic
market.
 |
| NIHON KOHDEN in 1997 had a range of products with a huge digital gap to close |
The processing unit of Life Scope 14 (launched in July 1992) at 18kg was huge, and complemented by an even larger 25Kg monster display (above image). As a comparison the equivalent processing unit (Computer Module) of HP Merlin (M1176A) together with the display was less than 20kg and the market leader was selling it at a cheaper price.
Life Scope monitoring products were not saleable in foreign markets even as stand-alone devices (without the need for digital networking)
The only viable business for the export business was to sell a single or scant few standalone monitors to
more remote places where the competitors were neglecting due to the miserably low
volume; a purchase order of just three monitors made an exciting big deal!
Fortunately, Nihon Kohden was able to benefit from sales to the Japanese Government through their Official Development Assistance (ODA) projects which was a good source of income for export. The selling prices were based on domestic market prices which were twice that of the export market and exclusive to only domestic bids from Japanese companies.
(II)
Exporting Without A Strategy
A Strategy delineates a territory in which a company seeks to be unique - Michael Porter
| How was it possible for a business relationship to exist between Nihon Kohden Corporation and Marquette Electronics, Inc. in the 1990s? |
|---|
Below image shows the Marquette bedside patient monitors range (Eagle Monitors for
standard monitoring while Solar Monitors for premium cardiac care) in the 1990s.
 |
| Marquette Eagle and Solar monitors in the 1990s |
Marquette was using high-contrast digital EL flat screens for the monochrome Eagle
Patient Monitors. While the Eagle 3000 could have optional recorder
attached, the Eagle 4000 monitors could only use a network recorder which was
vocabulary unknown yet to a legacy NIHON KOHDEN Life Scope network.
 |
| Marquette Bedside Monitors using monochrome digital EL screens |
While
Marquette was already declaring the Unity network IEEE 802.3 compliance at the
system level, NIHON KOHDEN could not yet produce a single monitor with
this compliance. At the time,
we were seeing market players with Ethernet Connectivity competing who
could offer
the most digital connection nodes in an Ethernet Network.
 |
| Marquette Unity network |
With
such a busy digital battleground around the world, it is thus
noteworthy to know that Nihon Kohden Corporation in December 1994 concluded an agreement with Marquette Electronics
to sell and service Marquette products in Japan. Marquette Electronics
was looking for a distribution channel for their products in Japan and
selected Nihon Kohden Corporation as their distribution partner.
Marquette Electronics had the advanced Cardiology solutions (not limited
to patient monitors) badly needed by Nihon Kohden for their business in
Japan, while distribution choices for Marquette Electronics were limited.
Substantial Current Incomes and Profits Are Not From Being A Manufacturer
In
the protected domestic market in Japan, Nihon Kohden Corporation has
two equally important roles, that of manufacturer and
also a leading distributor for imported products such as ventilators
from Swiss manufacturer Hamilton Medical AG, anesthesia machines,
BIS (Bispectral Index) monitor, branded consumables and many more. NIHON
KOHDEN created value in Japan by providing solutions with the help of technologies from complementary imported products, and often do not market the entire range of the foreign manufacturers, leaving out the ones that compete directly with their own products. The reason they can do so is because of their strong distribution power; thus, a big proportion of the corporate
income and profit in each fiscal year are generated from
selling products in Japan made by third-party world-renowned
companies, and it should of interest to learn how these are being reflected on the balance sheet.
As captive customer solutions in Japan are typically a combination of own and distributed products, such solutions cannot be exported due to strict restrictions of distribution territory. This is the major weakness of NIHON KOHDEN as an exporter for solutions.
It is no coincidence good market
reports on the
Asia-Pacific region typically do not include the Japanese market; the prices
for
patient monitors in the Japanese domestic market (being a highly-guarded closed market) are well-inflated to
double what are found in foreign markets. NIHON KOHDEN should see the
competitive situation in Japan taking a drastic turn for the worse if the
domestic market has to be
opened up in a trade negotiation.
The domestic and export businesses are worlds apart; the roles played by the products that are only meant for domestic distribution will be the product gaps for the export business! This is a very serious matter when you know it limits the business potential of any accessible market and making published market reports irrelevant. Distribution partners are of course greatly weakened by the product gaps, rendering meaningful performance appraisals a tricky affair, and highly subjective in nature.
The domestic and export businesses are worlds apart; the roles played by the products that are only meant for domestic distribution will be the product gaps for the export business! This is a very serious matter when you know it limits the business potential of any accessible market and making published market reports irrelevant. Distribution partners are of course greatly weakened by the product gaps, rendering meaningful performance appraisals a tricky affair, and highly subjective in nature.
The current export business model of NIHON KOHDEN is not competitive and deplorable
Based on Michael E. Porter's Competitive Five Forces,
the business model is one of major strengths in the protected domestic
market with market entry barriers greatly favoring the company but
glaring weaknesses and limitations when moving out of the comfort zone
into the International arena.
Product gaps mentioned earlier greatly limits the realizable sales potential in any market and significantly enhances the bargaining power of the buyers, making it very challenging for any seller to capture value in highly competitive markets
Besides
the product gaps and with limited development resources, product designs are only fine-tuned to the
peculiarities of the domestic demand with very selective responses
to the outside world demand. For consumables made by NIHON KOHDEN, the
prices are way off the mark compared to market prices; for example,
quality 3M disposable ECG electrodes are sold to end-users only at a
fraction of the prices Nihon Kohden ECG electrodes are offered to distributors! In practice, distributors
can only focus on the NIHON KOHDEN hardware and sell consumables from
alternative manufacturers who can meet the market prices (although
strictly speaking, this is not allowed under the distribution
agreement).
Consumables sales for the export market therefore only represents a small percentage of the annual export sales and the bulk of it are from the customer's initial hardware purchase. Without sizeable recurrent consumable sales, each new fiscal year's export sales is only about selling new hardware with a high degree of uncertainty and therefore revenue volatility. Reports of consistent positive growth from any sales office should therefore be taken with a big pinch of salt; there is just no competitive advantage at all for the export market! In the absence of a product strategy for the export business, the export operation is only surviving on a business of selling hardware as cheap as possible each new fiscal year, and year after year, years after years.
NIHON KOHDEN has no unique value proposition and is long stuck in a commodity market segment of the highly competitive export markets
There is currently no solution at the system level to acquire or lock in high value customers, depriving NIHON KOHDEN resellers (including subsidiaries) the necessary margin needed to sustain their business growth; a big order simply means a purchase order with exceptionally low margin.
When the acquired customers become successful, their needs move from hardware purchase to paying for monitoring solutions; when this happens, NIHON KOHDEN resellers become helpless and have to literally surrender the hard-earned customers to competitors who had been waiting patiently for the anticipated D-day.
It is painful and frustrating for NIHON KOHDEN resellers to keep spending time and money to acquire new customers, without the ability to retain them when they reached the doomed success point. This is also the point resellers could benefit most profitably from the lost customers.
A good product strategy does not need any business from World Bank projects, this is one exposed manifestation example the kind of business the company is going after. This is a subsidiary, not a distributor; what is driving them to do this?
 |
| No sustainable export sales growth is possible without a unique proposition |
Technical
co-operation with big players outside of Japan is also impossible to
realize because of the perpetual fear of bringing them into the
protected Japanese domestic market, and for this reason NIHON KOHDEN
products cannot be compared to other manufacturers in the market which
are more co-operative with system integrations.
When under siege, the company will hold on to the domestic market at the expense of the export market, wasting years of efforts by individuals in foreign markets.
(III)
Digital Defeat: A Crushing Blow That Echoes Endlessly
Our greatest glory is not in never failing, but in rising every time we fall - Confucius
It
was exciting time for NIHON KOHDEN in August 1998, as the company was
preparing for the launch of the first digital modular monitor and expecting
the worst to be finally over. It was unsuspectingly the onset of a much
bigger crisis.
With the race against time, the 1997 Asian Financial Crisis was
a relief from the red-hot Asian markets where competitors were all
having a great time growing their businesses exponentially while Nihon Kohden was only getting a few crumbs!
Against
such a battered backdrop, the focus for NIHON KOHDEN cannot be on
innovation but getting the first digital-based monitors out as soon as
possible. Any
claim of innovation from this period is doubtful and should be
questioned.
NIHON KOHDEN's attempt to make digital modular monitors was a failure, one that was unfortunately disastrous.
| The failure to make digital modular monitors |
|---|
The
moment came that Life Scope S (BSS-9800) Bedside Station as the first
Life Scope model to offer Ethernet LAN connectivity was finally launched
in August 1998 (Signals 354) internationally. For a while it did seem that the worst was finally over, but it was game over even before the product could be launched in the biggest US market.
The failure turned disastrous as
it led NIHON KOHDEN to initiate an all-out effort to hide the
incompetence to make digital modular monitors, and also took the risk to
export new type biphasic defibrillators three years ahead of official approval for domestic use in Japan.
 |
| The first NIHON KOHDEN digital modular monitor launched in August 1998 |
The Life Scope S Bedside Station
was to replace top-model Life Scope 14 (BSM-8800) and herald to the export market NIHON KOHDEN
was finally into the digital age.
 |
| Life Scope S Bedside Station unfortunately, was a product failure |
The Life Scope S bedside station was launched with many missing software, scheduled for gradual upgrading over time. When the Life Scope S product development was suddenly
suspended about a year from its export launch, these planned upgrades were left
unfinished.
The
top-model Life Scope S bedside station was complemented by a
lower-priced Life Scope M (BSM-9510)
bedside monitor, using the same measurement data-exchange network platform as Life
Scope S. The Life Scope M bedside monitor had lower processing power, only capable of sharing basic modules with Life Scope S bedside station.
As shown, the Life Scope M bedside monitor had a
built-in six-slot module rack.
 |
| Lower-priced Life Scope M (BSM-9510) modular bedside monitor complemented the Life Scope S bedside station |
Life
Scope M modular monitor was launched in June 1999, only to be abruptly withdrawn from the market just not long after launch. The
abrupt end to BSM-9510 (Life Scope M) modular monitor showed there was serious
doubts about the performance of the new modular bedside monitor even as a
basic patient monitor.
There remained no official confirmation of product
withdrawal, so it certainly looked like the problem could be fixed with time. This assumption was finally negated with the release of configured Life Scope
A (BSM-5100) series monitors.
 |
| Life Scope M (BSM-9510) modular monitor suffered the terrible destiny of a quick death |
Life Scope S (BSS-9800) Bedside Station was responding to emerging trend of using a high-density digital multi-parameter module as basic building block for modular monitors |
|---|
In analog modular monitors, only single parameter modules were produced by NIHON KOHDEN. However, when
designing new digital modules for the Life Scope S bedside station and Life Scope M bedside monitor, the
company discovered the critical care market had already moved to using a
digital multi-parameter module with higher density of electronic components as a
basic building block for modular monitors.
Apart from the higher electronic density, the difference between a
single parameter module and a multi-parameter module is the presence of a
CPU processor in the latter; the output of a multi-parameter
module is thus processed digital data. This new development of
distributed processing made it possible for patient data to be stored and moved with the module.
Digital modules can also be connected directly to a (proprietary)
digital data-exchange network as a node.
 |
| Marquette modular monitors distributed by NIHON KOHDEN in Japan |
In
Life Scope S BSS-9800
Bedside Station and Life Scope M BSM-9510 Bedside Monitor, Nihon Kohden
wanted to follow the trend, which was to release multi-parameter
modules for the first time, similar to what Marquette was already offering for Solar 7000/8000 modular monitors.
 |
| There were many types of Marquette multi-parameter TRAM modules to choose as basic building block |
For
Nihon
Kohden to offer a variety of multi-parameter modules would only
exacerbate
a long-standing delivery problem, it was eventually decided to offer
only one type of multi-parameter module for all prospects. This meant only one comprehensive type of multi-parameter module was offered and it was named the Saturn module. The manufacturer could do it because it has
strong bargaining power in the protected Japanese domestic market.
 |
| NIHON KOHDEN offered only one type multi-parameter module as mandatory building block for modular monitor |
Not
all the hardware were needed by each prospect but there was only one
type multi-parameter module, it was either take it or none; if you have a small need, this module is not what you want.
Obviously this is not acceptable in ex-Japan market when facing strong
competitors with various multi-parameter modules for customization. Many prospects
could not even pronounce the brand correctly outside of Japan.
Below
BSS-9800 brochure shows Life Scope S
Bedside Station offering only one type of multi-parameter
module at its launch in August 1998.
 |
| There is only one type of multi-parameter module in this brochure |
| Even occupying a 3-slot width of the module rack, the Saturn multi-parameter module (August 1998) was not big enough to hold all necessary connector sockets required by the large amount of hardware |
|---|
Nihon
Kohden intended a module rack integrated physically with the
main unit to form a limited footprint just big enough to stack the display monitor on top of it (see below illustration). The
physical size of the Saturn multi-parameter was therefore constrained; in addition, the multi-parameter module must still work
in
combination with
other parameter modules like recorder, sidestream CO2, BIS, EEG, Flow/
PAW, SvO2 in the module rack. In conclusion, we ended up seeing a small Saturn module with insufficient space to hold all the necessary connector sockets.
 |
| The Saturn module was intended to be physically small in size |
| The elegant but expensive solution from NIHON KOHDEN for the physical size limitation of the Saturn module was to modify two connector sockets for sharing use |
|---|
 |
| The Saturn module turned to sharing two modified connector sockets as solution to the constraint of space for more sockets |
The method selected by NIHON KOHDEN was to make use of coded measurement cables known as Smart Cables to share two modified connector sockets. The patient monitoring hardware can be separated into two blocks in the Saturn module:
(NORMAL BLOCK) These hardware make use of dedicated sockets and ordinary measurement cables:
- ECG
- SpO2
- NIBP
(MULTI-PARAMETER UNIT) These hardware share two adapting MULTI-parameter sockets and only make use of Smart Cables for connections:
- 2 channels of IBP (2 MULTI-parameter sockets = 2-ch IBP)
- 4 channels of Temperature (2 MULTI-parameter sockets = 4-ch TEMP)
- Cardiac Output
- FiO2
- Thermistor Respiration
 |
| Huge amount of hardware had to share only two modified connector sockets as a compromise |
The adapting MULTI-parameter sockets were additionally allowed to be diverted as costly digital serial ports