Japanese Approachto Productivity

Isolating the Elements Japanese, as a nation, have had

one fundamental economic goal since 1945:

FULL EMPLOYMENT THROUGH INDUSTRIALIZATION

FULL EMPLOYMENT THROUGH INDUSTRIALIZATION

Strategy Strategy employed by the

Japanese to achieve their economic goal:

OBTAIN MARKET DOMINANCE IN VERY SELECT PRODUCT AREAS

OBTAIN MARKET DOMINANCE IN VERY SELECT PRODUCT AREAS

Tactics

Tactics Tactics Tactics

They imported their technology, avoiding major R & D expenditure.

They concentrated their ingenuity on the factory to achieve high productivity and low unit cost.

Improve product quality and reliability to the highest possible levels.

Governing Factors

Respect for PeopleRespect for People Elimination of WasteElimination of Waste

Elimination of Waste “…anything other than the minimum

amount of equipment, materials, parts and workers (working time) which are absolutely essential to production…”

No surplus No safety stock Nothing is banked If you can’t use it now, you don’t make

it now.

Japanese Techniques Facilities Planning Techniques Production Planning Techniques Management Style Techniques Employee Relations Techniques

Facilities Planning Techniques Shared Resources Focused Factory Networks Group Technology Technology Specialization Automation/Robotics

Technology Specialization Japanese facilities are smaller and the equipment

within these facilities is specialized for the particular function that the facility is performing

The Japanese buy strictly what they need in order to perform a particular function and no more

This makes: Japanese machines smaller and much cheaper,

more machines can be packed into the same space Rapid tooling changes possible

Employees encourage the installation of new technology and are excited about getting the most out of new technology.

Shared Resources Two adjacent manufacturing

organizations share such things are water towers, warehouses, waste treatment facilities, garbage removal facilities, transportation, power generation, maintenance, service personnel, medical staff, and fire prevention facilities.

This offers a large and better-run organization for each of these areas,

Focused Factory Network Instead of building a large

manufacturing facility that does everything the Japanese build small plants that are specialized. There are less than 750 plants in Japan that have as many as a thousand employees. It’s very difficult to manage a large

installation Integrated plants can be operated more

economically

Group Technology Consider all of the operations

required to make a part and try to group those machines together. Productivity go up Work-in-process inventory comes

down dramatically

Automation/Robotics The number of Robots in Japan is several

times higher than the number of Robots in the U.S.

Japan has invested 1/3 of its growth national product in capital improvements for the last 25 years, compared to about 19% for the U.S.

In 1990, Japan invested 25.4 percent of its GNP on new industrial plants, Germany 15 percent and the U.S. 9.3 percent

Little worker resistance to the implementation

Uniform Plant Load Set up a firm monthly production

plan for which the output rate is frozen.

Plan to build the same mix of products every day, even if the total quantities are small.

Uniform Plant Load cont.

Toyota Example

Model Qty.

Monthly Qty.

Daily Qty.

Cycle

Sedan 5,000 250 2 minutes

Hardtop 2,500 125 4 minutes

Wagon 2,500 125 4 minutesSequence: Sedan, Hardtop, Sedan, Wagon, Sedan,

Hardtop, Sedan, Wagon, Etc.

Jidoka “Stop everything when something goes wrong.” It can be thought of as controlling quality at the

source Instead of using inspectors to find the problems that

somebody else may have created, the worker in Japanese factory becomes his or her won inspector.

Jidoka push-buttons are installed on the assembly lines.

Jidoka also encompasses automated inspections, sometimes called Autonomation.

Japanese believe that if inspection can be done by a machine then a person shouldn’t have to do it.

Minimized Set Up Time Instead of accepting setup times as fixed

numbers, Japanese fixed the lot sizes (very small) and went to work to reduce the setup time

Japanese aim for single digit setup times, i.e. less than 10 minutes, for every machine in their factories

The Japanese separate setup time into two segements:

Internal: that part which must be done while a machine is stopped

External: that part which can be done while the machine is operating

Minimized Setup Time (cont.)

Hood and Fender Press Comparison(800 Ton Press)

Toyota U.S.A. Sweden W. Germany

Set-up Time

10 min 6 hour 4 hour 4 hour

Set-Ups/ Day

3 1 ----------- ½

Lot Size

1 day 10 days

1 month

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Kanban Production Control System It is a “pull” type of reorder system in that the authority

to produce or supply comes from down-stream opportunities

Production Kanban authorizes the manufacturing of a container of material

Withdrawal Kanban authorizes the withdrawal and movement of that container

The number of pieces in a container never varies for a given part number

The whole system hinges on everyone doing exactly what is authorized and following procedures explicitly.

Just In Time Production “production of precisely the necessary

units in the necessary quantities at the necessary time.”

Producing one extra piece is just as bad as being one piece short

It is contrary to our current practice of stocking material “Just-In-Case” something goes wrong

The Just-In-Time concept applies primarily to a repetitive manufacturing process

Just In Time Production Under Just-In-Time, the ideal lot

size is One Piece The idea is to drive all queues

toward zero in order to: Minimize inventory investment Shorten production lead times React faster to demand changes Uncover any quality problems

Stages for Adaptation of JIT Stage 1: Control of Quality Stage 2: Control of Quantity

Control of Quality Train every person in the firm on quality issues Make every defect visible Make the production people responsible for quality Give every production worker the responsibility

and authority to stop the line or process if a problem develops

Make every worker do his/her own rework Make production equipment maintenance the

responsibility of the production worker using that machine

Pass every part through an automatic measuring device

Control of Quantity Reduce inventory of parts and

finished goods Stock outs occurring less often and

lasting shorter periods

Split Shifts Japanese run two shifts per day

rather than three. These two shifts have a two- to four-hour gap between them.

Maintenance, modification, or inspection of machines are done during the time between the shifts.

Advantages Fewer employees are required The duplication of setup or maintenance

employees is reduced Fewer maintenance employees are able

to accomplish more in the same amount of time

Communication between shift managers is greatly improved

Shift turnovers are smoother and more effective

Bottom Round Management “Consumer Management” or “Committee

Management” Decisions are made at the lowest possible level The layers of upper management are very thin

and the layers near the bottom (operational management) have the most employees

Managers at the operational level are closer to and more involved with their workers

Since the lower levels are the decision makers, there is not much need for upper level managers

Very difficult to implement in a large, complex manufacturing organization

Lifetime Employment If economic conditions deteriorate, the

company will maintain the payroll almost to the point of going out of business

It only applies to permanent workers, who constitute about one-third of the work force in Japan

People have a tendency to be more flexible and want to do all they can do in order to help achieve the goals of the company

Lifetime Vendor (continued) The Japanese also prefer to have their

vendors residing within close proximity to their factories, thus allowing closer contact

More than 90% of all Japanese companies are part of the supplier network

Kinds of Suppliers: Specialists: serve multiple customers (U.S.A.) Captive: make a small variety of parts for a

single customer (Japanese)

Lifetime Vendor Japanese do not bid contracts out every

year searching for the best price Vendor is involved in the final product, and

this involvement begins with the design of the product

In return for the input into the design and production of the product, he is given a long term contract (up to five years)

The vendor thereby becomes part of the company and is involved in the total project

Company Unions Objective of both the union and

management: To make the company as healthy as

possible so there would be benefits accruing to the people in a secured and shared method

The relationship is cooperative, not adversary

Quality Circles “Small Group Activities” The small groups, or circles, are

encouraged to use their creative talents and their high levels of education to come up with creative product improvements

It is used in over two-thirds of Japanese factories

Quality Circles (continued) Individuals are trained not just in the

traditional quality control and production methods, but also in: Conference Management Problem-solving skills Creativity skills Team building Leadership Sales and Service

Small Group Improvement Activities (SGIA)

Circle members are taught: Brain storming techniques How to define a problem How to evaluate solutions Statistical Quality Control

SGIA continuedQ.C. Circles Effectiveness at Toyota

Year Total Proposals

Proposals per capita

Percent Accepted

1960 9,000 1.0 39%

1970 40,000 2.5 70%

1973 247,000 12.2 76%

1976 380,000 15.3 83%

Statistical Management Japanese found that, through the

use of statistical management, quality control, error-spotting, and general facilities control are much easier

When information is statistical and displayed graphically, it is easier to see whether it is in line

Statistical Management(continued) Statistical management incorporates a

drive toward improved quality and improved productivity Process Management Pareto Charts Scatter Diagrams Histograms Trend Charts Control Charts Process Flow Charts Cause/Effect Diagrams

Long Range Planning Japanese look towards the long range

objectives and are geared for large improvements on a long term basis

All processes are analyzed carefully before implementation. Once implemented, they are not readily changed

The US makes changes to its production sequence on as much as a daily basis Products are introduced too quickly and are

not engineered as completely and thoroughly

Long Range Planning In Japan, borrowed capital provides

about 70 percent of the Japanese manufacturer’s needs and equity funds provide about 30 percent. The opposite is true in the United States.

Attitude Toward Workers “What they’re doing today is only

tapping their capability. We must give them an opportunity to do more.”

The management system provides every worker with an opportunity to display his maximum capabilities

Japanese spend more for employee training and education – at all levels – than any other industrial nation

Attitude Toward Workers Everybody in a Japanese company

gets a bonus, from the lowest employee to the highest, twice a year

In good times the bonus is high (up to 50% of their salaries), while in bad times there may be no bonus

Employees Attitude: If the company does well, I do well.

Morale Programs Morale programs within Japanese firms

are primarily designed to show interest in the employees Exercise programs Special interest programs Family orientation seminars Company schools Company stores Family outings

Morale Programs (Continued) All members of a family are involved

with the company, and this emphasizes that employees have a lifetime relationship with it

The Japanese have pride in their work and are proud of their equipment; they take care of it as if they owned it personally

They work in no crisis atmosphere

Management Style Techniques Bottom round Management Quality Circles Statistical Management Long run Planning Company Unions

Production Planning Techniques

Q.C. at the Source Uniform Plant Load Just in time or Kanban Minimize Setup Time Split Shifts Lifetime Vendors/Subcontractor

Networks

Employee Relations Techniques Attitude Toward Workers Lifetime Employment Morale Programs Employee Rotation Profit Bonuses No Nepotism

The Role of the Government Segments influencing industry

Business Management Unions Government

The Role of the Government

United StatesEach of these segments is battling for and striving for a different set of goals and objectives

Japan’sJapan searches for a common ground. These organizations work hard to remove roadblocks and barriers in order to progress

The Role of the Government

The Ministry of International Trade and Industry (MITI) is a collection of businesses and governmental leaders that look for international market areas that show promise. They target these areas and work as a national unit to effective inroads

Applicability of Japanese Concepts Most Appropriate

Attitude Just-in-Time philosophy Quality at the source

Manufacturing Engineering Minimized setup times Uniform plant load Group technology

Production Control Kanban system

Applicability of Japanese Concepts Not prevalent

Lifetime Employment Company Unions Subcontractor Network

Appropriate for Some Companies Attitude toward workers Bottom round management Quality circles

Major Strategic and Investment Decisions Focused factory networks Automation/robotics