Summary by Jose M. Luis
Master of Accountancy Program
University of South Florida, Fall 2000
Japanese Management Main Page | JIT Main Page
The purpose of this paper is to answer the question why Japanese manufacturing has become so successful and competitive.
Background
Twenty years ago, Americans pictured the Japanese factory as a sweat shop making shoddy products. Today, Americans imagine gleaming factories peopled by skillful robots – the factory of the future. In fact, it is the factory of today, running as it should. The Japanese achieved excellence by doing simple things, doing them very well, and improving them all the time.
What Hayes saw in Japan
1. Clean, orderly work places, Workers’ uniforms, machines and floors were clean. Sources of litter and grime carefully controlled. Workers were responsible for keeping machines and workplaces clean and in good order. "If you clean up the factory floor, you clean up the thought processes of the people on it, too".
2. The "root of all evil" eliminated. Suppliers often made three or four deliveries a day. Finished goods were removed immediately to a warehouse or shipped to customers. Buffer inventories were unnecessary, why?
3. Keeping Murphy out of the plant. Preventing machine overload. Japanese use machines, while Americans abuse machines. Preventive maintenance, constant cleaning & adjustment, reduced rates of use. Comprehensive machine monitoring and early warning systems to check process flow, tolerance, rate of use. No-crisis atmosphere. Production schedules set 2 weeks in advance. No expediting, no overloading.
Attitudes and practices of Japanese managers
1. "Pursuing the last grain of rice in the lunchbox". Pursue quality beyond the point of cost effectiveness. Goal: ZERO DEFECTS. "A defect is a treasure". Why? Quality means: Error-free operation. The problem can be design, inventory, delivery, not just a defective product. Quality is not achieved by random decisions but by an all-encompassing management system supported by the top.
2. "Thinking quality in". Planning - Careful planning in the design stage with engineers, production, quality assurance, sales, etc. Training - Train workers to deliver consistently high-quality products. Feedback - Encourage workers and quality inspectors to identify and correct problems. No "we against them". Materials – Intensive screening of incoming parts and materials. Pressure on suppliers to improve quality. The same conditions which promote defect-free operations also increase productivity.
3. Time consciousness: everlasting customers, lifetime employees, supplier-partners, owners. Co-destiny.
4. Equipment independence. Design and fabricate most production equipment in-house. No safety margins and design cushions that manufacturers build into general-purpose machines.
Re-solving the problem of production.
Competition on grounds of reliable, low-cost, defect-free products and dependable delivery hurt U.S. firms. The Japanese have never considered the problem solved. Always improving "the factory of the present".
U.S. managers must:
emphasize teamwork,
value and train employees,
not isolate themselves.
According to Hayes, the key to competing with the Japanese: Putting our best resources and talent to work doing the basic things a little better, every day, over a long period of time. Is he right, or is innovation a better idea?
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Related summaries:
Cooper, R. and C. A. Raiborn. 1995. Finding the missing pieces in Japanese cost management systems. Advances in Management Accounting (4): 87-102. (Summary).
Hiromoto, T. 1988. Another hidden edge: Japanese management accounting. Harvard Business Review (July-August): 22-25. (Summary).
Howell, R. and M. Sakurai. 1992. Management Accounting (and other) Lessons from the Japanese. Management Accounting (December): 28-34. (Summary).
Imai, M. 1986. Kaizen: The Key To Japan's Competitive Success. New York: McGraw-Hill Publishing Company. (Summary).
Martin, J. R. Not dated. Lean concepts and terms. Management And Accounting Web. LeanConceptsandTermsSummary.htm
Martin, J. R. Not dated. Profit Beyond Measure graphics and notes. Management And Accounting Web. JohnsonBromsGraphicsNotes.htm
Martin, J. R. Not dated. What is lean accounting? Management And Accounting Web. LeanAccounting.htm
Martin, J. R., W. K. Schelb, R. C. Snyder, and J. C. Sparling. 1992. Comparing the practices of U.S. and Japanese companies: The implications for management accounting. Journal of Cost Management (Spring): 6-14. (Summary).
Spear, S. and H. K. Bowen. 1999. Decoding the DNA of the Toyota production system. Harvard Business Review (September-October): 97-106. (Summary).
Spear, S. J. 2004. Learning to lead at Toyota. Harvard Business Review (May): 78-86. (Summary).