s

Everyone knows Japan is very much developed & also a ruling nation in the
business of production. There are many world class car makers & other manufacturing
industries in Japan.

“Improvement is simple but continuous improvement is a big change”.

Everyone can make improvement at some point of time but maintaining a

continuous change is a very difficult job. But Japanese people are emphasizing towards
the continuous improvement and not simple improvements.

Few years ago, the economy of Japan was following a climb up path & that was the
time when Japanese people implemented their real production techniques & methods.
Now there is a slight decline in the economy and now they are trying to implement the
old production techniques & methods.

What is work according to Japanese production

ideology?
Work is of three parts:

 Wasteful work(muda)

 Auxiliary work(work that has no added value in the current work condition
but must be carried out)

 Net work(work that upgrades the added values of a thing)

Muda (wasteful work) pushes up the cost of an enterprise and contributing

nothing good. And the valuable work has the following characteristics:

1) Problem consciousness is high.

2) Wastes can be detected.

3) Thinking for problem solving.

4) Preparation of a kaizen suggestion.

5) Implementation of kaizen.

6) Sense of achievement of kaizen.

Note: kaizen means continuous improvement- the innovative effort to create new
things.

Profile of traditional Japanese practices:

Rooted in these and other historical traditions, some of the other key practices
commonly associated with Japanese management techniques include:

• in-house training of managers

• consensual and decentralized decision-making
• extensive use of quality control methods
• carefully codified work standards
• emphasis on creating harmonious relations among workers
• lifetime employment and seniority-based compensation

It is important to note that these are generalizations according to a conventional

formula. There have always been variations, and, as noted above, some aspects of
these practices have been increasingly reconsidered in recent years.

Corporate Governance:

While directors from outside the company are common in the United
States, they are rare in Japan. The decision-making process in Japanese firms is highly
decentralized. In publicly held U.S. corporations, power is concentrated in a board of
directors, with each director having one vote. In Japan, both middle and senior
management serve as directors. Japanese directors typically retain production-line
responsibilities. For example, in the early 1970s, 14 of Hitachi's 20 directors were
engineers. This represents another facet of the strong production orientation of
Japanese management

New directions:

While many of the patterns just described continue unabated at some

Japanese companies, a variety of forces have caused them to change, often toward
Western practices. Since the 1980s, for example, the predominance of seniority-based
raises has been gradually giving way to a Western style regime of merit-based pay.
Indeed, as of 1995, three-quarters of Japanese companies surveyed allocated at least
some of their reward pay based on skills or achievements as opposed to tenure. And
more than a few Japanese companies have attacked seniority more directly, explicitly
revising policies to diminish or even eliminate it as a criterion in the compensation
structure. This trend may be evidence of a cultural shift from valuing length of service
to valuing quality of service.

Also mirroring Western trends, labor union membership in Japan has

dropped considerably since the 1970s, falling from 35.4 percent of the workforce in
1970 to just 22.4 percent by 1998, according to figures compiled by the Japanese
Ministry of Labor. Union participation remains the highest in large companies (those
with 1,000 or more workers), where in 1998 membership was still nearly 57 percent.
This share was down from 68 percent in 1987, the first year statistics by company size
were kept.

Other traditional Japanese practices appear more enduring, notably lifetime

employment. Although Japan's economic troubles have meant that some employees
have lost their jobs, a continuing commitment to the principle of lifetime employment
seems to remain at many companies and in the society as a whole. Still, younger
workers (e.g., those under age 30) are decidedly less loyal to companies than in
decades past, and there is growing evidence of a rise in professional identification over
corporate identification among workers (i.e., "I'm a tax accountant" instead of "I'm a
Toyota worker").

Nonetheless, even at the depths of the Japanese recession during the late
1990s Asian financial crisis, companies went to great lengths to avoid outright layoffs.
One of the most common practices instead was to reassign workers, either within the
corporate family or to other companies, such as vendors the company does business
with. These transfers (known as shukko) could be temporary, in which case the worker
is still officially employed by the company that has loaned him or her out, or
permanent, where the company essentially finds a new job for the employee at another
company. Employees who were never considered part of the lifetime staff, such as
part-time help, usually didn't enjoy such privileges.

Japanese Scientific management:

Japanese management techniques have been strongly influenced by the

tenets of scientific management. Like quality circles, scientific management originated
in the United States, only to be more systematically adopted in Japan. The pioneering
figure of scientific management is Frederick Jackson Taylor (1856-1915). Taylor is
best known for his time and motion studies of workers as part of an effort to optimize
and standardize work efforts, but he also argued for a system of bonuses to reward
workers based on productivity. These ideas were implemented by Japanese firms as
early as 1908, and a translation of his Principles of Scientific Management sold 2
million copies in Japan.

In the post-World War II years, carefully codified work standards and the
use of semiannual bonuses for workers became common practices in Japan. Consistent
with the Japanese emphasis on teamwork, bonuses are generally allotted to a work
group rather than an individual worker. Scientific management emphasizes the role of
management in the production process. This is reflected in the more hands-on
approach in Japanese management training, as well as the relatively high share of
managers directly involved in the production process.

Various Japanese techniques & methods

1. Lean manufacturing/just-in-time:
Just In Time (JIT) is not a new concept as it has been a part of the Japanese
manufacturing industry since a long time. JIT was initially known as Toyota
Production System and Toyota motor company recognized its very
http://ads.associatedcontent.com/www/delivery/ck.php?
n=a14de4a9&cb=1199136000philosophy and working techniques. The objective
of this manufacturing system is to eliminate waste totally. It basically means making
what the market demands when it is in need. JIT not only increases the work
productivity but also saves the cost along with work performance and producing
quality products.

Introduction

In order to have a complete JIT manufacturing system it is important to meet

the demands of the market whenever needed. These include a companywide
commitment; proper material, quality, people involvement as well as equipment must
always be available there. Moreover, to establish the identification of duplication of the
efforts, it is also important to extend the developed policies and procedure of an
internal JIT structure into the company’s supplier and customers. Furthermore, in order
to reduce wastage and improve the quality of work, it is important to get in hand a
continuous feedback of the performance. (Gregory Jobe, Danny Misson, Adam Smith)

History

This Japanese management manufacturing company was developed in the 70’s

and was first adopted by the Toyota manufacturing plants by Taiichi Ohno. JIT gained
extensive support by the mid 70’s by many companies thus many companies followed
the JIT management strategies. If we trace back the history for the actual incentive to
develop a good manufacturing technique, which would be an elementary part to
rebuild their economy was the major setback of the Toyota Company after World War
II. They wanted to catch up with America as soon as possible in order to save their
(Japan’s) automobile industry. Nevertheless the roots are traced back to their strong
work ethic rather than sitting idle or wasting time in relaxation. (Danny Misson, 2006)
Though the Japanese people were very hard working since the beginning even so, they
did not achieve this stage of economic recognition in a day or two. Basically the
existing system at that time had many defects in the manufacturing fields.

The major defects in the manufacturing industry at that time included the
inventory problems, defects in the products, the high cost and delivery delays as well
as the large lot production. (Imai (1986)) Nonetheless, only a single product defect is
enough to destroy the reputation of the producer, so it was needed to develop a
manufacturing system, which was completely defect free. Therefore, JIT took the
initiative to introduce a very strong and solid manufacturing system that was not only
defect free from the existing defects of that time but also provided a faster and reliable
delivery system in regard to satisfy the needs and demands of the customer. (Gregory
Jobe, 2006)

Process

JIT is an integrating production process where the suppliers, manufacturers

as well as the customers are inter-related to each other for the successful competition
of the JIT manufacturing. The process of JIT does not work on the basis of
independence in regard to the stages of manufacturing process. Therefore, the process
of the JIT manufacturing needs to complete the following stages as a manufacturing
process: Prior to set a JIT manufacturing system, every company needs to define its
plan and objectives. However the degree of appropriateness varies from one individual
company to another. So planning for JIT is the most important process for setting up a
JIT manufacturing system. Furthermore, while planning for JIT, the objectives should
be very much clear, as the system needs a complete understanding of its objectives.
Once these objectives are set then the process of planning start determining the
requirements to meet these well-planned objectives. However to make the goal and
objectives successful, it is also important to be equipped to integrate and optimize each
and every step of the manufacturing system, to produce the products in time and on
demand, to develop manufacturing flexibility as well as to produce quality products to
maintain commitments and communication among the customers and
suppliers. (Gregory Jobe, 2006)

However, manufacturing flexibility is the ability to start new projects

or the rate at which the production mix can be adjusted to meet customers demand.
(China time report) where planning for flexibility is related to the understanding of the
very elements of the manufacturing process that limits flexibility and improves in the
areas needed. So the production managers need to focus on certain important factors to
be made flexible like the supplier lead time, the time for the process of production as
well as the setup time for the process and so on. (Adam Smith, 2006)

Furthermore, the process also includes the reduction of the manufacturing

cost in order to build up the product to any specified benefit. A good employer and
employee relationship can serve best to the completion of this process. This will help
in cost savings as well as encourage a strong relationship among the members and the
manufacturing company resulting in great success of the JIT system.

Nonetheless, a successful JIT system demands a healthy communication

between the customers and suppliers. This will help encouraging suggestions, getting
to know the demands of the users as well as very much responsibility to fulfil its
commitments.

2. PokaYoke Methods:

PokaYoke is Japanese for fool proofing. Mistakes in manufacturing are

avoided by making the work-cell and tools mistake proof. Die designs are done in such
a way that they can be mounted only one way. Avoiding mistakes in setup. Manual
processes as well as computer application software can be made mistake proof in
service processes. Mistakes and rework can be avoided by carefully mistake proofing
every step of a service process and how each process is performed by the company’s
representative. Extensive data validation and crosschecking of data fields in service
applications is one way PokeYoke can be practiced.

3. Fishbone diagrams:

Fishbone diagrams (also known as Ishikawa Diagrams), FMEA (Failure

Mode and Effect Analysis) and why-why-why diagrams have been used in
manufacturing processes to trace back problems to their root causes, fixing the root
causes rather than the symptoms. The same principles and techniques are just as
applicable to service processes as they are to manufacturing. Root cause analysis has
the capability of identifying root causes such as lack of training, lack of knowledge,
lack of automated, and the need for more efficient systems because of holes in the
process definition itself. Process modelling should include failure modes and the
reasons for failure for each process step. When you are analyzing process execution
results, these will be helpful in not simply designing some band-aid solutions, but in
really addressing root causes.
4. Genchi Gembutsu method:

In Japanese, this means go to the actual scene (genchi) and confirm the actual
happenings or things (gembutsu).Observation of service processes at the point where it
is actually delivered may unearth a host of problems such as lack of training in specific
skills or subjects, outdated or unnecessary process steps, or a number of other areas
that would benefit from small but significant process improvement ideas. Many of
these process improvement ideas may be outside the scope of general process mapping
and analysis activities. Small improvements eventually add up to significant gains in
efficiency or effectiveness. Looking at and addressing, say, a claims processing
process at a process level, may not reveal many small improvements that direct
observation may suggest

5. Multi-skill Development and Job Rotation:

In Japanese manufacturing, they have found that developing workers’ skills

in multiple areas or Functions of the company had a number of benefits for both the
company and the employee. For The company, they get employees who can perform
multiple functions and can fill in for people on Vacations or during a work surge in any
particular area. For the employees, it relieves the monotony of doing the same kind of
work over and over again, increases their value to the company, and ensures that they
can be reassigned to other areas of the company in case of cutbacks necessary in any
one area. Multi skill development and job rotation have the same benefits when it
comes to service processes. Training a claims adjuster in multiple kinds of claims may
be good for both the employee in terms of career skills and growth and the company in
utilizing the employee’s skills in multiple areas.

6. The Ringi system:

The traditional decision-making process in Japanese firms is referred to

as the ringi system. The system involves circulating proposals to all managers in the
firm who are affected by an impending decision. Proposals are generally initiated by
middle managers, though they may also come from top executives. In the latter case,
an executive will generally give his idea to his subordinates and let them introduce it.
Managers from different departments hold meetings and try to reach an informal
consensus on the matter. Only after this consensus is reached will the formal
document, or ringi-sho, be circulated for approval by the responsible managers.

The ringi system requires long lead times, and thus is problematic in a
crisis. In recent years the focus on speeding up decision making has made this
approach unpopular at many firms. Nonetheless, one of its underlying principles
remains prevalent. That is, when a decision proves beneficial, the middle-level
managers who initially advocated it receive credit; when a decision proves
unsuccessful, responsibility is taken by top-level executives. This practice is intended
to promote aggressiveness in younger managers.

7. Pervasiveness of Engineers:

As with managers, Japanese industrial engineers are more directly involved

with production processes than their counterparts in the United States. In his book The
Japanese Industrial System, Charles J. McMillan explained that most Japanese
companies make few distinctions between engineers and blue-collar workers, although
engineers do tend to earn more. They work closely alongside production workers. In
addition, Japan produces up to three times as many engineers a year as the United
States. Japan's emphasis on production oriented engineering is consistent with its
dominant competitive strategy in the postwar years—indeed, since the Meiji era—of
focusing on improving existing products or processes rather than developing
completely new ones.

8. Quality circles:

The extensive use of quality circles is another distinguishing

characteristic of Japanese management. The development of quality circles in Japan in
the early 1960s was inspired by the lectures of American statisticians W. Edwards
Deming and J.M. Juran, in which they discussed the development of wartime industrial
standards in the United States. Noting that American management had typically given
line managers and engineers about 85 percent of responsibility for quality control and
only 15 percent to workers, Deming and Juran argued that these proportions should be
reversed. Production processes should be designed with quality control in mind, they
contended, and everyone in the firm, from entry level workers to top management,
should be familiar with statistical control techniques and undergo continuing education
on quality control. In general, Deming and Juran argued that quality control should
focus on prevention, with the ultimate goal being to improve the production process
until no defective parts or products are produced. Quality circles were one method of
reaching these goals.

In Japan, quality circles consist of groups of about 10 workers who meet

weekly, often on their own time. The groups typically include foremen, who usually
serve as circle leaders. Quality circles focus on concrete aspects of the operations in
which they are directly involved, using tables and graphs to communicate the statistical
details of their quality issues. In one common format, problems are categorized by
materials, manpower, and machines.

Quality circles provide a means for workers to participate in company

affairs and for management to benefit from worker suggestions. Indeed, employee
suggestions play an important role in Japanese companies. Two associations, the
Japanese Association of Suggestion Systems and the Japan Human Relations
Association, were developed to encourage this process. Japanese employee suggestions
reportedly create billions of dollars' worth of benefits for companies.

9. Enterprise unions:

One distinctive characteristic of labor-management relations in Japan is the

enterprise union, which is organized around a single plant. Consequently, any given
company may have several enterprise unions representing various portions of its
workforce. Enterprise unions generally belong to a larger federation, but the balance of
power is at the local level. Japanese unions are distinct not only because of their highly
decentralized nature, but also because they represent both white-collar and blue-collar
workers, with union membership open to managers up to the section chief level. The
fact that many upper-level managers have moved up through union ranks and may
have even served as union officials highlights the generally less antagonistic
relationship between labor and management in Japan. Combined with a relatively
narrow income gap between managers and workers and the willingness of manager
recruits to work on production lines as part of their training, the open membership
policies of Japanese unions contributes to the fairly harmonious interaction between
unions and management.

Union membership is generally associated with lifetime employment

guarantees. Membership varies widely by firm size, and relatively few workers in
firms with fewer than 100 employees receive lifetime employment guarantees.
Nonetheless, in large firms the lifetime employment guarantee creates an environment
in which workers are less likely to feel threatened by technological change. As a
consequence, changes in the production process are likely to be undertaken by
management and workers on a cooperative basis. More generally, since semiannual
bonuses and annual wage negotiations are based on a firm's competitive strength,
workers have a large stake in their firm's long-term success.

10. Quality Improvement:

Service process quality improvement increases revenues and at the same

time
Reduces costs. Japanese manufacturing techniques have proven that you can increase
Quality and, at the same time, cut costs.
Operating expenses in different industry verticals vary from 30% to 80% of
revenues1. A large portion of operating expenses in any organization is spent on
service processes. Making service processes more efficient and effective delights
customers, increasing revenues. Making them more efficient and effective cuts costs.
Improving service process quality has the potential of doubling or even tripling profits
given the large portion of operating expenses spent on them.
11. Service process improvement is a continuous and never-ending
effort:

Setup times for machine presses in Japanese automobile manufacturing

have been reduced from a couple of days to a few minutes over a couple of decades
through continual improvement (Kaizen). Service processes also offer such
possibilities. In automobile insurance claims processing, repair shops used to take
pictures of the damage to a car and send them to the insurance company by courier or
regular mail. Many of these repair shops now use electronic cameras instead, to take
the pictures and upload them directly to the Insurance company computers, cutting two
or three days out of the cycle. The Internet, document imaging, and digital
photography offer endless ways for improvement. The very concept of acceptable
quality prevents service processes from reaching their full potential. Just as in
manufacturing, quality could be a never-ending goal in service processes also.

12. Reducing Muri – Physical Strain:

In the context of manufacturing, reduction of Muri usually addresses

unnecessary motion – working harder than necessary, leading to the reduction of
repetitive actions, and so on. In the context of Service Process Management, Muri
applies more to convoluted and unnecessary routings, physical transfer, and distances
paper files may have to travel for a process to be complete. Process mapping and
workflow analysis could help identify unnecessary process steps that can be
eliminated or shortened in any service process.

13. Address non-value-adding activities:

Attaching a bumper in a car assembly is a value-adding activity in that it

adds direct value to a customer. Filling out an internal form for the company’s use does
not add any value directly to the customer. It may be valuable to the company for
management of internal operations. Value added analysis helps identify and separate
value-adding activities from non-value-adding activities. You then try to eliminate
completely, or shorten as much as possible, non-value added activities. Service
processes have steps that could be either value-added, mandatory, or non-value added.

For example, in a Bill Collections Process, collecting the check is a

valueadding activity for the customer (on whose behalf, the collection is done);
sending out the appropriate legal notices could involve mandatory steps; while
completing an internal form might be a non-value adding activity. Non-value adding
activities are candidates for elimination. Mandatory steps may not be eliminated but
speeded up. Value-adding activities are also candidates for speeding up or appropriate
other quality improvements. Japanese manufacturing techniques have proven
themselves by the results they have achieved in product quality as well as in numbers
over the past three decades. They have proved consistently that improving quality
relentlessly actually reduces costs, in addition to delighting Customers. Japanese
manufacturing has taken quality lessons from American Quality gurus like Edwards
Deming, Joseph Juran, and Armand Feigenbaum, but has adapted and improved upon
them for use in manufacturing, with great success. The same kind of opportunity exists
now for their use with service processes. This has the potential of greatly increasing
the profitability and competitiveness of organizations across many industry verticals.

14. Multi-skill Development and Job Rotation technique:

In Japanese manufacturing, they have found that developing workers’

skills in multiple areas or functions of the company had a number of benefits for both
the company and the employee. For the company, they get employees who can
perform multiple functions and can fill in for people on vacations or during a work
surge in any particular area. For the employees, it relieves the monotony of doing the
same kind of work over and over again, increases their value to the company, and
ensures that they can be reassigned to other areas of the company in case of cutbacks
necessary in any one area. Multi skill development and job rotation have the same
benefits when it comes to service processes. Training a claims adjuster in multiple
kinds of claims may be good for both the employee in terms of career skills and growth
and the company in utilizing the employee’s skills in multiple areas.

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