American Firms Adopt Japanese Manufacturing Strategies Summary

  • Last updated on November 10, 2022

In response to gaps in worker productivity and product quality, American firms began to adopt various strategies that were being used by Japanese manufacturers. Many obtained extraordinary results by applying the Japanese methods.

Significance

A survey in 1984 found that American firms that had applied just-in-time methods had obtained extraordinary results. Not uncommon were 90 percent reductions in throughput time, 90 percent reductions of work in process, 10 to 30 percent reductions in manufacturing costs, 75 percent reductions in setup times, and 50 percent reductions in the floor space required for production. Similarly, a study of eighty European plants revealed typical benefits of 50 to 70 percent reductions in throughput time, 50 percent reductions in average inventories, 20 to 50 percent increases in productivity, 50 percent reductions in setup times, and an average payback for investments in just-in-time methods of less than nine months. Just-in-time inventory practices[Just in time inventory practices]

In 1976, a Quasar plant in Chicago that manufactured Motorola television sets was purchased by Matsushita. Within two years, with the same full-time workforce, Matsushita doubled output, increased product quality twentyfold, and reduced the cost of servicing warranties by more than 90 percent. General Motors General Motors began using Japanese techniques in 1980 and soon cut inventory costs by about 75 percent, increasing the turnover of inventories almost fivefold. Other American automobile manufacturers obtained similar results.

General Electric, Westinghouse, and RCA also reported impressive results. The computer system division of Hewlett-Packard increased productivity by 55 percent, decreased welding defects by more than 90 percent and rejected items by 95 percent, and reduced the lead time for production by 90 percent. Other American companies that profitably adopted Japanese production techniques, including just-in-time inventory practices, included Black & Decker (power tools), Deere & Company (heavy machinery and farm equipment), and American Telephone and Telegraph. In Europe, gains were equally impressive. Firms benefiting from the techniques were as diverse as Olivetti (typewriters), Michelin (steel cord), Fiat (aircraft engine parts), Famitalia Carlo Erba (pharmaceuticals), Lever Industriale (detergents), and Europa Metalli (metals).

Just-in-time practices were applied to processing industries such as production of chemicals, pharmaceuticals, and metals as well as to production to order and to more traditional manufacturing. Just-in-time practices proved applicable in service industries as well as in the factory. The successes, however, did not mean that implementation of Japanese production techniques was free of problems or provided the solution to every difficulty. Many problems refused to go away quickly. Resistance to change by both managers and workers, underestimation of education and training needs, shortages of parts or components as production scheduling changed, and lack of commitment were commonly reported.

The 1980’s will be remembered as a period of dramatic change in Western manufacturing. Changes for the most part had their source in the overwhelming success of Japanese industry in lowering costs and improving quality, as demonstrated by Toyota, Suzuki, and many manufacturers of electronic components, among other firms. Once they realized that they had fallen behind in the productivity race with Japan, many Western managers thought that they were beaten. Until the end of the 1970’s, many of them believed that catching up would be impossible. They had preconceived notions about the sources of Japanese success, including a belief that Japan had unbeatable advantages in labor costs, the number of labor hours per worker, worker attitudes, and punctual suppliers. Western managers did not believe that these conditions could be matched in their environments. Facts soon demolished all of these alibis for poor performance, and Western managers had no choice but to try to understand the Japanese lesson and make serious efforts to close the productivity and quality gaps.

The Japanese successes particularly affected American industry, as the two countries competed in many product lines, but other countries also found themselves challenged. American managers launched their own revolutions in strategy, organization, management, and workplace culture, sometimes modeling efforts on Japanese successes and other times creating new techniques to fit the American environment.

Management philosophy came to accept that quality rather than efficiency was the top priority and that operating horizons had to be expanded beyond the short term to achieve long-term success. Clients were to be treated as well as possible, even if that meant spending money in the short term. Suppliers were partners in the production process, and employees were not merely suppliers of labor but instead could make valuable contributions through their ideas and simply through becoming more motivated and more concerned about the welfare of the company. Further developments set in motion by the advent of just-in-time techniques included focusing on rapid development and introduction of new product lines and achieving competitive advantage through flexibility in manufacturing. Just-in-time inventory practices[Just in time inventory practices] Japan;manufacturing strategies Manufacturing strategies

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Cutcher-Gershenfeld, Joel. Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices. New York: Oxford University Press, 1998. Examines eight Japanese-affiliated manufacturing facilities operating in the United States and traces the cross-cultural diffusion of ideas between Japan and the United States.
  • citation-type="booksimple"

    xlink:type="simple">Hay, Edward J. The Just-in-Time Breakthrough. New York: John Wiley & Sons, 1988. A dynamic, comprehensive, practical, and clearly written explanation of just-in-time concepts and their relationship to quality, vendors, management, systems, and technology. Written from the perspective of an experienced practitioner. Outlines the process of getting started and cautions against the pitfalls.
  • citation-type="booksimple"

    xlink:type="simple">Hernandez, Arnaldo. Just-in-Time Manufacturing: A Practical Approach. Englewood Cliffs, N.J.: Prentice Hall, 1989. Explains the fundamental concepts from a theoretical angle, covers critical operational rules, and provides specific instructions for starting a just-in-time system from scratch. Shows how the concepts apply to all levels in the organization, for both workers and management.
  • citation-type="booksimple"

    xlink:type="simple">Hirano, Hiroyuki. J.I.T. Factory Revolution: A Pictorial Guide to Factory Design of the Future. Cambridge, Mass.: Productivity Press, 1989. An encyclopedic picture book of just-in-time practices. Shows how to set up each area of a plant and provides many useful ideas for implementation. Simply, easy-to-read text. Pictures provide a vivid depiction of work in a just-in-time environment.
  • citation-type="booksimple"

    xlink:type="simple">Merli, Giorgio. Total Manufacturing Management. Cambridge, Mass.: Productivity Press, 1990. Provides a thorough comparison of Western and Japanese management approaches and cultural distinctions. Develops a model for production organization and integrates the tools and methods that support this model. Lays out the principles and steps for just-in-time practices and offers a powerfully integrated strategy and implementation plan.
  • citation-type="booksimple"

    xlink:type="simple">Ohno, Taiichi. Toyota Production System: Beyond Large-Scale Production. Cambridge, Mass.: Productivity Press, 1988. Written to enable people to understand the system correctly and implement it successfully in their own plants. The emphasis is on concepts, with only a few case studies. Based on the knowledge and experience of one of the originators of just-in-time procedures.
  • citation-type="booksimple"

    xlink:type="simple">Shingo, Shigeo. A Study of the Toyota Production System from an Industrial Engineering Viewpoint. Rev. ed. Cambridge, Mass.: Productivity Press, 1995. Written by one of the inventors of the just-in-time system. Explains the philosophy, highlights the system’s important aspects, provides additional information, and criticizes weaknesses. Aims to treat the subject in such a way that special features will stand out.

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