Industry Today: The World of Manufacturing

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 Date:1/30/2009

 

News & Views
Get the Monozukuri
Doing business with Japanese automakers means understanding the culture of quality – or monozukuri – inherent in Japan’s automotive production practices, stresses Ralph Inforzato.

In the 1950s and 60s, the pursuit of quality production in Japan was catalyzed in part by the teachings of W. Edwards Deming and the best practices of American companies. Dr. Deming’s expertise in developing qualitative methods to improve productivity while lowering costs was internalized by many engineers in Japan’s manufacturing sector. While these engineers are now at the most senior levels of management in Japan, they remain keenly aware of the impact of Dr. Deming’s ideas on their early careers and how his influence helped shape the course of modern Japanese manufacturing.

The last 25 years have been of critical importance to the globalization of Japanese automotive manufacturing because during this period production facilities were established in North America. In the 1990s, Japan’s automotive related companies expanded into Canada and Mexico. Japan’s original equipment manufacturers (OEMs) like Toyota, Honda, Mazda, Mitsubishi, Nissan, Subaru, and Suzuki as well as their tire one suppliers like Aisin Seiki, Calsonic Kansei and Denso, established new production capacity in the American Midwest and Southeast regions. While there were some joint ventures and acquisitions, most of Japanese auto manufacturing was entirely new. These new facilities were equipped with state-of-the-art production technology and were managed by Japanese process engineers tasked with implementing their respective production philosophies and methods.

The Impact of Japan’s Manufacturing Affiliates in North America
This first generation of Japanese production engineers introduced concepts like Poka Yoke, Total Production Management (TPM) and Kaizen to automotive factories throughout North America beginning what amounted to a revolution in automotive quality. Over time, these production processes spread throughout their new North American supply chains.

By the 1990s, domestic companies began to understand that if they wanted to do business with Japanese OEMs then they had to adopt a mindset focused on quality. Once a company actually became a supplier to a Japanese-related automotive OEM or parts affiliate, then the company would have to document exactly how quality practices were implemented and explain the resulting improvements on a regular basis. While this is common practice today, embracing Japanese manufacturing practices at the request of a customer was quite revolutionary in the early 1990s.

Over the past 20 years, there has been tremendous growth in the number of Japanese manufacturing facilities in the United States. As these expanded, American workers were increasingly exposed to a new manufacturing mindset of best practices. As a result, there is a whole generation of North American production managers that have been fully trained in Japanese industrial quality programs, and, who in turn, train their successors, resulting in a perpetual cycle of increased productivity.

Today, American plant managers at domestic auto parts companies that sell to Japanese automotive OEMs are fluent in the language of Japanese production processes. Concepts like Poka Yoke, (mistake-free production), TPM Solutions, group problem solving exercises and kaizen (continuous improvement) have become commonplace. A plant manager in Canada recently told me that doing business with a Japanese supplier requires a sustained degree of quality throughout all levels of the company, from the factory floor to the marketing department. He indicated that his Japanese customers must see management’s ability to embrace future quality practices. This dissemination of Japanese manufacturing practices to overseas suppliers continues to be transformative and has a tremendously positive impact on product quality, overall productivity and increasing global competitiveness throughout a region’s supplier base.

This team concept is the most holistic element of Japanese automotive production management. Each person in a company, not only those within the manufacturing process but also those in sales, marketing, and administrative personnel, are responsible for improving the quality of their company. For example, Japanese plant managers do not deploy much of their human talent to an inspection department because they believe quality is not achieved by taking defective parts off the line at the end of a shift. Quality of work must be ensured at every level of a company’s manufacturing process. Even temporary workers at Japanese plants have a keen understanding in how to carry out and complete their daily jobs as well as how to maintain the machinery and equipment they are using. It is important to realize just how important good communication is throughout the organization of a Japanese manufacturer. Employees realize the importance of their roles and ultimately how they are the ones responsible for their company’s performance. For example, even if the engineering department developed good products and the sales team obtains contracts, if they cannot assure quality in the mass production of the products they know their business will not be sustainable.

Collaborating to Build a Monozukuri Culture
By the end of 2008, Japanese auto-related OEMs in the U.S. were responsible for approximately 30 percent to 40 percent of U.S. production, with many expanding their production capability in North America. As a result of this investment, significant business relationships between Japanese automotive OEMS and Japanese Tier One suppliers have developed deep business linkages with their domestic counterparts.

It is for this reason that the Japan External Trade Organization (JETRO) believes the key to fostering collaboration with Japan’s manufacturing community is to go beyond simply giving information on salesmanship and conducting Buy-Sell interactions. It is not about sales techniques or speaking to the “right” person at a Japanese OEM, nor is it even about product pricing. The focus must be on how a company embraces and sustains quality throughout its entire organization and how a company’s leadership articulates quality practices to its existing and potential customers. Not long ago, an American engineer at a Japanese auto-related company told me that after just 15 minutes on a supplier’s factory floor, he can tell if they have a culture of quality or not.

What is needed is a fundamental understanding of Japan’s philosophy in product making, what is called monozukuri in Japanese. Once monozukuri has been achieved, it serves as a catalyst for accelerating innovation, management solutions, production processes, human resources, and sales and marketing. In order to truly enhance business relationships with Japanese manufacturing companies, it is critical to have a fundamental understanding of Japan’s monozukuri practices.

Ralph Inforzato is Director, Business Development, Japan External Trade Organization (JETRO Chicago). Visit www.jetro.org.