inyong ham, distinguished prof. emeritus, pennsylvania sate u, visitng prof., city u of hk 1 do we...

Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK

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Do we knowJAPAN?


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PARADOXContrary to the general belief of American

businesses and industrial communities with regard to the unique features and real strengths that characterize the Japanese industry’s success, it is not ‘JIT’, ‘QC Circles’, Life-time Employment, etc.

Two of the most important facts are:

1. Subcontractor System

(Big Company vs. Small Company)

2. Management of Technology


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Balance of ForcesJapanese Strengths• Applied Research and

Development

• Incremental Improvements

• Commercial Applications

• Process and Production Technology

• Components

• Hardware

American Strengths• Basic Research

• Breakthroughs and Inventions

• Military Applications

• New Product Design

• Systems Integration

• Software


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You just don’t understand “The Fact”• Percentage of Japanese high school students who have taken 6

years of English--------------------------------------------------- 95%

• Number of America’s 2.7 million high school students graduating in 1987 who took Japanese for at least 1_yr---- 2,300

• Americans awarded bachelor’s degree in Japanese in 1989-- 162

• Americans awarded master’s degree in Japanese in 1989----- 14

• Americans awarded doctorate in Japanese in 1989--------------- 4

Sources: Japanese statistics: Jackson Balley, Institution for Education on Japan,

Eartham College. American statistics: Department of Education.

THE NEW YORK TIMES, SUNDAY, JANUARY 5, 1992


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R&d IN Universities, Institutions and Corporations

In Japan 94% Read and write English

85% Read English journal articles

In America 4% Read Japanese

9% Read translated papers

In Japan 85% Attend technical meetings outside of normal work: 2/Month

In America 30% “ “ “ “ “ “

In Japan 83% Are aware of foreign activity in their field

In America 30% “ “ “ “ “ “

In Japan 60% Had spent +1 year outside

In America 34% “ “ “ “ “


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JAPAN US Europe

Revolutionary Inventions C B A

Future Technology C A B

Advanced Technology B A C

Applied Technology A B C

Improved Technology A B C

Production technology A B C

Comparison of Technology DevelopmentsAmong Japan, US and Europe


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GM* TOYOTA NUMMI

Assembly hoursPer car

31 16 19

Assembly defectsPer 100 cars

135 45 45

Assembly space percar, per year (sq. ft.)

8.1 4.8 7.0

Average inventoryof parts

2weeks

2hours

2days

Comparison of Operating Efficiency ofUS and Japanese Automobile Production

Operating efficiency of G’s Framingham, Mass., plantversus Toyota’s Takaoka plant versus the G.M.-Toyota joint venture in Fremont, Calif., as of 1987. * Plant close in July 1989. [“The Machine That Changed the World” and also New York Times, Sept. 23, 1990]


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Percent of Distribution of College Graduates (All Degrees)

Source: Misistry of Education, Japan (1982)

Science Engineering

Agriculture Health

JAPAN (1981)

USA (1978)

UK (1978)

W. Germany (1979)

0 20 40 60 80 100


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1965 1970 1975 1977

FRANCE 20 34 28 33

JAPAN 82 133 162 185

U.K. 32 46 45 46

U.S.A. -- 85 67 66

W. GERMANY 16 11 48 109

Electrical Engineering Graduates(per million population


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What the U.S. and Japan buy from each otherLeading categories of goods traded by the U.S. and Japan in 1990. Figures in billions of dollars.Source:

Commerce Department [The New York Times, Sunday, January 5, 1992]

Top 10 exports to Japan

1. Aircraft, spacecraft and their

replacement parts $3.499

2. Computers 2.041

3. Logs and lumber 1.649

4. Corn 1.648

5. Arts and antiques 1.622

6. Computer and office

machine parts 1.580

7. Computer chips 1.361

8. Tobacco products 1.314

9. Fish 1.269

10. Controls and instruments

(thermostats, etc.) 1.116

Top 10 exports from Japan

1. Motor vehicles $19.547

2. Computers 5.924

3. Motor vehicle parts 5.342

4. Telecommunications equipment

(telephones, cellular phones, etc.) 1.648

5. Computer chips 3.757

6. Computer and office

machine parts 3.454

7. Consumer electronics

(televisions, household audio

and video equipment) 3.140

8. Motor vehicles (mostly auto

(engines and parts) 2.575

9.Toys and sporting goods 2.500

10. Electrical machinery 2.267


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Comparison of Most Important Requests by US and Japan Stock Holders

0

10

20

30

40

50

60

70

80

90

Rise of StockPrice

BusinessExpansion

Stability ofBusiness

USA

JAPAN


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An Example of SuccessfulJapaneseIndustrial

Developments


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FANUC Ltd.And

“Management Philosophy”of

Dr. Seiuemon Inaba, CEO

An Example of Successful

Japanese Management of Technology


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FANUCThe Success Story

of

FANUC LTD. (Japan)

(Management Philosophy and Practice

of Dr. S. Inaba

President of FANUC)

THEREE SLOGANS

(a) RELIABILITY UP

(b) LOW COST

(c) WENIGER TEILE


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1988 Rankings of Excellent Companies in JapanSource: Asahi Daily News, August 20, 1988

Rank Name of Company Points1. Toyota Auto Co. 1000

2. NIT 942

3. Matsuhita 930

4. Fuji Fillm 927

5. FANUC 917

6. Nintendo 910

7. Yamanouchi Pharm. . 891

8. Hitachi 884

9. 7-Eleven 872

10. Nissan 871

13. Kyocera 854

14. Toshiba 849

15. Fujitsu 848

19. Honda 838

32 Sony 813

39 Sharp 796


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1990 Rankings of Excellent Companies in JapanSource: Nippon Kaizai, August 18, 1990

Rank Name of Company Points1. Toyota Auto Co. 1000

2. FANUC 967

3. Nintendo 963

4. 7-Eleven 947

5. Fuji Film 941

6. Matsuhita 917

7. Tokyo Steel Mfg. Co. 896

8. Hitachi 886

9. Nissan 886

12. Toshiba 872

16. Honda 850

19. Sony 84428. Sharp 823

33. Kyoeeta 816


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FANUC Products Development• Difference between Products” and

“Commodities”

FANUC’s definition of “Commodities” (merchandises): “Products which bring high profit and excellent competitive position”.

• Develop “Commodities (saleable and competitive products) to be marketed throughout the world.


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FANUC’s Procedures for New Product development

(a) Through world-wide market survey.

(b) Lower “price” than any other competitive items (worldwide) with better quality. FANUC price is decided at the beginning stage of design.

(c) Profit rate must be more than 30%. Production cot is then decided to meet the above b) and © requirements.

(d) The R&D staff design a product to meet the cost and quality requirements, and also are responsible to design the necessary manufacturing systems to produce products.

(e) The same R&D staff will be assigned as a temporary production team to install the specific manufacturing systems, and will be relieved the job after the successful implementation.


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FANUC’s Management Philosophy(Some Selected “Highlights”)

(1) “Cost Down”, “Quality In” & “Fewer Parts”.

(2) Continuously pursue “New Technological Innovation” and “Engineering Excellence”.

(3) Invest “Money” & “Time” for “Technical Excellence”.

(4) Better “Design” for “Economic Manufacture”.

(5) “Quality” built into “Design” and “Production”.


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FANUC’s Research Management

(1) For “Engineering”, the history is important.

For “Engineers”, “Innovation” is important.

(2) No conventional library for the research staff (Because any published book is already obsolete).

(3) Pursue “New Idea”, “New Information”, “new Innovation”.

(4) “Product with new invention is not successful commercial commodity.”


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QUALITY CIRCLE (FANUC”s View)

“FANUC does not practice Quality Circle. Quality Circle activity is a sales’ ceremony. If shop-floor operators can provide any suggestion for further quality improvements, something is basically wrong with the manufacturing system. Any quality problem must be dealt with at R&D stage.”


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FANUC’s Sales Motto

(a) First “Friendship” and then “Sales”.

(b) Never discount to bargain. If the price is high, go back to design drawing board.

(c) Better service and maintenance.

(d) More salesmen with engineering background.


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FANUC emphasizes R, D & E

• “R” is not a primary function of FANUC.• “D & E” are more important for FANUC.• <ost important aspect is “Better Design”.• No matter how you “automate” manufacturing

systems, if “design” is not good, then the plan will fail.

• “Better Design”: less parts, less trouble, better maintenance.

• “Quality” built into “design” and “Production”.


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(6) More “Engineers” 80% than “Administrative Staff” (20%).

(7) Emphasis on balanced “Engineering Excellence” and “Efficient Management”.

(8) Train and cultivate te “Next Generation of Executive Managers”.

(9) Rational and Regimental Management is better than non-responsible loose democratic management.

(10) Loyalty and Trust to the company is most important.


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FANUC’s Research Management Philosophy

(1) For “Engineering”, the history is important.

For “Engineers”, “Innovation” is important.

(2) No conventional library for the research staff (Because any published book is already

obsolete).

(3) Pursue “New Idea”, “New Information”, “new Innovation”.


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(4) Relax and enjoy your life with your family in weekends and come back on Monday with

fresh ideas and new energy recharged.

(5) “Time” is precious and do not waste “Time”.

(6) CEO is briefed on all major developments.

(7) “Basic research” vs. “Product Development Research”.


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FANUC’s Product Development Philosophy

(1) Difference between “Products” and “Commodities”.

(2) Develop “Commodities” (Saleable and Competitive Products) to be marketed throughout the world.

(3) Lower “Price” than any other competitive items (world-wide) with better quality.

(4) “Quality” is built into “Design” and “Production”.

(5) The R&D staff design product to meet cost and quality requirements, and also are responsible to design the necessary manufacturing systems to produce the products.

(6) The same R&D staff will be assigned as a temporary production team to install the specific manufacturing systems, and will be relieved the job after the successful implementation.

(7) No matter how “Automate” production systems, if “design” is not good, the the system will fail.


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Estimated Share of Companies Supplying US Machine Tool NC Controls

FANUC

Mitsubishi

Siemens

Others

Allen Bradley

Kearney & Trucker

Cincinati Milacron


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THE BUNSHA GROUPA diversified OEM network whose greatest strength is turning your

biggest needs into your best assets.

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988

Gro

wth

in S

ales

(m

illio

n ye

n)


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Growth in BUNSHA Group

0

500

1000

1500

2000

2500

3000

3500

No. of Employees

Captal (million yen)


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Sharp’s Basic Philodophy for Product Development

(5 “S” Principles)

• Speedy

• Simple

• Smart

• Successive

• Systematic


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Growth in the BUNSHA Group

13 1416

19 20 21 22

2628

3436

0

5

10

15

20

25

30

35

40

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

Num

ber

of

Com

pan

ies

inyong ham, distinguished prof. emeritus, pennsylvania sate u, visitng prof., city u of hk 1 do we...

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