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Towards World Class Manufacturing

Archive for November 13th, 2006

WCM – The Japanese Way

Posted by smeding on 13 November, 2006

Prof. Em. Dr. Yamashina
Osaka 06-11-2006
See “Profile of Dr. Yamashina”  for his background and activities.
Below a short summary of the lecture, covering the following subjects; 

  • Time and innovation in Japan
  • Ten Keywords to understand manufacturing in Japan
  • Strength comparisons between the West and Japan
  • What is WCM in Japan
  • Seven staps toward WCM
  • Major activities to support WCM

Time and innovation in Japan
Until mid seventies there was a sellers market where the focus was on volumes, measurements on;

  • Productivity;
  • OEE;
  • Output/hour;
  • Number of machine breakdowns;
  • Defect rates, etc. 

From mid seventies until approximately mid nineties there was a buyers market where the focus developed in 3 steps;
1. Diversification, managing on;

      a. Number of claims from the customers;
      b. Direct going rate
      c. Manufacturing lead time;
      d. Delivery lead time;
      e. Stock turns, etc.
2. Constantly launching new products, managing on;
      a. Product development lead times;
      b. Man hours to develop;
      c. New products per year;
      d. Design quality;
      e. Number of design changes, etc.
3. launching prospective profit making and manufacturing profit making products, managing on;
      a. cost reduction;
      b. efficiency of R&D
As result of the globalization the market became ‘society wide’, further on developing by;
4. constantly launching many new distinctive products, managing on;
      a. the degree of innovation.
5. constantly launching many innovative products, making it possible to create new markets, managing on;
      a. brand power;
      b. speed;
      c. minimum costs;
     d. innovations which create new markets.

Growth has become the new battlefield.

All above mentioned KPI’s are used in Japan. Productivity improvement developed by industrialization, information technology and creativity.
The human resource allocation during this period moved from manufacturing towards creativity (research, product and production development)
To win the battle of growth the manufacturing industry should focus on;

  • Nr. 1 in cost competitiveness
    We must be extremely cost competitive when we have competitors in the market (the winner takes it all)
    Establish strong production engineering for developing new and improved methods and processes.
  •  Speed (flexibility)
    The market demand varies highly because of various factors in the global economic climate, such as war, increase of off-shore production, demand fluctuation, private consumption, etc.
    Suppliers who have the speed (flexibility) to follow this demand are the winners.
  • Brand strategy
    Brand product manager responsible for a product from its product concept to its sales results
  • Innovation
    Establish strong R&D organizations to develop new innovative products.
  • Create competent human resources
    To continuously improve and launch new methods, processes and attractive products.

Ten keywords to understand manufacturing in Japan

1. Focusing on production engineering
Process engineering is as important as product engineering,. Production engineering should have knowhow of toolings, processes and layout.
• In Europe the ratio of production engineers to production employees is appr. 1 : 60.
• In Japan the ratio of production engineers to production employees is appr. 1 : 17.
2. Continuous improvement (Kaizen)
• The European approach is often a ‘fire fighting’ approach, due to lack of foundation and lack of standardization and maintenance, sustaining the achieved result is difficult and the problem will come back.
• The Japanese approach is continuous improvements with PDCA cycles on; bad design, production waste and losses, maintenance, market change, new technology. Only changes create improvements.
3. Zero optimum concept
• In Europe we are trying to divine an optimum level, this becomes a big issue on its self.
• In Japan there is no room for discussion, zero is zero, by aiming for zero the optimum value can be reached.
4. Knowledge management
• In Europe we try to invent the wheel every time again.
• In Japan they try to learn out of the paste by extensive knowledge management and then try to make it better
5. Visual management
• In Europe visual means there’s maybe one central publication board
• In Japan visual means much more; abnormal operation can be detected immediately, requirements for “management” and “control”
  are visualized and continuous improvement is visualized with help of the 5G’s.
6. Detail oriented
• In Europe we fix the problem quickly, but the root cause remains.
• In Japan a detailed analyze of the problem tries to discover the root cause to prevent future problems.
7. Focus on quality
• In Europe Quality is seen as an important strategic issue focussing on customer satisfaction
• In Japan Quality is also a strategic issue, but there business operations is based on TQM.
8. Standardization
• In Europe we like to be innovative, it seems to be a challenge to develop everything new
• In Japan products series and parts are standardized (80% of a new car consists of existing parts) and management and control
   are standardized (classifications, regulations, purchasing, procedures, measures for recovering abnormalities, operations, etc.)
9. Reduction of lead times
• In Europe manufacturing leadtimes are often long due to (semi) batch production, development leadtime of a new car is appr. 3 – 4 years.
• In Japan manufacturing leadtimes are often < 1 day due to flow production, development leadtime 12 – 18 months.
10. Equipment independance
• In Europe we buy universal machines which are compromizes among various users and therefore, various uses.
• In Japan they insist on designing and fabricating production equipment inhouse (if possible based on available equipment on the market)

Strength comparisons between the West and Japan

     The West                                                            Japan
1. Strategy (what to do)                                 Tactics (how to do)
2. Conceptual & imaginative                          Practical (always visualizing)
3. Software                                                   Hardware
4. Innovation (discontinuous)                         Incremental innovation (continuous improvement)
5. New functions                                           Quality
6. Individualistic solutions                              Standardized solutions
7. Cosmetic design                                        Manufacturing
8. Top down                                                 Middle up and down (democratic, suggestion system)
9. Theoretical                                                Trial and error
10. Specialization (members:specialists)         Integration (members: generalists)

What is WCM in Japan?

Japanese World Class Manufacturing involving JIT, TQC, TPM and TIE under the umbrella of TQM is a practical way of providing sustainable benefits. The drawback of these activities is the direct relationship with cost reduction. In addition to these activities Cost Deployement has to be developed.

  • demand fluctuation; zero stock, short leadtimes with quick setup, JIT (just in time)
    a total production system which emphasizes producing exactly what is needed and conveying it to where it is needed precisely when required. The goal is to find a practical way to create the automated plant which realizes this concept as close as possible.
  • quality problems; zero defects, build in quality at the process, TQC (total quality control)
  • machine breakdowns, zero breakdowns, high availability, TPM (total productive maintenance)
  • productivity, minimal cost, motivation for higher productivity with very low absenteeism rate, TIE (total industrial engineering)
  • cost deployment, establishes a cost reduction program for meaningful cost reduction.

A World Class Manufacturing company in Japan uses TQM as the brain, JIT as the nerve system, TPM as the muscles and
TIE as the blood.

1. The definition of TQC and TQM and tools and methods

2. The definition of JIT production and tools and methods

3. The definiton of TPM and tools and methods

4. The definition of TIE and tools and methods

5. The definition of cost Deployment and tools and methods

Towards WCM

Generally, the succesful implementation of WCM requires as a base;

  1. A safety, hygiene and working environment protection program
  2. Improvement of customer satisfaction
  3. Cost deployment to reduce cost systematically
  4. Focused improvement for the elimination of the big losses defined with cost deployment
  5. Elimination of defectives by a quality control program
  6. An autonomous activity program
  7. A scheduled maintenance program for a professional maintenance department
  8. An early product/equipment management program
  9. People development
  10. Creating good environments

The implementation and realization of WCM takes a lot of years (at least 12 – 15 years).
A clear step by step strategy is very important, the next seven steps are a guideline for implementing;

  1. Safety (5S, SOP)
  2. Reliability (TPM)
  3. Yields (Focused Improvements, TQC)
  4. Quality (build in quality control, TQC)
  5. Rationalization in logistics and manning (TIE)
  6. Synchronization between sales and production (JIT)
  7. Fully autonomated plant, world class in Q, C, D, H. (TQM)

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