the japanese manufacturing industries - its capabilities and...

The Japanese Manufacturing Industries

- Its Capabilities and Challenges -

June, 2011 FAIM

Takahiro Fujimoto

Professor, Faculty of Economics, Tokyo University

Executive Director, Manufacturing Management Research Center

Senior Research Associate, Harvard Business School

Evolutionary Analysis of Capability and Architecture

Manufacturing

(monozukuri)

Capability（local concentration）

Product-Process

Architecture(Different by

Products）

Comparative

Advantage of

Design Sites

Fit？

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society

Decisions and Behaviors of Designers

Other Environmental Factors, and Chances

Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology

C Takahiro Fujimoto, University of Tokyo

The Architecture - Capability Framework

1 Design-Information View of Manufacturing （Monozukuri)

2 Organizational Capability – Controlling Design Flows

3 Performance Measurement -- A Multi-Layer Approach

4 Product-Process Architecture

5 Capability-Architecture Fit --- Explaining Competitiveness


Design-Information View of Open Manufacturing （Monozukuri)

Key Concept: Design Information = Value

A firm’s products and processes are artifacts that has been designed.

Manufacturing is essentially creation and transmission of design

information to customers.

A firm’s manufacturing (monozukuri) capability is its distinctive ability

to handle flow of design information toward customers.

Product-process architecture is designers’ basic way of thinking

when creating design information for the product and processes.

“Design” is the common denominator for these analyses.


Open Manufacturing (Monozukuri) Means Creating

Design Information Flows to the Customers

We focus on design (as opposed to material) side of manufacturing

artifact = design information + medium

c.f., Aristotle: object = form + material

where form is more essential

Products (goods and services) are the artificial (= something designed)

manufacturing, if service if

medium is tangible medium is intangible

Primary source of customer value is design information

medium

design

information

material

form

intangible medium

design information

tangible medium

design information


Product Development

Purchasing

Production

Body Exterior

Design

Embedded in

Press Dies

0.8 mm thick

steel sheetMedia

(Material)

Design

Information


Product = Design Information + Media

Production = Marriage of Design Information Media

Body Exterior

Design

Embedded in

Press Dies

0.8 mm thick

steel sheet


What is Going on at the Press Shop

Body exterior design information, embedded in press dies (steel block), is transmitted to 0.8 mm thick sheet steel (media)

Information transmission time = value-adding time

Information non-transmission time = MUDA


body

design

cast

iron

body

design

steel sheet

tran

smissio

n

press dies

body panel

Sheet Steel (Media) Absorbs Design Information

through the Press Operation

Design information, embedded in press dies, is transmitted to sheet steel


body

design

cast

iron

press die

body

design

cast

iron

press die

body

design

cast

iron

press die

body

design

cast

iron

press die

Open Manufacturing (Monozukuri) as a System of

Design Information between Productive Resources

Manufacturing activity is design information flows between

productive resources

productive productive product

resource resource

medium

design

information

medium

design

information

Design

Information

flow

medium

design

information

design

Information

flow

material

(media)

flow

development production sales

customersfirms


Goods and service as flows of design information

physical goods ・・・ 2 stage transmission： ① to tangible medium② to customers

service・・・ intangible medium; direct transmission to customers

design

info

medium

(tangible）medium

(tangible）

design

info

medium

(tangible）

design

info

design

infoproduction

design

info

medium

(intangible）

design

info

Design

info

sales

consum-

ption

satis-

faction

unsatisfied

customers

development

satisfied

customers

unsatisfied

customers

satisfied

customers

developmentproduction

sales consum-

ptionmedium

(intangible）

①

②


Function,

Service,

Value

What is Genba (Manufacturing Site) ?

Feedback Info.

Environments

Noises and Changes

Structure of

Artifacts

(Controller)

People

Automatic

Control

Manual

Control of

Artifacts

Info. on

Functions

Info. on Structures and

Environments

Energy and Material Inputs

Work together

A Place Where People on the Spot Work Together, Control Artifacts,

and Thereby Create a Good Flow of Value (Function) to the Society

Energy and Material Outputs

Structure of

Artifacts

(Controlled)

Receiving and Enjoying

Value (Community)

Service to Themselves – Community, Family

Service to Customers – Service Site

Service to Materials – Production Site

Broader View of Lean Manufacturing

東京大学藤本隆宏

Production Sites in Manufacturing SectorNarrow View of

Manufacturing

ManufacturingSector

Non-Manufacturing Sector

Production Development/Sales

Shifting attention fromMaterials to Designs

Broad View ofManufacturing

ManufacturingSector

Non-Manufacturing Sector

Production Sites in Manufacturing Sector

Operation Sites in Service Sector

Development Sites in Service Sector

Production Development/Sales

Development and Purchasing Sites in

Manufacturing Sector


1 Design-Information View of Manufacturing






Manufacturing

(monozukuri)


Product-Process

Architecture(Selected by

Products）

Comparative

Advantage of

Design Sites

Fit？

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society



Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology

Design-Based Comparative Advantage


Organizational Routines and Capability of

Manufacturing

Organizational routine

of manufacturing ------

medium

design

info

medium

design

info

Repeated control of design information

flow between productive resource

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

medium

design

info

Organizational

capability -------

of manufacturing

routine

A system of organizational routines

for fast, efficient and accurate flows

of design information to customers

routine routine routine routine routine

routine


Figure 9 Organizational Capability Regarding Productuvity and Throughput Time (Toyota)

M+A

Product Design

(M+A+B)

product design for manufacturability

A

supplier's Kaizen (impronements)

supplierM

reduction of work-in-processiinventory or piece-by-piece transfer

process step 2 process step 1

B

regular pace of information transmission (levelization, small lot)

Worker and Equipment


customer

Work Design Equipment Design

Parts Design

(M)

parts design for manufacturability

b lack box parts system

A

A

B

B

Work Design Equipment Design

reduction of raw material inventory

reduction of finished goods inventory designing process

flow pror to work & equipment design

M+A+B

low cost automation

in-house design of equipmentrevision of work designs

by supervisors

maximizing value-adding time

flexib le equipment

workers participate in Kaizen (improvements)

quick set-up change

multi-skilled worker

pull system

mixed-model (small lot) assembly

lshort-term levelization of production volume

dealer

visualizing non-value time (JIT, andon, line stop cord)

levelization of product mix (heijunka)

M

M

Msupplier Kanban

JIT delivery

communication

preventive maintenance

flexib le task assignment (shojinka)

incremental impovement of equipment

(1) Higher Productivity and Shorter Throughput Time


（2） Higher Manufacturing Quality

Toyota-style system as an integrative manufacturing capability

M+AM+A+B

yes

no

yes

no

yes

no

M+A+B

Product Design

(M+A+B)

design for manufacturability

M+A

A

prevention from sending error messages (poka-yoke, jidoka, etc.)

maintenance of process information stock (total productive maintenance, worker training, standard operating procedures)

M

supplier's Kaizen (impronements)

supplier

supplier's on the spot inspection

on the spot inspection

scrap or rework

scrap or rework

elimination of inspection of receovomg parts

yes

no

MM?

reduction of inventory or piece-by-piece transfer

M+A?

scrap or rework

process step 2 process step 1

quick feedback of defect information

M+A+B

M+A+B?M+A+B?

scrap or rework

B

final inspection

Kaizen (continuous impronements)



Worker and

Equipment

customer

dramatizing the defect information (andon, jidoka, etc.)

information flow

material flow

A,B,M information content

inspection

productive resource

transformation

Key:

Figure 10 Organizational Capability Regarding Manufacturing Quality (Toyota)


The Lean Principle (Manufacturing)

Design Information is Transmitted to Materials

Creating Good Flows of Good Design (Value) to Customers

Reducing MUDA (Non-Value-Adding Time)

Maximizing Value Adding Time Ratio

Total Process First, Individual Operations Next

Lead Time Reduction First, Cost Cutting Next

Pursue High Quality First – Quantity Follows as a Result


Efficient/Accurate Information Processing at Toyota

Integrative Manufacturing Capability

Production --- Dense and Accurate Transmission of

Design Information from Process to Product

Development --- Early and Integrative Problem Solving Cycles

For Fast Creation of Design Information

Purchasing --- Long-Term Relationship,

Capability-Building Competition, Bundled Outsourcing

for Joint Creation of Design Information with Suppliers

Toyota’s Manufacturing capability -

Smooth, dense and accurate transmission of design information

between flexible (information-redundant) productive resources.

--- Integration-Based Manufacturing Capability


Information Transmission and Reception in Production

productivity (#1station)（person-hour per unit）

cycle time

Worker

material

Work-in-process product

#1 station #2 station

inventory time

Inven-tory

Tansport

cycle time

production lead time

Reception side(process)

Transmission side(working)

cycle time

Worker

Value adding time (transmission）

Value adding time (reception）

Non-value-adding time

Inventory, waiting, transporting, etc.

Productive resource

productivity (#2station)（person-hour per unit）

cycle time

design information flow

material flow

Inven-tory

inventory time


Themes in Clark & Fujimoto (1991) Product Development Performance

(1) Early Supplier Involvement in PD (2) Applying JIT-TQM to PD(3) Overlapping Problem Solving (4) Compact and Coherent Team (5) Heavy-Weight PM as Champion

The Key is “Early and Integrated Problem Solving “

New Information Technology is Necessary, but not SufficientOrganizational Capability is Key After All


Basics in Product Development

History Matters in Industry’s Capability-Building

Manufacturing

(monozukuri)


Capability-

Building

Environment



Capability-

Building

Competition

Capability-

Building

Capability


Evolutionary Hypothesis

for Integrative Manufacturing Capability

Common Experience during the High-Growth Era May Create A Common Set of Capabilities at Manufacturing Sites of the Same Country

“Economy of Scarcity” ・・ Hungry Organizations Are Forced to Become Lean

Common Experience of “Poverty” (Input-Hungry Situations) When the Organization Was Young, Small and Growing.

→ Limiting Intra-Firm Division of Labor (= Multi-Skilled Workers)Promoting Inter-Firm Division of Labor (= Supplier Systems) 、

Promoting Coordination Inside and Between Firms (= Team Work)

→ Forced Increase of Productivity (High Altitude Trainings of Marathon Runners)

→ Subsequent Increase of Inputs Results in Rapid Expansion of Outputs,

But Expansion of Supplies Also Intensifies Competition Among Firms. Capability-Building Continues in the Sectors of Tradable Goods.

・・ Partly Unintended Results of Industrial Histories in the Late 20th Century.


Manufacturing

(monozukuri)


Product-Process


Products）

Comparative

Advantage of

Design Sites

Fit？

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society



Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology



1 Measuring and Analyzing Industrial Performance-- From Competitiveness to Profitability

ProductivePerformance

MarketPerformance

Profit Performance

other factors of environments and strategy

Arena ofCapability-building Competition

productivitylead time

conformance qualityetc.

pricedelivery

perceived qualityetc.

organizationalroutine

Figure 12 Capability, Competitiveness, and Profitability

Organizational Capability


Example: Productive Performance of Japanese Auto Firms-- Development Productivity (Adjusted Person-Hours per Project) --


0

500000

1000000

1500000

2000000

2500000

3000000

3500000

Period 11980-84

Period 21985-89

Period 31990-94

Period 41995-99

USA

Europe

Japan

Adjustment scheme:

(1) # of body types=2, (2) New design ratio=0.7, (3) Supplier’s contribution=0.3, (4)

Product class=compact/sub-compact*Following Graphs Cited from

Nobeoka & Fujimoto(2004)

2000~2010

?

?

Example: Productive Performance of Japanese Auto Firms-- Assembly Productivity (Adjusted Person-Hours per Vehicle) --


16.8

24.9

35.5

41.0

16.5

21.925.3

29.7

12.3

16.820.1

28.0

0

10

20

30

40

50

日/日米/北米欧/欧新興国

1989 1994 2000

US/NAJP/JP EU/EU Developi

ng Cont.

Source: M. Howleg & F.K. Pil, The second century (IMVP Survey)

(Hours*Person)

30 30

Final Assembly Productivity (2006)

Assembly Productivity (person hours per vehicle)

Factories of Asian Multinationals in Asian Countries

Productivity（man-hour/vehicle） (assemble)

5.1

9.7 9.8

7.5

9.7

14.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Japa

n Av

erag

e(10

)

Korea&

Taiwan

Ave

rage

(6)

Taiwan

Ave

rage

(3)

Thail

and Av

erag

e(6)

China

&Ind

ia Av

erag

e(6)

India

Ave

rage

(3)

C Takashi Oshika, and Takahiro Fujimoto, IMVP

Example: Productive Performance of Japanese Auto Firms-- Assembly Throughput Time (from Welding to Assembly) --


Throughput Time (Start of Body Assy-Final Line off)

17.120.1

25.5

36.3

20.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

日本海外日本北米欧州韓国

（hr.)

JP/JP JP/NA NA/NA EU/EU KR/KR

Data: IMVP2000yr. Survey, made by Jeweon Oh, MMRC

(Hours)

Manufacturing

(monozukuri)


Product-Process


Products）

Comparative

Advantage of

Design Sites

Fit？

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society



Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology



Architectural Thinking and Industrial Classification

Product architecture,

Basic way of thinking of engineers

when they design functions and structures of a new product

Product Function

Sub-functions

Product Structure

InterfaceInterface

Component

Component

Mapping betweenFunctional and

Structural Elements

Figure 4 Product Architecture


Basic Classifications of Product-Process Architecture

Modular architecture

one-to-one correspondence

between functional

and structural elements

Integral architecture

many-to-many correspondence

between the functional

and structural elements

Body

Suspension

Engine

Handling

Ride

Fuel Efficiency

PC

PC System

Automobile

Computing

Printer

Projection Projector

Printing

Open architecture： “mix and match” of component

designs across firm

Closed architecture： mix and match only within a firm


(1) Closed-integral, (2) Closed-modular, (3) Open-modular

ModularIntegral

Closed

small cars

compact consumer electronics

internet

bicycle

LEGO (building-block toy)

motorcyclemachine tools

Figure 6 Basic Types of Product Architecture

Open

game software

mainframe computer

personal computer (PC)

PC software

Three Basic Types of Product Architecture


Closed-Integral Architecture (Car)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Closed-Modular Architecture (Mainframe Computer)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


パソコンの写真を貼り付ける

Open-Modular Architecture (PC)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Closed-Integral Architecture (unit-body)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Closed-Modular Architecture (Body-on-Frame, or Truck-type)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Quasi-Open-Modular Architecture? (Chinese local makers)

ModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Evolution of Architectures

－ a Macro-Micro Loop －

Product-

Process

Architecture

(Selected by

Products)

Customer or

Market

Requirements

Constraints

imposed by

Society

Constraints

imposed by

Technology


Designer

variation

Simplifying

Structures

Improving

Functions

Under-performance

Over-Performance

Constraints

by Society,

Markets,

Physics --

Designers’

Intentions

-- or Chances

Surviving

Architectures

Unintended

Design Changes

Evolution of Architectures

-- by PerformanceMacro-

Architecture

Micro-

Architecture

selection retention

-- by Cost


Macro Architectures ・・ are Selected by Society, Market and Technology

Architecture of the Whole Product ＝ Aggregation of Parts’ Architectures

Macro-Architectures Affect Structures and Cultures of Industries and Firms

Macro-Architectures Affects Micro-Architectures through Structures/Cultures

Micro-Architectures ・・ are Selected by Designers’ Intended/Unintended Behaviors

The Same Product may Have Different Architectures Layer by Layer (Vertically), or Area by Area (Horizontally)

Ex Ante, Designers Intend to Improve Performances or Decrease Costs by Changing Micro-Architectures

Ex Post, Micro-Architectures that Survived in Internal/External Selection Environments are Aggregated into a Macro Architecture of the Whole System

Loops of Macro-Architectures and Micro-Architectures


・ Technological Progress Expands Cost-Performance Frontier

・ The Same Kind of Products with Different ArchitecturesMay Have Different Cost-Performance Frontiers

・ Customers of Different Tastes (e.g., Performance-Oriented or Cost-Oriented) May Select Products of Different Architecture

Performance-Oriented Customers May Choose Integral Architecture; Cost-Oriented Customers May Choose Modular Architecture

・ Architectures, Coordination Mechanisms, and Industrial Structures are Selected Simultaneously

Modular Architecture -- Market Coordination -- Dispersed Industrial StructureIntegral Architecture – Organizational Coordination – Concentrated I Structure

・ Organization’s Coordination Capability Building → Shift to Integral ArchitectureｓMarket’s Coordination Capability Building → Shift to Modular Architectures

・ Middle Range in the Architecture Spectrum Relational (Long-Term) Contracts and Other Hybrid Coordination Mechanisms.

Selection of Macro Architectures


Technological Progress Expands

Cost-Performance Frontier

性能

t ｔ＋1 ｔ＋2平均費用（価格）

技術進歩

AverageCost (Price)

Performance

TechnologicalProgress


Expanding the Frontier (Electric Calculator)

Price

(yen)

Function Index

CasioSharp

C J.Shintaku

Integral

Architectures and Cost-Performance Frontier

Modular Intermediate

Performance

AverageCost (Price)


Integral

Performance

Modular

Overall Cost-Performance Frontier (Envelope)

Average

Cost

(Price)


Integral

Overall Cost-Performance Curve

and Choice of Architectures

Performance

Choice of

Price-Oriented

Customers

Price

Indifference Curve of

Performance-Oriented

Customers

▲

Overall Cost-Performance Curve

▲

Modular Intermediate Integral

Choice of

Performance-

Oriented

Customers

Choice of

Intermediate

Customers

Indifference Curve of

Price-Oriented Customers

Average

Cost

(Price)

Modular

Customer Types and

Overall Reservation Price Curves


Manufacturing

(monozukuri)


Product-Process


Products）

Comparative

Advantage of

Design Sites

Fit？

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society



Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology



Hypothesis: Capability-Architecture Fit at National Level

A group of firms in the same country or region, facing similar

environmental constraints, national-regional institutions, demand

patterns or other forces specific to a particular geographical area may

develop similar types of organizational capabilities

Products with the architecture which fits this organizational capability

tend to demonstrate competitive advantage (-- if not profitability)

History mattersModularIntegral

Closed

small cars


internet

bicycle




Open

game software

mainframe computer


PC software


Japan’s Architectural

Comparative Advantage

Ratio of Export and Integral Architecture Index Scatter chart(1)

（Regression Equation for Assembly products：52sample）

Ratio of Export and Integral Architecture Index　Scatter chart（assembly products：52sample）

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

-3.000 -2.500 -2.000 -1.500 -1.000 -0.500 0.000 0.500 1.000 1.500

Week　　　　　　　　　　　　　　　　　　　　　　　　　　Integral Architecture Index 　　　　　　　　　　　　　　　Strong

Rat

io o

f Exp

ort

Ratio of Export

Regression Curve

C Oshika and Fujimoto, MMRC, University of Tokyo

Ratio of Export and Integral Architecture Index Scatter chart(2)

（Regression Equation for Process-Oriented Products：43sample）

Ratio of Export and Integral Architecture Index　Scatter chart（Raw Materials products：43sample）

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

-2.500 -2.000 -1.500 -1.000 -0.500 0.000 0.500 1.000 1.500 2.000

Week　　　　　　　　　　　　　　　　　　　　　　　　　　Integral Architecture Index 　　　　　　　　　　　　　　　Strong

Rat

io o

f Exp

ort

Ratio of Export

Regression Curve

C Oshika and Fujimoto, MMRC, University of Tokyo

Asian Industrial Performance

History matters

Different history, different capability, different advantages

Complementary nature of Asian trades


(1) Products may be Designed

Where Organizational Capability and Product Architecture Fit

(2) Products may be Produced

Where Products are Designed

(Scale Economy and Product Differentiation) or

Where Organizational Capability and Process Architecture Fit or

Where Products are Sold (Production Located in the Market)

Design Matters When Policy Makers Choose Industries to be Promoted


Predictions on Architecture-based Comparative Advantage

Japanese firms -- integration capability

More competitive in products with closed-integral architecture

based on integration-based manufacturing capability

Chinese firms – mobilization capability

More competitive in labor-intensive products

with open-modular (or quasi-open) architecture

Korean (large) firms – concentration capability

More competitive in capital-intensive products

with modular architecture (moving toward integral?)

ASEAN firms – labor-retaining capability??

More competitive in labor-intensive products

with closed-integral architecture?

U.S. firms – conceptualization capability

More competitive in knowledge-intensive products

with open-modular architecture

European firms – expression capability

More competitive in closed-integral products

based on brand-design-marketing capability


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Architectural Geopolitics:

A Prediction in the Pacific Region

Integral Axis

Modular Axis ＵＳChina (south)

Japan

ＡＳＥＡＮIndia?

Taiwan

Korea


Application of the Framework

Toyota Recall 2010

EV and Future of the Automobile

3.11 Earthquake and Supply Chain Robustness

Toyota’s Quality Issue 2010

No excuse! – but it is not so simple.

Root Cause: over-complexity, over-speed, over-confidence

The war against the demon of complexity continues.

Toyota stumbled, but is still among the leading runners

The rule of the game changed

– stricter regulations & requirements

Toyota may still have advantages in the long run.

But difficult dual strategy may be needed

– developing both complex and simple vehicles


Toyota Problem as Complexity-Capability Imbalance

Over-Confidence

of

Quality-Handling

Capability

Explosion of

Product

Complexity

Toyota Problem

In Design Quality

Out of

Balance

Capability-

Building

Environment

Customer or

Market

Requirements

Constraints

imposed by

Society



Capability-

Building

Competition

Capability-

Building

Capability

Constraints

imposed by

Technology


Capability, Complexity, Quality and Volume

Acceptable

Toyota Quality

Over-Growth of

Toyota’s Global Production?

Frontier ofToyota’s Quality-Handling

CapabilityUpper Limit of Production Volume

Compatible with Toyota Quality

Capability-Building in Quality

© Takahiro Fujimoto, University of Tokyo

Complexity in Design,

Production and Purchasing

– Can EV Change the Industrial Structure?

Currently – NO, for ordinary household use.

Variable cost is too high. Volume does NOT solve this problem .

Breakthrough battery innovations may solve it, but when??

EVs for developed car markets are still integral architecture.

It may become modular architecture,

but unless battery cost goes down dramatically,

EV use will be limited to the application

with high utilization ratio, short-range, & limited area.

Car is not PC, after all

Diversification of motive power

in the first half of the 21-st century?


volume

Average unit

production cost

Internal Combustion

（steel, plastic, silicon -- ）

fixed

cost

variable

cost

Current EV

（Expensive rare metal included）

Mainly cost of batteries.

Can Innovations eliminate this gap??

A Simple Economic Analysis of EVs

fixed

cost

variable

cost

volume


Mitsubishi’s commercialized EVs –Battery pack alone is 200kg, $ 20,000, practical range is 100km.

Vehicle price is over $40,000 ( Less than $30,000 after subsidy)

long

Range per

Charge

Diversified Mix of Motive Power in the 21st Century?


Utilization Ratio

short

low high

このボックスをすべてカバーできる絶対的な駆動形式はない

No technology dominates.

Right vehicle for

Right use

EV?

East Japan Earthquake and Supply Chain Crises

Unprecedented! Compared with Past Disaster

Complete Destruction in Broad Area

→ Restoration of Design Information Flows is Key

Past Example：Nihonzaka Tunnel Fire, Kobe Earthquake,

Aishin Fire, Chuetsu Earthquake, etc.

Difference from the Past Disaster：

Global Operation, Global Competition, and Electronic Control

“A Huge Disaster that Happened in the Era of Global Competition”


The Tohoku Earthquake and Supply Chain Crises

Critical Parts that Afffected Global Supply Chains

① Microcomputer Chip ・・

Design Information is not Substitutive, not Portable

・・ But Restoration is Faster than Expected

② Functional Chemical ・・ Rubber and Paints

Tsunami and Nuclear Plant

③ Piece Parts & Expendable Supplies ・・ Lower-Tiers, -- not Visible

Toyota’s Recovery from the Supply Chain Destruction

by the Earthquake is Faster than Initially Expected.


Supply Chain as Flow of Design Information

Customer

(Market)

WIP Product

製品設計

工程設計

Flow of Design Information

実物工程

Material

Prod.

Design

Proc.

Design

Proc

ess

Info.

Transfer

Flow of Material (Medium)

Takahiro Fujimoto, Univ. of Tokyo

Info.

Transfer

Prod.

Design

Proc.

Design

Proc

ess

Analysis of Supply Chain Robustness/Weakness

• Monozukuri (Manufacturing) Theory

Based on the Concept of Design Information Flow

• Four Attributes of Supply Chain Robustness/Weakness

1 Dependence on Supply to one Supplier/Factory

２ Lack of Visibility of Supply Chain

３ Lack of Substitutability of Design Information

４ Lack of Portability of Design Information



Some Remedies Under Discussions -- Their Limits

Robustness without Competitiveness is Not Feasible in the Long Run

① Adding Inventories（×）

Don’t Design Inventory Systems Based on Rare and Unpredictable

Events Whose Probabilities Cannot be Calculated

② Switching to Standard/Common Parts（×）

Survivable Product Architectures are Selected by Customers

③ Duplicating Supply Chains and Equipment（×）

Feasible only When Market Growth Absorbs Added Capacity

④ Transfer of Facilities out of Eastern Japan（×）

In the Long, Run, There are Risks Everywhere in the World



Counter Measures for Robust Supply Chaions Agaist Huge Disasters

Goals: Recovery ofSupply Chains within a Few Weeks after Huge Disaster?

Supply Responsibility

& Competitive-

ness

Is Product Design Information Product-Specific or Substitutable?

Standard Parts

WIPmaterialProductInventory

Takahiro Fujimoto, University of Tokyo

① Reducing Product Inventory

①’ Adding Inventories for Safety

④ Dual Sourcing (Dual Lines or Suppliers) ?

④’ Virtual-Dual Sourcing (Design Portability)?

Destroyed?

②Switching to Standard Parts？

②’ Modifying Standard Parts to Customized/Optimized Parts?

Prod.Design

Proc.Design

Process, Equipment, Tools,

Dies, Recipes

Back-upEquipment, etc.

Is Process Design Information Portable ?

③’ Virtual-Dual Tooling

③ Dual Tooling

• Huge Disaster Someday – But Global Competition Everyday

• The Goal is Recovering Design Information Flows (In A Few Weeks)

• Improving Supply Chain’s Visibility (Getting Info in a Few Days?)

• Improving Design Information’s Portability (Transferability)

• Making the Supply Chains Virtual-Dual

by Nominating Back-up Production Lines/Suppliers

• Adding Article on “Back-up Lines” in the Supply Contract?

Periodical Drills for Smooth Back-up in Case of Disasters ?

Increasing Supply Chain Robustness

Without Sacrificing Competitiveness


Industrial Marathon Continues in Asian Industries

What is Going On in the Early 21th Century?

Globalization – as Realization of International Division of Labor

Microscopic Intra-industrial Trade based on Comparative Advantage

The Keys Are:

Architecture-Capability Fit -- Comparative Advantage of Design

Capability-Building Competition

Evolutionary Learning Capability

Strong Strategies and Strong Operations


Across the Manufacturing-Service Boundary

Open-manufacturing (monozukuri) principles are applicable to

both manufacturing and service sectors

Inter-sectoral learning and knowledge-sharing is key!

Learning Across Industries

C Takahiro Fujimoto, University of

Tokyo

Front Runners Can Learn Each Other

Toyota → Canon

Toyota → A Fashion Company (World)

Toyota → A Super Market Chain (Ito Yokado)

Toyota → Japan Post Office

Toyota → Toyota Dealers

Ritz Carlton → Toyota

Lean Knowledge Transfer across Industries is Key

Service and Manufacturing -- Difference in Media

The Medium is Intangible and Ephemeral in Typical Service Proceses

Service Products are Produced and Consumed at the Same Place and Time

Software

Financial Products

Face-toFace Service

Broadcasting

Tangible

Intangible

EphemeralDurable

Cars

Semiconductors

Other Durable Goods

Perishable Foods

Non-Durable Goods

tangible medium

design information

medium


Tokyo

Transfer of Toyota System to Service Sectors

Hospital（５S, streamlining client flows),

Insurance Firms (Customer Oriented Product Development)

Government （Project Management）、

Police （Preventive Maintenance?）

・・・ Different Aspects in Different Industries

Post Office： Living with Input Volume Fluctuation

Creating Standard Units of Flows (15 min) at the Entrance

Ito-Yokado Super Market

Backyard 2S、JIT Tempura、JIT Meet Cutting、

Piece-By-Piece Cabbage Flow ・・

Toyota Automobile Dealer： Showroom Sales（Home Game by Team）

“Home Doctor” System (Sales Personnel)

45 Minute Inspection (work standardization)

Broad Definition of Customers’ Flow of Total Customer Experience is Key!


The Lean Principle Applied to Service

Design Information is Transmitted to Customers, Not Materials.

Creating Good Flows of Total Customer Experience

Total Customer Experience is a Part of Customer’s Life

Custoner’s Life is a Flow -- Imagination on Their Lives is Key

What is Customers’ Muda/Value Experience ? -- Not So Clear

Optimizing (Not Maximizing?) Value Adding Time Ratio

Customer Experience First, Service Operations Next

Lead Time Optimizing (e.g. Waiting Time) First, Cost Cutting Next

Pursue High Quality – Quantity Follows as a Result


Tokyo

Creating a Good Flow of Customer Experience: A Super Market

Entrance –

Unsatisfied

Customers

Exit –

Satisfied

Customers

Lead Time = Information-Receiving Time

ReceptionFloor

Design

Talks to

CustomersProduct &

Price DesignCashier

Timely and Accurate Information

Transmission to Customers

Productivity =

Information-Sending

Efficiency

Quality =

Information

Sending

Accuracy

設計情報

Tangible

Medium

Design

Info

設計情報

Tangible

Medium

Design

Info設計情報

Intangible

Medium

Design

Info

設計情報

Intangible

Medium

Design

Info

Intangible

Medium

Design

Info


Good Flow of Customer Experiences

(Harley Davidson Japan)

Design

InfoDesign

Info

Design

Info

SatisfactionProduction

Consumption

Sales Floor

Design

Potential

Customer①

Existing

Customer①

設計情報

Tangible

Medium

Tangible

Medium

設計情報

設計情報Production Sales

ConsumptionProductDesign

設計情報

Intangible

Medium

設計情報

SatisfactionProduction

Consumption

PromotionDesign

Potential

Customer②

Existing

Customer②

Tangible

Medium

Flow of Customer Experience

Design

Info

Design

Info

Design

Info

Design

Info

Design

Info

Design

Info


Tokyo

Intangible

Medium

Intangible

Medium

Intangible

Medium

Manufacturing Instructor School

for

Diffusing Momozukuri Knowledge to SMEs

Transforming Manufacturing Veterans

to Manufacturing Instructors

Teaching across industries

Helping the regions and SMEs share manufacturing knowledge

Tokyo University Manufacturing Instructors’ School

Educating Instructors Who Can Teach Lean Manufacturing Across Industries

Over 50 people are now active as lean manufacturing instructors

Tokyo University Manufacturing Instructors’ School

Reference

• Asanuma, B. (1989). “Manufacturer-supplier relationships in Japan and the concept of relation-specific skill,” Journal of the Japanese and International Economies, Vol. 3, pp.1-30.

• Baldwin, C. and Clark, K.B. (2000). Design Rules, MIT Press

• Clark, K.B. and Fujimoto, T. (1991). Product Development performance, Harvard Business School Press, Boston.

• Fujimoto, T. (1999). The Evolution of a Manufacturing System at Toyota (OUP)

• Fujimoto, T. (2007). Competing to be Really, Really Good, I-House Press, Tokyo.

• Fujimoto, T. (2007) “Architecture-Based Comparative Advantage – A Design Information View of Manufacturing.” Evol. Inst. Econ. Rev. 4(1): 55-112.

• Ohno, K., and Fujimoto, T., ed. (2006) Industrialization of Developing Countries: Analyses by Japanese Economists, National Graduate Institute for Policy Studies

• Ulrich, K. (1995). “The role of product architecture in the manufacturing firm,” Research Policy, Vol. 24, pp. 419-440.

• Womack, J., et al., The Machine That Changed the World (Rawson)

the japanese manufacturing industries - its capabilities and...

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