Do we know
JAPAN?
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
1
PARADOX
Contrary 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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
2
Balance of Forces
Japanese Strengths
American Strengths
• Applied Research and
Development
• Incremental
Improvements
• Commercial Applications
• Process and Production
Technology
• Components
• Hardware
• Basic Research
• Breakthroughs and
Inventions
• Military Applications
• New Product Design
• Systems Integration
• Software
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
3
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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
4
R&d IN Universities, Institutions and Corporations
In Japan
In Japan
94%
85%
4%
9%
85%
In America
In Japan
30%
83%
In America
In Japan
In America
30%
60%
34%
In America
Read and write English
Read English journal articles
Read Japanese
Read translated papers
Attend technical meetings outside
of normal work: 2/Month
“
“
“
“
“
Are aware of foreign activity in their
field
“
“
“
“
“
Had spent +1 year outside
“
“
“
“
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
“
“
“
5
Comparison of Technology Developments
Among Japan, US and Europe
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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
6
Comparison of Operating Efficiency of
US and Japanese Automobile Production
GM* TOYOTA NUMMI
Assembly hours
Per car
Assembly defects
Per 100 cars
Assembly space per
car, per year (sq. ft.)
Average inventory
of parts
31
16
19
135
45
45
8.1
4.8
7.0
2
weeks
2
hours
2
days
Operating efficiency of G’s Framingham, Mass., plant
versus 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]
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
7
Percent of Distribution of College Graduates (All Degrees)
Source: Misistry of Education, Japan (1982)
W. Germany (1979)
UK (1978)
USA (1978)
JAPAN (1981)
0
20
40
60
Science
Engineering
Agriculture
Health
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
80
100
8
Electrical Engineering Graduates
(per million population
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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
9
What the U.S. and Japan buy from each other
Leading 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
2. Computers
3. Logs and lumber
4. Corn
5. Arts and antiques
6. Computer and office
machine parts
7. Computer chips
8. Tobacco products
9. Fish
10. Controls and instruments
(thermostats, etc.)
$3.499
2.041
1.649
1.648
1.622
1.580
1.361
1.314
1.269
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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
10
Comparison of Most Important Requests by US
and Japan Stock Holders
90
80
USA
JAPAN
70
60
50
40
30
20
10
0
Rise of Stock
Price
Business
Expansion
Stability of
Business
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
11
An Example of
Successful
Japanese
Industrial
Developments
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
12
An Example of Successful
Japanese Management of Technology
FANUC Ltd.
And
“Management Philosophy”
of
Dr. Seiuemon Inaba, CEO
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
13
FANUC
The 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
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
14
1988 Rankings of Excellent Companies in Japan
Source: Asahi Daily News, August 20, 1988
Rank
Name of Company
Points
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
13.
14.
Toyota Auto Co.
NIT
Matsuhita
Fuji Fillm
FANUC
Nintendo
Yamanouchi Pharm. .
Hitachi
7-Eleven
Nissan
Kyocera
Toshiba
Fujitsu
Honda
Sony
Sharp
1000
942
930
927
917
910
891
884
872
871
854
849
848
838
813
796
15.
19.
32
39
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
15
1990 Rankings of Excellent Companies in Japan
Source: Nippon Kaizai, August 18, 1990
Rank
Name of Company
Points
1.
2.
3.
4.
5.
6.
7.
8.
9.
12.
16.
19.
Toyota Auto Co.
FANUC
Nintendo
7-Eleven
Fuji Film
Matsuhita
Tokyo Steel Mfg. Co.
Hitachi
Nissan
Toshiba
Honda
Sony
1000
967
963
947
941
28.
Sharp
823
33.
Kyoeeta
816
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
917
896
886
886
872
850
844
16
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.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
17
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.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
18
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”.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
19
FANUC’s Research
Management
(1)
(2)
(3)
(4)
For “Engineering”, the history is important.
For “Engineers”, “Innovation” is important.
No conventional library for the research staff
(Because any published book is already
obsolete).
Pursue “New Idea”, “New Information”, “new
Innovation”.
“Product with new invention is not successful
commercial commodity.”
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
20
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.”
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
21
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.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
22
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”.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
23
(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.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
24
FANUC’s Research
Management Philosophy
(1)
(2)
(3)
For “Engineering”, the history is important.
For “Engineers”, “Innovation” is important.
No conventional library for the research staff
(Because any published book is already
obsolete).
Pursue “New Idea”, “New Information”, “new
Innovation”.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
25
(4)
(5)
(6)
(7)
Relax and enjoy your life with your family in
weekends and come back on Monday with
fresh ideas and new energy recharged.
“Time” is precious and do not waste “Time”.
CEO is briefed on all major developments.
“Basic research” vs. “Product Development
Research”.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
26
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.
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
27
Estimated Share of Companies Supplying
US Machine Tool NC Controls
Others
Siemens
FANUC
Mitsubishi
Cincinati
Milacron
Kearney &
Trucker
Allen Bradley
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
28
THE BUNSHA GROUP
A diversified OEM network whose greatest strength is turning your
90000
biggest needs into your best assets.
Growth in Sales (million yen)
80000
70000
60000
50000
40000
30000
20000
10000
0
1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
29
Growth in BUNSHA Group
3500
3000
No. of Employees
Captal (million yen)
2500
2000
1500
1000
500
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
0
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
30
Sharp’s Basic Philodophy
for Product Development
(5 “S” Principles)
•
•
•
•
•
Speedy
Simple
Smart
Successive
Systematic
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
31
Growth in the BUNSHA Group
40
34
30
26
25
20
15
19
13
14
20
21
36
28
22
16
10
5
0
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
Number of Companies
35
Inyong Ham, Distinguished Prof.
Emeritus, Pennsylvania Sate U,
32