Productivity Improvement

The productivity effects of the Japanese operating system are quite pervasive. The close linking among workers that produces the heightened awareness of problems and their causes coupled with management’s intervention to reduce buffer inventories produce the production effect:

1) Smaller lot size inventories
2) Smaller buffer inventories
3) Less scrap
4) Less direct labor wasted on rework
5) Less indirect cost of inventories
6) Less space for inventories
7) Less equipment to handle inventories
8) Less inventory accounting
9) Less physical inventory control effort

These productivity improvements result from workers’ efforts as a part of a closely linked system. Since most of the system is run by workers and supervisors, the costs of administration are low, and managers are freed to deal with strategic issues.

Market Effects:

While the JIT system leads to productivity improvements, the reductions in delays and scrap also improve response. Production lead times are reduced because of the low cost of change over, so marketing can promise better delivery dates because the product mix and quantities can be changed quickly as demand and forecasts of demand change. Even forecasting is improved because of the shorter lead times.

Total Quality Control:

The concepts of total quality control were originally introduced in Japan by the American consultant W Edwards Deming in the 1950s. Deming was able to get top managers to install both a philosophy and statistical techniques to foster quality as the prime manufacturing competitive priority. The result was a complete reversal in the quality of Japanese manufactured products, which had a very bad reputation.

While quality control is obviously involved in the process, it is only a part of the Japanese concept of total quality control. All plant personnel are inculcated with the view that scrap/quality control is an end in itself. Quality at the source is the slogan. It means that error, if any, exists should be caught and corrected at the work place. This is in contrast to the widespread US practice of inspection by sampling after the lot has been produced. In US practice quality is controlled by inspectors from a quality control department, in Japanese practice, workers and supervisors have the primary responsibility for quality. With quality control at the source, there is fast feedback concerning defects, resulting in fewer rework labor hours ad less material waste in addition to the other benefits previously discussed.

Responsibility for Quality:

The key to the Japanese practice is that “the responsibility for quality rests with the makers of the part”. The workers and the supervisors rather than a staff quality control department bear this responsibility. If western manufacturers are to close the quality gap with the Japanese, there is no better way to begin than by transferring primary responsibility for quality from the QC department to production.

The Japanese consider quality control to be a line function, not a staff function. This fact was highlighted in the Sanyo takeover of the Warwick TV plant. The quality control manager under Warwick’s management was made plant manager in the Sanyo reorganization, a clear announcement of a pledge to quality as a line responsibility.

By placing responsibility for quality directly on workers and supervisors, the Japanese implement a commitment to the prevention of defectives. They implement the slogan, quality at the source through the following principles:

1) Process control, a classic statistical quality control concept, covered, of checking quality as the process continues and stopping the process if it goes out of control. Whereas US practice is to select a limited of processes for control, the contrasting Japanese practice is to establish control at each work station.
2) Visible, measurable quality is implemented through easy to understand charts and diagrams that keep workers and managers informed about quality.
3) Insistence on compliance with quality standards.
4) Line stop authority in the hands of workers in order to implement the insistence on compliance. In capital intensive processes, devices detect poor quality and stop the process automatically.
5) Self correction of errors is the responsibility of each employee, who must rework bad items, usually after regular working hours. By contrast, US plants employ special rework lines as a common practice.
6) Expose problems and get them solved, for example, by deliberately removing buffer inventories.
7) 100 percent inspection, especially for finished goods.

The duties of the rather small quality control departments in Japanese plants are to monitor production processes to see that standard procedures are followed, to assist in the removal of the cause of defects, and to participate in the audit of supplier plants in order to maintain standards, Receiving inspection of supplier’ materials is usually eliminated; instead the quality control procedures of the suppliers are relied upon.