Economic Slowdowns in Japan - Case Study Example

Heading: Operations Management Your name: Course name: Professors’ name: 28th February, 2014 Introduction The growth of industries necessitated change that was necessary in increasing production and competitive environment for companies within different sectors. As a result, new forms of production such as lean production or TQM (Total Quality Management) were adopted by companies such as Toyota and other companies within Japan. Consequently, we are going to analyze the case studies of four companies operating in Japan using the lean production systems in their production units. These companies enabled us to look into the two models of production in different perspectives. This report will look into the trade-offs of the two production systems. Analysis The Japanese economic growth in the 80’s witnessed astonishing growth that enabled companies to produce massively on huge scales for the huge domestic and export markets. Due to the huge demand for consumers good especially for automobiles, the Japanese car industry grew tremendous through adoption of lean production technique. This technique ensures that fewer materials were required and thus industry production was fast and higher output performance was achieved leading to customer satisfaction. This production model lead to phenomenal economic growth thus contributing to inflation and higher value of the Japanese Yen (¥) leading to disuse of the lean production system (Hill 129). Therefore, the viability of lean production in the current Japanese market is not sustainable due to external and internal factors. Some of the external factors included the high value of the ¥ and the increased imports from overseas plants feeding a shrinking demand due to economic slowdown (Lefebvre 108). The main internal factor that affected lean production was the ageing workforce which has made the Japanese labour costly while at the same time the workforce has dropped considerably compared to other major car producers. Several industries adopted lean production as outlined; Case 1: Auto Plant This is company based in Japan which has a capacity of 60,000 cars within its 3 assembly plants and employing 5,000 workers. This auto plant relies on lean production mechanisms since it relies on fewer materials in production while the plant can introduce new models with ease due good software which allows mixed production (Lefebvre 123). The main features of the plant are; Due to subdued demand, shifts are stopped 25minutes early for housekeeping Job rotation has been adopted to ensure the development of multi-skilled workers Kaizen has been adopted to increase efficiency for manual operations Case 2: Printed Circuit Board (PCB) plant This is a plant that produces circuit boards mainly for the Japanese market with NTT has its main client. The company produces around 50,000 boards with NTT accounting for over 50% of the demand. The company produces around 200 variety of boards for NTT and around 2,000 to 3,000 for other companies. Boards are produced either through mass production lines or flexible assembly system (FAS) for small boards (Hill 104). Main features of the company are; Need for technological solution for production of small batches Due to wide product variety, it is necessary to focus on upstream products and processes such as board design, manufacture & logistics FAS is flexible due to software utilization Grouped production of similar boards increases efficiency Case 3: Refrigeration Plant This plant operates in a competitive market due to high demand and the company exports 10% of its 600,000 units produced annually with daily production standing at 2,400 units. The main features of the plant are; Reduced efficiency due to mixed production while TPM and set-up times are used in improving assembly efficiency. Product mixing and addition of models does not affect efficiency Balanced spacing within the assembly line ensures smooth completion of products Case 4: Air Conditioner Plant The plant produces around 700,000 units per year through mass production and automation of the processes. The main features of the plant are; Seasonality of the products counteracts mixed production techniques and warehouses are used to store finished goods. Assembly line is almost 100% manual for adaptability of the plant while automation will ensure cost reduction and standardization of parts and goods. Around 60 to 70% of parts production is automated depending on model such tube-welding operations have been automated. The rising value of the Japanese Yen (¥) has meant that some of company’s market is under threat from cheap imports were production costs are nearly half that of the plant. Thus need to diversify production with importation. Adaptable Production Due to the inefficiencies and challenges presented by lean production, it is vital that we ensure a new approach to dealing with these issues is established. As a result, adaptable production is suited for ensuring that shortcomings experienced within lean production as seen by the 4 case studies are sorted out. For instance, adaptable production ensures that it sorts out issues concerned with fixed production costs experienced within lean production systems (Hill 96). Lean production plants require huge demand to ensure that break-even point is achieved unlike adaptable production which adopts the collection of technologies or methodologies to ensure prudent production (Lefebvre 97). This is unlike agile production which requires continuous change of processes and technologies. The main features of adaptable production are; It is more adaptable to changes in demand so as to serve the market These systems allow for adjustment of production to allow changes in demand The adoption of software systems allow production to accommodate mixed production and improvements can be done by Kaizen system Lower fixed costs on new products or acquisition of new production facilities It allows the adoption of manual human operators It allows production systems that support job enlargement and rotation This technique allows the adoption of Kaizen activities such as TQM and TPM to ensure that production remains competitive. Conclusion Economic slowdowns in Japan led to industrial deficiency due to reliance on lean production which has inefficiencies in addressing pertinent industry issues. As a result, a new production technique of adaptable production was adopted to address these issues. The adoption of this new technology will allow Japanese companies to produce effectively and compete with other producing countries with lower production costs. Therefore, companies should take up adaptable production as a result of addressing inefficiencies and absorbing trade-offs of this new production technique. References Hill, Thomas. Production and Operations Management: Text and Cases, Prentice-Hall, Hemel Hempstead, 2008. Print. Lefebvre, Mario. Operations Managment, Chicago, IL: Palgrave, 2007. Print. Read More