Led Industry Policies in the USA and Japan - Case Study Example

LED INDUSTRY POLICIES IN USA AND JAPAN Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 26/04/ 2011 Led Industry Policies in USA and Japan Introduction Aspects of daily lives have been undergoing changes due to technological revolutions. Manufactures of light emitting diodes in order to live within the technological changes and the competitive market field must produce high quality products. The semiconductor lighting industry is well developed in Europe, Asia and United States. The LED industry requires high technological development for dominance. United States and Japan are the leading in this industry since they have high innovations in technical fields and production of new products. The two countries ensure that they continually increase industrial investments as well as the international cooperation between companies. By doing that, they are able to accelerate the pace of taking market positions that are favorable (Jones &Hitchman, 2009). Due to the market’s rapid development the two countries have put in place ways of speeding up expansion of their market share. For example Nichia and Toyoda Gosei in Japan and Cree and Lumileds in United States have increased their investment in producing light emitting diode equipments. Shimokawa (2010) puts it that international LED companies are increasing their cooperation, for example Sumitomo Electric in Japan is a sales agent for US in Japan. That is a strategy that is aimed at enhancing cooperation between the LED industries between the two countries. Strong support for the LED industry in the USA began in 2009. Upon introduction of new policies the number of LED industries increased. Before, the government had little consideration for the industry hence people did not highly invest in it. The local government had been very generous and shared the investment with investors for it did not fully offer tenders to investors. Policies on worker management Though the LED industries are involved in production of the same kinds of products, the production systems differ in various countries. The way the industries are managed in the United States is different from the way they are managed in Japan. Workers in the Japanese LED industry are expected by the management to give suggestions. That helps them build their own efficiency in operation which positively impacts the company’s productivity. By doing that, the management aims at promoting continuous improvement. Though the United States uses suggestive systems, suggestions from employees are regarded as a threat to the management. Employees in Japan are viewed as very important resources and in order to develop these resources the company grants them promotions, trainings, job rotations, no lay off policies and lifetime employment (Mowery, 2000). The human resource is the competitive weapon for LED industry in Japan. In United States the management is committed to little training and during economic down turns, employees are always laid-off. The industry is run through scientific management that is based on the specialization system. With that approach employees are de-skilled and have no trust in one another. In the human resource sector the industry scavenges for skilled and trained workers from other industries. The industry uses investments of other firms in the human resource section in achieving results. The two countries also differ in terms of incentives since the Japanese industry highly recognizes workers, for example it gives workers trophies and medals. The positive responses due to psychological incentives act as a motivation to them (Shoven, 1988). But in the American industry the incentive system is mostly in terms of monetary system like bonuses, promotions and salary increases. The Japanese industry has systems in place that enhance worker participation which greatly differ from those used in the US. In Japan workers participate in decision making and have to ensure that before reaching a decision they have to unanimously agree (Irwin, 1996). While making decisions, voting is not used since it denotes losers and winners hence through the system of consensus everyone is a winner. But in the US, workers are not allowed to participate in decisions related to work to the extent of that in Japan. Workers may only provide pseudo participation. Autocratic supervisors have the role of making decisions at the work place. Decisions made by committees and groups use democratic voting that divides the members into groups of losers and winners. In the Japanese LED industry, workers easily access their managers who wear clothes that are the same as those worn by line workers. The manager’s offices are located inside the industry and are as well open to all workers. In America the industry managers who are above the level of the supervisor cannot be accessed by workers. They work in offices that are air conditioned and the offices are separated from the factory by corridors which are long and infrequently used. Policies on Management Competitive Focus The Japanese LED industry mainly focuses on a strategy to ensure that the industry has a long run competitive advantage (Irwin, 1996). But that is unlike in the US’s LED industry where the concern of the managers is on the short run performance. That is true because in the management systems of Japan, the industry does not release quarterly reports. Management techniques and policies in Japan are based on the continuous improvement concept, unlike in the US industry which relies on the optimization concept. The two concepts in the two countries have a fundamental difference in that the industry that bases its management on the continuous improvement concept is dynamic. In that regard it continuously removes constraints by seeking perfection. But the optimization concept can be described as static and if given constraints will find optimal solutions. Ozawa (2006) suggests that the concept of continuous improvement positively impacts the industry in Japan in terms of equipment utilization and acquisition. The industry is able to design as well as maintain their equipment in good working order. Replacement of equipment parts is done before they breakdown and that helps the industry to prevent occurrence of idle time during production runs. Development of in house equipment enhances innovations and helps Japan maintain leadership in the technological field. The US industries highly encourage buying of systems and only do replacement to equipment parts when they develop problems. The industry in Japan uses the just –enough-resources (JER) sub-concept in the management of resources. Under that idea three types of wastes are squeezed, for example ‘muda’ that refers to waste which results from unnecessary motions and idle resources (Mikanagi, 1996). ‘mura’ which refers to waste resulting from inconsistent and irregular use of resources and finally ‘muri’ that refers to waste which is due to excessive demands placed on resources. All resources including, workers, equipment, inventory, product parts, job classifications and subassemblies are minimized in JER. Managers in the US use a just-in-case (JIC) concept in managing their resources. In that concept a large amount of resources are availed in readiness for guarding against contingencies like, fluctuations in demand, low quality and late deliveries (Martin, Schelb, Snyder & Sparling, 1992). Systems of JER and JIT in Japanese industries require mandatory replacement hence costs are not transferred to the future. The US industries buy equipment used in production from others and that has a short term benefit. According to Jorgenson & Nomura (2007) that has a long term risk of losing the share of the market to those industries that are innovative. By buying technology from shelves, the purchaser is unlikely to be competitive in terms of innovations and product differentiations (Branscomb, Kodama, & Florida, 1995). That is because other competitors can as well access the same technology. Industries aim at producing high quality products and to ensure that, the industry in Japan uses the total-quality control (TQC) sub-concept also called the zero defects. A lot of emphasis is kept on problem correction incase they occur. The management works at ensuring that its relationship with the vendors is good so that the vendors supply them with defect free raw materials. The relationship with customers is also close and ensures that they meet customer specifications. The partnership with vendors helps the industry in maintaining fewer but very reliable vendors who ensure that deliveries are frequent. Shoven (1988) claims that the industries in the US prefer using numerous vendors and put a lot of emphasis on quantity discounts and price variations; in that regard quality is not prioritized. Conclusion For sustainability in the market, industries must ensure that they are very competitive. One aspect of enhancing productivity is through enhancing the worker performance. That can only be achieved if all workers are involved in the management of the industry and given both formal and informal rewards for excelling. Due to the changing technology industries should be very innovative to ensure that they come up with new mechanisms of production which ensures product differentiation. Customers are very sensitive on the quality of services and products that an industry offers hence through innovativeness the industry can develop products that adequately meet the requirements of customers. Management policies used by the LED industries in Japan highly support innovativeness and also enhance worker performance. Hence compared to those used in the US industry, the LED industries in Japan are well placed to drive the industry to successful operation. References Branscomb, L. M., Kodama, F., & Florida, R. L., (1995). Industrialization knowledge : University industry linkages in Japan, pg. 630 Irwin, D. A., (1996). Trade Policies and the Semiconductor Industry The Political Economy of American Trade Policy. (p. 11 - 72) Jones, A. C., &Hitchman, M. L., (2009). Chemical vapour deposition: precursors, processes and applications, Technology & Engineering, pg.583 Jorgenson, D. W., & Nomura, K., (2007). The Industry Origins of the US–Japan Economic Systems Research, Vol. 19, No. 3, 315–341, Martin, J. R., Schelb, W. K. Snyder, R. C. and Sparling, J. C. (1992). Comparing the practices of U.S. and Japanese companies: The implications for management accounting. Journal of Cost Management (Spring): 6-14. Mikanagi, Y., (1996). Japan's trade policy: action or reaction? Business & Economics, pg. 163 Mowery. D. C., (2000). U.S industry in 2000: studies in competitive performance. National research council. Pg. 411 Ozawa, T., (2006). Institutions, industrial upgrading, and economic performance in Japan: Business & Economics, pg. 234. Shimokawa, K., (2010). Japan and the Global Automotive Industry. Business & Economics – pg. 327 Shoven, J. B., (1988). Government Policy towards industry in the United States and Japan. IC industry and government policym pg. 319. Read More