Japanese Market Today and Its Developments - Research Paper Example

Japanese Market Today and Its Developments Among the various optimal organizational processes that originated in Japan, lean manufacturing is a key one, even in today’s market. Japan is considered the world leader in lean manufacturing and production, with many Japanese majors being the pioneers of this process. In simple language, lean thinking aims at focusing on giving maximum value to customer by reducing or completely eliminating waste. Thus, it helps the organizations by helping them provide maximum value to their customers by using minimum resources on account of waste elimination. “Japan, of course, has long been a global leader in lean production. Japanese companies invented just-in-time manufacturing, where parts arrive at the loading dock right when they're needed. (businessweek.com). To achieve the target of complete zero or near zero waste, the management needs to focus away from optimizing individual functions, assets or technologies to optimizing the entire value chain. This involves changing or streamlining not just the way a department or function runs but the entire chain of value stream which runs through the various processes and technologies. Thus, lean implementation requires the overall understanding of the entire value chain of a product or service and then using the various tools and techniques to eliminate waste in the chain. Before doing this, Japanese companies practicing lean manufacturing firstly understands what value is for the customer and then to achieve that value lean methodology should be used. By eliminating waste across the entire value stream of production or service rather than just single points helps consolidating the various resources and produce the synergy. Thus, by re-arranging processes to retain just the value add steps in the entire chain Japanese companies practicing lean manufacturing can achieve cost benefits by re-arranging processes to ensure less human effort resulting in lower defects and higher space utilization. Hence, the synergy produced by this re-arrangement will ultimately result in reduced cost on account of lesser manpower requirement, lesser defects and hence lesser rework and wastage and finally lesser capital expenditure on space. Another advantage of this streamlining by using various lean tools is that the information flow and management becomes very easy. This not only helps in reducing defects but also in analyzing and planning for the processes by the management. Most of the well known Japanese companies practice lean manufacturing including its originator Toyota, Matsushita group, Toshiba group, the Hitachi, etc, as this process developed in Japan and then spread to other countries and companies. Development over the years The basic principles of Lean process Management originated in the Japanese manufacturing industry. The concept of Lean thinking made its entry into the Japanese industry in 1950’s, when Eiji Toyoda, a young Japanese engineer, started implementing an opposite version of the manufacturing process practiced in USA. Eiji Toyoda was the former president and chairman of the Japanese auto major, Toyota Corporation and he is only regarded as the one who through his leadership skills or management functions or organizational practices made Toyota a profitable organization, helping it to gain worldwide prominence. Eiji Toyoda, after completing his engineering degree at the Tokyo Imperial University, joined his cousin Kiichiro Toyoda who at that time has established an automobile plant called Toyoda Automatic Loom Works in Nagoya, Japan. Impressed by Eiji’s management skills in the construction of the new factory near Nagoya, Kichiro made him the Managing Partner and asked him to study the American auto industry to learn and optimize their own functioning. So, Eiji Toyoda visited American auto major, Ford's River Rouge Plant in Michigan in early 1950s exploring "some possibilities to improve the production system" (Womack, et al). Toyoda was searching for a means to make his fledgling manufacturing enterprise more competitive among the more than 80 automobile firms starting up in Japan’s reconstructing post-war economy. (Brockberg). Even though, he was impressed by the scale and automation of the infrastructure, he was thoroughly dismissive of Ford’s manufacturing practices and functioning. So, after his return to Japan, he and a veteran loom machinist by the name Taiichi Ohno fine-tuned Toyota's own manufacturing practices and operations, based on the inefficiencies he witnessed in Ford’s plant. That is, he concluded that Ford's system of mass production would not work out in their manufacturing plants in Japan and so he came up with new operational innovations, which only evolved into later day lean process management. “His observations led to innovations for (1) reducing the time for manufacturing processes by standardizing practices and (2) maximizing value by eliminating the waste of both material and human resources. Eventually, (3) empowered employees participated regularly in small-group strategic planning sessions (Kaizen events) to further streamline processes and reduce waste.” (Brockberg). This standardization of operational practices is known as the Toyota Production System, generically defined as lean. Although these operational practices were visible in the Japanese industry for around 60 years, it made its entry into USA only in 1980’s courtesy Massachusetts Institute of Technology, Boston. That is, in 1984, MIT launched an international study into the production of motor vehicles all over the world. The researchers mainly focused on the significant paradigm shift in the Toyota Production System from the mass production methods, which were practiced by Ford and other American automobile majors. At the end of the study, the MIT research team came to the conclusion that lean manufacturing is "Japan's secret weapon” (Womack and Jones.,) and in course of time should revolutionize Western industry, if it was adopted by them. They concluded, lean production is a superior way for humans to make things. It provides better products, in wider variety at lower cost. Equally important, it provides more challenging and fulfilling work for employees at every level, from the factory to headquarters. It follows that the whole world should adopt lean production, and as quickly as possible (Womack and Jones). With the Toyota’s operational practices being implemented in other parts of the world in 1980’s, the English term for these practices was first coined by Professor James P. Womack and consultant Daniel T. Jones in 1990 in the book, The Machine That Changed the World . Only after the exposure given by these two experts regarding the Toyota’s operational practices and how lean has been revolutionizing Japanese industries, their coining of the term and importantly their efforts to introduce those practices in American industries, the lean process management became known worldwide. Now, all over the world and especially in Japan, Lean is the catch phrase in the Japanese organisational circles as well as in the markets. With many Japanese as well as other Multinational companies incorporating lean philosophy in their functioning, this Japanese concept is producing optimum results for those companies and at the same time, earning optimum recognition for this concept. Works Cited Brockberg, Kaylee H. Lean Schools: Origins and Elements of Lean: A Brief Review of the Literature. 2008. 23 March 2010. http://www4.oakland.edu/upload/docs/Pawley/White_Paper_Origins_and_Elements_Lit_Review_031708rc.pdf businessweek.com. No One Does Lean Like The Japanese. 10 July 2006. 23 March 2010. http://www.businessweek.com/magazine/content/06_28/b3992071.htm Womack, James P., Daniel T Jones and Daniel Roos. The Machine that Changed the World. New York: Rawson Associates. 1990. Womack, James P and Daniel T Jones. From Lean Production to the Lean Enterprise, Harvard Business Review 72.20 (1994):93-103. Womack, James P and Daniel T Jones. Lean Solution. New York: Free Press Pubs. 2005 Read More