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9. Benchmarking best practices of Japan

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Quality wave began with Japan

• Japan can be considered as one of the best examples for benchmarking continuous improvement practices.

The whole world has seen their rags to riches story. Within no time the country has transformed its “Made in Japan” label from cheap to the one signifying quality, reliability and preference.

FICCI CEBenchmarking Best practices of Japan

It will be interesting to study the best practices of their industries for making continuous improvement under the following 4 sections:-

I. People II. Work style III. Product Quality IV. Customers

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I. People

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Selection of personnel is the most important phase for quality & continuous improvement. Screening of people is done on 2 principle criteria:

1. Does the person really want to work for the organization. 2. What is the applicants potential.

Employee selection based on potential

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Japanese organizations have true & genuine concern for people. This is reflected in most of their organizations and is the first & foremost objective for achieving continuous improvement. Besides healthy bonus, the perks include housing for unmarried, home loans for newly weds, promise of upward mobility within the company, access to employee cafeteria and holiday trips.

Importance of the individual

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Once accepted for employment, the Japanese workers are guaranteed employment for lifetime with the company. The employees do not consider leaving an organization even if he could get a substantially better position & salary. This gives the organization the advantage of stable & experienced workforce.

Lifetime employment

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Many mistakenly believe that company loyalty is achieved by much publicized Japanese exercises, motto repetition or vision statements. It goes much deeper & broader. It consists of a working relationship in which workers recognize that the company is concerned not only about customers, products, bottom-line & share holders but also about them.

Company loyalty

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II. Work Style

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Top management involved in quality

The top executives of all Japanese firms wear the same uniform as their workers. The top management is personally involved in all the areas of quality improvement. Many times the top management is on the shop floor, they meet their workers, observe what they are doing & converse and resolve their problems.

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Job rotation

In Japan workers are rotated in different jobs irrespective of their qualifications. This is beneficial both for the management & the employees. The employees tend to view all the problems with a fresh perspective and do not have a biased attitude. This also relieves monotony and instills fresh enthusiasm in the employees which is regarded as an important motivating factor to obtain continuous good performance.

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Very important to have an inquiring mind

The Japanese organizations inculcate in their employees the quality of an inquiring mind. They believe that unless you have an inquiring mind, continuous improvement is not possible. Thinking about new ideas in most of the organizations is thoroughly encouraged.

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Attitude to Excel under challenge

Japan with its limited space & scarcity of resources has been able to make the most of whatever it has. Space, people and other natural resources in Japan are so limited that all Japanese workers have been taught to exploit them with great care & diligence. This colors the Japanese workers efforts to excel with whatever little they have - A classical example of the positive influence of adversity.

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Commitment to training

Formal training is a way of life in Japan & Japanese industry provides resources for this vital area to ensure that workers know what they are doing. The company believes that as you invest more & more in training, the employees become more & more living assets who can be shifted to new responsibilities & higher positions.

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Financial incentive to be innovative

The organizations in Japan give adequate financial incentive for employees who come up with innovative ideas for improving quality & productivity.

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Consensus management

Japanese managers do not make unilateral decisions effecting production, quality and improvements. An idea or concept is aired for comment by workers & middle management and their observations & suggestions are seriously considered by the top management. The consensus style of management has a great advantage because if many participants are allowed to comment on an idea or a policy change, there will be least resistance when it is actually implemented.

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Long term management outlook

Most of the decisions taken by the Japanese organizations are long term in nature. Their investments aim for growth over a long period of time.

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Competitive spirit

Competition in Japan is taken as an opportunity to improve. More and more Japanese companies benchmark their products with the global leaders in quality.

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III. Product Quality

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Zero defect policy

Zero defect is a well understood & practiced quality standard of Japanese industry. At a Sony factory one could see a color T.V that had been operating 8 hrs a day for over 37,000 operating hrs with no adjustments or repairs, and the T.V was still producing an acceptable picture. The Industry standard is 10,000 hrs.

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Quality supersedes production

In almost all the Japanese organizations quality supersedes production. In Toyota plants every workstation has a line stop button. Each worker is empowered to stop the production line if something goes wrong and they do not fear reprisal for interrupting the production line.

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Supplier quality

Poor quality work is not accepted from any supplier and definitely means an end of relationship with the organization. The organizations also conducts training program for their suppliers and takes interest in continuously improving their products & services as well. The supplier is considered to be an integral part of the organization.

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Just in Time inventory

Japanese dedication to quality has given them the additional advantage of low inventory which considerably reduces capital investment in materials, storage space, material handling equipment and labor. Toyota claims of a 2 hour inventory. The Sony factory in Ichnomiya claims that the supplier’s truck rolls in every 90 minutes to keep up with the production rate of Trinitron color TV.

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Effective fool proofing

In most of the Japanese industries effective fool proofing principles are followed. Most of the production line have a censor which halts the machine whenever the machine begins manufacturing parts which are outside the tolerance limits and are defective.

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Development of suppliers

Japanese industry enjoys high vendor quality because many suppliers are formal employees who having learnt the parent company’s systems of quality have set their own shops. Since they understand the requirements of parent company’s in toto, they can provide quality components with little inspection & few rejects. Infact many industries in Japan finance such suppliers with venture capital. Toyota for e.g.. has grown 90% of its suppliers with such venture capital.

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IV. Customers

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Global reach

Japanese had a very clear vision of developing products for the global market from the very beginning. They were quick in identifying the disadvantages of some of the important products manufactured globally. They made fast improvements on those products and offered to customers at the most affordable price. Electronics and Automobiles are live examples.

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Attention to detail

The customer to most of the Japanese, is a human face with likes & dislikes and not a faceless, formless impersonal market. Customers, whether their employees, their suppliers or ultimate consumers are of constant concern to the Japanese.

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Attention to detail

What are there tastes? How can we innovate to satisfy them better? How can we assure that our product is going to give trouble free service far beyond the warranty period? How can we be responsive to the customer in the event of a breakdown?

From design & production to packaging & delivery the Japanese pay lot of attention to details for customer satisfaction.

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Most of the organizations in Japan have risen to eminence because of excellent market research - determining what consumers want and giving it to them. The U.S auto manufacturers failed to perceive that the 1972 fuel crisis would have a real impact on the customers and they continued to manufacture large fuel inefficient cars. The Japanese saw the need and came out with small fuel efficient cars which met with great success. The same thing was also done for the Indian market.

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Research, Artwork, Design and Development

Pravin Rajpal

Mr.Pravin Rajpal is a Chartered Accountant with more than 20 years of work experience. He has developed 7 CD-ROM titles on various subjects of Quality Management which are being used by more than 10,000 organizations for training and development of human resources.

At present he is the CEO of Competitive Edge, Management Consultants.