Sep 14, 2009
Japan – where operations really are strategic (Wheelwright, 1981)
Japan – where operations really are strategic (Wheelwright, 1981)
“Strategic operations policy flourishes in Japan and it can flourish here – if U.S. companies learn to view the nuts-nd-bolts management of operations as an absolutely critical strategic undertaking.”
Is it true that (as the business press suggests) Japanese manufacturing performance is inimitable and founded on culture, government policy and industry-specific industrial relations?
No. Good management (putting effective thinking about manufacturing into practice) is the key.
“…the Japanese ‘don’t work harder. They just work more consistently, and they work together.” – GE executive examining a Japanese manufacturing plant (p182)
> Operations Vs. Strategy
American approach to management focuses strategic attention and top management attention on capacity, facilities, vertical integration and production. This signals to middle managers that work force, quality control and product assurance, production planning and materials control and organizational issues are operational, not strategic areas.
One problem with this is it encourages manipulation of these ‘second tier’ issues to meet short term goals (e.g. lowering quality to meet monthly production targets).
Japanese approach puts production system and strategic purpose first, but also acknowledges that operations can have a positive culmulative effect on a strategic level.
> Operations Policy in Japan
- * Paying attention to detail (e.g. Tokyo Sanyo Electric, Toshiba Tsurumi Works, Yokogawa Electric Works) – Setting long term goals which could be worked toward through even short team operations (c.f. America where companies make a conscious distinction between strategic and operational production decisions).
- * Avoiding false choices – The American manager’s tradeoff between quality-cost and dependability-flexibility is a false one in the Japanese way of thinking. Japanese managers will view quality improvements as a means to reduce costs. They emphasise the link (not conflict) between long and short-term goals. Further, Japanese-style broad job definitions (as opposed to narrow American ones) indicates high expectations of workers and emphasizes a wider range of responsibility than, say, merely for production output and cost.
> Operations as Strategy
Exhibit 1: Manufacturing decision categories considered strategic
(emphasizes that Japanese firms regard more functions as strategic than U.S. firms do)
- * Strategic operations policy: Merges long and short-term goals; Rejects false dichotomies; Emphasizes broad job definitions (discouraging ‘nit-picking’); and is the remit of top management (in order to ensure consistency and support for implementation).
- * Strategic operations policy means: Increased demands on managers; Limitations on strategic analyses (i.e. U.S. managers are not used to understanding the impact that short-term operational changes may have on strategy – this is because they are trained to view the firm from a ‘business environment’ perspective); A redefinition of felxibility (making operational issues strategic need not reduce the ability to respond to short-term market fluctuations).
> Can it Work Here?
Yes, it already has (e.g. General Electric, Signetics, Company X, Hewlett-Packard)
Original Text: