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Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Do we knowJAPAN?
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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PARADOXContrary to the general belief of American
businesses and industrial communities with regard to the unique features and real strengths that characterize the Japanese industry’s success, it is not ‘JIT’, ‘QC Circles’, Life-time Employment, etc.
Two of the most important facts are:
1. Subcontractor System
(Big Company vs. Small Company)
2. Management of Technology
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Balance of ForcesJapanese Strengths• Applied Research and
Development
• Incremental Improvements
• Commercial Applications
• Process and Production Technology
• Components
• Hardware
American Strengths• Basic Research
• Breakthroughs and Inventions
• Military Applications
• New Product Design
• Systems Integration
• Software
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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You just don’t understand “The Fact”• Percentage of Japanese high school students who have taken 6
years of English--------------------------------------------------- 95%
• Number of America’s 2.7 million high school students graduating in 1987 who took Japanese for at least 1_yr---- 2,300
• Americans awarded bachelor’s degree in Japanese in 1989-- 162
• Americans awarded master’s degree in Japanese in 1989----- 14
• Americans awarded doctorate in Japanese in 1989--------------- 4
Sources: Japanese statistics: Jackson Balley, Institution for Education on Japan,
Eartham College. American statistics: Department of Education.
THE NEW YORK TIMES, SUNDAY, JANUARY 5, 1992
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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R&d IN Universities, Institutions and Corporations
In Japan 94% Read and write English
85% Read English journal articles
In America 4% Read Japanese
9% Read translated papers
In Japan 85% Attend technical meetings outside of normal work: 2/Month
In America 30% “ “ “ “ “ “
In Japan 83% Are aware of foreign activity in their field
In America 30% “ “ “ “ “ “
In Japan 60% Had spent +1 year outside
In America 34% “ “ “ “ “
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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JAPAN US Europe
Revolutionary Inventions C B A
Future Technology C A B
Advanced Technology B A C
Applied Technology A B C
Improved Technology A B C
Production technology A B C
Comparison of Technology DevelopmentsAmong Japan, US and Europe
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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GM* TOYOTA NUMMI
Assembly hoursPer car
31 16 19
Assembly defectsPer 100 cars
135 45 45
Assembly space percar, per year (sq. ft.)
8.1 4.8 7.0
Average inventoryof parts
2weeks
2hours
2days
Comparison of Operating Efficiency ofUS and Japanese Automobile Production
Operating efficiency of G’s Framingham, Mass., plantversus Toyota’s Takaoka plant versus the G.M.-Toyota joint venture in Fremont, Calif., as of 1987. * Plant close in July 1989. [“The Machine That Changed the World” and also New York Times, Sept. 23, 1990]
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Percent of Distribution of College Graduates (All Degrees)
Source: Misistry of Education, Japan (1982)
Science Engineering
Agriculture Health
JAPAN (1981)
USA (1978)
UK (1978)
W. Germany (1979)
0 20 40 60 80 100
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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1965 1970 1975 1977
FRANCE 20 34 28 33
JAPAN 82 133 162 185
U.K. 32 46 45 46
U.S.A. -- 85 67 66
W. GERMANY 16 11 48 109
Electrical Engineering Graduates(per million population
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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What the U.S. and Japan buy from each otherLeading categories of goods traded by the U.S. and Japan in 1990. Figures in billions of dollars.Source:
Commerce Department [The New York Times, Sunday, January 5, 1992]
Top 10 exports to Japan
1. Aircraft, spacecraft and their
replacement parts $3.499
2. Computers 2.041
3. Logs and lumber 1.649
4. Corn 1.648
5. Arts and antiques 1.622
6. Computer and office
machine parts 1.580
7. Computer chips 1.361
8. Tobacco products 1.314
9. Fish 1.269
10. Controls and instruments
(thermostats, etc.) 1.116
Top 10 exports from Japan
1. Motor vehicles $19.547
2. Computers 5.924
3. Motor vehicle parts 5.342
4. Telecommunications equipment
(telephones, cellular phones, etc.) 1.648
5. Computer chips 3.757
6. Computer and office
machine parts 3.454
7. Consumer electronics
(televisions, household audio
and video equipment) 3.140
8. Motor vehicles (mostly auto
(engines and parts) 2.575
9.Toys and sporting goods 2.500
10. Electrical machinery 2.267
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Comparison of Most Important Requests by US and Japan Stock Holders
0
10
20
30
40
50
60
70
80
90
Rise of StockPrice
BusinessExpansion
Stability ofBusiness
USA
JAPAN
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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An Example of SuccessfulJapaneseIndustrial
Developments
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC Ltd.And
“Management Philosophy”of
Dr. Seiuemon Inaba, CEO
An Example of Successful
Japanese Management of Technology
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUCThe Success Story
of
FANUC LTD. (Japan)
(Management Philosophy and Practice
of Dr. S. Inaba
President of FANUC)
THEREE SLOGANS
(a) RELIABILITY UP
(b) LOW COST
(c) WENIGER TEILE
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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1988 Rankings of Excellent Companies in JapanSource: Asahi Daily News, August 20, 1988
Rank Name of Company Points1. Toyota Auto Co. 1000
2. NIT 942
3. Matsuhita 930
4. Fuji Fillm 927
5. FANUC 917
6. Nintendo 910
7. Yamanouchi Pharm. . 891
8. Hitachi 884
9. 7-Eleven 872
10. Nissan 871
13. Kyocera 854
14. Toshiba 849
15. Fujitsu 848
19. Honda 838
32 Sony 813
39 Sharp 796
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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1990 Rankings of Excellent Companies in JapanSource: Nippon Kaizai, August 18, 1990
Rank Name of Company Points1. Toyota Auto Co. 1000
2. FANUC 967
3. Nintendo 963
4. 7-Eleven 947
5. Fuji Film 941
6. Matsuhita 917
7. Tokyo Steel Mfg. Co. 896
8. Hitachi 886
9. Nissan 886
12. Toshiba 872
16. Honda 850
19. Sony 84428. Sharp 823
33. Kyoeeta 816
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC Products Development• Difference between Products” and
“Commodities”
FANUC’s definition of “Commodities” (merchandises): “Products which bring high profit and excellent competitive position”.
• Develop “Commodities (saleable and competitive products) to be marketed throughout the world.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Procedures for New Product development
(a) Through world-wide market survey.
(b) Lower “price” than any other competitive items (worldwide) with better quality. FANUC price is decided at the beginning stage of design.
(c) Profit rate must be more than 30%. Production cot is then decided to meet the above b) and © requirements.
(d) The R&D staff design a product to meet the cost and quality requirements, and also are responsible to design the necessary manufacturing systems to produce products.
(e) The same R&D staff will be assigned as a temporary production team to install the specific manufacturing systems, and will be relieved the job after the successful implementation.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Management Philosophy(Some Selected “Highlights”)
(1) “Cost Down”, “Quality In” & “Fewer Parts”.
(2) Continuously pursue “New Technological Innovation” and “Engineering Excellence”.
(3) Invest “Money” & “Time” for “Technical Excellence”.
(4) Better “Design” for “Economic Manufacture”.
(5) “Quality” built into “Design” and “Production”.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Research Management
(1) For “Engineering”, the history is important.
For “Engineers”, “Innovation” is important.
(2) No conventional library for the research staff (Because any published book is already obsolete).
(3) Pursue “New Idea”, “New Information”, “new Innovation”.
(4) “Product with new invention is not successful commercial commodity.”
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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QUALITY CIRCLE (FANUC”s View)
“FANUC does not practice Quality Circle. Quality Circle activity is a sales’ ceremony. If shop-floor operators can provide any suggestion for further quality improvements, something is basically wrong with the manufacturing system. Any quality problem must be dealt with at R&D stage.”
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Sales Motto
(a) First “Friendship” and then “Sales”.
(b) Never discount to bargain. If the price is high, go back to design drawing board.
(c) Better service and maintenance.
(d) More salesmen with engineering background.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC emphasizes R, D & E
• “R” is not a primary function of FANUC.• “D & E” are more important for FANUC.• <ost important aspect is “Better Design”.• No matter how you “automate” manufacturing
systems, if “design” is not good, then the plan will fail.
• “Better Design”: less parts, less trouble, better maintenance.
• “Quality” built into “design” and “Production”.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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(6) More “Engineers” 80% than “Administrative Staff” (20%).
(7) Emphasis on balanced “Engineering Excellence” and “Efficient Management”.
(8) Train and cultivate te “Next Generation of Executive Managers”.
(9) Rational and Regimental Management is better than non-responsible loose democratic management.
(10) Loyalty and Trust to the company is most important.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Research Management Philosophy
(1) For “Engineering”, the history is important.
For “Engineers”, “Innovation” is important.
(2) No conventional library for the research staff (Because any published book is already
obsolete).
(3) Pursue “New Idea”, “New Information”, “new Innovation”.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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(4) Relax and enjoy your life with your family in weekends and come back on Monday with
fresh ideas and new energy recharged.
(5) “Time” is precious and do not waste “Time”.
(6) CEO is briefed on all major developments.
(7) “Basic research” vs. “Product Development Research”.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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FANUC’s Product Development Philosophy
(1) Difference between “Products” and “Commodities”.
(2) Develop “Commodities” (Saleable and Competitive Products) to be marketed throughout the world.
(3) Lower “Price” than any other competitive items (world-wide) with better quality.
(4) “Quality” is built into “Design” and “Production”.
(5) The R&D staff design product to meet cost and quality requirements, and also are responsible to design the necessary manufacturing systems to produce the products.
(6) The same R&D staff will be assigned as a temporary production team to install the specific manufacturing systems, and will be relieved the job after the successful implementation.
(7) No matter how “Automate” production systems, if “design” is not good, the the system will fail.
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Estimated Share of Companies Supplying US Machine Tool NC Controls
FANUC
Mitsubishi
Siemens
Others
Allen Bradley
Kearney & Trucker
Cincinati Milacron
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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THE BUNSHA GROUPA diversified OEM network whose greatest strength is turning your
biggest needs into your best assets.
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Gro
wth
in S
ales
(m
illio
n ye
n)
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Growth in BUNSHA Group
0
500
1000
1500
2000
2500
3000
3500
No. of Employees
Captal (million yen)
Inyong Ham, Distinguished Prof. Emeritus, Pennsylvania Sate U, Visitng Prof., City U of HK
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Sharp’s Basic Philodophy for Product Development
(5 “S” Principles)
• Speedy
• Simple
• Smart
• Successive
• Systematic