Culture of Manufacturing Engineering in Japan: Towards Improving the International Dimensions of Engineering Education

Transcription

1 Culture of Manufacturing Engineering in Japan: Towards Improving the International Dimensions of Engineering Education PROJECT REPORT prepared by University of Pittsburgh School of Engineering University of Pittsburgh University Center for International Studies Carnegie Mellon University Department of Mechanical Engineering

2 Acknowledgements This project was funded by the U. S. Department of Education under the Fulbright - Hays Group Study Abroad Program. Funding was also provided through grants from the Alcoa and Westinghouse Foundations. The project received encouragement and advice, from Dr. Arthur M. Diness, and Dr. George B. Wright of the Office of Naval Research; Mr. Robert Cutler of the National Science Foundation, and Dr. Mark Lincicome of the University of Pittsburgh's Asian Studies Program. The project received assistance in making contacts in Japan from Mr. Selwyn D. Berson, President, Commercial Engine Business, Pratt and Whitney,and Mr. Edward P. Czapor, Vice President and Group Executive, General Motors Corporation. The project receive tremendous support from Westinghouse Energy Systems Japan, Inc., including meeting space, secretarial services, local travel arrangements, and a real feeling of a "home" away from home for the project team. We would particularly like to thank Dr. Richard Slember, who was then Vice President & General Manager, Energy Systems Business Unit, Westinghouse Electric Corporation; Mr. Jon R. Elmendorf, President of WESJ, Inc., and Ms. N. Hirose and Ms. T. Uyama of the WESJ staff whose enthusiastic, professional, assistance helped make the project successful. Last, but certainly not least, we are most grateful to the Japanese organizations and people - too numerous to mention individually - who so graciously gave of their time and resources. The open and caring reception we received during our visits in Japan cannot and will not be forgotten.

3 Culture of Manufacturing Engineering in Japan: Towards Improving the International Dimensions of Engineering Education Table of Contents Section Page Foreword 2 Introduction 3 Family and Social Factors 4 Academic Factors 4 Industrial Factors 6 Recruitment 6 Training and Development 8 The Workplace 9 Promotion and Personnel Appraisal 9 Compensation 10 Corporate Relationships 11 Labor Relations 12 Small Group Activities 12 Non-regular Employees 13 Appendix A: Materials Obtained During Visits (In English) 14 Appendix B: Organizations Visited 18 Appendix C: References and Reading Material on Japan 19 1

4 FOREWORD This project was the idea of Dr. Burkart Holzner, Director of the University of Pittsburgh's University Center for International Studies (UCIS). Dr. Holzner was also instrumental in obtaining the backing of the U. S. Department of Education for this project. Dr. Muhammad Shahidullah, also of UCIS, prepared the original proposal and provided extensive assistance to the project team prior to our leaving for Japan. But for a visa problem, Dr. Shahidullah would have been a part of the team that visited Japan. The team that visited Japan included Dr. Robert Avery, Professor of Sociology at the University of Pittsburgh; Dr. Keith Brown, Professor of Anthropology and Director of the University of Pittsburgh's Asian Studies Program; Dr. Nicholas Eror, Professor and Chairperson of the Material Science and Engineering Department at the University of Pittsburgh; Dr. Charles Hwang and Dr. Michael Khonsari, both Associate Professors of Mechanical Engineering at the University of Pittsburgh; Dr. Dwight Baumann and Dr. John Wiss, both Professors of Mechanical Engineering at Carnegie Mellon University; and Dr. Michael Kolar, Professor and Chairperson of the Mechanical Engineering Department at the University of Pittsburgh, who also served as Director of this Project. Mr. Xuomin Xu, a graduate student in the University of Pittsburgh's Asian Studies Program, also accompanied the Project team to Japan. Mr. Xu's funding was not from the U. S. Department of Education; consequently, for purposes of this report, Mr. Xu is not considered an official member of the project. 2

5 Culture of Manufacturing Engineering in Japan: Towards Improving the International Dimensions of Engineering Education PROJECT REPORT INTRODUCTION During July and August 1990, a group of educators - six from the University of Pittsburgh and two from Carnegie Mellon University in Pittsburgh - visited Japan. The group was on a six week study mission sponsored by the U.S. Department of Education under the Fulbright-Hays Group Projects Abroad Program. The mission was to study the culture surrounding the manufacturing enterprise in Japan and to incorporate findings into courses given to U.S. engineering students. The group included an anthropologist, a materials scientist, five mechanical engineers, and a sociologist. Two members of the group were fluent in the Japanese language. While in Japan, we visited sixteen companies, seven universities, seven non-profit organizations, and many cultural sites. Prior to arriving in Japan in early July, we had read a great deal about Japanese culture and held several workshops with individuals who had recently been employed in Japan. So much has been written on Japanese culture, it was hard to believe that anything new could be learned. However, the relationship between Japanese culture and Japan's success in manufacturing had not been specifically studied so we hoped to gain some new insights; we were not disappointed. The reader should be aware that we approached our visit to Japan as teachers seeking information and insights to incorporate into our classes on manufacturing. While several members of our group were professionals in the study of Japanese culture and others were experts in manufacturing, no one was an expert on the relationship between Japanese culture and manufacturing. Consequently, the following comments give our impressions - not the definitive word - on what we observed. Probably the most significant difference between Japanese and U.S. manufacturing culture that we saw is the way people are treated. One cannot observe motivation, however, it is difficult to escape the feeling that the underlying stimulus for employing people in U.S. industry is to benefit business. In other words, U.S. business is not run to employ people. It appears that this is nearly the opposite in Japan, i.e., businesses must grow to assure that people continue to be employed. This may be attributed to national policies which emphasize that the Japanese people are "special" and that continuing the Japanese culture is of overriding importance to the government and the people. 3

6 In this project report, we have chosen to provide data - e.g. names, places, books titles, materials gathered - in Appendices. The body of the report describes the factors which we perceive as having the greatest impact on the culture surrounding the manufacturing enterprise in Japan; we then describe how Japanese companies have capitalized on those factors to succeed in the business of manufacturing. Where appropriate, we have selected specific examples to illustrate general observations. We limit the discussion to those aspects of "culture" which impact the development, recruitment, and motivation of people. FAMILY & SOCIAL FACTORS Much had been written about the family and social structure of Japan (e.g., Refs.25 and 27). We list here those factors related to family and social structure which we feel have significant impact on manufacturing in Japan. a. The concept of an inner and outer world. For example, the Japanese family considers its home to be its inner world and everything outside the house is the outer world. Another example, the Japanese language uses different words to describe a person depending on whether or not that person is a part of one's social group. b. A hierarchy according to age. For example, the Japanese language has different words for brother depending on whether the brother is older or younger than the sibling who is speaking. c. "Education Mama". Practically all Japanese children have an older family member (usually the mother) who pushes the child to learn and to succeed in school. d. "Filial piety". The Confucian value of devotion to one's family is common throughout Japan. This leads to the desire of children to succeed in school so that their family will not be shamed (lose face). This value is so deeply embedded, that it is transferred to other groups to which one belongs including one's school and one's company. ACADEMIC FACTORS The Japanese educational system is described in Ref. 25. Briefly, grade, middle, and high school education is rigorous, demanding, and broad. Many Japanese children attend two schools at the same time - the normal full time public school as in the U.S., plus a private school three evenings a week. The competition which students face is fierce. All high school students are trained in Mathematics and the Sciences as well as in foreign languages (English being one) and Social Studies. At least 95% of all Japanese children graduate from high school. It is our impression that a Japanese high school graduate has studied more science and math than most U.S. college graduates. To enter a Japanese University, a student must pass an extremely competitive examination. The following applies to those students who pass the exam and choose to study engineering. 4

7 There are approximately 180 engineering schools in Japan. A handful of these - those that were once the Imperial universities plus a few private schools - are considered to be the elite. Entry into these schools has traditionally meant a secure job for life; engineering graduates of the elite schools tend to enter government, banking, and manufacturing. The emphasis by students at these schools is toward making personal friendships and developing leadership skills rather than studying. Apparently, many foreign observers visit only this group of schools, because much of what has been written about Japanese Engineering Education appears to be a description of them. We visited five universities from the group described above, and two from the remaining 170 or so schools. We also spoke to Professors from six additional schools in the latter group. Most of the mechanical engineering students from the latter group of schools go into manufacturing. We received the impression that course work, laboratories, and the study habits of students at these schools were comparable to those of U.S. engineering students. Moreover, we were told that most students from this group of schools stayed on for one additional year of study, during which time they obtained a Master's degree. There are two ways to earn a Doctorate in Engineering in Japan; the common U.S. method of continuing to do course work and thesis, and what is referred to as a "paper" Ph.D. whereby a person with extensive industrial experience who has published many papers submits his/her work to a University as evidence of qualification for the degree. Several interesting facts arose during our discussions at Universities. First, professors felt they have some influence over which company a student chooses to join, but little influence over the student's choice of industry. Particularly at the elite schools in the Tokyo area, banks recruited an increasing number of engineering students over the past five years. However, following the October 1987 U.S. stock market crash, this trend reversed itself. Further, engineering graduates who are already working in the banking industry have begun to approach professors to ask for assistance in changing to the manufacturing sector. The apparent reasons are a lack of job satisfaction and concerns over job security. Second, nearly all engineering graduates aspire to work for large companies; this desire is apparently fostered by parents who are concerned about their children's long term job security. A result is that virtually no engineering graduates are interested in starting new companies. All of the schools we visited reported difficulty in attracting students to curricula aimed at production machinery. At one of the schools we visited, the agricultural engineering department was training students for this type of work. Some schools have solved the problem by restricting other options, effectively requiring some students to choose this curriculum if they want an engineering degree. There is only one Japanese Business School (Keio University, Tokyo) in the entire country. Very few Japanese engineering graduates get an MBA. As was noted above, a large number of engineering graduates get Master's degrees in their discipline. Further, Japanese manufacturing companies often send engineers overseas to acquire advanced degrees; apparently, only an extremely small percentage get an MBA (e.g., one 35,000 person company we visited had only two MBA's on its entire staff). 5

8 One wonders why this is so and what the implications are for the U.S. manufacturing industry. Nearly every top manager in the Japanese manufacturing companies which we visited had at least an undergraduate degree in engineering. All had been provided the necessary business related training by their company. In the U.S., top managers of manufacturing companies often have no engineering training but many have MBA's. These people do have very high level marketing, finance, and other business related skills, but so do their Japanese counterparts. Yet, manufacturing is a technology driven industry and technology requires math, science, and engineering skills. As we noted earlier, it appears that even Japanese high school graduates have a better education in math and the sciences than U.S. college graduates. If this is so, then those U.S. MBA's who do not have undergraduate degrees in math, science, or engineering are not adequately prepared to compete with the Japanese in manufacturing. INDUSTRIAL FACTORS The Japanese industrial system is described in refs. 24,26,and 30. In summary, the manufacturing industry is commonly composed of large companies that perform design, marketing, sales, and final assembly of products, with much smaller, independently owned, second and third tier companies manufacturing subassemblies and components. Manufacturing employment is split about 25%, 25%, 50% between the 1st, 2nd, and 3rd tier companies. The 2nd and 3rd tier companies are often completely dependent on a single 1st tier company for their business. Salaries in 2nd and 3rd tier companies are perhaps 20% lower than those of 1st tier companies. Both 1st and 2nd tier companies promise to try to keep their workers employed until retirement (usually age 55), but 3rd tier companies make no such attempt. Recruitment A shortage of engineers currently exists in Japan. All Japanese companies which we visited were concerned about how they would fill new positions. This appeared to be a greater problem in the Tokyo area than elsewhere. Several of the companies were developing plans to hire foreign engineers to work in Japan and a few had already implemented such plans. Japanese companies recruit at least 90% of their engineers directly from Universities. Consequently, great emphasis is placed on keeping good relations with professors; also, graduates employed by the company are very active in recruiting new engineers at their Alma Mater. Several universities which we visited said that they try to restrict the number of their graduates that go to a specific company. Also, many universities have a professor in each department who has control over all recruiting for that department. In Japan, there is a specific day on which all companies can begin to recruit new engineers. This is very similar to the way that U.S. professional football franchises recruit college players. In recent years, Japanese companies have regularly been jumping the gun by making offers to the best students before the agreed upon day. It seems ironic that the Japanese are so interested in getting the best for their businesses (including manufacturing) while the U.S. seems more concerned with sports. 6

9 Japanese companies do not emphasize grades when recruiting. While these are of interest, personality - particularly the ability to work together with others - is more important. In looking at the entire Japanese system, one can make an educated guess as to why this is so. At the University of Pittsburgh, we have been educating engineers for almost 150 years. We have data that shows that SAT scores are not a good predictor of success in our engineering school. However, doing very well in high school relative to your peers is an excellent predictor. Engineering school is highly competitive; it requires long hours of hard work as well as intelligence to graduate. As one measure of how difficult it is, not a single one of many thousands of graduates of the Mechanical Engineering Department over the past 40 years has achieved a 4.0 (straight "A") grade point average. (At Carnegie Mellon University, only one person graduated with a straight "A" average in Mechanical Engineering in 1991). Many U.S. engineering graduates get into engineering school on the basis of SAT scores: these are exams which can be studied for in a relatively short period of time (high schools commonly offer one year courses which prepare students for the SAT). Consequently, grades in college, earned in fierce competition with peers, are probably the best indicator of future success in the competitive world of business. As a result, U.S. companies must emphasize college grades as the only available predictor of future success (We realize that many U.S. companies emphasize other characteristics as well as grades but ALL companies emphasize grades.) Now consider the Japanese situation. Every graduate of an engineering school in Japan has successfully completed many years of competitive schooling and passed a highly competitive exam before entering the university. Consequently, Japanese companies can be secure in the knowledge that every Japanese engineering school graduate they recruit has already demonstrated the necessary qualities to succeed. Therefore, they have the luxury of concentrating their recruiting attention on other attributes of future employees. The Japanese cannot recruit sufficient numbers of certain engineering disciplines. Many companies we visited have training programs to give, for example, mechanical engineers those additional skills required to do electrical engineering work. At one company which we visited, the training consisted of a three month full time program followed by a life-long part time program. More will be said on training below; however, it is interesting that people who have just spent 4 or 5 years studying a particular field are willing to shift fields shortly after starting their professional careers. The remaining 10% of engineering recruits come from other companies, but first tier companies restrict the age of such recruits. Some traditional Japanese companies are willing to recruit a few specialists in their thirties, but most recruit only people under the age of 30. The average employee age of the company was among the first statistics given to us at many companies. Because salary is tied directly to years of service, keeping the average age of the company low translates into relatively low labor costs. Also, the energy and vitality of a company depends in large measure on the average age of it's employees. Second and third tier companies appear to have fewer restrictions on the age of their employees and many of them employ workers retired from first tier companies. 7

10 In 1986, Japan passed a law requiring equal employment opportunities for women. Nonetheless, we saw very few women engineers or managers during our visit. One reason could be that the law is new so there are few women in engineering in Japan. Another possibility is the following. Some Japanese companies adopted a two-track arrangement for their professional staff after the law was passed. Track A is for those professionals who are willing to move while Track B is for those who are not. Most women choose Track B because they would like to have a family and feel that moving would be detrimental to that end. However, only those in Track A are eligible to enter management. When a new recruit enters a company with the track system, they must immediately and irrevocably choose a track. Consequently, such companies effectively exclude women from management while still meeting the letter of the law. It would be interesting to look into this further to determine the extent of such practice. The Personnel Department has the final say in all hiring and promotion decisions. While technical managers can request certain skills, it is up to the personnel department to decide whether the position will be filled and who will fill it. In manufacturing companies, the Personnel manager is often an engineer. Consequently, hiring decisions are made by someone with a technical background. Also, since the personnel manager is rotated to another position after a few years, it is likely that he will be prudent in his decisions. It is interesting to note that the supervisor typically has no choice of new employees. Training and Development All the companies which we visited had training and development programs. These varied from on the job training to entire centers dedicated to training and development of employees at all levels. All companies we visited emphasized the importance of continuous training and development and it was evident that they invested heavily in such activities. As will be discussed below, once a Japanese engineer is employed by a manufacturing company, there is little chance that he/she will leave. Consequently, companies know with certainty that their investment in training and development will stay with the company. At a number of companies we visited, every new engineer is required to start on the shop floor working as a machinist or in a similar capacity. In addition, there is a specific effort made to teach all employees what the company does. One story that we heard in Japan was that the Japan Railway Company requires all it's new employees to take tickets at Shinjuku Station during rush hour so that they will know who the customer is and what it is like for the employees who are in contact with the customers. (Shinjuku Station is the busiest in the world with more than 2,000,000 people passing through it every day.) Both technical and business training is given to employees. The literature gathered shows the content of a number of training programs. One interesting visit was to the Sanyo Electric Training Facility in Kobe. Besides a comprehensive in-house training program, Boston University's School of Business teaches all courses (on-site) required to obtain an MBA. As stated earlier,it seems clear that Japanese engineers working in manufacturing companies are at least as well trained in all aspects of business as U.S MBA graduates. 8

11 The Workplace The workplace in the manufacturing facilities we visited appeared very similar to that of U.S. facilities. Such was not the case in Japanese research laboratories. Specifically, in the research laboratories we visited (two examples were Minolta near Osaka and Sanyo Chemical in Kyoto) worker's desks were in the laboratory in an open arrangement. The Japanese feel that this promotes team work - a much sought after characteristic of Japanese companies. In the Minolta Laboratory, the entire building had been designed to force researchers to interact many times each day. Rest rooms and the cafeteria are centrally located so that one must walk down a long hall past many laboratories (most with open or no door) to reach these facilities. Further, large, expensive equipment, located centrally, is available to all researchers and they are permitted to operate the equipment themselves. The companies believe that this promotes personal involvement in all aspects of research and is a "perq" for research staff. Other interesting aspects of the workplace which we encountered include the following. At a Fujisawa Pharmaceutical manufacturing plant we saw a Shinto Shrine. We were told that a Shinto priest comes once a month and all employees gather to pray for the safe operation of the plant. At the same facility, we were on a tour inside the manufacturing facility when a bell went off and all employees appeared in the hallways to do five minutes of group exercise. At a Minolta manufacturing facility we saw a Tea Room and a Japanese garden used by employees to learn and perform the Japanese tea ceremony. Such examples demonstrate how Japanese industry incorporates various aspects of Japanese culture directly into the workplace. Promotion and Personnel Appraisal Personnel appraisal is a pro forma process because it is a foregone conclusion that everyone will be promoted at roughly the same age and that everyone will receive approximately the same raise each year. However, even though everyone of the same age (actually, the same number of years of service to the company) gets a new title at approximately the same time, some promotions include increased responsibilities while others include no new responsibilities. Those workers who receive additional responsibilities are on track to reach management. There is a pyramid structure to each company and only those people who reach management are eventually retained. Especially after age 40, increasing numbers of workers are transferred out of first tier companies into subsidiaries and to suppliers. This leaves the first tier companies with the best managers and a lower average age. The paper given to us by Mitsubishi Heavy Industries describes this system in great detail. We asked all companies what they did about employees who had problems with things like alcohol and drugs. They all emphasized that only a very small number of employees had such problems; nonetheless, there are some. These employees are the responsibility of the immediate supervisor and the employee's peers. Much like a Japanese family, individual work units compose an "inside" group. All members of this group are helped by each other. (Even deaths in the family, births, weddings, and other personal events provoke assistance by this work unit.) Consequently, the central personnel office rarely encounters problem employees. 9

12 It is interesting to note that there are no "Employee Assistance" programs in Japan. Indeed, the largest bookstores in Tokyo don't even have a section on Psychology. Several companies stated, however, that if serious crime is involved, the employee is subject to dismissal. Compensation Compensation is a rather complicated subject but well worth examination. It explains much of why Japanese manufacturers have been successful and, understanding it helps to reduce the legend of the overworked, dedicated Japanese worker to more human dimensions. All Japanese college graduates start out at approximately the same salary, irrespective of field. However, over the years, certain fields increase more rapidly than others. Manufacturing companies give engineering graduates with a Master's degree credit for two extra years of experience so an engineer with a Master's starts at a higher salary than had he/she started in the company immediately after completing the B.S. degree. (Note that all engineering schools we visited said that students could obtain a Master's degree in one year. Consequently, an engineer with a Master's is a full year ahead of others in salary throughout his/her career. This leads to a large number of engineers in manufacturing who have a first graduate degree in Engineering - a decided advantage over the U.S.) Salary is paid in two parts: base salary and bonus. In 1990, base salary for new engineers in Japan was approximately $20,000. In addition, a bonus of about $10,000 is paid. Additionally, most engineers work an average of 2 hours per day of overtime. Many U.S. engineers interpret this as dedication to the company. However, unlike most U.S. engineers, all Japanese engineers are paid for all of their overtime hours. This adds 25% to the base earnings of Japanese engineers or another $5,000 per year. All first tier companies and government agencies (but not universities) which we visited provide housing subsidies. These include renting company-owned housing to engineers for as little as 10% of the going market rate and co-signing for housing loans so that extremely favorable interest rates are obtained. Additionally, the companies and government agencies pay for all commuting costs. Health and life insurance benefits appear to be similar to those found in the U.S. (However, health costs appear to be under far better control in Japan than in the U.S.) Retirement benefits seem to be adequate to maintain a basic lifestyle until government benefits begin around the age of 65. We found many Japanese engineers who thought that their U.S. counterparts were better compensated. However, it appeared to us that exactly the opposite is true, i.e. Japanese engineers are better compensated than in the U.S. This would be interesting to scrutinize further. The presidents of the Japanese companies we visited earned about 7 times the amount earned by a new engineer. Contrast this to the 40 to 1 ratio of U. S. companies and you get another clue as to why Japanese employees feel closer to their companies than do their U. S. counterparts. 10

13 Corporate Relationships A very important aspect of compensation is the bonus. This varies from year to year depending on the the profitability of the company. It is a crucial mechanism in maintaining the "lifetime employment" system. A Japanese company can reduce it's labor costs by as much as 30% simply by not paying a bonus. In a downturn, this enables companies to keep their staffs employed. If this is not enough, first tier companies reduce the profit margin of their second tier suppliers and second tier companies reduce purchases from third tier companies. Since employees of third tier companies are often housewives, working part time in their homes, when these employees have no work they do not show up on unemployment statistics. Other observation about the relationship between first and second tier companies follow. At several first tier companies we visited, we saw trucks lined up in the street outside the plant with their engines idling. We were told that these were owned by second tier companies and that they held parts needed by the first tier company. First tier companies practice "Just-in-Time" manufacturing, so they don't accept the parts until they are needed. This permits the first tier company to keep their inventory costs down and improves their profits. However, the second tier companies told us that they always keep stockpiles of parts because they cannot afford to not deliver an order to their customer. It would be interesting to learn whether Just-in-Time manufacturing actually saves any money in the overall Japanese economy since the costs of storing spare parts is borne by someone. (In defense of Just-in-Time, we saw this inside a large manufacturing plant owned by Nissan Motor Co. Here, car doors and other subassemblies of the correct style and color arrived at the right spot at the right time which reduces storage space requirements and probably other costs.) Second tier suppliers spoke of the close social relationships they maintain with both their first and third tier partners. Friendly discussions several times a year, with alcoholic beverages available, play an integral role in these relationships. The importance of drinking alcoholic beverages with suppliers was pointed out by the Japanese plant manager of a large IBM manufacturing plant which we visited. He pointed out that his suppliers cannot understand why they cannot drink beer with him when they sit down for their discussions. IBM has a policy that no alcoholic beverages are allowed in any of their plants anywhere. The plant manager has tried unsuccessfully to get IBM to rescind this rule for Japanese plants. The whole matter of first, second, and third tier companies is a reflection of the underlying society and culture. Taken together, they comprise an "inside" group which is hard to break into. Many U.S. companies complain that the Japanese will not let them have any business. It appears to us that U.S. companies have not been willing to become a part of an "inside" group. This would require moving nearby Japanese companies and developing relationships over many years. (We were told by a General Motors executive in Japan that a GM division is currently attempting to develop such a relationship.) 11

14 Labor Relations Japanese workers are highly unionized; however, there are few "Trade" unions. Rather, most workers belong to "Enterprise" unions. An Enterprise union is usually a group of people located at a single plant who band together to bargain with the plant management on wages and working conditions. Everyone at the plant - from secretaries to engineers - belongs to the union. This situation prevails until a person joins the rank of management. We met several Senior Directors that had been officers of their union. Further, nearly every company we visited had at least one director who had been an officer in their union. This situation leads to a great deal of understanding between management and workers but does not result in complete acquiescence by either side. It does tend to temper excess by either side, and promotes consensus decisions. Each Spring, all of Japan's labor unions attempt to get management to increase wages. This event is known as the spring wage offensive. The unions tend to seek an increase based on the industry that is doing the most poorly. For example, if the steel industry had a bad year and can only afford to give a 3% increase, then all unions try to get 3%. Once again the concept of an "inside" group appears as all unions act so that their members can save face. Small Group Activities Quality circles are a well-known feature of Japanese manufacturing companies. These are small groups of employees who work together to improve the quality of a product by undertaking a series of projects based on their own experience. The Japanese use the same concepts to improve management, maintenance, and possibly other things. The information provided by Toyoda Machine Works is an excellent example of how such activities are initiated and progress with time. Two issues seem to us to be of particular interest; the similarity between these "circles" and the Japanese family and the fact that every company can win every year. We were told by some companies that these "circles" take on the responsibility of making sure that neither its members nor the "circle" lost face. For example, many companies ask employees for suggestions to improve the work environment. These are given in prodigious numbers (50,000 per year is not uncommon). It is important that everyone make suggestions. If a member of a "circle" does not have a suggestion to give, then another member of the "circle" gives him one to put forth. As mentioned earlier, personal problems are also addressed by members of the "circle. This seems quite similar to the way the Japanese family functions. The (Deming) quality award is based on clearly defined standards which are set for the entire country by the judging body - an amalgam of Japanese professional societies. Any company can win at any time so there are many awards in a given year and companies that win continue to pursue the award the following year. Companies sometimes change the thrust of the quality "circles" after winning an award. For example, Toyoda Machine Works shifted from product quality to maintenance quality after winning the award. While Japanese companies are proud of winning the national quality award, they do not appear to use the awards in marketing. Rather, they use the awards as incentive to strive for another award. 12

15 In contrast, the U.S. (Malcolm Baldrige) quality award is given by the government (not a peer group), and winners use the award as a marketing tool. Also, in the U.S., only a few companies can win the award each year. One last comment regarding quality circles. There have been several well publicized attempts to copy Japanese quality circles in the U.S. In light of the apparent close connection between the underlying Japanese culture and their success in quality circles, one wonders whether such circles can work over a long time in the U.S. Our underlying culture tends toward rugged individualism, many of our families are nuclear in that they are a long distance from grandparents, uncles, aunts, etc., and a great number of our children are raised in single-parent families. It seems to us that the challenge we face in manufacturing is how to use our own culture successfully in structuring our enterprises rather than copying methods that succeed in foreign companies. Non-Regular Employees The last feature of Japanese manufacturing we will discuss is the use of part time and foreign workers. We heard of many manufacturing plants located in rural Japan where part time workers are employed. Toyota Motor Company announced the construction of several new plants in such areas while we were visiting Japan. Local farmers are employed at the plants during the winter and work their farms during other times of the year. We wondered why Japanese companies would do this since it seems inefficient. Dwight Baumann, one of our team members, suggested that the culture and values of farmers are conducive to successful manufacturing. He carried this idea further by noting that U.S. manufacturing companies have thrived by using immigrant workers who were usually from rural settings in their country of origin. For example, the steel industry in Pittsburgh was built on the backs of peasants who emigrated from Europe. However, after several generations, their offspring forgot their rural roots. As a result, companies moved plants south to more rural areas of the U.S. or to rural areas of other countries like Mexico or Korea. In a sense, these companies "used up" the underlying culture It is interesting to note that Japanese companies opening manufacturing facilities in the U. S. tend to locate them in rural areas. A related observation is that many of the Japanese manufacturing workers we met were fishermen in their spare time. Fish is one of the primary food sources in Japan. The close connection to one's food source may also be a hint as to why Japanese workers seem to be better at manufacturing than their U. S. counterparts. Foreign workers were employed by a number of the companies we visited, particularly in the automotive field. It appeared to us that automotive assembly work was the most stressful type of manufacturing job that we observed. The relative lack of young Japanese workers willing to do such jobs probably explains this. One last item that fits the mold of "irregular" worker is the baseball player we saw at an IBM plant. According to the plant manager, IBM hired the young engineer directly out of the University of Illinois because he is an excellent baseball pitcher. IBM has a baseball team that competes in a Japanese industrial league. IBM has a corporate belief that successful advertising is based on the number of lines of coverage of a company that appears in the newspaper. A successful baseball team gets many lines of print; hence the star pitcher. 13

16 APPENDIX A MATERIALS (IN ENGLISH) OBTAINED DURING VISITS (available at University of Pittsburgh, School of Engineering Library) DATE ORGANIZATIONS TITLE July 9 WESJ July 10 U.S.Embassy "The American Embassy, Tokyo, Japan" Economic Section NSF Cultural Affairs July 11 MHI, Ltd. "Organization Chart", April 1, 1990 July 11 MHI, Ltd. "Personnel Management of MHI, Ltd. July 11 MHI, Ltd. "Education System for Electronics and Control Technology in MHI July 11 MHI, Ltd. "Giant Product Range" July 11 ONR, Tokyo July 13 Univ. of Tokyo "Information on the Faculty of Engineering", 1988 "The Influence of Changes in Industrial Infrastructure of the Career Choice made by Students of the Faculty of Engineering" by Yotaro Hatamura July 16 Onoda Cement Co. "Onoda Cement 1989 Annual Report" July 16 Onoda Cement Co. "Onoda Cement" July 16 Onoda Cement Co. "Onoda Cement Research and Development" July 17 Waseda University "Waseda University: Facts '88" July 17 Waseda University "Waseda University" (small brochure) July 17 Waseda University "Waseda University Bulletin " July 17 Waseda University "Waseda University" (large brochure) July 17 Waseda University "School of Science and Engineering" July 17 Nireco "Nireco General Information" July 18 Science U. of Tokyo "The 20th Anniversary Report: ", The Department of Mechanical Engineering, Faculty of Engineering, The Science University of Toyko July 18 Science U. of Tokyo "Science University of Tokyo" July 19 Keio University "Keio University Bulletin: " July 19 Keio University "Keio University: Faculty of Science and Technology, 1990 July 19 Keio University "Keio University: General Information" July 20 MITI "IMS: Joint International Research Program Into An Intelligent Manufacturing System" Ver. 4, May, 1990 July 20 MITI "AIST: Agency of Industrial Science & Technology 1989, MITI July 20 MITI "U.S. - Japan Trade Today", April 1990 July 20 MITI "Handy Facts on U.S. - Japan Economic Relations", JETRO (Japan External Trade Organization) 14

17 July 24 Toyoda Machine "TQC-TPM in Toyoda" (Hard copies of visuals) July 24 Toyoda Machine "Toyoda Company Outline" July 24 Toyoda Machine "Toyoda Stat Bearing" July 25 Kyoto University "Faculty of Engineering: Kyoto Univ., 1989/1990" July 25 Kyoto University "Kyoto University Bulletin: Faculty of Engineering 1988/1989" July 25 Kyoto University "Kyoto University: 1989" July 25 Kyoto University "1989 Guide to Graduate Research Students of International Course", Graduate School of Engineering July 25 Kyoto University "Kyoto University Bulletin: 1988/1989" July 26 Sanyo Chemical "Organization Chart", April, 1990 July 26 Sanyo Chemical "Performance Chemicals" July 27 IBM Japan, Ltd. "Yasu Site Profile" July 27 IBM Japan, Ltd. "Yasu Site" July 27 IBM Japan, Ltd. "Quality and Reliability through Advanced Technology: Semiconductor Chips through Computer Systems", (Videotape) July 30 Sumitomo Chemical "Hard copy of Viewgraphs covering company background, organization, and personnel management" July 30 Sumitomo Chemical "Sumitomo Chemical" July 30 Sumitomo Chemical "Annual Report" July 31 Fujisawa Pharmac. "Organization Chart", April, 1988 July 31 Fujisawa Pharmac. "GMP Organization in Fuji Plant", April 1990 July 31 Fujisawa Pharmac. "Annual Report", 1989 August 1 Minolta Camera Co. "Tea Ceremony at Tea House, Itami Plant", (Photographs)) August 1 Minolta Camera Co. "Where Minolta Quality Begins: An Overview of the Minolta Manufacturing Complex" August 1 Minolta Camera Co. "Administration Policy of Itami Plant" August 1 Minolta Camera Co. "Takatsuki Laboratory" August 1 Minolta Camera Co. "I'm Minolta Techno Report", No. 7, 1990 August 1 Minolta Camera Co. "Annual Report", 1989 August 1 Minolta Camera Co. "Minolta Mirror", 60th Anniversary Issue August 2 Sanyo Electric "History of Sanyo" August 2 Sanyo Electric "An Invitation to Sanyo Electric Group" August 2 Sanyo Electric "Boston University School of Management at Sanyo August 2 Sanyo Electric "Training Schematic Map" August 2 Sanyo Electric "The Profile of Toshio lue", (Founder of Sanyo Electric Co., Ltd.) August 2 Sanyo Electric "Organization Chart", May 1989 August 2 Sanyo Electric "Training Schematic Chart" August 2 Sanyo Electric "Technical Training Courses in 1989 August 2 Sanyo Electric "Sanyo - Explanation of Corporation Logo, Management Philosophy August 2 Sanyo Electric "Layout and Photographs of Sanyo Electric Training Center" 15

18 August 3 Babcock-Hitachi "Corporate Outline and Structure" August 3 Babcock-Hitachi "The Hitachi Spirit" August 3 Babcock-Hitachi "The Origin of the Hitachi Mark" August 3 Babcock-Hitachi "Personnel Management and Labor Relations" August 3 Babcock-Hitachi "Management Improvement (M.I.) Movement" August 3 Babcock-Hitachi "Guide to the Kure Works" August 3 Babcock-Hitachi "Kure Research Laboratory" August 6 Nissan "Creating Customer Satisfaction: Oppama Plant" August 6 Nissan "Nissan Corporate Profile", August 7 Nippon Sheet Glass "NSG Organization Chart on R & D", August 1, 1990 August 7 Nippon Sheet Glass "NSG - Company Profile" August 7 Nippon Sheet Glass "NSG - Training Program" August 7 Nippon Sheet Glass "NSG - Tsukuba Research Laboratory" August 7 Nippon Sheet Glass "NSG - Central Research Laboratory" August 7 Nippon Sheet Glass "Tsukuba Science City - Research Institutes and Universities" August 7 Tsukuba Res.Cons. "Tsukuba Research Consortium" August 7 Tsukuba Res.Cons. "Scientific Communication in Tsukuba Science City", from New Technologies in the Pacific Basin Countries: ACS Corporation Associates Annual Symposium August 7 Tsukuba Res.Cons. "Tsukuba - Japan's City for Science", from Yearbook of Science and the Future", 1990, Encyclopaedia Britannica, Inc August 8 Tokyo Inst. Tech. "Tokyo Institute of Technology General Catalogue", August 8 Tokyo Inst. Tech. "Tokyo Institute of Technology", 1989 August 8 Tokyo Inst. Tech. "Service Quality: Japanese Perspectives", by Masao Akiba, Shane J. Schvaneveldt, and Takao Enkawa August 8 Tokyo Inst. Tech. "Handouts for a Meeting on Culture of Manufacturing (with attachments)", by Professor Dr.-Eng. Yoshimi Ito August 9 MRI "Journal of Mitsubishi Research Institute", No. 17, 1990 August 9 MRI "Sample List of Past Projects" August 9 MRI "Hardcopy of Viewgraphs Used in presentation" August 9 MRI "Research Review", Vol. 4, No. 2, Spring 1990 August 9 MRI "Research Review", Vol. 5, No. 1, Autumn 1990 August 9 MRI "MRI in Brief" August 10 JSME "Japan Society of Mechanical Engineers" August 10 JSME "JSME News", Vol 1, No. 1, March 1990 August 10 JSME "JSME Division & Technical Committee" August 10 JSME "Impressions of the Academic Environment in Japanese and U.S.A. Universities", by Robert M. Deiters, Sophia University 16

19 August 14 August 14 August 14 August 14 August 14 August 15 Inst. Future Tec. "Institute for Future Technology" Inst. Future Tec. "Background of IFTECH Inauguration - Fifty Years of a Movement by Japan's Leading Engineers" Inst. Future Tec. "Future Technology in Japan - Forecast to the Year 2015" Inst. Future Tec. "Survey of Scientists and Engineers - Summary", August 14, 1990 Inst. Future Tec. "Introduction to JATES Activities", Japan Technoeconomics Society GM Overseas Corp. 17

20 APPENDIX B Organizations Visited DATE PLACE ORGANIZATION July 9 Tokyo Westinghouse Energy Systems Japan, Inc. July 10 Tokyo U.S. Embassy, Economic Section July 10 Tokyo U.S. Embassy, National Science Foundation July 10 Tokyo U.S. Embassy, Cultural Affairs Section July 11 Tokyo Mitsubishi Heavy Industries, Ltd. July 11 Tokyo Office of Naval Research July 13 Tokyo University of Tokyo, Faculty of Engineering July 16 Tokyo Onoda Cement Co., Ltd. July 17 Tokyo Waseda University, Department of Industrial Engineering July 17 Tokyo NIRECO Corporation July 18 Tokyo Science University of Tokyo, Faculty of Engineering July 19 Tokyo Keio University, Faculty of Science and Technology July 20 Tokyo Ministry of International Trade and Industry July 24 Aichi Toyoda Machine Works, Ltd. July 25 Kyoto Kyoto University, Faculty of Engineering July 26 Kyoto Sanyo Chemical Industries, Ltd. July 27 Yasu IBM Japan, Ltd. July 30 Osaka Sumitomo Chemical Co., Ltd. July 31 Fuji Fujisawa Pharmaceutical Co., Ltd. Aug. 1 Osaka Minolta Camera Co., Ltd., Itami Plant Aug. 1 Osaka Minolta Camera Co., Ltd., Takatsuki Laboratory Aug. 2 Kobe SANYO Electric Co., Corporate Educational Training Center Aug. 3 Kure Hitachi, Kure Works and Kure Research Laboratories Aug. 6 Yokosuka Nissan Motor Co., Ltd., Oppama Plant Aug. 7 Tsukuba Nippon Sheet Glass Co., Ltd., Tsukuba Research Laboratory Aug. 7 Tsukuba Tsukuba Science City Research Consortium Aug. 8 Tokyo Toyko Institute of Technology Aug. 9 Tokyo Mitsubishi Research Institute, Inc. Aug. 10 Tokyo The Japan Society of Mechanical Engineers Aug. 14 Tokyo Institute for Future Technology Aug. 15 Tokyo General Motors Overseas Corporation - Japan Branch Discussions with Individuals from other Organizations July 13 Tokyo July 27 Kyoto July 31 Kyoto Aug. 10 Tokyo Aug. 10 Tokyo Aug. 10 Tokyo Takushoku University Kyocera Corporation Ritsumeikan University Nippon Telegraph and Telephone Corporation Hokkaido University Sophia University 18

21 APPENDIX C References and Reading Material on Japan 1. "Simple Etiquette in Japan", by Helmut Morsbach, Paul Norbury Publications, Sandgate, Folkestone, Kent, England, "Japan - A Travel Survival Kit"", by Ian L. Mcqueen, Lonely Planet Publications, Berkeley, California, February, (Author is a Canadian born Chemical Engineer who has traveled and lived in Japan in many years.) 3. "The Practical Guide to Japanese Signs - 1st part", by Tae Moriyama, Kodansha International, Tokyo and New York, "Frommer's Dollarwise Guide to Japan & Hong Kong", by Beth Reiber, Prentice Hall Press, "Tokyo - A Bilingual Map", Kodansha International, Tokyo and New York, "Gateway to Japan", by June Kinoshita and Nicholas Palevsky, Kodansha International, Tokyo and New York, "Easy Japanese - A Direct Approach to Immediate Conversation", by Samuel E. Martin, Charles E. Tuttle Company, Rutland Vermont and Tokyo Japan, "Tokyo - A Bilingual Atlas", Kodansha International, Tokyo and New York, "Illustrated - A Look into Tokyo", Japan Travel Bureau, Inc., "Kyoto - Seven Paths into the Heart of the City", by Diane Durston, Kodansha International, Tokyo and New York, "Discover Japan, Vol. 2, Words, Customs, and Concepts", Kodansha International Tokyo and New York, "Day Walks Near Tokyo", by Gary D'A. Walters, Kodansha International, Tokyo and New York, "Japan Unescorted", by James K. Weatherly, Kodansha International in cooperation with Japan Airlines, Ltd., Tokyo and New York, "Illustrated - Festivals of Japan", by Japan Bureau, Inc., "Illustrated - Today's Japan", by Japan Travel Bureau, Inc "Illustrated - Living Japanese Style", by Japan Travel Bureau, Inc., "Illustrated - 'Salaryman' in Japan", by Japan Travel Bureau, Inc.,