The Impact of IT Technology on the Quality ... - ScienceDirect

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ScienceDirect Procedia Technology 9 (2013) 209 – 214

CENTERIS 2013 - Conference on ENTERprise Information Systems / ProjMAN 2013 - International Conference on Project MANagement / HCIST 2013 - International Conference on Health and Social Care Information Systems and Technologies

The impact of IT technology on the quality management organization in Japan Yoshiyuki NAKURA a*, Masakazu OHASHI b a Graduate school of Policy Studies, Social system studies, Chuo University, Tokyo, JAPAN b Chuo University, 742-1 Higashinakano,Hachioji-shi,Tokyo,192-0393,Japan

Abstract The goal of this paper is to clarify the impact on enterprise organizations and inter company relationship in Japanese assembly type of manufactures to arise in the course of the spread of IT technology. Competitive advantage of the Japanese manufacturing industry which is strengths in technology that are close to the production site has been attributed to change the paradigm of manufacturing and to minimize cost increases, while carrying out execution of the process of moving into the high-end market segment. However, with rapid progress of overseas production and development of information technology in recent years, the role of on-site adhesion type technology has been reduced. Eventually the competitive advantage of "being budget prices at high quality" or “conformance quality” of Japanese products is being lost. Moreover, it was felt that excessive quality by “KAIZEN” as an improvement of continuous innovation, profitability has gone up. In a society of mature market, consumer needs are diversified. Economy advances to software oriented and the trend towards service economy. Today, quality is no longer the first priority for consumers. The global market has enabled the selection of the optimal supplier or supply partner. Being extremely efficient technique of the conventional quality control produces a risk of falling into over-quality. Society’s as a whole consumption and the relation of production change a lot in the computerized society. For adoption of this, the organization that can manage it is indispensable to construct where consumers and manufactures can share information back and forth. © 2013 The©Authors Published byby Elsevier Ltd. Open under CCand/or BY-NC-ND license. 2013 Published Elsevier Ltd.access Selection peer-review under responsibility of Selection and/or peer-review under responsibility of SCIKA – Association for Promotion and Dissemination of CENTERIS/ProjMAN/HCIST. Scientific Knowledge Keywords˖ Tacit Knowledge, 3D CAD, TQC, Conformance Quality, Operational Effectiveness

* Corresponding author. Tel.: +90-7421-6162 E-mail address: [email protected]

2212-0173 © 2013 The Authors Published by Elsevier Ltd. Open access under CC BY-NC-ND license. Selection and/or peer-review under responsibility of SCIKA – Association for Promotion and Dissemination of Scientific Knowledge doi:10.1016/j.protcy.2013.12.023

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Yoshiyuki Nakura and Masakazu Ohashi / Procedia Technology 9 (2013) 209 – 214

1. Introduction It was pointed out the competitive advantage of the Japanese assembly type of manufactures, which are strengths in technology that are close to the production site. Historical changes of the industry of Japan's Manufacturing are deployed SQC (Statistical Quality Control) in 1920 era, then it was completely introduced into Japan in 1950 era.[1] Since 1950, it was based on the domestic market first then export was started to the European and American advanced nation markets. In that time, many Japanese companies faced problems in that the quality was only able to compete in the market in Europe/United States but only in the lower value market segment. Then Japanese companies strove to improve the quality without increasing the cost, The product was gradually shifted into higher value markets in the Europe and America, and establish their competitive advantage in the markets. Competitive advantage of the Japanese manufacturing industry has attributed to change the paradigm of manufacturing, to minimize cost increases, while carrying out execution of a process of moving into the high-end market segment.[2] However, by rapid progress of overseas production and development of an information technology in recent years, the competitive advantage of "being budget prices at high quality" or “conformance quality” of Japanese products is being lost. Additionally, it was felt that excessive quality by “KAIZEN” as an improvement of continuous innovation, profitability has gone up in the in the European and American market. This paper is to clarify the impact on an enterprise organizations and inter-company relationship to arise in the course of the spread of IT technology since 1990, to identify a conformance quality based on today's market, and to propose what are the competitive advantages for Japan's manufacturing industry. 2. “KAIZEN” as an improvement of Continuous innovation Even when compared with companies in other countries, technological capabilities and manufacturing capabilities of Japanese companies remain high. Since the tendency to aim at the differentiation strategy by technical innovation or multi-functionalization is strong. On the other hand, the superfluous competition that checks profitability occurs frequently. For accumulation in reservation of profits, and maintenance of competitive power, it is inescapable for craftsmanship of Japan to need to develop a production base abroad. There is a challenge to respond to regulatory and technical training of local productivity and the understanding of local needs. It has become a reality that the speed of business deployment and change are quick and cannot fully be coping with these subjects. This case is seemed non-language type communication is appropriate because the level in which an employee's background is comparatively the same in Japan. Of course, this is not acceptable as it is in overseas markets. Since common sense and a differing view from Japanese people, it is not transmitted unless it makes directions and information into a clear format for a technology partner. Overseas deployment is a difficult conversion to “explicit knowledge” from these Tacit Knowledge based technologies. Japanese companies have not freed themselves from the successful manufacture scheme in conventional Japan. Therefore Pressing issue is not level up between the problem that you are already into formal knowledge or efficiency Intellectual property and tacit knowledge loss is imminent and how a company is exposed in the field of formal knowledge.[3] Many engineers created a craftsmanship technology during many years of trial and error through business development, as skilled production technology and empirical operations. These technologies are those that have been mastered䠊Many details are not described in most working standards䠊Tips on ambiguous work which do not adapt themselves to expression and㻌 therefore most of these were not collateralized inside the company in the form of explicit knowledge.[4] For example, current 3D (three-dimensional) CAD has the ability to define all product attributes as digital data throughout size, weight, shape material, then to visualize it. In the conventional 2D (two-dimensional)


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CAD, the aim was assuming that the existing development process and development organizations to achieve the efficiency of the individual design activities. On the other hand, usage of 3D CAD currently seeks fundamental changes for the product development process. 3D CAD is positioned as a technology to exchange information between companies and between different functional departments to achieve continuous concurrent development processes. In the course of product development, the parts of CAD data can be used to order the parts in common to the related companies, from the design phase to the assembly and completion. This means significant time savings and cost compression can be achieved. To accomplish this, this process must be managed in an integrated production facilities management, personnel management, distribution management, user support and user management, etc. Customer’s opinion is fed back to the developer to easily make minor changes; this is immediately reflected in the production line, distribution arrangements.[5] 3. Quality Standard differences between Customers reference and Suppliers one There is an idea that quality is what the customer decide, it is not what the manufacturer decides on its own. According to the quality requirements of customers, improve the quality level is the role of design, is the role of the production site to decrease the variation of the product. Even in the same look and feel product, different quality levels are determined by income range. Corporate side, there is a need to take national and regional strategies that apply to this. Concretely basic design may be changed such as durability, parts and colour used by the market. The way of thinking to avoid excessive quality ideas is to look at the failure rate experiences but Japanese companies have been aiming for zero defects by complaints from customers as a species of incremental improvements. It is suggested that this approach will not be able to respond to the market differences. Quality level of the product in Japan already lies as close as possible to the point of the arrow in the graph of Fig. 3 below. There is a possibility that the failure rate can be further reduced, but then excessive quality will result, thereby causing an increase in costs conversely. costt costt

Failure cost

Preventive & inspection cost

Defective rate

Defective rate Fig. 1

Fig. 2

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Qu uality inquiry Specification level

F + P&I cosst cosst

C stomers Cus leveel le

Gap p

Defective rate Fig. 3

Fig. 4

4. Paradigm shift in the market The essence of the problem is assembly-type manufacturing companies in Japan are regarded as more efficient quality control objectives into IT. Many of the Japanese companies still believe that quality improvement as a source of competitive advantage, trying to invest many resources in-house to further improve the quality. 4.1 Quality is no longer the first priority for consumers Traditionally, production process is assumed that there is a social significance in that they make what the consumer wants. However positioned in today's consumption concept become a kind of language activity to communicate with others, it can be aggregated into the following three points. Consumption is code of sign, which is emitted continuously and is received and is reproduced as a system of communication and exchange, that is, it defines as language activities. A consumptive object serves as a use acquired from the idea, meaning, and product that were given to the product instead of to the product itself. A product model change will stimulate consuming goods, at this time, people do not recognize the product feature itself but they will have been consumed by the idea of the “change the model”.[6] That is, by the spread of the Internet, consumer-driven cultures have caused great changes, and quality is no longer the first priority for consumers. 4.2 The global market enabled selection of the optimal supplier. As a result, from the time for taking action of QC by company-wide was seen to contribute to business performance, as long as there is production machinery, manufacturing of constant quality can be digital manufacturing machine to support the manufacturing even in emerging markets such as Asia, and also progress have boosted the quality improvement of manufacturing in emerging countries. Moreover, from around 2000, in order to meet the demand from companies in the international division of labour in developed countries, manufacturing company of Asian countries introduced a large amount of production machinery and machine tools, they have achieved rapid industrialization. Assembly of electronic components industry, the electronics contract manufacturing service called EMS (Electronics Manufacturing Service) has spread rapidly. Thus, focusing on products that accelerate the


industrialization of emerging economies, and module digitization has progressed; the global price competition has intensified. Due to the spread of the Internet, a company can select the most suitable suppliers and supply partners from the global market to reduce the costs.[7] The EMS-production ratio in Japanese companies is 44.9% for LCD TV-sets and 20.1% for mobile phones. US corporations have aggressively promoted the international production-specialization by EMS as Apple has distinctively adopted the “selection and focus” strategy. [8] Million USD

year Fig. 5 EMS revenue growth Source : reuter knowledge

5. The impact of IT technologies for Japan 5.1 Conversion of a competitive advantage According to the survey of “ Information and Communications in Japan”, the fixed-line broadband, Japan is lagging behind the other countries in terms of the diffusion ratio. Regarding FTTH (Fiber To The Home), Japan still leads other countries in 2010 in the spread ratio, Japan is 62.5%, Korea as 58.9%, and Sweden as 30.6%. The state of Japan’s mobile infrastructure, it is ahead of the others, the 3G ratio as 97.2% and the mobileinternet-diffusion ratio is 89.5% in 2010. However, with regard to the mobile-phone-diffusion-ratio, Japan is 23th of the 27 countries investigated. Moreover the e-commerce usage-ratio in Japan, having reached 79.7%, is the lowest in the other developed countries. [8] In the past, Innovation = Invention, but currently Innovation = Invention × diffusion. That is to say this requires a drastic shift in strategy, such as location and scale of investment, production and sales from a global perspective. In the background of the worsening profitability of Japanese companies today, is also one of the factors that in developed markets, falling into excessive quality by continuous innovation of “KAIZEN” improvement. It is suggesting that without falling into partial optimization of each function in the department, there is a need for mechanisms such as strategic and organizational attitude to achieve the optimization of the entire development process. 5.2 The definition of quality in the market conformance and competitiveness It is an essential problem that products in emerging countries must be studied to understand what consumer price ranges and their relative kinds of function can be accepted etc; it is required to continue to build a

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business model that unifies engineering, manufacturing, and sales. It is dangerous idea that because income levels are low in the emerging markets, maybe the lowest price should be the priority basis for entering the market. Price declines, as the first step of market development is important, but it is not mandatory necessarily to lower the price, but relative to what consumers can accept and at what price in each country. Even selling the same product is depending by the market, and the distribution of preferences in each market. It is because different consumer-oriented functional, quality-conscious and consumer price preferences rule. 5.3 A comparison of the IT impact to the other countries With regard to the Internet diffusion, Japan’s internet users’ ratio to its population is 79.1% as of the end of 2011, growing from 72.6% as of the end of 2006 with an annual growth rate of 6.5% during this period, This ratio is not high compared with the major developed countries, showing distinctive differences in comparison with Norway, Sweden, Switzerland, and The Netherlands that have high Internet users’ ratio to the population from 85% to above 90%. In the advanced fields such as FTTH, mobile-Internet including 3G and IPv6, Japan still holds its advantages. However regarding the ICT-utilization, concerning Internet utilization in Japan, for solving problems is failing [8] 6. Conclusion It has changed significantly the relationship between consumption and production of the entire society by the information technology, to comply with it, it is essential to share information under the construction of organization and management for both consumers and producers. [9] The era of social media, business activities will be necessary to change the organization of decision-making and shift mainly from production principal to marketing oriented. Even product in Japan is excellent one which could be solely demonstrated from the comparison such as numeric, depending on measurement method physical function, should be focused on the fact that consumer confidence is quite different in between the "good quality but high price" and "expensive but high quality". Information sharing of the members who are working with the same customer and towards the same market within a company, it becomes possible by practical use of an enterprise social network, it is becoming possible to offer a high quality service to customers. Also from this, solely the function of the product itself, and improvement in quality, attractiveness to consumers is not necessarily raised. References [1] Yajun Zhong., 2005. Historical Developments of Quality Management, St. Andrew's University, [2] Toshiyuki Horiuchi, Maki ISHIKAWA, Kenichi SAKURAI, Tetsuro SEKI ., 2001.The Introduction method of the project management that is Based on the Knowledge of the Quality Management, The society of project management, [3] Takashi Moriyama, Hiroshi TSUJI., 2011. Acquiring Explicit knowledge for making evaluations from Tacit knowledge, Industrial management association 62, 75-85, [4] Yoshinori Naruko .,2006. Emerging synthesis of export knowledge for design and manufacturing, Information management Vol. 49 No.8 439-448, [5] Hiroshi Nojiri., 2006. Process innovation oriented PLM, International Association of P2M, [6] Takao Mamano., 2007. The third customer culture, Mineruva Press, [7] Toshiyuki Taguchi.,2008. Corporate strategy and structure of business unit in “ Commodity” phenomenon, Shizuoka Sangyo University, [8] Ministry of Internal Affairs and Communications, Japan., 2012. Information and Communications in Japan, Part 1 Chpter1, Section 3, [9] Junjiro Shintaku, Tomofumi AMANO.,2009. Emerging Market Strategies, Manufacturing Management Research Center, discussion paper No.277, p.7-8, [10] Masakazu Ohashi, Mayumi HORI., 2005. The theory of economics for network society, Kinokuniya Co., Ltd. p.244, [11] Yoshiyuki Nakura., 2013. The Study of specific supply chain characteristics in Japanese assembly type manufactures, American Academic Research Society, ICBM 2013,