April 28th 2007

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Articles from this issue:

COVER STORY: East Timor election: what's cooking?

EDITORIAL: Implications of East Timor's election

CANBERRA OBSERVED: Kevin Rudd's character under scrutiny

OVERSEAS TRADE: Wheat-growers back single-desk selling

MANUFACTURING: Japan still shows the way

STRAWS IN THE WIND: Easter and the media / Literacy, and all that / Anzac Day / Jews and Muslims / Pre-Budget ruminations

DAVID HICKS AFFAIR: Media's blind eye to Hicks treason

THE COLD WAR: How Moscow framed Pope Pius XII as pro-Nazi

GREAT BRITAIN: Why Britain is no longer great

PUBLIC ADMINISTRATION: Lottery players fleeced for $100 million

ETHICS: New safeguard for vulnerable patients

HEALTH: Married gays die 24 years younger

OBITUARY: Dr John Billings (1918-2007) and the Culture of Life

AS THE WORLD TURNS: The unmarriage revolution / Unexpected outbreak of morality / Mediocrity on the march / Children recruited to spy for Big Brother

Antidotes to narcissism (letter)

Problems with surrogacy (letter)

Politicised public service (letter)

Bell tolls for national icon (letter)

CINEMA: Spartan sacrifice that saved Greece


BOOKS: BACKS TO THE WALL: A larrikin on the Western Front, by G.D. Mitchell with Robert Macklin

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Japan still shows the way

by Dr John Blakemore

News Weekly, April 28, 2007
Japan has taken manufacturing production techniques to a new level, with a heavy focus on reducing production time, increased training and more worker involvement, writes Dr John Blakemore.

My recent tour of some of the world's best manufacturers, including Honda, Toyota, Panasonic, Kawai, Mazda and Canon, principally in Japan, has shown that the concepts of kaizen (suggestions for improvement) and kyosei (working together) have been taken to a new level.

By working on the “nine wastes” in production, and continuously improving all aspects of process, product and people, and focusing simultaneously on long-term and short-term objectives, the Japanese workforce remains highly motivated and creative.

In particular, at the new Canon plant at Toride, I saw the most positively motivated workforce I have witnessed anywhere in the world. This comparison includes manufacturing plants in the US, Germany, France, Italy, Switzerland, China, New Zealand and, of course, Australia.

Innovation by workers

The most significant and noticeable change I saw on this visit, compared with my earlier visits, was the greater emphasis on shortening the production time and the larger release of creative innovation by the workers as they designed their own clever tools to make their job easier and improve product flow.

Special emphasis is placed on training using the Meister system under which skilled professionals hand down their specialist knowledge and skills to those junior to them. Everyone is encouraged to move up the skill level, and the Meister is revered by all including the Canon CEO.

On one occasion, I used a tool designed by an operator, which allowed him to lift and assemble a 65kg part into a copying machine with his little finger.

At the head of each production line was a massive colour photograph of the team leader followed by signs saying that it takes 0.8 seconds for a step and 0.6 seconds to turn. Unnecessary movement of people and product is a waste.

The shortening of the planning cycle has become a sharp focus of all plants so that the use of forecasts can be reduced as much as possible in the production process and batch sizes can be continuously reduced. This is a step which is often overlooked in Australia.

The process of what we call lean manufacturing has passed to a new level which can only be described as continuous innovative manufacturing, the step beyond lean. The lessons from this simple approach can be applied by all Australian manufacturers.

When products are not made to order because the production lead-time is too long to satisfy the customer just-in-time (JIT) without inventory, the finished goods inventory can be manipulated and reduced dramatically using the new rules. This is not understood by producers who stick to old material requirement planning (MRP) rules.

The approach used at Canon is the same as the one I developed at Shaw Australia in 1999, where, after implementation, the total working capital was reduced by $40m and the on-time deliveries at the same time were improved from 32 to 99 per cent.

The profitability improved dramatically from loss to approximately $40m EBITA (earnings before interest, tax and amortisation). This enabled the company to withstand a six-week strike and increase gross margins on fast-moving lines. The old MRP rules were abandoned for the 5,500 products made. Simple application of the lean manufacturing rules would not have led to such an outstanding result in such a short time.

The power of the Japanese approach can no longer be questioned. Toyota and Honda have demolished GM and Ford in the American companies' own markets.

For a considerable time in the '80s there was a popular line of thinking in the US, pushed by Harvard and MIT and American management gurus, that the Japanese were good copiers but they lacked the creative talent to be innovative. Who would be game enough to say this now?

Highest quality

Toyota in Australia is now leading the sales race. At the time of the launch of the 2007 Camry, the Australian-produced car was ranked as the highest quality of all the new Camry plant products as measured by Japanese auditors. This to me illustrates that we can do it.

The manufacturing problem in Australia is firmly based in the management court. The leadership has not been good enough. Too often the CEOs take a short-term view to maximise shareholder value and sacrifice longer-term improvements.

The new planning techniques, focusing on industries where we have a unique competitive advantage, must be taught and implemented urgently. If this requires government assistance, then so be it.

After all, Toyota was supported heavily by the Japanese Government, and look at what they have achieved.

It is not in the national interest to abandon manufacturing.

- Dr John Blakemore is national president of the Manufacturing Society of Australia. This article is from Manufacturers' Monthly.

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