Academic journal article Annals of Business Administrative Science

Competitiveness of Japanese Electric and Electronics Factories

Academic journal article Annals of Business Administrative Science

Competitiveness of Japanese Electric and Electronics Factories

Article excerpt

Abstract: This study employs data collected from a questionnaire survey of 97 business operations (factories) in Japan's electric and electronics industry to measure gemba-level and market-level competitiveness based on the framework of Fujimoto (2003). In addition, the employment situations within these sites were surveyed. The results of these surveys revealed that, as strengths of the electric industry gemba in Japan, 1) these gemba are superior in all metrics of competitiveness except for manufacturing cost, relative to overseas sites in the same companies; and 2) the high level of responsiveness to customers is the major source of market-level competitiveness. Nevertheless, the primary issue faced by these gemba is the skewed age composition of the full-time employees. There are few workers to carry forward necessary skills into future, and the labor costs of the veteran workers are increasing. Japan's manufacturing gemba must develop manufacturing competencies and improve design and development capabilities, in addition to nurturing younger personnel, to gain and sustain competitive advantage.

Keywords: competitiveness, Japanese electric and electronics industry, factory management, strategic management, human resource management

Introduction

This study employs data collected from a questionnaire survey of Japanese electric and electronics industry to measure the competitiveness of Japanese factories. Existing studies on automobile industry have examined the relations among performance, strategies, and manufacturing or R&D organizations (Clark & Fujimoto, 1991; Fujimoto, 2012; Holweg & Pil, 2004; MacDuffie, Sethuraman, & Fisher, 1996; Womack, Jones, & Roos, 1990). On the other hand, few studies have measured the competitiveness of the manufacturing gemba in Japanese electric and electronics industry. During the past few decades, Japanese electric and electronics companies have been struggling to compete against lower-priced rivals from South Korea and China. Certainly, some companies have lost international market share, but other companies have maintained competitiveness. Thus, this industry is an appropriate research object to investigate what factors are critical for manufacturing organizations to maintain competitiveness.

This study used the framework of Fujimoto (2003) to measure the competitiveness of factories (business divisions). When measuring competitiveness, the types of metrics used are very important. Corporate competitiveness comprises the competitiveness of the various business divisions. Moreover, competitiveness is not merely a function of organizations, but it is impacted by, for example, environmental changes such as the fluctuating yen. Fujimoto (2003) proposed three layers of competitive performance: profit performance of a firm, market performance of a product, and productive performance of a manufacturing site (gemba). In addition, he considered that organisational capability supports productive performance. As this framework focuses on stable performance depending little on the macroeconomic changes, this study adopts it as a framework. In this framework, market performance directly influences profit performance (e.g., sales, profit, and stock prices) as providing compelling products and services to customers is a source of corporate earnings. Market performance is measured by metrics such as price, performance, timely delivery, and brands, and it results from productive performance. Productive performance is measured by the metrics of productivity, cost, production lead times, development lead times, and research productivity. Furthermore, productive performance results from organizational capabilities.

In general, market performance is used as a metric of competitiveness, and productive performance is used only rarely. In many industries, competition is based on the metrics of market performance. However, Fujimoto (2003) indicated that Japanese automakers compete on the basis of productive performance and their manufacturing organizational capabilities. …

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