Manufacturing Trends in Japan | Brad Schmidt’s perspective

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My co-organizer on this tour, Brad Schmidt, is based in Japan, and this is how he sees what is happening in Manufacturing there today:

“My opinion based on living here and dealing with companies here.

There is definitely a trend for companies to be moving production from China to Japan but only when the market is Japan.  Basically, everything except electricity and labor is actually lower cost in Japan than China so if your product can get over those two humps and your customers are not in China, it makes  a lot more sense to do things here.

I think the one thing that really attracts me about Japan is that the well-run companies use a very different approach than our MBA style in the West.  (The badly ones in Japan use the MBA style – albeit not the way they should)  So seeing success achieved in a very different way than we would imagine really forces us to broaden our minds.  The amazing thing is this is done with a country like China – 1/10th the labor cost and way less regulations 3 days away by boat!  Basically if you have a production site in China, a warehouse in Japan and China your planning would only need to add about 5 working days to the lead-time.

Even with this, there is a lot of manufacturing, especially in the mid-sized companies that stays in Japan.

Some of the better run companies actually do Kaizen and then challenge their overseas operations to make it better – which they often do!

So it’s not a Japanese thing at all.  I think seeing an excellent perspective on things which may be different from ours, comparing it to our definition of excellence and taking the best parts of both will allow us to design our work environment which includes management and operations to one that will allow Lean to take place naturally.”

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