Just-In-Time (JIT) and Total Quality Control (TQC)
The nature of Japan’s corporate culture allowed it to excel in the industry. Management worked hard to develop successful corporate processes and two of the best
Examples of such processes are just-in-time (JIT) and total quality control (TQC). The Toyota Group managers came up with the JIT, which they referred to as just in time. Kiichiro Toyota, a former president of Toyota Motors Inc., wanted the company to catch up with the US auto industry. Mr. Toyota was known to be the father of the Japanese automotive industry. Toyota management developed the Toyota production system, which used JIT. Basically, this system gets the parts on the line on time and in the correct quantity. There is a high level of automation in this process where the system works by itself. One of the benefits of JIT is that it eliminates overproduction and prevents defective products. Plus, it keeps costs down and increases productivity. There is nothing more expensive for a business than accumulating unused inventory in its warehouses. Lastly, it ensures that each worker masters a variety of production techniques and keeps them actively involved in factory processes. Today, the JIT system is used by many corporations around the world and is a manifestation of the success it had in Japan decades ago.
Japanese products during the pre-WWII era were known to be cheap and of low quality. Today, they are admired around the world for their high quality. One of the reasons for this distinction is TQC. As mentioned above, Japanese corporate culture is paternalistic and encourages employment for life. Once JIT was implemented, production systems became more efficient. It also led to high growth in labor productivity. The Japanese also invented TQC. This was a type of suggestion system in which top management solicited suggestions from workers. Today it is used by ninety percent of companies on the Tokyo Stock Exchange. The idea of TQC was to improve the effectiveness of management objectives in the most efficient means.
Fuji Xerox Corporation will be used as a case study in the use of TQC. Fuji Xerox implemented TQC in 1976 and participated in rigorous exercises four years later to win the prestigious Deming Award. Fuji Xerox was established in 1962 as a joint venture between Fuji Photo Film and Rank Xerox (UK), a subsidiary of Xerox Corporation. It started as a marketing company. Fuji Photo Film, the Japanese parent, was primarily made up of a workforce made up of people who joined the company directly after high school or college and were expecting a job for life. Fuji Xerox, on the other hand, recruited a diverse group of workers with diverse work backgrounds and was more individualistic than the company-oriented Japanese parent. Management brought both entities under one roof, leading to internal conflicts between divisions and even layoffs, which was seen as a last resort in Japan.
TQC was implemented in 1976. The administration encouraged contribution at all levels. On average, 90,000 ideas were collected from employees per year, mostly discussing problem areas and ideas for improving business functions. This system instilled creativity, teamwork, and initiative among employees. An important result of TQC was the development of a successful new product in 1978, the Model 3500, which also stimulated other product lines and turned the business around. Four years later, Fuji Xerox won the Deming Award along with three other companies after submitting a formal application to the Japan Union of Scientists and Engineers.
TQC succeeds in a specific set of circumstances, which they must meet: good leadership, adequate training, sufficient resources, clarity of program objectives, and cultural unity. There are three fundamental principles of TQC: customer focus, in which customer needs are met or exceeded; continuous improvement; and teamwork. TQC is also considered one of the reasons why Japanese corporations have performed well in the 1970s and 1980s. Another reason for this success is due to excellence in manufacturing management. Facilities were kept clean, employees were responsible, and the JIT system was used. The JIT system was especially known for increasing worker skill levels, improving quality and reputation, and reducing costs.