JIT, TQC and Japanese corporations

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). Toyota Group managers came up with JIT, which they referred to as just-in-time. Kiichiro Toyota, former president of Toyota Motors Inc., wanted the company to catch up with the US auto manufacturing industry. Mr. Toyota was known to be the father of the Japanese automobile industry. Toyota management developed the Toyota Production System, which used JIT. This system essentially puts parts on the line just in time 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 costly 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 the 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-World War II 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, the Japanese corporate culture is paternalistic and encourages lifetime employment. Once JIT was implemented, production systems became more efficient. It also led to high labor productivity growth. 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 the 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 Prize. Fuji Xerox was established in 1962 as a joint venture between Fuji Photo Film and Rank Xerox (UK), a subsidiary of the Xerox Corporation. It started as a marketing company. Fuji Photo Film, the Japanese parent, consisted primarily of a workforce made up of people who joined the company directly after high school or college and expected lifelong employment. Fuji Xerox, on the other hand, hired a diverse group of workers with diverse work backgrounds and was more individualistic than the Japanese parent company. Management brought both entities under one roof, leading to internal conflicts between the divisions and even layoffs, which was considered a last resort in Japan.

TQC was implemented in 1976. Management 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 business around. Four years later, Fuji Xerox won the Deming Prize along with three other companies after submitting a formal application to the Japan Union of Scientists and Engineers.

TQC succeeds under a specific set of circumstances, which they must meet: good leadership, adequate training, sufficient resources, clarity of program goals, 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. The facility was kept clean, the 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 lowering costs.