Crumbling and empty plants led Japan Inc. astray
Nikkei -- Nov 11
The series of quality compliance scandals that has rocked Japanese manufacturing has unmasked the sobering truth that workers were often tempted to take shortcuts in quality testing as they struggled to keep up production at decaying and short-handed plants.

Japanese manufacturers have positioned domestic plants as "mother factories" where they kaizen, or perfect, efficiency. They then transfer that know-how to offshore facilities. But establishing cutting-edge plants in emerging nations, where labor costs are cheaper, ended up hurting competitive advantage on the domestic front. With Japanese plants compared unfavorably to sister installations overseas, the fear that domestic production will shrivel up has started to take root on the factory floor.

Nissan picks global production hubs based mainly on production capacity and local labor costs. In 2007, the automaker transferred production of the March compact from Japan to Thailand, and sent many surplus engineers overseas.

Kobe Steel, which falsified quality data on aluminum products, employed similar tactics. "There was a fear that plants whose sales have declined will have their operations shut down," said an employee.

Japanese manufacturers often leave site staff in charge of solving problems, all in the name of kaizen. According to the investigative reports, the staff shirked compliance to cut costs and meet deliveries.

News source: Nikkei
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