Cost management in Japanese companies in the U.S.A. and the U.K.-香川大学学術情報リポジトリ

Kagawa UnzversiかEωnomzcReview Vol 66， N o.2， September 1993， 63-114

Cost Management i

n

J

apanese Companies

i

n

the U.S.A. and the U.K.

by ShinうichiInoue*

1. Introduction一一 aimand scope

Two of the provokillg issues for Japallese malluf以 turillgcompanies

(.JPCs) alP hO¥九町rto adapt 孔t 悶

Ollli & <ωonrpaω1111e，.s払 aωn吋cclh以<o刑w tωO札claptth巳 clevelopm犯悶(e白当吐n引氏t0吋fIl凶I吋fo侃rn1瓜ati山onl

technology a川n吋cdne叶twoωrk王S切ys坑tems

iVlany .Japanese comp，3inies have been multillatiollalised in these few

dec孔desぅancla clrift of globalisation was especia11y rλpid in th♀ 1980s

.

Japanese companies began overseas operatiolls in Asi孔 at firstうnω日正e位空つx対涜di山n

NOI丸nthAr口nH附〈仔町ゐ苛!1<乱礼nclre

“

centl防y1山nEurope.. Nowaclay臼tl以H(与USAo似)c引'口cu中p1e悶sthe

sec

∞

O凶 biggest 0吋fJapanes肘e即弘江悶nu

Ther やale 1

，

054 .Japanes問e-a伍li叫ate釘吋clmanufa以cえtt山u1江n山ng<ω刈Jompa凱1山l江1e偲81山nthe US

(σJUS日吋)i山n1印99卯

o

a似n吋l吋cli討tsぬha創re邸s22..9% 0吋fa11.Japa川正aむ元泊n山拙l

tur口1山ngcoαmpan山i民esin the worlcl (4

，

612).. On the other hλncl

，

.Japallese

-a伍liatぞdman吐acturi時 (ompaniesin thp UK (.JUKs) O((Upy 155

(om-palll何 andit is the 1孔.1gestl1umbers in Europe.. FIOm this point of view，

the din、けillvestmelltor m礼1mfa仁tmingin the USλnd t he UK ha8 gained

fm t he1 import孔11<e

Sti111Il0lP.. trade仁onfiict8among J.apan， the USA and Emo戸、 have })('(，11 Sp1('礼d011十 At the same tirne Arnほ1<札口孔lldBriti日11comp礼111e8

-64 Kagawa Universily Economic Review 242 (USCs 孔u<1UKCs iu shω川o叫ntre附叫叶Hp代 tlV(、

川

1

り

γy

)

h川t孔1れV0I山礼川IImy口ill<凶礼u川日1仙i刊0印口l以1円<当'ヨ1凶11

1 0

θ円111凶s

，

such ω10w-qlla1ity of prodlld人 1ow01pIOd1H tivity aud old fash

i01l0d productiou systems lu ordPl.tO l(刊llveth(~s，ふくli伍(u1ti('s whi( h aIe

(OUfloutecl bγUSC臼audUKCs

，

.JUSs礼u<1.JUlu (，.u礼ucl札口‘I(刊pur似1to

support USCs allll UI(Cs ou III札 口yλspe<ts su< h孔日 付dmo10gy， hllsiuesお

aclmiuistratiou aucl(tC(ouutiu巴

This pλp0r孔un日toaua1y問 .JUSs aud J.UKs from ul札口礼gPUleut(l.(ー

couutiug poiut of view， which has be('u 1"ss exp10IPく1compared to th0

researches ou JUSs & .JUKs frOll1the point of mauagemeut or busiuess

admiuistration.. Especially 1 wallt to focus Oll cost mallag0m01lt plOblems

based on the surveys，

I

t

is expectecl to fill up a gap of ullderstandillg

on managemeut accoU!凶iugiu Japauese parellt compa凶es(JPPs) aucl to transfer management accouuting teclmiques illto JUSs ancl.JUKs.. 1 am sure that this killd of research will contribute to solve urgent aucl esselト

tial matters both for academics孔llclpractitioners ill related coulltries

This comparative research Oll cost mallagemellt practices of JUSs and .

JUKs will make the transferability of cost management practices in Jap -anese parent companies still more clearぅbecausethis will help ancl clarify

our understanding on cost mallagemellt problems ill Japallese compauies operating overseas countries.

I

t

a1so aims to contribute the British alld the American to understancl ancl introduce mallagement a仁coulltingtech

-niques of Japanese fiavour into their compallies for improving produけ qua1ity ancl gaining higher productivity

243 Cost Management in J apan巴seCompanies in the U S A and the U. K ~65

2. Management practices in JUSs and JUKs

IIIthis (hapter

，

mallagelllellt PI以 ticesill .JUSs alld .JUKs will be 10'

-viewed illOlder to darify the pl何<'utst川nsof .Japalles巳 lnallageUWll t practices (.JMPs) ill b泊)oth(0例叩}川n川凶l1

tio仙IIof θ何川1G目rp戸卯I日1路 附se出S山 t仕h氏eUS 孔川凶1 tはhe、U Kう仏2

幻

)

tr孔deullio11 rθl加aat札101山1ヲ8夙3

幻

)

h礼I山11

8

伊1日l<i刊色θ伺S1.1お山se吋di山IIme町e抗吋tin伊gsう，4引)p戸roc小l11以ctionsy刊st.加θ白l凶日nω札仙n叫d5)μtr剖i凶sfお加eぽr0吋f.JMPs E白t

i

山ntωoJUSs ζ&JUK 日a似n吋cdCOl日n中p礼川nygoals of hoth JUSs alld JUKs.

2 1 FUl1ctioIl()f e1ltel pIis伺 i1ltileUS a1ld theUR

This section examilles the fnnction of enterprises in the US and the U K by Table 2-1One exp1icit question is how mallagemellt activities are alloted betw関 口 JUSs 01 JUKs and t heir par ent compallies (JPPs). This

may depend on how much JUSs and JUKs are localised or i11tegrated into host societv and culture

Table2-1 Function of enterprises in JUSs and JUKs

2 3 4 う 6 7 8 9 10 Function Level JUSs .JUKs Pelsonnel activity 449 1 460 l Aftel-sel vice of Ploducts 446 2 4.29 3 Sales activity 427 3 4.14 4 Purchase aιtivity 427 3 4.12 5 Production aιtivity 424 5 449 2 Malketing activity 4.14 6 4.03 6 COlpolate i二mtlaVglte alxiιultUle (CI) 372 7 347 8 Financial activity :353 8 :393 7 DevelolcphIllentot dpu loduιls 241 9 210 9 Resealch of ploduds 234 10 185 10 The SCOles ale cal.culated as follows; 1 -Japan， ， 5 -the US 01 the UK Calιulated lotal sιoles of each activity and divided by the lesponding cornpanies.JUSs (n'= 82)， JUKs (口'=43)

Table 2-1indicates that personnel activity is ranked the first and gains 4 49 points ill .JUSs and 4 60 in .JUKs This meallS that recluitillg

66 Kagawa University Eωηomic Review 244

emp10yees is fully de1egated to 10<:a1 perSOlllle1 m加 agers

，

except recruIt -illg J apanese 0伍c:ia1sand higher-rallked persollne1s (such as directors a凶

vice presidents). After-care of plOd昨 tsgains 446 (2nd) in JUSs and 4..29

(3d) in JUKs.. Both sa1es and pUlchasr以 tivitirsarr 4.27 (3rd) Irspec

-tively in thr US The fig川 rof sa1出 illJUKs is 4..14 (4th) and that of

purchase is 412 (5th). Plocluctioll孔llcl山 lrkrtillga1so gaill mωr thall 4 poillts ill both JUSs allcl JUKs TherefOle it is said that those activities

are re1ative1y 1oca1isecl to the US alld the UK. The trend is paralle1 both in JUSs ancl in JUKs

In case of research and deve10pment (R & D)

，

deve10pment indicates 241 (9th) and research does 2..34 (10th) Ill the US“1n the UK the figures

are simi1ar to those of the US. Deve10pmellt is 2.10 (9th) and research is1.85 (10th).. This exhibits that R & D activities are the most di伍cult to be transfened even into JUSs and JUKs

，

but reallocalisation of com向

panies should be formed on these most fundamenta1 activities..

I

f

figures of R & D in JUSs and JUKs are examined in detailうthescores in JUSs

is a 1ittle bit higher伽 Thereasons are guessed that the US i13 the most

essentia1 country for productioll and marketillg to JPCs. According1y

，

JPCs have been eager to develop more R & D divisions or 1aboratoIIes in JUSs in order to adapt to consumerぶtastesand requirements imme-diatel

y

.

.

Trade conflicts between Japan and the US give stronger impact to the situation..

2.2 Trade 11l1IOllS

Types of trade unions a1so influence on the managemer比 例γ1esand cost management of.JUSs and JUKs

There are 74.7% (62ιompani

回)

w hich have not a union in JUSs and 476% (20 compa山田)which have ωt a union in JUKs. There are 22

245 Cost Manag巴mentin Japanese Companies in the U. S.A.and the U K -67

unions(1)But in case of.JUKs

，

15 cOll1panies have c0ll1pany-wide union

and 7 have industrial union accOIding toll1y interview surveys to.JUKs

JUSs JUKs

Table 2-2 Trade unions in JUSs and JUKs ln house union lndushial union Othels No union (12%)

。

(0.0%) 20 (241%) 7 (167%)

o

62 (74.7%) 15 20 (357%) (47.6%) JUSs(n= 83， unknownn = 6)， .JUKs(口=42， unknownn = 1) 2..3 Languages used in meetillgs

The languages used in.JUSs and .JUKs also indicate some ll1easures

of how well.JUSs and J.UKs are localised to the US or the UK.

Table 2-3 shows the resulL Generally speakingうEnglishis the

ma-jor language for meetings both in.JUSs and in JUKs，. Specifically more

than 80% of the JUSs use English fOr board meetingsうbutat the same

time 225% of the.JUSs also use.Japanese for board meetings.. Thereω fore

，

in some companiesう bothEnglish and J apanese are used for the

board meetings depending on the situations.. 1n case of.JUKs they also have a similar trend with JUSs

，

but English is more often used in board meetings，

1n workers' meeting

，

Ellglish is used for almost all the meetillgs but there are some companies which use plurallangu，ages at the meetillgs ill JUSs 1n this case Japanese and Spanish are used fOI workers'll1eetillgs

246 Kagawa UniversityE正onomz(Revieω 68 Table2-3 Languages inl11eetings Spanish Japanese English (JUSs) 1) Board of directo¥ 's meeting 2) Worker's meeting

;

1

j

i

?

:

%

j

2

!

?

3

i

%

j

!

j

i

川

(JUKs) 1) Board of dil ectol 's llleeting 2) WOlkel 's meeting

:

:

j

l

;

;

;

%

j

n H V ハ H u

j

n u o り

引

2;;%! Multiple answels JUSs(n= 87)， JUKs (11= 43)

Wllele were main production sys.te11ls acquired'1

Another important determinant of J apanese infiuence on JUSs and JUKs is where they acquired main production equipments fOr their

man-ufacturing operations. Table 2-4 is the result. JUSs acquired 628% of their production facilities from Japan; 28.1%台omJ apanese parent companies and 33.7% from other Japanese companies.. At the same time JUSs produced production facilities by themselves and it shares43..8%肝

On the other hand JUKs acquired 93% of the production systems from Japan and bought 349%台omlocal or overseas companies. This indi -cates that JUSs have been much more localised to the US than the JUKs 24

from the point of hardwares acquisition.

Table2-4 Where were l11ain production systel11s acquired? JUKs 442% 48.8 93 349 23 23 JUSs 281% 337 43.8 169 23 67 Ploduction systems Produced by Japanese parent companies Produced in Japan except theil parent companies Developed and Ploduced by JUSs01 JUKs Bought flom other local01 overseas companies Others Unknown 1 4 A 4 1 V 4 A V U 白 v JUSs(n = 89)， JUKs (n = 43) JUSs and JUKs ale allowed to tickle plmal items. Therefore the percentage of aJlitems exceeds more than 100%

247 Cost Manag巴mentin Japanese Companies in theU S. A and theU. K.

-69-25 Japa11e開 lllRllagelll臼ltplacticesi11JUSs and JUI，山

What are Japallese management practices (JMPs)? They have been often discussed what are JMPs and yet it is di血cultto defille them evell now.. Therefore

，

so-called 'JMPぷarereviewed from the following three aspects based on practi<、esof J apallese companies ill J apall.

1) Personnel managemellt illcludi時 labourrelations: in-house or

compally-wide trade ulliollS

，

selliority wage systems

，

selliority pIO -motion systems and lifelong employment.

2

幻

)

Fa舵ctωorげyma但nag酔eme叩叫nltじmaむ.i叫a羽叩1Il山l

man凶agement式tby walking aroundう qualitycontrol circles

，

group

-oriented decision-making and multi-skill workers

3) Other JMPs: wearing compa町 suitsand equal opportunity for

using company facilities (common parking lotsうcanteenfacilities

and etc.) and so on

1n my postal survey

，

the items on personnel management were not included; accordingly it is vely difficult to discuss details of JMPs in JUSs and JUKs. But from my interview to 29 JUKs done in 1989-1990

，

some inferences could be drawn fi::om them.. As it was examined in Sec -tion 2.2

，

Japanese style relation with trade unions is common in JUSs and in JUKs.引 Buti比tiおsv刊erげyd心i伍C叩ul抗ttωo p戸ra舵，ct“1S配e剖0the釘rpe位rsoωn叩nelma凱叩.nト

-agemer凶l凶ts叩uchas se凶nl札10侃r

in JUSs and JUKs，只 because all three c

∞

ountむnおesha創司;veown d必iffe白renthis

-torical and cultural background. Of course there are many JUSs and JUKs which stless on advantage of no lay-o丘andother fringe benefit for their employees in the US and in the U K It is advantageous for workers

，

but it is not for company leaders

，

such as0伍cersand engineers.It is closely related with social systems and culture of each country. There -fOre

，

there are many obstacles to introduce seniority systems and lifetime

248 Kagawa University Eco同omicReview

emplo.yment yet..But so.me co.mpanies strive fo.r practising

‘

lo.nger-term' employmellt systemsぅasW. Ouchi po.inted o.ut in‘The.ry Z¥ o

Thell this paper mainly deals with the features o.f pro.ductio.n malト

agemellt and related fields o.n .JMPs by Table 2--5.. The mo.st frequelltly practiced.JM P in.JU8s is 'equal o.ppo.rtunities fo.r using co.mpany facili -ties suc:h as parking l.tos or canteens' and the average po.int is 4..17 poillts Next is 'a cleall factoryう(58movement) and ranked the second (3.90)

'Management by walking aro.und' gains 368

‘

，

traillingo.f multi-skill wo.rk -erぶis3.40 and 'wearillg <川、o.mpallyunifo.rmうis3..3L

said that tho.se.JMPs described abo.ve have been practiced to. some ex -tent.. 'Gro.up-o.riellted decisio.n-making

，

and

‘

quality co.ntrol circles and a suggestio.n systemヲgain2..78 and 2.99 respectively and tho.se activities

have been less performed in.JU8s.

Accordillgly it is 70 Table 2-5 Japanese management practices JUKs JU8s JMPs Equal oppoltul1ities for usil1g compal1y facilities Cleal1factoly (58 movemel1t*) Managemel1t by walkil1g aroul1d Trail1ing of multi-skill wOlkeIs Wear.ing a company unifolm Group-oriented decision-making Quality contlol Cilcl巴s& a s時gestionsystem t i o L q O A q p D ρ 0 7 ・ 1 poil1t was given to 'not practiced' and 5 point w拙 given‘actively/ totally practiced' The SCOle in the table is average point (mean) of each company. JU8s(n

=

83)， JUKs (n

=

41) *58 means (souji -cleaning， shitsuke -discipline， seitol1 -orders，

悶ketsu-cleal1n由 民SelIl-arra碍eme叫 Allthose自vewords begil1

with‘8' in Japal1eSe Accordil1g1y it is called 58 movemel1t in Japan十

In case of.JUKs

，

'eql凶o.ppo.rtunities'is ranked the first (4..71)

，

the second is 'wearing a compallyu凶 orm'(435)

，

the thircl is 'ma凶 gement

by walki時 aro.und'(3..84) and the fo.urth is '58 mo.vement' (3.81) They gain higher po.ints than tho.se o.f .JUSs

249 Cost Management in J apan巴seCompanies in the U. S.. A and the U K -71

I

f

we compare JMPs in JU8s with those in JUKs

，

the levels of pr以:ti問

of JMPs in JU8s (except two items) are a bit less perfOlmed than those

in JUKs.. Of COUIse two比t快加e引叩I口msれ(tra心叩11山山III略 O吋fmu叫lt“ト凶‘蜘守sl北kil岨~il出11 wo凹rkω((-'1立1San紅吋仁cl58 mo仰veme叫)μl

2.6 Strategiccompany objectivω ，

Itis often saicl that仁ompallygoals or strategic objectives betweell

J apanese companies allcl Westerll Coullterparts are quite cli丘erent ancl the fact has been verifiecl by several surveys cOllcluctecl so far. This time strategic goals which have beell regarclecl as important in JUSs allcl JUKs were askecl to their managers.. The results are showecl in T;札ble2-6

τ'able 2-6 Strategic company objectives Strategic objectives JlISs J:ljKs JPCs USCs 1) InC1ease market share 1.20 (1) 1.31 (2) 238 (1) 73 (3) 2) Return on sa!es (ROS) 1.14 (2) 1.64 (1 ー 3) P10duction& physica! dist1ibution 99 (3) 1.00 (3) 71 (4) 50 (4) 4) Return on investment (ROI) 95 (4)54 (4) 124 (2) 243 (1) 5) Qua!ity of w01king condition 47 (5) 33 (6) 09 (7) 04 (8 6) New products ratio 45 (6) ..33 (6) 106 (3) 21 (6 7) Pub!ic image of companies 40 (7)36 (5) 20 (6) .05 (7 8) Equity / debt ratio 13 (8) 19 (8) 59 (5) 38 (5 9) Capital酔inf01 stoc対 叫de1s ω9) ))) σ29 028) ) )2431

JUSs (π86)， JUKs (11 :36) The data 01 JPCs and USCs (Ame1ican companies) a1e cited lrOlll Kagono et a! [1984]. The scores in the tab!e were calcu!ated as lollows; 3 points 101 the most impo1tant， 210r the second and 1 f01 the third， and the tota! SC01es we1e calcu!ated and divided by the nUlllbe1 of asponding companies ‘一，llleans no such itelll in question ('Return on sa!es' was added in llly question )

1n JUSs increaseof market share is1.20 ancl rankecl the first. Return on sales (ROS) g肝伊a羽叩ins山.114 a創n吋L吋clrar

tωo酔get山he引E'i比tbecomes 2..“34.Iri JPCs increase of market share is 238 ancl

it is the first rankecl (There is no item 'return on salesうanclit is closely

ヌ2- Kagawa Uηzversity EconomκReview 250 1u case of JUKs

，

ROS is ra此edthe first (1 64) and increase of market share is the second (1 31) a凶 thesum of those two items becomes 2.95

The third strategic goal is productiou& physical distribution (LOO) and the fourth is R01 and gaius 0..54 poillts

Accordiugly it could be said that.JUSs aud .JUKs have a similar treud ou strategic objectives of compauies.. This is a very coutrasted result with USCピdecisiveobjectivesぅasit is ofteu pointed out.. 1u USCs

，

R01 and

capital gain for stockholders are two of the biggest cIUcial objectives (2.43) and each item shares the first respectively

Other distinctive feature of JUSs and .JUKs is the importance of net -work systems of 'production& physical distribution' and it is ranked the 3rd in both JUSs and JUKs (099 in JUSs and LOO in JUKs).. This is because JUSs and JUKs have beeu building their own sales network sys -tems

，

as.JPCs have already had such systems in Japan.. At present.JUSs and JUKs have been shifting to local production in the US and the UK

，

therefore they need to reorganise new sales-distribution network systems from

‘

importing products from JPPs and selling them through sales sub -sidiaries or local agents' to

‘

local production and sales by their own sales subsidiaries¥Accordingly it is an urgent issue for them to reorganise current distribution systems or build new network systems for sales and distribution in America and Europe

2..7 The achievement level ofthe goals

1n this section the following questions were made to JUSs and

.

JUKs: What degree are senior executives of JUSs and JUKs sat -isfied on various company goals? The consequence is in Table 2-7. They begau for striving to localise themselves to local environ -ment in the 1980s Most JUSs and JUKs do uot have a long his -tory of manufacturing overseas operations in the US and the UK..

251 Cost Management in Japanese Companies in the U S.A and the U K

-73-Table 2-7 The level of achievement of company goals Achievelllen( of the goals JUSS JUKs Reducing 1a.bour (ur nover :340 276 II 2 Sa1es glOwth >:3:7 2 :J70 3 1IhD1mm1ePp pv 10 111剖 tof四vplieぽピwelfare 3>:5 3 3:50 2 4 lovement in mora1e of workers 335 3 297 8 5 IoveIIlentill 1P11li oduct quality 3:34 5 : 13:> 4 6 eve10pment of human reSOlll ces 305 6 2.62 12 7 1ncrease of market share oflIla.j01 products 303 7 289 9 8 Efficient production & distribution systellls 3.00 8 289 9 9 I111ploveme11tof ploduct dpeOII S tfolio 294 9 :304 5 9 Capital gain fOl stoιkho1 294 9 291 6 11 Liquidity of assets 288 11 2.91 6 12 Strengthening of malketing capabi1ity 282 12 256 14 13 New products ratio 281 13 3:15 3 14 Growth of eall1ing 265 14 259 13 15 RetU111011Investment(ROI&) 261 15 2.47 16 16 Strengthening of Research & Development 2.45 16 2.52 15 1 -greatly dissatisfied， う3-nei ther satisfied n01 dissaもisfied， 5 -great1y satis自ed. JUSs(n

=

78，)JUKs (n

=

38)

TherefOre it is di伍cultto find any iterns which show 'greatly satisfied' nor 'greatly dissatisfiedヲintheir goals The di丘町encebetween the 'rnost

satisfied iterns' and the 'least satisfiedうiおsa little less th胤 削a紅n one poII凶l此t.t

Relatively successful goals i白nJUS臼swhich gain rno凹rethan 3 po叫11凶1叫ts乱紅re

8

iterns; r吋edu即1配C11略 labo旧 tl山

O

吋fernployees' welfare (335)

，

irnprovernent in rnorale of workers (3..35)ぅ

irnprovernent in product quality (3..34)ぅdeveloprnentof hurnan resources

(3..05)

，

increase of rnarket share of rnajor products (3..03) and efficiency of production

&

physical distribution (3..00).. On the other hand in .JUKsラ

the successful iterns are followi時 five;sales growth (3..70).

，

irnprovernent of employees' welfare (3.50)

，

growth of earni時 (315)

，

irnprovernent of product quality (3.13)ぅirnprovernentof product portfolio (3..04).

Reversely 'dissatisfiecl goals' in .JUSs are follows; R & D (245)うROI

-74- Kagawa UniverszかEwnomicReview 252

items:ROI

ロ

(

2.引47η)

，

R

&

D (ρ252

幻

)

うma紅叫rketingcapability (σ2.56

的

)

うandg伊rowth1

of e側 叩a旧I山山n山止L山11時 (2..59)

3. Information Systems

Iu this chapter the following subjects will b巳examined;what extent have computer systemsぅ networksystems and database systems been

iutroduced in JUSs and JUKs? In other words

，

how much do JPPs use network systems for communicating accounting information with JUSs aud JUKs? Because nowadays infonnation systems have played a very e妊ectiverole especial1y in globalised companies..

3.1 Introduction 01computer systems

This section examines the level of introducing main-frame computer systems

，

0伍cecomputers and micro computers in JUSs and JUKs

3.1 1 Main-frame computers

Table 3-1 shows introduction of main-frame computers in JUSs

，

JUKs and JPCs.. As you see in the table

，

43..8% of JUSs and 44.2% of JUKs have already introduced main-frame computer systems respec -tivel

y

.

.

Those figures indicate very low levels contrasted with the case of JPCs which have main-frame computers in all companies.. But installing of computer systems is closely related with company-scales.. For exam-pleうnotonly JUSs (11 companies) but also:JUKs (6companies) which

have more than 1う000employees

，

have already introduced main-frames..

On the other hand

，

there are alsoabout 40% of JUSs and JUKs which have not any plan introducing them for business purposes yet. Those companies mostly belong to smaller companies in sizeわ (Thenumber of

-75 Cost Management in J apanese Companies in the U.S.A and th巴U K 253 Table3-1 Introduction of main-frame computers Q d ‘ ， f 1 3 1 1 1000% O 0 0 0 JUlくs 442% lG..3 0 395 0 JUSs 438% 79 311 427 22 Main-frame cOlllpulels Aheady intIoduuてl Partly intloduuxl Planned No plan Unknown 2iq ， U 今 、 M d 斗 Akd JUSs(n

=

89)， JUKs (円=43)， JPCs(口=557) 0伍ceCOlllputers 3.L2

As to0伍cecomputers

，

similar phellomena can be seen to main-frame computers.. Table 3-2shows that more thall 1/4 have already introduced o伍ce-computersboth in JUSs乱lldJUKs.. 1n JPCs

，

all companies have

There are also another already introduced them for business purposes

1/4 of JUSs and JUKs whiιh have partly introd町 ed0伍cecomputers On the other hand

，

there are about 40% of JUSs and JUKs which have no plan to introduce0伍cecomputers.. JUSs alld JUKs are on the way to organise their network alld computer systems for their business systems

，

because they started operations of their overseas plants comparatively in recent years Table3-2 Introduction of office computers JPCs 1000%

。

O O O JUKs 279% 256 46 419 0 JUSs 281% 258 4..5 393 23 Office computers JU α ， J U u v λ d 山 口 、 d ト ぃ 0 1 I -u t -v ι U A u n w d y 問 均 同 日 誌 は 即 P 日 u h ね h o 凶 A P A P A N U -ょ っ 白 つ A V バ 三 に リ JUSs(n= 89)， JUKs (n= 4:3)， JPCs(口=557)

254 Kagawa Universzty Economzc Review

76

Micro compute1's

Last1y

，

the case of mic1'o computers is showed ill Tab1e 3-3.. In case of micro computers

，

llearly 80% of JUSs and JUKs have a1ready 01'part1y illtroduced them fOI their business purposes.. Evell though there are 15% to 20% of JUSs and JUKs which have 1l0t ally p1an for using them yet(2)

3.L3 Table3-3 Introduction of micro computers JPCs 1000% O 0 0 0 JUKs 442% 349 46 163 O JUSs 438% 326 1.1 202 2.3 Micro computels A!teady intloduced Paltly intlOduιed Planned No plan Unknown 12345 JUSs(n

=

89)， JUKs(口=43)，JPCs(n

=

557)

Database systems on main-frame computers

In JUSsぅthereare 26 companies (23..0%) which have a1ready intro

-duced database systems (DBSs)

，

and there a1'e 12 companies (13..5%) which have part1y introduced DBSs.. On the other handラthereare 48

companies (53..9%) which have not a町 planto introduce DBSs“

main fie1ds which introduce DBSs are as follows; sales management (76.3%)

，

financia1 accounting (73..7%)ぅinventorymanagement (684%)

，

production management (65..8%) and cost management (63..2%)

In case of JUKs

，

there are 12 (27..9%) companies which have already introduced DBSs on mainframes.. There are 7 companies (16..3%) which have part1y introducedぅthereare a1so 23 companies (53..5%) which have

not any plan yet.

The main五eldsi山nwhich they have a1readyir凶1式troduceda叙rea剖，sfollows:

i

山nver

managemer叫1比t(6ω8

川

.

4

%

)

，

う

∞

Cos幻tma制n胤ag伊eme凶 (684%)a凱J1吋dsales mallagemellt (474%).

The 3..2 Database systems in JUSs and JUKs

255 Cost Management inJ apanese Companies in theU. S A and theU. K -77ー

3.2.2 Database systems on 0伍 凹 C0111pllters

When it comes to DBSs on 0丘icecomputels in.JUSs

，

DBSs have been 1ess introduced and it is 33..8% (already introduced -14..6% ancl part1y -19..1%)“ There are a1so 57..3% which have auy p1an to introclllιr

DBSs.. The main fie1ds which iutroclll(巳DBSsou of五cecomputers are

as f 叫1ows; illventory ma凶 gemeut(56.7%)I 五fi山ni凶凶eU川以K:凶laa札1a以〈仁牝1

a

ω.n吋dp戸rodu昨ctionma創u凶ag酢eme引1凶 (46.7%)

1n case of.JUKs

，

there are 6 cωompaω組山nlle白日 (14..0%) wh山1C仁ch

i

出n凶ltroduc閃edDBSs on mainframes. T1悶 eare 6 companies (14，.0%) which

have part1y introducedうthereare a1so 29 compallies (67.4%) which have

not any p1all yet

The main fie1ds in which they h孔.vealready introcluced are as follows:

purchase management (50%)

，

productiou ma凶 gement(50%)

，

aud sa1es

management (50%)

3，.2..3 Database systems on micro computers

1n case of micro computers

，

there are 19.1% which have a1ready in -troduced and there are 22..5% which have partly introduced in.JUSs There are a1so 48，.3% which have any p1an to illtroduce DBSs for busi

-ness purposes十 Themajor areas which have already introduced DBSs

are personne1 management (54.1%)うfiilancia1accounti時 (43，.2%)

，

pro

-duction management and sa1es management (37.8% respectively) In case ofJ.UKs

，

most companies (78..6%) have not a町 p1allto illtro

-duce DBSs fOr business purposes yet，. There is ollly Olle compally which

has already introduced alld there are 2 companies which have part1y introduced， The main fie1d in which they have a1ready introduced is

-78- Kagawa University Ewnomic Review 256 4. Production systems

This c:hapter dea1s with advallced tecllllo1ogy suc:h as fiexib1e m孔n11

-facturing systems (FMSs) a凶 Iぬoticsfor production

，

product 1ifecyde

，

production systems

，

product portfo1io ill.JUSs and .JUKs Those e1e -ments are essentia1 prerequisites for cost management systems

，

because they are ve1y basic fac:tors for manllfacturing companies

，

espetial1y in the era of high-variety alld 10w-vo1ume produ:ction

4.1 FMS and lObotics

FMSs and robotics p1ay a very important 101e for high-variety and 10w-or medium-vo1ume productions. Because today consumer's needs become diversified and individualised.. Manufacturing companies are re -quired to adapt such a situation

4.L1 1nstalling FMS and robotics

Current situation of installing FMSs orjand robotics in.JUSs alld .

JUKs is showed in Tab1e 4-L 4L6% of.JVSs have a1ready introduced and there are another 11.2% of.JUSs which are planning to install them..On the other hand the1e are a1so 43.8% which have no p1an to introduce.. 1n case of.JUKs

，

approximate1y 70% have already introduced FMSs orjand robotics.. There are 28.2% gap between twoド.JUKsuse FMSjrobotics much m01e than .JUSs. This may be derived from the di妊erenceof in -dustrial structure between .JUSs and .JUKs. Because .JUSs are shared on1y 58.17% by machine industry

，

but it is 79..07% in.JUKs. The1e is more than 20% gap between the two and .JUKs are much more machille -industry oriented than .JUSs. 1n machine industry

，

especially home e1ec -tronics and automobi1e produ:cersぅtheyuse printed circuit-board (PCB)

257 Cost Management in Japanese Companies in the U. S. A. and the U K '-79ー

Table 4-1 Introducing FMS or/and robotics JUSs JlJKs ︿ ︿ ，e u l ' d ︿ l i l -r1111v ' 出 u m u m u t E 1 1 五 日 P A U ︽ J } h u B_凶 0 H APNU

i

-A 0 4 今 、 υ A a 416% 112 4:l8 ;34 6U 8% 116 186 0 JUSs (n= 8U)， JUI¥s(口=43) The figllres in the table indicate which ins(all any 01 FMSs， lohotiくsand FMSs & 1仙ot川 illj)01 2)

4..1.2 Applied fields of FMS or/and robotics

Let us review applied fields of FMSs or/and robotics in two countries by Table 4-2" In JUSsぅtotal (final) assembly shop sh紅 白 432% and

ranked the first..The second is sub-assembly shop alld the score is 37.8%，

Press shop and machine shop gain 32

.

4

%

respectively and are ranked the 4th" Welding shop and packing shop are ranked next to them and each gains 27，0 % respectively

Table 4-2 Applied fields of FMS or/and Iobotics Fields JUSs JUl{s FSPvMpInvuIaEnadseεbnscdkdheasimsllclasnthsgggeieaoomdse8np hmhlboosolbphp p yly ms shop 432% 233% 5 2 hop 378 2 53.3 l 3 324 3 200 6 4 324 3 16.7 7 5 270 5 300 2 6 270 5 133 8 7 spectlOn Sl10p 243 7 267 3 8 PallItinillgg osI ilfoup ll 189 8 267 3 9 Cast.ing 01 funding shop 108 9 6.7 11 10 Pla.stic eXlIdation shop 81 10 13.3 8 11 Metal plocessing 27 11 67 10 JUSs (n

=

:37)， JUKs (n

=

:30)

80ー Kagaωa University E(onomiじReview 258

4.2 pzoduct lifecycle

1t is often said that product lifecycle has become shorter alld shorter ill r ecellt yea四時

τ

'able4-3 exhibits the product lifecycle of.JUSs

，

.JUKs

and .JPCs

The product lifecycle of.JUSs is lo(、atedin the middle of the two

(

.

J

UKs aud .JPCs). The plO小 川lifecycleof.JUKs is the Sh01 testうbecause

.

JUKs are maillly consisted of assembly illdustry

，

alld the products of assemblers are the shortest lifecyde of a11 products.. Another reason is that most .JUKs were establishecl allcl began operation mOIe recent1y than JUSs clid.

The time-series analysis of.JUSs indicates that product lifecycle of 3，，-，6 years has been increasing

，

because the length of.JUSぶoperationin

the US has become longer as the time goes“

1n case of.JUKs

，

genera11y speaking

，

proclucts of 'less than 3 years' shares 74..2% in 1984 and 791% in 1989.. The plenty of products which are p10duced in.JUKs are comparatively new

，

ancl fo11owing reasons will be adoptecl for; 1) many .JUKs began operation more recently than JUSs 2).JUKs' industrial structure is much more assembly-orientecl than JUSsぅ

as inclicated in Table 2-1.. As you can recognise

，

the product lifecyde has become shorter ancl shorter in assembly industry

，

especia11y in auto -mobiles ancl home electronics Table 4-3 Product lifecycle Less 3 years 3~6 years More 6 years JU

叫附

j 560% 17.0% 270% JUSs(1989 513 239 248 UKsjlm 742% 12A% 133% JUKs(1989 791 119 90 JPCs (1986) 210% 208% 582% JUKs(n= 21 (1984)， n = 40(1989))， JUSs(n= 54 (1984)， n

=

79 (1989))， JPCs(n

=

513 (1986)) SOUIce: The data of JPCs i b$ased on Miura et al [1986]

259 Cost Manag巴mentin Japanese Companies in the U S.A. and theU K

-81-4..3BCG ?LOduct ?ortfulio Matrix

Accordillg to product portfolios by BCG (t h(OBostOll COllsultillg

Group)

，

prod町 tlife仰 山ω山1lw divided illtO fom 1ηsrowth rate of

market alld competitive pOSitiOll: st孔IS

，

questioll marks

，

cash cows alld

clogS(3l

In JUSsぅthereare about 30%ぐomparw唱 of'stほ うproductsうthesecond

is 'dogs' which shares about 28%

，

the third is '(a5h (OWゲwhichis 24%

孔lldthe fourth is 'questioll mmks' which h札veabout 189もofa11 sales

arnoullts.. 'Stars'

+

'cash cows' 1コe<:onleSlnore t h札口54o/cof sa1es allcl the

resu1t illdicates that 54% of a11 companies are well opelated

，

but there are a1so 27% which can not doing business we11 in the US..

In case of JUKs

，

there is a phenomenon sp1it into two states: one is suggested by 'starピprocluctswhich share 41% of a11 products ancl the other is by 'clogs' products which occupy near1y 35%.. This means that JUKs are dividecl into stars and clogs from the point of profitabi1ity. For examp1e VCR ancl the re1ated parts be10lls to 'stars'

，

because the growth rate of VCR is high in the UK allcl on1γJapallese VCR manufacturers can enjoy the techno1ogy of VCR On the other hancl TV set producers be10ng to 'dogs¥because there are strong TV manufacturers

，

for ex -amp1e Philips and Thomson in Europe.. At the same time a11 Japanese TV set makers have operatecl in the UK in orcler to acquire know-how ancl techno1ogyう therefOreevery compally call llot share strong market position“ Table 4-4 BCG product portfolio JUSs JUKs mean s.d mean sd 3028% 3844% 4100% 4441% 23QCamshst1011 1₂7₄7₀₄0 ₂1₄7₀70_{4 1}8₅₉3₄6 2₂₉3_.4₁2₂ 4) Dogs 2798 27 98 :34G9 4098 JUSs(n= 50)， JUKs(n= :3G)

-82- Kagawa Unzversi.かEconomiιReview 260 4.4 Production metllOds Proclllction methocls ale Olle of pre-requisite cOllclitioIlS for builclillg cost mallagemellt systems.. This sectioll reviews six asp紅 白ofpr oclll( tiOll methocls; techllology

，

procluct market

，

procluct variety

，

plOduct vo11llne

，

procluctioll process

，

alld plocluctioll management. 4A..lTechllological characteristics of illdustry From the aspect of teclmological features of illclustryぅtheprocluけ1O1l methocl is diviclecl into assembly productionぅ mechallicalprocess P

lO-duction

，

and chemicaI process production.. JUSs are occupied 57.3% bγ assemblers

，

24..7% by mechanical process proclucersぅancl13..5% by

chem-ical plOcess proclucers..

In JUKs assemblers share 79..1% and there are few mechanical pro -ducers and chemical process proclucers. In JPCs assemblers is 44..0% of a11 JPCs These figures inclicate fo11owing facts: JPCs are more assembly-oriented than American companies (USCs) ancl British com-panies (UKCs) by my 1邸 tsurvey(4) Comparecl with the figures of JPCs

，

which centered on assemblers

，

JUSs and JUKs have iuclusttial structure of assembly-orientecl 宝'able4-5 Technological characteri::;tics of industry JUSs JUI{s JPCs 1) Assembly ploduction 57 3% 79 J % 440% 2) Mechanical plOcess production 24 7 93 265 .3) Chemical proιess plOduction 135 2.3 205 4) OtheIs 113 9.3 90 JUKs (η= 43)， JUSs(n= 89)， JPCs(n= 513)

261 Cost Management in Japanese Companies in the U S.A and th巴UK. -83

44..2 Product mar1ωts

The feature of product markets will be reviewed here.. Which killd of production method is beillg illtroduced

，

prodllctioll toOlder illdustry

(PTO) or productioll to stock illdllstlY (PTS)? Talが 4~-6 ill品 川 何 that .

JUSs are the most PTOべniellted孔rllOll色t1nee: PTO share日65.2%of

.

JUSs

，

alld it is 58.1 % ofJ.UI-':s aucl 46.8% of JPCs. This g孔PλlllOUgt hr仰

c01l1d be exp1ailled by the followillg reaSOllS. JUSs allcl.JUKs are euga色ecl

in on1y mallufacturillg activities ill mauy casesう 礼llclthere注re孔lsom<tlly

illclepellcl巴ntsa1es subsicliar ies (JSSs) acconlillg to my intervieV¥刊urveyto

JUKS(5) There are many JUSs aucl JUKs which mauufacture Ploclucts from the orcler of JSSs“ This is oue of the main reason for increasing

PTOs of JUSs ancl.JUKs in many cases comp孔reclwith that of JPCs

In case of JPCs few companies procluce proclucts basecl on the orcler of JSSs" Table 4-6 Product market JUSs JUKs JPCs Production to order industry 652% 58.1% 468% Production to s(ock industry 438 465 509 Others

。 。

2.4 Unknown 1 1 3.2

。

JUSs(n==89)， JUKs (n==43)， JPCs(n==513). There are some companies which circled plural items 4“4..3 Variety of proclucts Itis often said that high-variety procluction of proclucts is the maiu stream in J apanese manufacturing companies十 Varietyof proclucts is an

important aspect fOl procluction mallagement.. A clear result Oll this

question cou1cl be obtainecl from Tab1e 4-7.

Japallese markets have the highest variety of proclllct items

，

thelefore JPCs are rallkecl the first

，

.JUKs are the secoucl aucl.JUSs出 尽 10west

262 variety of products

，

so-called mass崎productionorIented.. This might be

refiected on variation of market structure.. JPCs are required to sell their Kagawa Universiか EconomicRevzew

-84

products not only in domesti:cmarket

，

which has the most competitive and individualised character in the world

，

but also export them to many (According to my interview to a representative machinery company

，

it exports products to more than 150 cou山 ies)

countries

Those ar♂

the reasons why JPCs are required to adapt to higlトvarietyproduction

In case of JUKsぅtheysell products not only to the UK but also to

There are more than 15 countIIes in Europe and each countrγhas its own t剖 teぅsafetyregulation and e

t

c

.

This may be one

of the reasons why JUKs are ranked the second.. Another reason is that JUKs are smaller in size and they can not cope all needs of consumers in Europe from the point of cost-volume-profit (CVP)“Therefore JUKs are

required to focus their production on some important models and JSSs in Europe import other ones from JPPs

European c山ountries

In case of JUSs

，

they have huge domestic market in the US.) from where mass-production and mass-sales system was originated.. Evennow the US market is most centred on low-variety production and sales com馳

pared with other markets such as in Japan or Europe.. Of course it has been gradually infiuenced by Japanese style of production and marketing in the 1980s Table4-7 Var伐材ofproducts JPCs 744% 119 12..7 LO 0 JUKs 465% 395 163 O O JUSs 393% 281 303 1 1 23 High-variety ploduction Medium-variety Ploduction Low-variety production Others Unknown ー ょ っ “ q d a a z v b JUSs(n==89)， JUKs (n==43)，庁Cs(n==513)

-85ー

Variety of proclllct vo1mne

Variety of procluct volllme is a1so a Sigllificallt e1elllellt Whell cost mall -agemellt prob1ems are reviewecL Tab1e 4-8 shows that JUSs are m11<h

higher vo1ullle procluctiollOlielltecl仁ompareclwith those ofJUI~s alld

JPCs JPCs are the 1owest-volll111e produιtiOll illtellsified amollg t hree; 10w-volllme proclllction of JPCs is 45.7%

，

the ratio ofJ.UI":s is 34..9% alld that of.JUSs is 32.6%.. Why have JUSs illtellsifiecl higher-vo1ullle prodllc -tion than ot1問 日 ?The same reaSOll may be app1ied des口ibedabove (in

44..3). The US market has a 10略 h山iおs坑山t<向ωO凹)ly0吋f m乱 砕p

sa1es a邸sAmne工佼n化c為湖&凱nc

∞

ompa凱n斗iesanc仁dci比凶tiz伐en凶st乱ake王匂e1比tfおorg伊I組a正L紅凶n叫1式te吋d..Before two Cost Management in J apan巴seCompanies in theU.S.A.and theU.K

263 4.44

oil crises in 1973 and 1978

，

JUSs c01l1d also elljoy mass-market effect as

US companies did.. But even in US marketうith耐 graduallydrifted from

mass-market to variety-products m叫 ketorientedう becauseconsumersう

tastes have shifted to higher-variety and have been illdividua1ised even in American market Table4-8 Variety of product volume per. model JPCs 457% 23.2 284 28 0 JUKs 349% 395 256 23 0 JUSs 326% 371 348 0 1 1 Low-variety production Medium-variety production High-variety production Others Unknown 12345 JUSs(n

=

89)， JUKs (n

=

43)， JPCs(n

=

513) Production process The features of production processesぅwhichare classified into five by lot-size or batch-size of each proclllct: single unit proclllction

，

small -lot procluction

，

medium-1ot productioll

，

high-1ot production ancl mass-production.. JPCs are the most small-1ot productioll oriented

，

ancl the share of two items (sing1e unit

+

small-1ot) occupies肘 arly70% (67. 7%)ラ 44..5

but JUSs share 573% and .JUKs do 58..1% respectively

smalllot production (single unit

+

smalllot) of.JUSs alld.JUKs isλbout

10%

less than that of.JPCs. The main reaSOll of this fact can be guessed as follows“ Both JUSs alld JUKs are much smaller ill compally scale thall

JPCS(6) alld ill order to secure孔 仁 巳rtaillvolume of lot-size

，

they lleed For example， ll1ally.JUKs' mallagers reportecl the followillg story.. In JUKs they target to sell theiI products llOt only in UK m孔rket but also in other Europeall countries.. Therefore if JUKs challge shifts (setups) of procluct lines based Oll the di丘erencesof coulltries (because there叫 edifferences of industrial standardうsafetyr egulation

，

broadcast

-i時 methodsand etc..)

，

the number of set-ups becomes very freq肝 ntalld

it is very inconvenientうtime-consumingand cost-raising.. Consequelltly

JUKs shift their product-lines basecl on product models alld make millor changes of setups (shifts) by the di旺erencesof destination coulltries.. 264 The share of Kagawa University Economic Revzew ← 86ー some device Table4-9 CharacteI'Istics of production process JPCs 197% 480 262 87 43 16 O JUI<s 93% 488 302 93 47 4..7 0 JUSs 146% 42..7 32.6 11.2 90 12 1.2 Single unit production Small-lot Ploduction Medium-lot plOduction High-lot Ploduction Mass production Other productions Unknown t i っ “ 。 O A 1 w h υ ハ り η t Production management

The way of production mallagement can be divided into three; batch order system

，

just-in-time system (JIT) ancl material requirements plan -山 時 system(MRP)

Generally speaking

，

JUSs and especiallγ .JUKs concentrate on MRP

，

allcl J

:

p

Cs use maillly batch orcler system for procluction managemellt

JUSs(n==89)， JUKs (n= 43)， JPCs(n= 513)

-87 There is not much di丘eH'llceof illtroducillg JIT amollg t hp three agaillst our expectation(7) Cost Management in Japanese Companies in theD..S A and theD.K 265 Table4-10 Characteristics of production management .JPCs 477% JLl 358 5.3 JUKs 37.2，'fi! 11.6 605 0 0 JUSs 348% 12 1 46 1 6 7 34 Batch01 dCl systelll Just-in-time (JIT Ol KANBAN) Matelialle中 I l 印 刷Jt

，

1山11111時 (MRP) OthelS Unknown - ょ っ ρqdA1vu Multiple answelS JUSs(11= 89)， JUK

，

(口=43)， JPCs(口=486) Cost structure

5

.

This section reviews cost structure of product cost and other sales expellses..

Manufactur i時 coststructure (present)

Table 5-1 shows present manufactur ing cost of JUSsぅJUKsalld JPCs

The direct material cost (DMC)of JUKs is abo川 10%higher than those

This may be resulted from that JUKs have more assemblers than other two and JUKs are not localised as much as other

Manufacturing cost structure 5L1 5..1 of JUSs alld JPCs.. two. Direct labour cost (DLC) of JUSs is ranked the釦st(13..7%

ト

the second is JPCs (12.3%)ぅthelast is JUKs (10..5%) in 1989. The ratio of

labour cost in JUSs has been gradually decreased for thesp fiもeyears

The expenses for subcontractors (ESC) are 11.1% ill.JPCs

，

but they ale L4% in.JUSs alld they are 3..3% ill JUKs. ESC ofJ.USs. and .JUKs ale in very low level引 Becausethe main IeaSOll is that it is very di伍cult

88- Kagawa UniversiかEιonomicReview 266 to fillcl goocl supp1iers ill America allcl Britaill allcl it is a1so very clifficu1t to procure llecessary parts alld components from 10ca1 supp1iers ..

Depreciatioll eXpellSeS (DPE) of JUSs alld JUKs are much higher thall .JPCS This is 1ed from the fact that they have been expalldillg their 10ca1 factories for 10ca1 procluctioll JUSs allcl .JUKs neecl mllch more illvestmellt for their factories allcl as a resu1tう DPEof JUSs礼lld

. JUKs figures 01lt 1arger ratio than that of JPCS(8) Table 5-1 Manufacturing eost structme (pr'esent) Cost structure JUSs JUKs JPCs 1984 1989 1984 1989 1986 1) Direct material cost (DMC) 543% 570% 573% 671% 570% 2) Indirect material cos( (IMC) 42 3 7 35 24 23 3) Ditect laboUl cost (DLC) 154 137 149 105 123 4) Indilect laboulwst (工LC) 7 7 64 31 33 60 5) Expenses fOl subcontractOls (ESC)

o

7 14 1 6 1 7 11j 6) Depreciation expenses (DPE) 73 74 88 63 3 7 7)Othel expenses (OTH) 103 103 108 86 77 Total 1000 1000 1000 1000 1000 JUSs(η= 76 (1984)， n = 85 (1989))， JUKs(η= 14 (1984)， n = 38 (1989))， JPCs(n = 486 (1986)) 5.1.2 Manufacturing cost structure (future)

Then how about the future ratio of product cost? The characteristic trencl of JUSs is as follows:2/3of who1e companies think DMC will clecrease in the future (decrease -29 companies / increase -17 companies

，

the w町 ofexhibit is the same below) As to ESCうlnsome meansうJUSs

consider that increasing ESC is very important e1ementうbutat the same

time ma町 companieshesitate to increase it(30 companiesァ sameヲ

4-clecreaseラ8-increa吋 Because the environment of procl.山町 partsor

components has been graclually satisfactori1y proviclecl by 10ca1 ancl JUKs parts companiesヲbutJUKs have not attained the satisfactory 1eve1 of

267 Cost Management inJ.apanese Companies in the U.S. A.and theU K. -89一一

to reso1ve those plOh1emsぅtheconsolidation of infra-structure sllch as

suppliersぅtrallsportlletwork

，

10c<11 support and etc.is not fully arrallgecll

γe叶 eveni凶nth犯eUS. DPC iおss叩p1恥i比ti凶lltωotwo叫;山 :1町ea耐se

ロ

(

25C(叩 L叩pa但 削n山11e伺

吋

S

)

札ω仙n

d

伽e舵 叩CI町a剖se(2幻2cωompal山州es吋日)

In case of JUKsう astrikillg featnre is that ESC and DPC are dθι

nite1y c:onsidered to illCIease ill the near fllture in most compallies.. But other items such出 DMCラIMG，DLM alld DLC are consicler吋 variedill

compallles.

5.2 OtheIexpenses

5..2.1Other expenses (present)

The f叶10wingexpenses will be a1so reviewed by Tab1e 5-2:genera1 & administrative expenses (GAE)

，

selling ex功penses(SLE)

，

finallcia1 ex -penses (FNE)

，

R & D expellses (R&D) and capita1 investment (CPI)“

Table 5-2 Othel expenses (pl.esent) Ot her expenses JUSs JUKs JPCs 1984 1989 1984 1989 1986 1) General& adm expenses (GAE) 861% 869% 9.78% 697% 712% 2) Selling expenses (SLE) 842 7 28 54i 492 874 3) Financial expenses (FNE) 351 359 183 401 225 4)R & 0 expens田 (R&D) 261 225 092 141 281 5) Capital investment (CPI) 1425 21 14 3084 1611 481 JUSs(n

=

37 (1984)， n

=

66 (1989))， JUKs (n

=

13 (1984)， n

=

24 (1989)) JPCs(n

=

368 hom 1) to 3)， 1l

=

478 in 4)， and n

=

461 in 5)). The ratio is 'to annual sales amounts' (turnover) 5..22Other expenses (future)

Then the characteristic futme of other expenses in .JUSs will be ex -amined in this section.. Two items of R & D aucl CPI are contemp1ated as the e1ement of increase in the future by most compallies. R & D is a1so regarded as increase item in the futUIe in almost a11 C01叩 anies(2

90- Kagawa Unzve.rsztyEwnomZG Review 268

decrease / 24 -illCreaSe) This will indicate that R

&

D localisatioll is an essential factor fo1'transferring teclmologies

，

mallagement softwares alld adapting for consumer's tastes of the US and this will 1ead JUSs to become rea1 Ame1'ice111compallies.. GAE is acknow1edged as d θ似肘(仁:re伺t礼tS肘e

by 2/3 0吋fJUSs爪)but they 1

FNE

In case of JUKsぅtheyhave fair1y sim日ardrift with JUSs: all.JUKs

regard as R & D will surely illcrease ill the futnre

，

CPI will a1so ill<TeaSe ill

2/3 of.JUKs (6/10). GAE and FNE are items which will decrease (GAE: 7/2ぅFNE:12/7) with the same as JUSs. SLE 1蹴 differentopillions about

the future

5..3 Inventory assets

Inventory 01'stock of a company a1so becomes an indicator how com-panies are well operated

，

because decreasi時 11附 凶ory(raw叩 ateria1sラ

wo1'k-in-prog1'ess and finished goods) is essentia1 for companies to gain competitive edge and increase higher productivit

y

.

.

Therefore manγ白ms are enthusiastic to decrease i町 entoryusi時.JIT(just-in-time) not JIC

(just-in-case) systems.. The resu1ts are followed in Tab1e 5-3.. Tota1 in -ventories (raw叩 aterials

+

WIP十五nished)ぅthoseof.JUSs

，

.JUKs ancl

.

JPCs have gradually decreased in these five years“ But abso1ute amount

of tota1 invento1'Y is the 10west (1942%) in.JPCs; JUKs ranked the s喧c

-ond (23..05%)叩 dJUSs is the highest (46..71%).. This may indicate that

.

JPCs are most high-variety 10w-vo1ume procluction oriented in the severe market competition

，

llext is.JUKsぅand.JUSs are most mass-productioll

and mass-sa1es orientecl acco1'cling to tota1 inventory assets.. This a1so re -f

l.ects the cli妊erenceof market competition among three regions

，

because

.

269 Cost Management in Japanese Companies in theU. S. A and theU K -91ー

export tol1lany ( 川llltlies. European market is segmentecl into manγby

the reg1l1atioll

，

ecollomI<b礼lliers

，

society allCl c1l1ture.. Therefore JUKs

are for何 clto acljust to higher-variety market than JUSs.. JUSs can make

products for 1mge clom伺ti(US consurners ancl markEぶにはlUSJUSs (札口clo l1lass-procluιtioll for A mほicanclomesticl1larket indllcling C札口孔d礼 孔ncl

Mexico

Now 1et 100k at the cletails frOl1lthe point of productioIlprocess-wise

of invelltOlY: that is to say

，

those of raw-materia1s

，

wor1←in-progless ancl

proclllcts

First

，

inventory of raw-mat喧ria1sill JUSs is about 21% ancl that of

JUKs is about 15% both in 1984 ancl ill 1989.. There is no clifference between two periocls. 1n JUKs

，

there is twice asl1luch as JPCs ancl in

JUSs there is nearly three times asl1luch as JPCs.. One of the reasons

is the above mentionecl.. The other is purchasing ratio from JPPs ancl the 1ength of transportation periocl of those from Japan to Great Britain neecl to be taken into consicleration as far as parts01 raw-materia1s to

JUSs or JUKs have pUIchasecl from JPPs ancl they use free on boat (FOB) b出iS(9)

Next is inventoIIes of work-ir印 rogress(W1P)うanclWIP is similar be

-tween JUKs ancl JPCs

，

ancl that of JUSs is twice as much as JPCs.. Two contraclictory reasons can be consiclerecl. One reason is that production 1ines in JUKs are re1ative1y shorter than in JPCs

，

because they are on the stage of semi knockclown (SKD) or comp1ete kωckclown (CKD) ancl they can not produce a11 ill the UKうbecauseJUKs have not been fu11y

10ca1isecl to the UK yet..The other opposite reason is that JUKs have mOle stock in each stage than JPCs but proclllction lines of JUKs are

relative1y shorter than those of JPCs.. Two reaS011S clescribecl above (011 -traclict each other

，

ancl they resu1t i11 thE当smallλmOll11tof WIP. ThereforEふ

-92 _{Kagaωa UniversilyE.正onomicReview 270} as JUKs produce most of process here in the UK and obtain most of parts ill Europe

，

the ratio of WIP will become longer than now ..

Then how about the case of JUSs? As 1 mentiolled above

，

WIP in -velltory of JUSs is twice as much as that of JPCs or JUKs.. The followillg reasolls inftuellced on the inventory of JUSs: operatioll years

，

industrial stru<、tureof JUSs and the illftuellce of Americau style of mallufacturingぅ

so called mass-production and mass-sales systems

Then inventory of finished goods (products) in 1989 is 14.25% in JUSs

，

4..67% in JUKs and 5..74% in JPCs respectivel

y

.

Whell we compare products among JUSs

，

JUKs and JPCs

，

the following di旺erencemust be kept in mind.. In case of JUSs and JUKs there are many manufacturing companies which have sales subsidiaries independently with the same JPPs.. Thus they usually manufacture products based on the order of the same parent-affiliated sales companies.. Then the inventory of finished goods of those JUSs and JUKs become much lower

，

because they make products based on the order of JUSs and JUKs(Iu)

Table 5-3 The amounts of inventory assets Raw-materials WIP Finished Total 11Ssjl

内

2L09% 1180% 1752% 5042% JUSs (1989 2150 1096 14.25 46.71 Ms?984j 1512% 522% 9.99% 3033% JUKゾ 1989 1481 357 467 2305 JPCs (1986) 792% 575% 575% 1942%

*

1町 entoryratio= (Inve凶ory

I

annual sales x 100). One extleme data (1989) of JUKs was excluded flom calculation JUSs(n = 44 (1984)， n = 71 (1989))， JUKs (n= 28)

271 Cost Managem巴ntin Japanese Companies in theU S A.and theU.K -93ー

5.4 Prodll川iOIllead-tilllθ

Let us r巳viewillvelltOl y hom allother aspect

，

prodnctioll lead-time

This also refiects illvelltory lell色th; the、lOllgerlead-time is

，

the more compallies have invelltory

The trelld of lead-time both illJ.USs and ill.JUKs has become shor tθl and shorter..1n 1989うitisλbout 15 daγs shorter ill.JUKs than in.JUSs引

Table5-4 Production lead-time f WOlkill)(ぐlaysbasis) 1984 1989 Raw-mats WIP Finished Total Raw-mats WIP Finished Tota! JUSs 4739 2581 3867 11187 4093 21:32 3:399 9624 JUK5908 1900 :3664 114 72 :37 84 2227 2128 8139 JUSs (n= 44 (1984)，η 7 5 (1989))， JUKs (n= 12 (1984)， n = 37 (1989)) Raw-mats is law-mate!Ials inventOly， WIP is wOlk-in-plOgless inventOly，市nished' is finished plOducts inventOlY and 'total' is tolal inventOly 5..5 Overhead abSolptioIlbase

Overhead absorption base (OAB) is essential for al10cati時 overhead cost to each product.. There are several ways of allocating overheads.. The consequence is in Table 5-5.. The most frequently used method is direct labour hours (DLH) in.JPCs (50%)ぅinJ.USs (42 7%) and .JUKs (44..2%)

and it is ranked the second in UKCs (33%).. The similar measme with direct labour homB coincide with direct wages percentage

，

because this is multiplication of direct labour hom with wage rate per hom..

I

t

shares 13..5% inJ.USs

，

23.3% in.JUKs and 7% in.JPCs. 1n UKCs it is first ranked and shar es 34%“ Those two are the main me乱SUIemellts. The other

character is that unit of output is ranked the secolld in.JUSs (25..8%)ヲ

23.3% in.JUKs and it is the third in .JPCs and 4th in UKCs. Those three described above are main measu日mentsfor overhead absorptioll base

94- Kagawa Universzfy Ewnomzc Revzeω

Table 5-5 Overhead absorption base

OAB JUSs JUKs JPCs UKCs 1) Dired labollr hOUlS 2Dilect wa11且0e1s1 pmEe11t a且e (DWP) 135 (3) 233 (2) 7 (6) 34 (1 3) Machine hOllrs (MCH) 12.4 (4) 93 (4) 12 (4) 30 (3 4) Units 01 output (UOP) 258 (2) 233 (2) 16(:3) 21 (4 5) Direc!Illaterials percentage (DMP) 7 1 1 i 1 1 11 ('j) 18('j 6) Prilll巳costpercentage (PCP) 56(7j70(5j21 7) Others (OIH) 9.0 (5) 9 3 (t/) 0 0 8) Unknown 9 0 (5) 4 7 (7) 0 0 (JUKsn

=

43， J.USs11

=

89， JPCsn

=

139， UKCs 11

=

67) The figures of . JPCs and UKCs are ba.sed on Yoshikawa [1989J '-' in the table indicates that there is no question item‘5) direct materials percentage' 6. Cost management 272

This chapter reviews manageriability of product costうmajorproblems

of cost management and main techniques of cost reduction and control

61 Managi碍 productcost(present)

Itis strongly emphasised to comprehend in what stage and how prod -uct cost is controlled..Ithas been pointed out that product planning or up-stream management (stages of prod町 tco恥 eptand design) has be

-come more important and essential for contemporary cost management in JPCs引 Accordingly

，

cases of JUSs and JUKs will be examined ill

comparison with JPCs in this sectioll(11)

6.1 1 Possibility of managi時 productcost (present)

The current status of mallaging product cost is showed in Table 6-1 1n JUSs the stage of 'product cOllceptうshares23..7%

，

'basic desigll' is

17.0%う'detaildesign' is 19..0%

，

'preparing stage for production' is 12..0%

-95-Cost Management in Japanese Companies in theU S.A.and the U K 273

produd planni

The possibility of managing cost川 pl孔nningis78.9%

product cost

in JPCs and that of JUKs is80%..JUS日正当mphasisecomparative1y the

This 1("出on

importance of manufactming stλge 01 st孔geof (0臼tcontlOl

may be explained that th<当日孔1('not lllany JUSs which h孔v e R & D

clivisionOI department in the USうandJUS白lelylIlostly on

R

&

D

<1nd

At the same time JUSs h孔venot been fnlly localised

basic design of JPPs

to the US yet that JUSs still impOlt parts or components f10m Japan

As a result of those

，

JUSs clo llot emphasise so llluch on clesign ancl Allother reason will be clerivecl preparillg for procluctioll陥 JPCsclo

from mass-procluction orientecl phe1l0mel旧 ofJU品川

In case of JUKs plannillg stages share807% and control stage gains 19.3% for managing procluct cost.. This shows that JUKs emphasise the importance of planning or cost reduction.. But at the same time there ale few companies which have

R

&

D

ancl basic clesign clivision in JUKS(12) Most JUKs undertake functions from detailed design to production ancl

Of COUIse there are a few big trust R & D and basic design to JPPs

JUKs which share up-stream functions such as product concept and basic clesign and work on the equal level with JPPs.

Table6-1 Possibility of managing product cost (present) JPCs 24.2% 212 17.7 15.7 21.1 JUIくs 214% 285 177 r30 19 :3 JUSs 237% 17.0 19.0 120 28 :3 Stages Product concept Basic design Detailed design Preparing fOl production Production - ム つ h q o n t k υ JUSs(n

=

58)， JUKs (n

=

2:3)， JPCs(口=431)

274 Managing prodnct <:ost in the fntme

Then how about the future trend of produd cost in JUSs and JUKs? The result is showed in Table 6-2 Product concept is the first impOIt礼nt

( 4..07)うbasicdesign is ra山 町1the seconcl (3.61)ぅcletaileclclesign is the

thircl (3..23)

，

preparation fOl pro山ctionis the fourth ancl production or manufacturing stage is the last引 ThisOI der is the s孔nleas the C(ise

of JPCs inclicated iu Table 6-2.

Kagawa UnzversZty Economic Revzew 96

6L2

This shows that JUSs have beeu礼lso

putting much emphasis ou product planning or cost recluction

Table 6-2 Manageriability of product cost (future) 1 ょ っ “ qdA 坤A M U JPCs JUKs JUSs Stages Product concept Basic design Detailed design Preparing fOl production Production JUSs(n= 58)， JUKs (n= 23)， JPCs(n= 398) We asked fOl the com -panies to put the number of impOl tance of 5 items The most impOl tant item in the future is 5 point added， the second is4， and the 5th is1. The average point was calculated together and divided by the number of responding companies

6..2 Major ploblems in cost mallagement

This section reviews main problems in cost management based on Ta-ble 6-3 1n JUSs

，

purchase management of raw-materials is rankecl the first (200 point) The seconcl important issue is quality control (L87) This is the same clrift as the cases of JUKs ancl.JPCs.. Relating to the sCOles of those two

，

the SCOle of purchase management in.JUSs is lower

But the point of TQC is shiftecl to the reversed The thircl ranked item is higher operation ratio (L73)

，

improve -ment 0I'yielcl ratio (L58) is the fourth

，

ancl the臼this replacement of

machines or equipment (L27) than other two cases

275 乙ostManagem巴ntin J apanese Companies in the U S. A and the U K -.97ー

Table 6-3 Major problems in cost reduction and control JUSs J Uh:s JPCs PQIhhIRH 出¥，h口mい1ee円1u1朋u雪1叩巨p似Ipa凶】dlhIIah制 肝lie1amt【 拙lay : zm凹eoCひ0悶 剛ucαnιitl刷山toιO叫a叩ilg(mYm凶lは川a川udtnuMM叫tdOdz凶Hぬo3u凶i80z州1 i H Bate ua 18 2 0 0 ( ((( i 295 228 2 、QC) 187 ( 2 1 67 2 1.72 2 3 158 ( 4 150 3 1.48 3 4

。

quijllllen( 1 27 (5 95 7 131 4 5 ，'1hel opela.lIon 1 a.t io 1 73 ( 1: 74 9 114 う Ra.tiona.lisation 01 design 86 ( 9 1 33 4 108 11eductionoi iadol yil expellsm 951 86 8 10よ 7 8 ShOl (a，'1e of laboUl tilll匂 5i (11 102 6 1 00 8 9 InventOl y control 124 5 71 9 10 Chan，'1e 01 law-ma(el ials 93 ( 8 57 10 68 10 11 Managementoi S1d1pupι liels 36 13 50 13 67 11 12 Rationalisilaltgl P10ιtion plOιesses 44 12 5211 66 12 13 Standaldisation of jobs 63 10 5211 44 13 14 StalldaldisilLltg opf Ioducts 31 14 19 14 37 14 15 Mana，'1ement of R

&

D 24 15 19 14 36 15 16 Oもhers 05 16

。

15 09 16 JUSs (n

=

84)， JUKs (n

=

43)， JPCs (n

=

509) 1st -5， う5th-1， points 乞(sCOles)jn

Those five items described above got more than 1 pointうalldthis is

conside日b1ysimi1ar drift with JPCs. (Of course tl日 間isa 1itt1e di狂erellce about the orders betweell JUSs and JPCs.)

Other activities which are regarded important are the fo11owing items: inventory co凶 01(6thぅ0.97).

，

reduction of factory expe山田(7thぅ(95)ぅ

change of raw-materia1s (8thう0..93)うandrationa1isati叩 ofdesigll (9thう

0..86)..

1n case of JUKs purchase managemellt of raw-mateIIa1s is the first ranked (2..28)

，

the seco凶 isqua1ity cOlltro1

(

1

.

67)

，

the third is improve-ment of yie1d ratio

(

1

.

50)ラthefourth is ratiolla1isatioll of desigll (L33)

孔ndthe fifth is illvelltory cOlltro1 (L24).

The similar prob1ems are amollg JUSs

，

JUKs and .JPCs.. Pmchase mallagemellt of raw-materia1s is the first importallt ill孔11ιoUlltriesぅb十

cause materia1 cost shares more th札口 60% of a11 product cost amollg

-98 Kagawa Unzversity E正onomzιRevzew 276

them.. Those items are most important and they ranked them as the first and the second. The di丘erencebetweell JUSs and JUKs is that the former emphasise on the subjects of production ma1凶gemen.tsuch

as TQC

，

ope1ation ratio and investment which are closely related with mass-production On the othぽ lmndJUKs are reqllired to adapt to v礼1

-iOlls marke.ts in Europeぅ thereforeit is necessary for them to adapt .to

high-variety and low-volume procluction.. They might have inftuenced011

the di妊erenceof major problems such as quality control and ratiOl凶lis<ト

tion of design

6.3 Major tecll11iques i11 cos.t reduction and control

1n the above section the major problems for cost management were reviewed.. Then what kincl of techniques are introducecl for cost recluction and control in JUSs ancl JUKs? 1s there any characteristic cli妊erence between JUSs ancl JUKs in cost management techniques?

The first ra此eclteclmique is b吋getaryplanlli時 anclcontrol (6..34 points in JUSs and 598 in JUKs) ancl this is the same order with JPCs

(

7

.

32). Buclgeting is the most important and essential tool for account山g

managementうanclit is only one methocl showing the inclex for evaluating

the company-wicle performance unitarily

The characteristic features in JUSs and JUKs (not in JPCs) are that accounting techniquesうsuchas stanclarcl costing and absorption costingヲ

are much more stressed in conventional cost management

，

are rankecl 2nd and 4th in JUSs

，

and 3rd and 8th in JUKs respectively. This could be understoocl as follows: The first reason is that Japanese-a缶liate dcompa-nies in foreign countries have not operatecl for many years yet ancl they have clevotecl to transfer their accollnting methocls for cost management techniques in.to J apanese-a伍liateclcompanies in the JUSs ancl JUKs

，

277 Cost Management in Japanese Companies in th

巴

u

.

S. A. and the U K. -99-for cost mallagemellt The secolld rea..'iOll is that JUSs are much mOle

mass-productioll & mass-sales systems orielltecl comparecl with other two cases as mentiollecl ill earlier prodllctioll systemsうtherefore.JUSs aH当 III

the goocl positioll to illtrodll((，以C01111tillgsystems fOl (ゆstIII札 口 礼geuwllt

The thircl is that巳vellill JUSs

，

which are expectecl to be most localised

to the foreigll coulltries (ill t his('出e the U山teclSt ates).) f加l1口1l1山11町l

R&ζD

activities

，

clesiglling are llot fll11y localisecl to the US yet alld mally of the fUllctioll are reserved in JPPs川 Thereforethe emphωis of

cost managemellt is apt to focus ou cost coutrolllot cost plalluing. This call be said to the case of JUlu. Therefore the score of cost engilleerillg ancl stanclarcl costing are quite contrastecl amollg JUSs

，

JUKs and JPCs.

Table 6-4 Majol'techniques in costl'eduction and control

MajOl techniques JlJSs JUKs JPCs 1) Budgetary planning and cont101 634 (1) 598 (1) 732 ( 1 2) Cost en邑ineelIng01 talget costing 3 32 ( 7) 4 32 ( 5) 482 ( 2 3) Company 4) Absorption costing 418 (4) 250 (8) 3.92 ( 4 3.41 (6) 301 (7) 3 74 ( 5 6) Standald costing 451 (2) 461 (3) 361 ( 6 7) Value enginee山gjvalueanalysis (VEjVA) 259 (8) 228 (9) 335 ( 7 8) Management by objectives (MBO) 439 (3) 434 (4) 319 ( 8 9) lndustrial engineering (IE) 256 (9) 3.46 (6) 201 ( 9 10) Simulation models 71 (10) 44 (10) 37 (10 12) Netwolk analysis (PERTjCPM) 25 (12) 0 (12) 14(11 11) Reglession analysis 29(11) 0 (12) 13 (12 13Mathematical pIogmmming17(/14)0((1211((13) ) 14Others 18(13)41 (11) 09 (14) JUSs(n = 84)， JUKs (n = :38)， JPCs(n = 506) 1st -14， .， 14th -L points =乞 (scores)x 10j14

-100十 Kagawa UniversiかEconomzιRevzew 278

7

.

Concluding remarks and prospects

We have reviewed the operations of JUSs aud JUKs hom several礼 会

pects in the above chapters

，

especially focusillg on managemellt pr州、tices

alld cost mallagemellt: JMPsぅillformatiollsystems

，

proclllctiolllllethods

，

cost struct.ure and cost lllalle弘gelllellt

JPPs have engagecl ill working harcler to trallsfほ JMPsalld cost lllall

-孔gementtechniques into.JUSs allcl.JUKs. Transferrillg them into JUSs

ancl JUKs

，

they have hacl variety of cli伍cultiessuch as suppliers prob -lems

，

clifference of worker's attitucle

，

society ancl culture

，

but they could resolve the clifficulties ancl made their act.ivities localisecl into the US ancl the UK to some degree.. 1n spite of those reasonsうtheyhave speedecl up

transplanting their factories into f白eigncountries after the Plaza Agree -ment in 1985 But it takes some more time for them to be localisecl ful1y illto the US and the UK

，

ancl to have citizenship as American companies or British counterparts.

Of course there are much clifference of management practices ancl cost management methocls in cletails in.JUSs ancl.JUKsぅbutthe overall

features of both J.USs ancl.JUKs have approximately similar clrift

，

as examined in the above chapters. This inclicates that.JPPs have the consistent policy to transplant factories for globalising their operations in the US ancl the UK.

This may be the first pilot research of cost management in.JUSs ancl .

JUKs

，

and the main emphasis of the paper resicles in revealing presellt management practices

，

cost managemellt of JUSs and JUKs ancl theII problems for the future statistical ancl interview researches川