Lean Production and Manufacturing Performance Improvement in Japan, the Uk and Us 1994-2001

This paper reports the findings of a longitudinal study into manufacturing performance, lean production principles and buyer supplier relations in the Japanese, US and UK automotive industries. A total of 26 first tier component makers in the three countries were subject to detailed benchmarking exercises in 1994 and in 1999-2001. In each exercise data on labour productivity and quality performance were obtained, along with a series of quantitative measures indicating the extent to which each plant conformed to ‘lean production’ principles. The results show that the Japanese plants improved their labour productivity by around 20 per cent between 1994 and 2001, whilst productivity in the US plants remained flat over the same period. All plants improved their quality performance during the period, but the Japanese plants retained their lead with an average external defect rate of 81 parts per million (ppm), compared to 111 ppm for the US plants and 416 ppm in the case of the UK plants. Measures of leanness in the supply chain (inventory levels, delivery frequencies and so on) should be sensitive to any weakening of the inter-firm relationships that have historically characterized the Japanese auto industry. These measures showed no evidence of such weakening, although qualitative evidence suggested that a polarization of the Japanese auto industry may be occurring under the influence of foreign capital, with independent firms such as Toyota and Honda (and their suppliers) retaining a stronger ‘Japanese’ character than their counterparts who have entered into equity relationships with non-Japanese companies. JEL Codes: L2, L6, M1