Business Administration

Lecture No. 1:
What Is a Manufacturing Company?

Takahiro Fujimoto
Faculty of Economics, The University of Tokyo
The figures, photos and moving images with ‡marks attached belong to their copyright holders. Reusingor reproducing them is prohibited unless permission is obtained directly from such copyright holders.

Class of Business Administration
Lecture Schedule (subject to change)

Drawn by Fujimoto in October, 2004

Business Administration of Manufacturing Company: Introduction
10/12 What is a Manufacturing Company?
10/15 Process Analysis on Development and Production
10/19 Case Studies on Process Analysis: Iwaya Porcelain, Organ Needles, etc.
10/22 Analysis on Product and Process
10/26 History of Production System: (1) Evolution of Automobiles; Product Process Lifecycle
10/29 History of Production System: (2) Progress and Limitation of American System ofManufacturers
Source of Competitiveness and Its Management/Improvement
11/2 Factors of Competitiveness11/6 Manufacturing Cost and Productivity: (1) Cost Management and Productivity Measurement
11/9 Manufacturing Cost and Productivity: (2) Total Factor Productivity and Learning Effect
11/12 Improvement Activities and IE (Industrial Engineering)
11/15 Delivery and Process Management
11/19 Delivery Improvement and Inventory System
11/26 Quality and Its Management: (1) Concept of Quality
11/30 Quality and Its Management: (2) Management/Improvement of Quality
12/3 Flexibility

Management/Improvement of Production Factors
12/7 Personnel and Labor Management
12/10 Facility Management and Automation
12/14 Purchasing Management
12/17 Production Strategy
12/21 Summary on Production Management (occasional day)Process and Organization of Product Development
1/11 Process, Organization, and Performance of Product Development
1/14 Development Period and Its Management
1/18 Development Productivity and Its Management
1/21 Total Product Strength and Organization/Process of Development
1/25 Summary
1/28 Occasional Day (the class most likely to be held)(an additional makeup class possible to be held)
Note: Be careful not to be late for the class as there will be small tests at the beginningof five different lectures which will serve as the class attendance checks as well.
(10-15 minutes per test, no reference to books/notes allowed, 40 points appropriatedin total for these tests). Thus the semester exams constitute 60 points.

１．What Is Business Administration?
Business Administration ・・・ Management: Almost too generalSo, narrow it down ・・・management science for manufacturing companies
Then, what are functions unique to manufacturing companies ・・・
production, product development, purchase, etc.
“Mono-Zukuri” in Japanese ・・・ a broad concept, unavailable in English,
to include, in effect, service industry as well
Management science for Mono-Zukuri fields(production management/technology management)
in English “Technology and Operations Management” (TOM)
Learning of “humanities and sciences combined”

Incidentally, specialized subjects for Department of Economics (related tomanagement) are:Business Administration
Management Strategies
Corporate FinanceIndustrial Relations
Business History/Business History of JapanMarketing
Management ScienceFinancial Accounting
Management Accounting
・・・There are no Production, and Research and Development that are the core

Organization Chart Of
A Large Company (maker)

Production,Purchase,
R&D(including product development)
Strategytake up large positions.

Strategy

Research &Development

Production& PurchaseMarketing

H.R.M
Accounting& Financial

From Pamphlet of Mazda Motor Corp.

M.I.S

Organization Chart Of
A Large Company (maker)

Strategy

Research &Development

Production& Purchase

From Pamphlet of Mazda Motor Corp.

Organization Chart Of
A Large Company (maker)
Marketing

H.R.M
Accounting& Financial

From Pamphlet of Mazda Motor Corp.

M.I.S

２．What Is Production/Manufacturing?
Production：
process to convert production factors to useful goods“product” for tangibles, “service” for intangibles

Manufacturing ：limited to production of tangible goods (narrow meaning)
including design/development and/or purchase (broad meaning)This class discusses Mono-Zukuri in a broad sense including the both terms.

３．Principles of Class（１）Empirical Business Science
To place a higher priority on grasping realities than theories, not necessarily
to slight theories
In this ground, a good research is not a scalar’s monopoly ・・・
active businesspersons, consultants, journalists, writers, etc.
Area where research on legs and learning by ear are effective ・・・
Learn from experts on research works by interviews(how to ask questions, and take notes, what to watch)
At the same time, never to neglect theories/logics ・・・
Watch out for those who like to say, “No theories apply to fields” ・・・likely to be in thought bog

Active Management

Consultant

Journalist

（２）Field-Oriented Philosophy of Mono-Zukuri
Mono-Zukuri site: place where added value (design information)
for consumers is being generatede.g., factories, stores, design rooms
Many Japanese manufacturing companies have adopted a fieldoriented philosophy since the end of the War.
“A wise man learns spontaneously”:
Have an imagination about the field.
Think in the manager’s shoes at his work site.
Main field in this class: Automobile industry
But many other industries will be discussed, too.

４．Manufacturing Company as System
System is: (1) way of observation, perspective, point of view
(Weinberg, Shunpei Kumon)(2) collective entity of two/more factors that are mutually related

relationshipfactors

System: has a “purpose” (function),and, at the border of its “environment”,exchanges “flow” (input and output),thereby “adapts” to the environment.
( flow = object, energy, information)
environment

Capability to adapt to environment = competitivenesspurposeoutputinput
systemPantoscopic view on System: Companies can be describedas various systems.

Organization Chart (company as system of paper)
株主総会
受託職能

取締役会

受託経営者

会長
最高経営者

経営職能
社長

経営職能

Figure removed

管 理 者

管 理 職 能狭義の全般経営者
常務 副社長 専務

due to copyright restrictions
狭義の工場長 支店長 部長 事業部長 技師長

管理職能
技師 調査役 課長

監督職能

○ ○係長

所長

主任

○ ○

部門

中間管理者

管理者

第１線

下位管理者

管理者

‡Toyoaki Ono 'Organizational Strategy of Japanese Enterprise' Management company Ltd. 1979 (p.38)

Articles of Association (company as system of paper)

From Pamphlet of Nissan Motor Co.,Ltd. (1993)

Financial Statements (company as system of money)

From Pamphlet of Nissan Motor Co.,Ltd. (1990s)

Production Process (company as system of merchandise)

From Pamphlet of DENSO CORPORARION

Product (company as system of merchandise)

From Pamphlet of Honda Motor Co.,Ltd.

Flow of Information (system of information)
Environmental informationⅠ

Person abbreviation production planPerson abbreviation plan information
Demand／Order information

Ⅱ-1

General production plan

Production technology information

Production plan information

Ⅱ-2

Ⅱ-3

Production process information

Production scheduling

Production process plan

Production schedule information
Material

Ⅱ-4

Production execution(factory)

Production

Production results information
Ⅱ-5

Production management‡

Production management information
Katsundo Hitomi 'Production System Theory'
DOBUNKAN SHUPPAN. CO., LTD. 1990 (p.24)

Example: To describe a company named “Organ Needle”
in terms of various systems・・・
Organ Needle Co. is・・・
Articles of Association

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・

Formal Organization
Chart

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・

From Pamphlet of Organ Needle Co.,Ltd.

Successive Management

Organ Needle Co. is ・・・

Management

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・
Product(s)From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・
Design Chart(s) of Product(s)(design information)

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・

Building of Factory

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・

Work Site in Factory

From Pamphlet of Organ Needle Co.,Ltd.

Organ Needle Co. is ・・・

Flow Chart of Production Process（ノートは藤本作成）

Organ Needle Co. is・・・

Production Process

From Pamphlet of Organ Needle Co.,Ltd.

５．Purpose of Manufacturing Company
For whom does the purpose exist?
Stake-holders surrounding a company:
Share holders
Customers
Employees
Suppliers
Communities
SocietyGovernment
To be evaluated in a fair balance …
to aspire ultimately to become “a respected company”

Company’s Performance and Stakeholders

Market (Customer）
Stockholder

Local society

Customer satisfaction
Competitive edge

Regional contribution
Environmental improvement

Stock pricesAutomaker
Corporate ethics
Live and let live.

Supplier

Employee's satisfaction

Employee

General society

Product Development/Production System andStructure of the Class（Factor inputs of productdevelopment）

The finalcustomer

Productdevelopment
systemProductDevelopment period

Product design
information
Personnel personal
management
Manpower
Equipment and production
technology management

Development production

Product development
management

Commodity power

Sales system
Production system

ProductCapital
equipment
Purchase control
The
middlefortuneProductivity(IE)
Quality(quality control)
Delivery date(process control)
Flexibility