Hypothesis about Compatibility Between Organizational
Capability and Architecture―Sketch of Whole Span
Independent behavior/choice of persons in charge of corporation/business/job site

Capabilitybuilding
environment

Capabilitybuilding
competition

Capabilitybuilding
capacity

Demand forfunction/cost frommarket/customer
Organizational
capability of
manufacturing(maldistributed in
specific regions)Compatible?

Architecture for
product/process(selection by product)

Comparativeadvantage of specificnations and products

Restrictions/
regulations
society imposes
Technological/
structural conditions of product

Other environmental conditions, accidental events, and such
The figures, photos and moving images with ‡marks attached belong to their copyright holders. Reusing or reproducing them isprohibited unless permission is obtained directly from such copyright holders.

Architecture(Basic Ideas Behind Design)

Lapping Type (Integral Type)And
Combination Type (Modular Type)2

What Architecture Is: Let’s peep into ○ (design)

Body design
customers
think cool

What sort of thinking does an architect have at designing?
3

“Architect’s Concept” to be Called “Architecture”
Basic design idea as to how to distribute the functions demanded for a
product to each structural part of said product, and how to design theinterface among these parts.
Product’s
functions

Product’s
structure

Subfunctions

Part
Interface
Overallfunction

Part
Interface

Functional, structural
correspondence relation

Part

Part

4

Modular (Combination) Architecture and Integral(Lapping) Architecture
PC’s system

Modular Architecture

Calculation

PC

Print

Printer

Projection

Projector

Product’s function

Product’s structure

MotorcarIntegral Architecture

Running stability

Suspension

Ride quality

Body

Fuel mileage

EngineProduct’s function

Product’s structure5Basic Types of Product Architecture① “Combination” type (modular type) architecture：
Possible to combine function-finishing parts with standard
interface
Even with a medley of ready-made parts, a product as a whole
fulfills a function.
② “Lapping” type (integral type architecture :To conduct custom design (optimum design) by mutualadjustment by individual product
Necessary to optimize design by each part in order to fulfill afunction of a product as a wholea. Open architecture: a kind of modular type
Industrially standardized interface beyond corporations
Possible with “a medley of design” among corporations
b. Closed architecture：
Basic design and interface design being finished in-house6Basic Types of Product Architecture
Integral

Modular(lapping)(combination)

Closed, integral

Closed(enclosure)

passenger car, motorcycle
game software
miniaturized home appliances
other

Closed, modular

mainframemachine tool
LegoOpen, modularOpen(industry
standard)

PC, its softwareinternet
new financial instrument
bicyclehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

7Basic Types of Product Architecture
Optimumdesigned
exclusiveparts

Integral

Modular(lapping)(combination)

Closed, integral

Closed(enclosure)

passenger car, motorcycle
game software
miniaturized home appliances
other

Closed, modular

mainframemachine tool
LegoOpen, modularOpen(industry
standard)

PC, its softwareinternet
new financial instrument
bicyclehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

8Lapping Type (Closed/Integral) Product: Motorcar

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)

Closed , m od u la rpassenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar

Open(industry
sta nda rd)

Multipurpose parts (usable for various companies’
products) are less than 10%.

PC, its softw are
in tern et
new fina ncia l instrum ent
bicycle9Basic Types of Product Architecture
Integral

Modular(lapping)(combination)

Closed, integral

Closed(enclosure)

passenger car, motorcycle
game software
miniaturized home appliances
other

Closed, modular

mainframemachine tool
LegoMedley ofmultipurpose
parts

Open, modularOpen(industry
standard)

PC, its softwareinternet
new financial instrument
bicyclehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

10Open/Modular Type Product (PC System)

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)‡ Source:http://vol01.eyes-art.com/0922.html

passenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar

Open(industry
sta nda rd)

Multipurpose parts (usable for various companies’
products) are more than 50%.

Closed , m od u la rPC, its softw are
in tern et
new fina ncia l instrum ent
bicycle11

Basic Types of Product Architecture
Integral

Modular(lapping)(combination)

Closed, integral

Closed(enclosure)

passenger car, motorcycle
game software
miniaturized home appliances
otherMedley of
in-housecommon parts

Closed, modular

mainframemachine tool
LegoOpen, modularOpen(industry
standard)

PC, its softwareinternet
new financial instrument
bicyclehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

12Closed/Modular Product(Mainframe Computer)

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)

Closed , m od u la rpassenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar

Open(industry
sta nda rd)PC, its softw are
in tern et
new fina ncia l instrum ent
bicycle‡To make many kinds of products by assembling “in-house common parts”
Design in own company
13

Closed/Modular (Lego)

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)

Closed , m od u la rpassenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar

Open(industry
sta nda rd)PC, its softw are
in tern et
new fina ncia l instrum ent
bicycle‡ LEGO and the LEGO logo are trademarks of
the LEGO Group. ｩ2009 The LEGO Group.

14

Applied Question: “Motorcar Is Not Motorcar!”
Monocoque RV (closer to closed, integral)

IntegralIntegral

ModularModularpping(la (la
pping
) )

(Com
bina
tion)
(Com
bina
tion)

Closedin tegClosed, in, tegra lra l

ClosedClosed(enclosure)(enclosure)

passengerm otorcycle
passengerca ca
r, mr,otorcycleg ame softwareg ame software

Closedm od
Closed, m, odu laurla r

in framm aminafram
e e

m ach
e toolm ach
in eintool
m iniaturizedhoma ppliancesm iniaturizedhom
e aepplia
nces
Leg
Leg
o o
other
other
m od
u lar
OpOp
enen
, m, od
u lar

Open
Open
(industry(industrynda
stastandard)rd)

softw
PC,PC,
itsitssoftw
arearein ternin tern
et et
new
ncia
l instrumnewfinafina
ncia
l instrum
ententbicyclebicycle15

Truck-type RV (closer to closed/modular)

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)

Closed , m od u la rpassenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar

Open(industry
sta nda rd)PC, its softw are
in tern et
new fina ncia l instrum ent
bicycle16

Passenger Car of Chinese Regional Enterprise (Geely)(closer to pseudo-open, modular)

Integral

Modular(la pping )(Com bina tion)

Closed , in teg ra l

Closed(enclosure)

Closed , m od u la rpassenger ca r, m otorcycle

m a in fram eg am e software

m ach in e toolm inia turized hom e a pplia nces
other

Leg o
Op en , m od u lar‡

Open(industry
sta nda rd)PC, its softw are
in tern et
new fina ncia l instrum ent
bicycle17

Evolution of Architecture
ー Macro Architecture and Micro Architecture ー
Demand forfunction/cost frommarket/customers

Architecture for
product/process(selection by
product)

Restrictions/
regulations
society imposes

Technological/
structural conditions of product18

Evolutionary Framework of Design and Architecture
Designer’s intent

Accident

Unintended change

Functional excess

MaintenanceAccident

Continuing
architecture
Functional improvement/
addition

Quality
improvement

Designer
Unintended design change
Structural simplification

Cost reduction

Functional
shortageMicroarchitectureMarket demandSocial restriction
Legal control

Macroarchitecture

Macro Architecture and Micro Architecture
Micro architecture ▪▪ to consider that it’s selected by market, society, andtechnology (weeding out)
Architecture of an overall product = an aggregate value of architecturesof parts’
Macro architecture influences a course of action of industrial climate andorganizational capability.
And through which macro architecture exerts an influences on micro architecture.

Micro architecture ▪▪ for a designer to select proactively (accident)
Even with the same product, the architecture differs depending onvertical and horizontal parts.
Before the fact, a designer intends to simplify structural design, functional
design.
After the fact, micro architecture that has not been weeded out
accumulate to become macro.
20

Relations Among Accident, Weeding Out and Maintenance ofArtifact (Architecture)
Collection of varied artifacts＝ Ｖ① General caseCollection of survivable artifacts not weeded out ＝ Ｓ

ＲＶＳ

Collection of maintained (under observation) artifacts R ＝ Ｖ ∩ Ｓ② Case of highenvironmental selection
pressure

Ｖ

Ｒ≒Ｓ

Collection of maintained (under observation) artifacts ＝ Ｒ ＝ Ｖ ∩ Ｓ ≒ Ｓ③ Case of low
environmental selection
pressure

Ｒ≒Ｖ

Ｓ

Collection of maintained (under observation) artifacts ＝ Ｒ ＝ Ｖ ∩ Ｓ ≒ Ｖ

Selection of Macro Architecture ▪▪ Hypothesis
・ Technological progress expands performance/cost curves. (e.g.. Shintaku)
・With the same category of products (functional proposition), performance/cost curves differ
by architecture.
・Customers with different orientations (price emphasis, performance emphasis) select different
architectures (e.g., Nobeorka)
It’s likely that price-oriented customers select modular type, while performanceoriented ones select integral type.
・Customers (market, society), macro architecture (technology), adjustment method (system)
are likely to be selected simultaneously.
Modular type tends to select market adjustment method, while integral type is apt toselect organizational adjustment method.
Modular type tends to select diversified-type of, while integral type is apt to selectconverged-type of, intra-industrial structure.
・When organizational adjustment capability enhances relatively, integral type is likely to be
selected among given products.
When market adjustment capability enhances relatively, modular type is apt to be selectedamong given products.
・In the area of intermediary architecture, an intermediate adjustment method like relational
trading is likely to be selected.
22Performance/Cost Curbs ▪▪ Technological Progress

Average cost
平均費用
(price)（価格）

Period t期
t Period
t+1
ｔ＋1期

Period t + 2
ｔ＋2期

Technological
技術進歩
progress

Performance
性能
23

Architecture and Performance/Cost Curves

Average cost(price)Modular
type

Intermediarytype

Integral type

Performance24

Choice of Architecture by Price-oriented Customers
and Performance-oriented Customers
Performance-oriented customers’ preference ofintegral architecture

Price-oriented customers’ preference ofmodular architecture
Average
cost(price)Modular typeIntermediarytype

Integral typePrice(average
cost）

Modular typeIntermediarytype

Integral type

Architecture to be
selected ＝ Integral
type
Performance/cost
indifference curves of
price-oriented customers
Performance/cost indifference curves of
performance -oriented customers

Architecture to be selected＝ Modular type

Performance

Performance25

Architectural Spectrum and Permissible Range（Reservation Price）
Customers’ type, architect,and performance/cost curbs
Average
cost(price)Modular
type

Intermediarytype

Customers’ type andreservation price curve

Integral type
Price

Performance-oriented customers’
reservation price curve

Price-oriented customers’
Reservation price curve
Performance

１

1/ N

Modular typeIntermediarytype

Architectural Spectrum

Integral type26

Comprehensive Performance/Cost Curves As
Envelope Curve
Averagecost (price)

Integral type

Modular type
Performance27

Relation Between Customer Type andArchitecture Selection
Averagecost (price)

Performance/cost curves
as envelope curve

Customer type, architecture,reservation price
Price

Integral type▲

Modular type▲

Performance/cost indifference
curves of performance oriented customers

Performance/cost
indifference curves of
price-oriented
customers

Performance
Modular typeIntermediary typePrice-oriented
customer’s
selection

Intermediarycustomer’s
selection

Integral type

Performanceoriented
28
customer’s
selection oInterdependence Among Architecture, Organizational
Capability, and Adjustment Method

Environmental conditions
Customer preference
Social restrictions
Technological restrictions…

Selection of macroarchitecture for
product/process

Selection of adjustment mechanism(market organization…)

Competitive performance
Production cost
Adjustment cost
Trading cost …
Organizational
capability inadjustment

Architecture and Production Cost/Adjustment Cost/
Trading Cost
Trading through market

Adjustment by organization
Average cost

Average cost

Against given N (element count) ▪▪

Against given N (element count) ▪▪

Adjustment cost

Trading cost＝b0N+(b1N2)Ｉ＝
c0N+(c1N)I

Total factor cost

Total factor cost
＝ production cost＝production cost１

1/ N

ModularIntegralArchitectural spectrum

＝ a0

＝ a0
１

1/ N

ModularIntegralArchitectural spectrum

30Adjustment Cost Curve and Trading Cost Curve

Average cost

Organization’s adjustment costMarket’s trading cost

１

1/ N

ModularIntegralArchitectural spectrum

31Selection of Adjustment Mechanism
Average cost

Organization’s adjustment costMarket’s trading
cost
１

1/ N
Selection of market

Selection of organization

Integral

ModularArchitectural spectrum

32Conformity Relation Among Customer Type,
Architecture, and Adjustment Mechanism
Average cost(price)Integral type
Performance/
cost curb bymarket trading
Performance/cost
curb byorganizational
adjustment

Indifference curb of performanceoriented customer▲

Performance/cost curb byorganizational adjustment

Performance/
cost curb bymarket trading

Modular type

Performance/cost indifference
curb of price-oriented customer

Performance33

Conformity Relation Among Customer Type,
Architecture, and Adjustment Mechanism
Average cost(price)Average cost(price)Integral type
Performance/cost
curb by market
trading

Performance/cost
curb byorganizational
adjustment

Indifference curb of
performanceoriented customer▲

Performance/cost curb byorganizational adjustment▲

Performance/cost curb
by market trading

Modular type

Selection oforganizational
adjustment

Selection ofmarket trading

Performance/cost
indifference curb of priceoriented customer

Performance

Modular typeIntermediary type

Integral typePrice-oriented
customer’s
selection

Intermediarycustomer’s
selection

Performanceoriented
customer’s
34
selection

Selection of Long-term Continuous Trading

Average cost
Organization’s adjustment cost

Adjustment cost of longterm continuous trading
Trading cost of spot market
１

1/ N
Select market

Modular

Select continuous trading

Selectorganization

IntegralArchitectural spectrum

35

Global Focus on Knowledge/Winter Semester 2008

Globalization and Industry:
Evolution of Organizational Capability andComparative Advantage in Architecture (3)The University of Tokyo(December 11, 2008)

Takahiro Fujimoto
Professor of Faculty of Economics, The University of Tokyo
Executive Director, Manufacturing Management Research Center
Senior Research Associate, Harvard Business School

Design and Comparative Advantage ofJapanese Industry―To observe chemistry between organizational capability
and architecture.

37

Hypothesis about Compatibility Between Organizational
Capability and Architecture―Sketch of Whole Span
Independent behavior/choice of persons in charge of corporation/business/job site

Capabilitybuilding
environment

Demand forfunction/cost frommarket/customer
Organizational
capability of
manufacturing(maldistributed in
specific regions)

Capabilitybuilding
competition

Capabilitybuilding
capacity

Compatible?

Architecture for
product/process(selection by product)

Comparativeadvantage of specificnations and products

Other environmental conditions, accidental events, and such

Takahiro Fujimoto, The University of Tokyo

Restrictions/
regulations
society imposes
Technological/
structural conditions of productStrategic Theory and Industrial Theory of Architecture
There is a certain chemistry between a corporation's organizational capabilityof manufacturing and a product’s architectural features.
If compatible, international competitiveness of the job site tends to bestrong.
If incompatible, international competitiveness of the job site tends to be
weak.

(1) Strategic theory・・to look at chemistry between individual corporations
and their organizational capabilities → competitiveness of Japanese
corporations(2) Industrial theory・・to look at chemistry between a group of corporations ina certain region or industry and organizational capabilities they tend topossess → competitiveness of Japanese corporations
39

Hypothesis: Product Architecture Japan Was Strong in ・・・“ Lapping” and “Enclosure”
Integral
インテグラルModular
モジュラー(lapping)（擦り合わせ）(combination)（組み合わせ）

Field
Japan was strong in?
日本企業の強かった分野？

クローズド
Closed(enclosure)（囲い込み）

乗用車、オートバイ
passengercar, motorcycle
ゲームソフト、
game
softwareminiaturized
home appliances
軽薄短小家電、他
otherメインフレーム
mainframe
工作機械
machine tool

レゴ

Lego
American (Chinese)firms are
米国（中国）企業が強い？
strong?

Open
オープン

PC, its software
パソコン、同ソフト、(industry

インターネット、（業界標準）
standard)

internet

new financial instrument
新金融商品、自転車、
bicyclehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

40

Average of integral spectrum

Measurement of Product’s
Integral Degree andModular Degree

Passenger car, other

Integral

ModularElectrical parts
Joint survey
conducted by the University of Tokyo andMinistry of Economy, Trade and Industry

Integral spectrum
Average of integral spectrum

Japanese Firms are Strong in “Lapping Products.”

Export ratio

Takashi Ohshika and
Takahiro Fujimoto, The
University of Tokyo

Integral architecture degree42Process Architecture of Outside Plate for Motorcar

Function

Surface
Appearance

Corrosion
Resistence

Dent
Resistence

Formability

Weldability

Converter

○

○

○

○

○

Secondary refining

○

○

○

○

○

Continuous casting○○

Hot Rolling○○

Pickling○

Cold Rolling

○

○

○

Continuous Annealing

○

○

○

○

○

○

Continuous
Galvannealing

○

○

○

○

○

○

ProcessPaintability

Dimensional
Accuracy

Rigidity○○

Iron Making○

Integral Architecture Index = 0.48 = 33 ÷(9X8)C Ge and Fujimoto, University of Tokyo

Relatively integral

43Process Architecture of Inner Plate for Motorcar

Function
Process

Surface
Appearance

Corrosion
Resistence

Dent
Resistence

Formability

WeldabilityPaintability

Dimensional
Accuracy

Rigidity○○

Iron Making
Converter○○○

Secondary refining

○

○

○

Continuous casting
Hot Rolling○○○

Pickling
Cold Rolling○

Continuous Annealing○

Integral Architecture Index = 0.23 = 15 ÷(8X8)C Ge and Fujimoto, University of Tokyo○○

Relatively modular

44

Hypothesis: “Geopolitical” Distribution of Specialty Architecture
Attributable to differences in history and an initial condition, there is a tendency
that exceptional organizational capability is maldistributed by country.
→ Compatible “specialty architecture” is not the same.
Japan：integrating force → lapping products (operation-emphasis)
Europe：expressive power → lapping products (design- and brand-emphasis)
USA：imaginative power → modular products (knowledge-intensive)
Korea：concentration power → modular products (capital-intensive)
China：mobilization power → modular products (labor-intensive)
ＡＳＥＡＮ: fixing power？ → labor-intensive lapping products (different from
China?)
Taiwan: conversion power? → flexible switching and proper use of modular
and lapping
45

Competitive advantage in Pacific Rim: Lapping Axis andModular Axis
Lapping axis
Japan

Korea

Modular axis

China (South)

TaiwanUSA

China (Northeast)?
ＡＳＥＡＮ？
India?
46

Points to Notice for Theory of “Fight It Out With Lapping”
・The key is “to build lapping into important positions.” Modulation of lapping and combination.
▪▪▪ Be careful not to be “plastered with lapping,” which is likely to be overly designed,
excessively costly.
・An absolute premise is “integrated-type manufacturing capability.” Lapping without
capability building is meaningless. Japanese semiconductor industry ▪▪▪ no “destitute
youth”: Was it an integrated-type manufacturing?
・As long as technology and markets allow, engineers should do the maximum possible to“modularize” (before the fact). But Japanese corporations are strong in “lapping”
products which do not allow that as the result (after the fact).
・Architecture is determined by customers. There’s no future for self-complacent lapping
products.
Whether or not one can have a customer said, “Sure enough, a lapping product isdistinguished,” is the dividing line between a “brand” and “over design.”
Is reproduction done for a “freak” (customer with peculiar tastes)? Motorcar, manga,
audio …
・If one fires in rapid succession “lapping products originated from deep down” to wholeheartedly
make a brand from an advanced development, one does not lose easily. The key is to bringout to the maximum the potential of “integrated-type manufacturing.”
47

How to Evaluate Chinese Manufacturing
An overreaction (“factory-of-the-world theory,” “threat theory” intoxicated by the atmosphere)
ought to be avoided.
Diversity of China (regional, industrial …)
Canton River Delta and the electronics industry model (low wages, single-skilled workers) do
not represent all; changes take place fast.
Don’t regard the electronic equipment industry in the same light as the automobile industry.
They are considerably different!
Product architectures are different (lapping/combination).
Levels of “manufacturing capability” in production sites are, in fact, different.
Foreign capital, nongovernmental powerful firms, private enterprises in surrounding areas,state enterprises ・・・diverse
Adaptation of architecture・・

Pseudo-open type architecture
Rush of merchant-capital type ventures
Technological lock-in

Foreign capital cannot assume a ruling power with finished goods? (TV, white goods, twowheelers, bicycles ・・） Preferably, there’s a chance in component business?
48

Did architecture of Chinese two-wheelers shift fromclosed/integral to open/modular?

Closed(enclosure)Integral

Modular(lapping)(combination)

Japan, Europe, India, Thai …

日本製
Motorcycles ofJapanese make
China, Pakistan,
Bangladesh ..

Open(industry
standard)

中国製

Motorcycles of
モーターサイクル
Chinese makehttp://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC238_2008.pdf

C Chinese Two-Wheeler Study Team (Fujimoto, Sugiyama, Ohtawara)

49

Example of Variation Expansion
From one ＥＮＧ （125cc)
Variation extension of 9 models in total

From one ＦＲＭ(copies of CHA125)
Variation extension of 4 models in total

50cc

90cc

‡
C Chinese Two-Wheelers Research Team (Fujimoto, Sugiyama, Ohtawara)

100cc

125cc

Ultra-microscopic Foundation ofComparative Advantage in Architectural

ー From perspective of design process theory ー51

“Simultaneous Equations” of Design and Two-tiered Coordination•••

Coordination ＝ defined as an “activity to converge design parameter toan optimum value”
A design problem can be approximated by simultaneous linear equations(axiomatic system design logic)
ｙ ＝ A x ｙ＝function vector, x＝ structure vector,
A= function structural matrix

ｙ ＝

A

ｘ

If A is diagonal matrix, it’s a pure modular design (assuming the order of x
and y to be identical).
・・・However, because of bounded rationality, let’s assume that only a part of
the formula (A’) is made out.

A’
52

“Simultaneous Equations” of Design and Two-tiered Coordination•

Because of bounded rationality, let’s assume that only a part of the formula (A’) is
made out.
・・・ First, let’s solve this incomplete equation.
1st step (scientific coordination) ・・・ initial value of trial and error
2nd step (heuristic coordination) ・・・ to be converged to an optimum value
through trial and error

Heuristic
coordination

Scientific (incomplete)coordination

Initial value

Optimum value(1) Organizational capability in scientific coordination ▪▪▪ percentage of scientificknowledge obtained before the fact
→ initial value’s distance from an optimum value(2) Organizational capability in heuristic coordination ・・・ multiskilled designer’
teamwork of
53→ speed in coordination

Japanese Corporations’ Predominance in “Heuristic Coordination”

Heuristic coordination・・・
in which Japanese firms
are quick

Optimum value

Initial value・・・
result of scientific coordination,i.e., derivation from well known
causal relation

54

American Corporations’ Predominance in Modularization
Shortcut effect due to removal of interdependency

Heuristic coordination・・・
in which Japanese firms
are quick

Initial value

Optimum value(1) Japanese firms are poor in scientific knowledge before the fact and dependon trial and error after the fact.
(2) U.S. firms take a shortcut with modularization (simplification of equation).
55

European Corporations’ Predominance in “Scientific Coordination”“The hare and the tortoise” phenomenon

Japanese firms’ initial value
European firms’ initialvalue: high theoretical“accuracy”

最適値(1) Product’s “lapping degree” is extremely high (complicated simultaneous equations).
(2) Japanese firms are poor in scientific knowledge before the fact and depend on trial anderror after the fact.
56(3) European firms have many variables and causal formulas grasped before the fact (scientificcoordination power).

Example: Simulation Analysis(From Research by Osumi and Fujimoto)・・・Wise Tortoise and Imprudent Hare57

1. Design Process Model
Axiomatic design
Causalrelation

From Suh(1990)

Structuralparameter

Functional requisiteparameter

Ａ・DP ＝ FRＡ＝⎡ a11 a12 Λ⎢a⎢ 21 a 22
⎢ Μ
Ο
⎢
⎣a m1

a1m ⎤
⎥
⎥
⎥
⎥
a mm ⎦

DP＝⎡ DP1 ⎤⎢ DP ⎥
⎢ 2⎥
⎢ Μ⎥
⎢
⎥
DP
⎣ m⎦

FR＝

⎡ FR1 ⎤⎢ FR ⎥
⎢ 2⎥
⎢ Μ⎥
⎢
⎥
FR
⎣ m⎦

58
藤本・大隈

http://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC70_2006.pdf

6Axiomatic design and architecture
Modular type

Integral type

A in Ａ ・DP ＝ FR is:

A in Ａ ・DP ＝ FR is:⎡a11 0 Λ
⎢0 a
22
⎢
⎢Μ
Ο
⎢
⎣0

⎡ a11 a12 Λ⎢a⎢ 21 a 22
⎢ Μ
Ο
⎢
⎣a m1

A＝

0 ⎤
⎥
⎥
⎥
⎥
a mm ⎦

A＝

a1m ⎤
⎥
⎥
⎥
⎥
a mm ⎦

Semi-modular type
A in Ａ ・DP ＝ FR is:

A＝Fujimoto/Okuma⎡ a11 0 Λ⎢a
⎢ 21 a 22
⎢ Μ
Ο
⎢
⎣a m1

0 ⎤
⎥
⎥
⎥
⎥
a mm ⎦

http://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC70_2006.pdf

59

9Configuration of Simulation【Example of problems given to designers】 ＊Case of A being ２×
２ matrix

In design space, find DP* that satisfies the following:FR*
ADP⎡ FR 1＊⎤ ⎡ a 11 a 12 ⎤ ⎡ DP1 ⎤=⎢⎢⎥ ⎢DP ⎥＊⎥aa
22 ⎦ ⎣
2⎦⎣ FR 2 ⎦ ⎣ 21
⎧ FR 1＊ = a 11 ⋅ DP1 + a 12 ⋅ DP2⎨＊FR⎩ 2 = a 21 ⋅ DP1 + a 22 ⋅ DP2(Formula式 ) 1)(1(Formula(2式）2)

Here, function FR* is a given optimum value provided bycustomer demand. A’s factors are all constant.
60
藤本・大隈

http://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC70_2006.pdf

13Two-tiered Design Process Model

Tentative placementof interim solution（1st step）

Influence ofprior causal
knowledge

Initial value(interim solution）
Influence ofintegrated-typeorganizational
capability

0
1

∧

∧

DP ( a 11 ~ a 12 , FR 1 , FR 2 )
0
2

∧

∧

DP ( a 21 ~ a 22 , FR 1 , FR 2 )Optimization process（2nd step）

Optimum
solution

DP 1* ( a 11 ~ a 12 , FR 1 , FR 2 )DP 2* ( a 21 ~ a 22 , FR 1 , FR 2 )
61

東京大学

藤本・大隈

http://merc.e.u-tokyo.ac.jp/mmrc/dp/pdf/MMRC70_2006.pdf

Simulation parameter (exogenous variable)＜Indices of complexity (product features)＞＜Indices of market condition＞●Architecture
Complexity：integral ＞ modular●A’s element countComplexity enhances as element countgoes up like ２×２， ３×３， ４×４ …

●Convergent condition
Threshold value of divergence from optimum
value FR* for ending the simulation. Whichshows that the smaller it is, the severer themarket demand for the attainment ofdemanded function is.

＜Indices of organizational capability＞＜Indices of prior level of scientifictechnology＞●Trial speed
Computational effort workable within one
period; its size corresponds to that oforganizational capability.
● convergent
Convergentmethod
method(trial(trialand
anderror)●error)① Reciprocal modulation (coordination)②Concurrent development (competition)●A’s incompleteness (law accuracy of initialvalue)The higher scientific technological level is,
the smaller the divergence between the initialvalue DP0 and the optimum value DP*
becomes.

62
Fujimoto/Okuma

Summary of Simulation Results:
Are Japanese firms good at developing “medium-degree oflapping” products by coordination?
Modular product・・・little disparity in design costs due to limited trial and error
Firm J’s design cost
Firm A’s design costMedium-degree of lapping product・・・clear disparity in design costs due to muchtrial and error
Firm J’s design cost
Firm A’s design cost
Excessive lapping product・・・ reversal being possible with varying degrees ofscientific coordination
Firm J’s design cost
Firm A’s design cost63

Summary: Theory of Comparative Advantage in Architecture•

Merger between design conception (science origin) and Ricardo-ish comparativeadvantage theory•

Magnitude of productivity differentials is the decisive factor in comparativeadvantage.

•

To consider: Product cost ＝ production cost ＋ design cost•

As for production cost, the traditional discussion will do just as well.

•

Regarding design cost, cost differentials in design parameter coordination should be
looked at.

•

Design cost ＝ cost of scientific coordination ＋ cost of heuristic coordination•

Provided that coordination speed of design parameter (job-site’s trial and error) ofJapanese corporations is fast・・・
Japanese corporations’ comparative advantage in design costs comes into being
in “lapping type” products that are large in module count, limited in establishedscientific knowledge (i.e., highly dependent on job-site’s trial and error). 64

Multinational Corporation’s
Selection of Design Location

65

Multinational Corporation and Globalization
Genealogy of the theory on multinational corporations① Multidomestic corporation (multinational corporation):
Offshore production strongholds aimed at each country’s market; to build
advantage over local corporations. Why can a multinational corporation, being an
outsider, get the better of local corporations being familiar with own market?: transfer of organizational capability of the mother country, and power as an oligopolistic
large company. A discussion assuming each country’s protectionism, barrier(individual conquest by country)② Global corporation (transnational corporation):
Offshore production strongholds aimed at international competitive advantage; tocompete also with own corporation’s strongholds in other countries. Why is thestronghold in a country where a multinational corporation is located stronger thanown corporation's stronghold in other countries?: transfer of organizational
capability of the mother country, capability-building environment in the locale, international competitiveness in local stronghold. A discussion assuming relaxation/
annulment of each country’s protectionism and barrier.
Actual corporation ・・・mix of the two ・・・①make where one sells ②makewhere one is advantageous66

Conditions for Location Selection: From Position of
Manufacturing Theory① Location selection for sales job site▪▪▪Market location being the basis.
To locate a sales stronghold closely contacting the market (recipients of design
information)② Location selection for production job site▪▪▪Constraints of media being effective
Production-factor location attracted by superior process media (manpower,
material..)Local-market location because of transportation cost of product media
Location close to design job site solicited by design information
Organizational-capability location induced by organizational capability
maldistributed in a country③ Location selection for development job site▪▪▪Little constrains of media
Market information being sticky → Market location
Technological information being sticky → Technological location
Organizational capability being maldistributed by country →Organizational-capability location for products with good architecturalchemistry67

Whole Concept of Multinational Corporation under
Globalized Economy① Globalization of economy ＝ Exposure of comparative advantage/disadvantage↓② Multinational corporations change their stance ▪▪▪
They not only “make in a market,” but also “make in a place where there isadvantage.”↓③ The location selection by multinational corporations accelerates globalization(international specialization).
The location selection by multinational corporations exerts a great influence on theindustrial structure; their responsibility is significant.
Mistake no. 1 ▪▪▪ Mistake to keep a job site that cannot remain in Japan →Verdict by market
Mistake no. 2 ▪▪▪ Mistake to transfer a job site that can remain in Japan →Evidence difficulty to be foundThe head office of a multinational corporation must accurately grasp organizational
capability, competitiveness, and potential ability in each country’s stronghold.
68Small and Medium Enterprises Fighting within the Country:
Example of Kaihara
Located in Fukuyama District (that produces Bingo kasuri ) in Hiroshima Prefecture; theworkforce of 765, established in 1893.
Devised laborsaving machinery for indigo dyeing and thread-binding machines; in the ’60s,
however, the business declined as the agricultural population decreased despite theconversion from farming clothes. A recovery from the brink of failure was jeans (1970)
starting with denim-yarn dyeing. By reproducing robe-dyeing technology on its own, the firm
increased productivity and came to life again taking advantage of a jeans boom.
Self-manufactured cotton-carding in ‘77, cotton spinning in ‘90; implemented vertical
integration and process lapping that carried quality to extremity; the tradition of machinery
artifice, with an in-house design of robe-dyeing equipments; alos active in capital investment.
Levi and Edwin use Kaihara frequently with special orders for high-grade jean cloth, as well
as Uniqlo, World, and department stores.
Produces the entire quantity in the vicinity of Fukuyama, two thirds of which are exported; theprices are 3 times as expensive as those made in China.
Essentially hires all workers as regular employees locally; still turns stable gains.
The key to differentiation of jeans lies in cotton-carding and washing-out work after finish.
Kaihara holds a highly developed technology, but is engaged neither in washing-out or
sewing. (Inter, Shimano) The firm provides jeans makers with the texture and its treatment
knowhow as a package as solution.
69

Summary―Toward “Good Current” Across Japan―

70Summary (1): Organizational Capability
・ “Open manufacturing” ▪▪▪ to make a “good current of design information” headed to customers
・ “Strategic theory originated from manufacturing workshop”: let’s have a perspective capable to freely pumpand dump the “altitude.”・Organizational capability, hidden competitiveness, apparent competitiveness, earning power ▪▪▪ let’smeasure all of them and redress their balance.
・Let’s have “business-model planning power” that links organizational capability in manufacturing with earning
power.
・Let’s analyze job sites of development, production, purchase, and selling from the perspective of “creationand transcription of design information.”・Ratio of net working hours ＝ ratio of hours to transcribe design information; futility＝ time not totranscribe information
・Let’s enhance transcription density of design information, and improve production lead time and productivity.
・Let’s enhance transcription accuracy of design information, and improve quality.
・A Japanese blue chip corporation (Toyota) possesses the capability of “integrated manufacturing” based
upon multiskilled teamwork.
・Let’s learn from Toyota ①organization capability in manufacturing, ②improvement capability, and③ evolution capability.
71Summary (2): Architecture
・”Product architecture” means a design conception that links a product’s functional factors andstructural factors.
・Fundamental types are integral (lapping), modular (combination), open, closed.
・Get down to an altitude of 5M, come near the job site and actual article, and form a clear viewof the product’s architecture without a prejudice.
・It’s likely that a product of good chemistry between organizational capability and architecture
becomes a strong product (specialty).
・As a result of evolution, organizational capability in manufacturing tends to be maldistributed incertain countries, regions, and corporation.
・Japanese corporations (Toyota and others) that have “integrated type” organizational capability
are strong in lapping-type architecture.
・“Geopolitics of design conception”: China and USA are good at modular, while ASEAN and
India are closer to lapping.
・Pay attention to positioning strategy for architecture; “way to make profit” differs by position.
・ Architecture is determined by customers in the end. “Freaks” support lapping.
・Cooperation between “techies who understand strategy” and “clerks who understand design”
supports a good manufacturing corporation.
72

Bibliography
What is a basic “success pattern” of product development? (automobile)→ Fujimoto and Clark, Product Developmental Power, Diamond Inc.
Comparison of effective product-development methods among different industries (computer, medicine, others)→ Fujimoto and Yasumoto, joint auth./ed., Successful Product Development, Yuhikaku
What is the real source of Toyota Motors’ strength?
→ Fujimoto, An Evolutionary Theory of Production System, Yuhikaku
To apply the concept of product architecture to strategies→ Fujimoto, Takeishi, Aoshima, ed., Business Architecture, Yuhikaku
Textbook on production management and technology management aimed to bridge the divide between thehumanities course and the science course→ Fujimoto, Introduction to Production Management, 1 & 2, Nikkei Inc.
Contemporary history to question why the automobile industry was strong→ Fujimoto, Capability Building Competition, Chuko-shinsho
Proposal of the strategic theory initiated in manufacturing job sites→ Fujimoto, Manufacturing Philosophy of Japan, Nikkei Inc.
Application of the architectural theory to strategies against China→ Fujimoto and Shintaku, auth./ed., Architectural Analysis of Chinese Manufacturing, Toyo Keizai Inc.
“Open manufacturing” extended over service industry as well
→ Fujimoto, et al, Manufacturing Business Administration, Kobunsha-shinsho

73