How have Japanese SMEs
become competitive?

Creation Co., Ltd.
President Masayoshi Utsumi© 2011 Creation co., ltd.

No.1

How have Japanese SMEs become competitive?
１．Management of Japanese SMEs
#1 Management, focusing on Corporate Philosophy#2 Management, foreseeing the future#3 Continuous Kaizen activitites#4 Management, taking advantage of ownership
２．Strategy of Japanese SMEs
#5 Differentiations in niche market#6 High level quality control
３．Human resource development of Japanese SMEs
#7 Long term development#8 Developing and handing down by the company© 2011 Creation co., ltd.

１．Management of Japanese SMEs© 2011 Creation co., ltd.

No.3

Management, focusing on Corporate Philosophy
・Corporate Philosophy represents why the company exists
・Understanding from top management to the bottom employees
・Regular meeting opportunity reminds its employees of the importance・Top management and employees make decision in accordance withthe philosophy

Corporate philosophy of a company
 We
We shallshall satisfy
satisfy customer,customer, flourish,flourish, andand makemake our
our dreams
dreams comecome truetrue We
We shallshall always
always challenge
challenge advanced
advanced technologies,technologies, andand manufacture
manufacture

products
products which
which does
does match
match thethe up-to-date
up-to-date market
market requirement
requirement
 We
We shallshall makemake ourselves
ourselves valuablevaluable toto thethe societysociety

Corporate philosophy of a company

 Cooperation
Cooperation andand progress
progress Creating
Creating technology
technology Social
Social responsibility
responsibility© 2011 Creation co., ltd.

No.4

Management overlooking the future
Establishing mid-term management vision and its
penetration to employees
Mid-term management vision is…

what top management images its company of a few years later
thoroughly and verbalizes so that employees will easily imagine aswell

Mid-term management vision of a company
 To develop new “delicious” and “healthy” products with our meat

processing techniques and selected ingredients To be an organization where employees keep higher motivationand carry out spontaneous Kaizen activities To position ourselves as marketing-oriented food manufacture To be an integrated manufactures from production to retailing, toseek effective management© 2011 Creation co., ltd.

No.5

Continuous KAIZEN activities
CorporatePholosophy
Mid-termVision

・Breaking down from Mid-term vision to targets
・Spiral up by PDCA cycle
・Improvement never ends

PlanTeamtargets

ActIndividualtargets

DoTarget review

Check
KAIZEN activities(continuous improvement)

Progress check

Result check© 2011 Creation co., ltd.

No.6

“Three Actuals” in KAIZEN activities☆ What is “Three Actuals”?

Actual place, Actual stuff, Actual situation

１．Seeing Actual place

1. To go and see the actual place where defect takes place
2. To go and see the actual place for sales

２．Seeing Actual stuff

1. To see what the defect is like2. To understand what is being sold well

３．Understanding Actual situation

1. To understand why defect takes place, and take necessary
corrective action
2. To analyze why the product is being sold well

KAIZEN always begins with precise understanding© 2011 Creation co., ltd.

No.7

Management, taking advantage of ownershipf Taking advantage of ownership

Inimitable affection and responsibility to its business
Fast decision making and strong authority
Setting clear vision and targets
Strong leadership to achieve the targets

f Involving employees into management
 Taking part in decision making of vision and target setting Setting Vision and targets
 Empowerment
 Take well care of employees’ opinion and independence© 2011 Creation co., ltd.

２．Strategy of Japanese SMEs

© 2011 Creation co., ltd.

No.9

Differentiations in niche market
Enjoy competitiveness, by focusing on a specific small
customer segment
fFocusing on niche market
 Not nation-wide, but local
 Considering geographical aspect (age, gender, income,occupation etc)
 Considering physiological aspect (lifestyle, value, characteristics,interest etc)f

One and only Differentiating points of products(functions and/or benefits)
 Quality, Technology, Price, Style Quality assurance, Maintenance Customer care, Speed, Delivery© 2011 Creation co., ltd.

No.10Case study: A lunch box manufacturer
Has become $ 60 mio enterprise from a small
lunch box delivery shop
<Company overview>
Business domain: Manufacture and sales of lunch box
Revenue: 60 million USD/y (approx. 4.7 billion JPY/y)# of employees: 400 （regular employees approx. 30)© 2011 Creation co., ltd.

No.11

What the lunch shop did?
１．Targetting at blue-collar labors such as truck drivers
２．Pursuing “Delicious, cost performance, and fast”
・Cost performance versus taste, volume and health・Serving in seconds

３．Market limited to Hyogo prefecture
４．Store making
・Less decoration, less function and less budget
・Atmosphere for ease of access

５．Site location limited to road side© 2011 Creation co., ltd.

No.12High level quality control
f Company-wide Quality Control Activity

 Spontaneous quality improvement meeting by small group
 Company-wide activity from manufacturing, designing,production, procurement, and sales
President

QC committe

SmallGroup

SmallGroup

Sales

SmallGroup

SmallGroup

Designing

SmallGroup

SmallGroup

SmallGroup

Manufacturing© 2011 Creation co., ltd.

No.13

Implementation of Quality Control Activity<Step for improvement>
Step 1 : Pick up the QC theme, along with Quality Policy
Step 2 : Understand the actual situation and set targets
Step 3 : Analyze the reason of bad quality
Step 4 : Come up with action(s) and execute
Step 5 : Check the result of the action(s)Step 6 : Corrective action by standardization

ActPlanCheckDo© 2011 Creation co., ltd.

No.14

Examples of targets for quality improvement
Manufacturer
DesignManufacturing
Sales■# of defection in designing train components…10/month to5/month■Defection rate of train components…3.0％ to 1.0％■# of complaints due to miss delivery…5/month to 2/monthSupermarket
Store■Improvement of staff’s attitude toward customer■Improvement of freshness of vegetables, meat and fish

Restaurant
PlanningKitchen■Development of healthy menu
■Shortening serving time
© 2011 Creation co., ltd.

３． Human resource development ofJapanese SMEs

© 2011 Creation co., ltd.No.16

Long term development
fPlanned internal training Training by rank and/or function
fPlanned Job rotation
 Developing future manager, by experiencing
horizontal functions (such as Manufacturing andQuality Control)
fDelopment by KAIZEN activities
 Experience in leading KAIZEN small group will
make the leader a future manager© 2011 Creation co., ltd.

No.17Developing Morals by Corporate Philosophy
f Let employee well understand Corporate Philosophy

・Corporate Philosophy will be Code of Conduct foremployee
・Corporate Philosophy will tell employee how important
Quality control, Cost control, technology development,
customer satisfaction, teamwork etc
Explaining why Corporate Philosophy was made and exists
from top management to managers
Each managers will tell towards its subordinatesSpeaking out loud at meeting and/or ceremony etc
Carrying as a philosophy card, exhibiting in the office
Penetrating to employees© 2011 Creation co., ltd.

No.18Developing and handing down by the company
f Developing and handing down the core technology
by the company itself
・Core technology is usually difficult to be imitated・Company can expect competitiveness by differentiation

1. Standardization
zCreating work standard
zTake full advantage of the standard

2. Handing down the techniques and skills
zOnsite workshop by skilled employee
zShow it! And let them do it!

3. Cross-trained worker

zCross-trained Æ higher operating rate and load levelingzTraining based on cross-trained worker development plan

© 2011 Creation co., ltd.

No.19

Summary
１．What-is-called “Japanese style management” is basically
aimed for big enterprise
２．Arrangements is necessary when you introduce it intoSMEs
３．SMEs need to steer itself, in accordance with the changeof the environment
４．The characteristics and strength of competitive SMEs
１）Management
２）Strategy３）Development of human resource© 2011 Creation co., ltd.