JAPAN: Inside management - The quality factor.

JAPAN: Inside management - The quality factor. - The prospects for project management are promising - in Japan.

by Malcolm Wheatley.
Last Updated: 31 Aug 2010

The prospects for project management are promising - in Japan.

Jujitsu is quintessentially Japanese. A polite bow, a rush, a deft movement, and the aggressor's own momentum sends him spinning through air.

Japanese management has its own form of jujitsu, the best known example of which concerns quality. The visitor to Toyota's Tokyo head office will find three photographs prominently displayed in the foyer. One shows the company's founder, another is of its current chairman, the third is Dr W Edwards Deming, the westerner who could not - until recently - find anyone at home ready to listen to his ideas about quality improvement. The Japanese not only listened but acted upon his words, and western manufacturing industry went into a spin. Now it looks as if they might be about to wrong-foot the West again, in a different area of management. At least there are disturbing parallels with the way they trounced the West over quality. Once more a western idea ill-regarded at home has been quickly picked up over there, and applied with great success. It could soon be sent back again with a "try it this way" tag attached.

Many people would dispute that project management is ill-regarded in the West. There are multitudes of books and courses available here - and hosts of managers - with the word "project" in their titles. Even so, the discipline is as much honoured in the breach as the observance. A "move into special projects" is generally understood to mean a discreet kick sidewards. And there's more than a grain of truth in the old joke about the six phases of the typical project: enthusiasm; panic; disillusionment - followed by success against all odds; the search for the guilty; and, finally, the bestowing of glory on the un-involved. It's funny, but how much of the humour comes from an uncomfortable recognition of reality?

Richard Bleasdale, of management consultants Coopers and Lybrand, believes that British companies "project-manage by challenge". They don't really like analysing problems, he contends, or working out solutions and then setting up teams to implement them. What usually happens is that "someone will get up on his feet and issue a challenge". The ensuing rush of adrenalin predictably gets people moving, but not necessarily in the right direction. Ironically, the ensuing imbroglio usually enhances a manager's status. "Companies give more credit to people who can dig their way out of a situation than to those who can actively plan their way around it," he says.

These days, however, businesses are having to take projects more seriously. Moreover, the areas where this trend is most evident are often those where competitive pressures are most intense. The process of bringing new products on stream, for example, is a matter of great concern to all kinds of companies in both East and West. Japanese motor manufacturers can bring out new models in two years. Western producers generally need around five. True, some companies - such as Ford - have been successful in compressing the timescale. But in industry after industry western manufacturers are struggling to get on even terms.

The pace of the Japanese was not achieved through massive investment in computerised design equipment. As Hewlett-Packard discovered in the course of its own attempt to reach a comparable rate of innovation, the answer lies in organisation rather than investment. Tagged in the West as "simultaneous engineering", the concept basically boils down to carrying out design processes in parallel rather than sequentially, and to drawing up a proper project plan and sticking to it. Certainly, computer-based design equipment has a part to play, but it's a supporting role rather than a starring one. For the bottleneck is not the engineer at his drawing board, but the complex flows of paper and information around him.

A survey conducted this year by Computervision, the leading CAD equipment manufacturer, found that only 38% of its potential customers believe computer-based techniques have enabled them to bring products to market more quickly. In the context, "computer-based techniques" relate to the engineering of a product development project. But what about computerising the management of it? The question is a serious one.

A glance at any book on project management quickly brings home the complexity of the techniques on offer - and, equally quickly, an insight into the huge administrative overhead involved in planning and monitoring the progress of all the activities. The sheer weight of this overhead can act as a barrier to entry into project management. The hapless manager charged with introducing his company's new, improved, Mark 2 widget can only gaze in wonder at the techniques employed in multi-million pound projects such as the Channel Tunnel.

The average manager has little access to such tools. Responsible for getting results, but squeezed on budgets, he remains locked into the tried and tested techniques which have proved so inadequate in the past. Bang out a quick bar chart - half a dozen bars or so (no need to bother about checking resource availability - after all, this is an important project) - and off we go. Boot a few backsides en route, in the name of "progress monitoring". And stagger on to the inevitable overrun.

Automation promises not only to lighten the load but also to improve the whole efficiency of the process. Create the plan, match people to activities, and then follow through: planned costs against real costs, envisaged timescales against actual ones, calculated workload against that actually incurred. Deviations from plan - in terms of time, cost or resource load - can be detected and dealt with almost as they happen. That's the theory, anyway. And the tools for turning textbook technique into desktop reality are readily available. Probably the best known one is a computer program called Project Manager Workbench - or PMW to PC aficionados.

PMW has been available in the UK since 1984, almost as long as the IBM PC itself. It is, according to its UK distributors Hoskyns, the biggest-selling project management software in the world. It runs on virtually any IBM-compatible office PC, and boasts a host of features such as automatic scheduling, costing analyses and so on. Yet - to the outsider at any rate - the sales figures look surprisingly unimpressive. Compared to programs of equal pedigree and standing that have been written for applications such as wordprocessing and spreadsheets, sales are quite modest. WordPerfect and Lotus 123 sell by the million. PMW has sold around 20,000 copies in the UK, and only 90,000 or so worldwide. Wordprocessed correspondence explaining the overrun in the new, improved, Mark 2 widget may fly back and forth. Spreadsheets may pop up on PCs all around, as the cost and profit penalties are examined. Yet project control continues to belong to pre-computerised prehistory.

Moreover, PMW is simply one product among several. Despite the availability of cheap and perfectly adequate software tools that will run on office PCs, managers remain loath to pick them up and use them. This is not a new phenomenon, of course. People are generally reluctant to alter the way they do things. Cynics say that the reason why wordprocessing and spreadsheet programs have sold so well is that they don't actually change the way managers work: they just make the results look slicker. Equally, for every spreadsheet that's usefully employed, there must be dozens that are rarely called upon to produce anything more than another fancy graph of last month's results.

Enter, now, the Japanese. Probably to the surprise of its creators, a British project management tool has proved something of a hit in Japan. Metier Management Systems - rechristened Lucas Management Systems following its acquisition by Lucas Industries last year - has quietly propelled its Artemis project management tool into the position of a de facto industry standard. From a standing start in 1977, the company has grown into the UK's biggest software house, with sales topping £50 million a year and 700 staff worldwide. Boeing, BP, BMW, Bayer and Renault are all numbered among its clients.

The company's first foray into the Japanese market came about by accident in 1984, when Kobe Steel and Ishikawajima Harima Heavy Industries made contact with Metier's recently opened Hong Kong office. Masamichi Tomita, of the IHI's plant engineering division, explains that a project management system had by then become a commercial necessity. The company's multi-million dollar overseas contracts were becoming more and more difficult to manage, since process plant might be designed in Tokyo and built 500 miles away before being installed on the other side of the world.

With typical Japanese thoroughness, IHI reviewed 73 packages before choosing Artemis. Just as typically, IHI was fully aware of Kobe Steel's parallel interest in the product. Indeed, all unknown to Metier, its big potential customers were pooling evaluation notes. When the order finally came, there were two conditions attached. First, a support office would have to be opened in Tokyo without delay. Second, the software must ultimately be made available in a Japanese language version. The company immediately began working to satisfy both conditions.

Artemis is a very different product from PMW. Far greater in scope, it runs on mainframes rather than PCs, and allows hundreds - if not thousands - of people to report in directly the progress being made on their projects. More of a programming language than a packaged program, it allows users to build unique project management applications that can run in parallel with other software. Indeed, the borderline between Artemis and a company's other commercial applications can be extremely uncertain.

No two Artemis applications look the same - this philosophy is fundamental. When Tomita puts up a slide indicating that projects (and therefore their control) belong to whole IHI divisions, rather than to project managers, the listener is tempted to regard this as hype. But when he painstakingly explains that, by 10am each morning, every single one of the company's thousands of engineers will have entered into Artemis an hour-by-hour, project-by-project breakdown of what he did the previous day, scepticism is dispelled. IHI has spent £500,000 on Artemis, but Tomita is reluctant to reveal the payback on this investment, claiming that it hasn't been calculated.

One of the first companies to buy Artemis from the newly-opened Tokyo office was Toshiba's Yokohama-based nuclear energy division. It not only builds nuclear power stations, it is also responsible for their annual safety checks and shutdown maintenance. The typical outage period is 85 days. During that time, as manager Satoshi Takahasi explains, almost 1,000 engineers put in around 100,000 man-hours. With every day of downtime representing considerable sums in lost revenue, tight control is vital. So Artemis lies at the heart of a whole pantheon of computer systems managing each project.

On a huge computer screen appears a 3D model of the inside of a reactor room. With a few strokes of the keyboard, a simulated maintenance worker walks across and climbs a gantry to close a valve and inspect a pipe. When the sequence is replayed, the observer sees what the worker would see - including the fact that the valve is partly obscured behind another and will take longer to close and inspect. Prior to the actual inspection, the time needed to do all this - and the tooling required - will have been fed into Artemis's project plan. The real maintenance worker will note what he needs, and how long he's got to do the job, and will later feed back the actual timings so that progress can be monitored. It's all very impressive. But as yet payback calculations are not complete.

Countless UK companies have found Japan a difficult market to break into. Yet sales of Artemis have gone from strength to strength, with revenues putting on over 100% a year. So far 47 of Japan's biggest and best have bought the product, paying out several hundred thousand pounds a time: Kawasaki, Isuzu, Fujitsu, Konica, Nissan, Fuji, Sharp. If you have a Japanese competitor, the odds are that he's on to Artemis.

Japanese users that are prepared to talk publicly about the product tend to be open about everything except the business benefits. Such reserve might simply be a matter of commercial secrecy. But after several days spent talking to some of these companies, another explanation begins to emerge. While they are happy to discuss the concept of payback in the abstract, they have little interest in performing the actual calculation because it is not important. Tomita of IHI says, in effect, that "The constraint on our business is the number of engineering man-hours available". The Japanese groups evidently decided that an effective project management tool was what they needed. And having found one, they each built it into the fabric of their business. "We don't calculate a payback on an accounting suite or payroll package," they seem to argue. "Why should we do so with a project management system?"

Many western companies will naturally be reluctant to commit large resources for so uncertain a return. There's also the inertia factor. "Hour-by-hour breakdowns of what everyone did yesterday? Capacity planning the engineers? It's not on, old boy." That's the likely reaction of the harassed hero of the Mark 2 widget. Much the same was once said about Total Quality, which is why Deming decamped to Japan. The rest is history - a history of trade deficits. So are we just about to see a repeat performance?

Artemis's oriental users are certainly stretching the "project" concept beyond its accepted meaning in the West. In integrated circuit production, for example, some Japanese companies have divided the manufacturing process into hundreds of thousands of steps, each of which is then analysed by Artemis to optimise efficiency. It won't be long before western companies are forced to emulate this dive into detail, predicts Chris Barfield, MD of Lucas Management Systems. That's all very well for organisations with large mainframes and matching budgets, perhaps, but what about the rest? No doubt Japan will show them the way too. A Hoskyns source reveals that a deputation arrived at the end of March, to enquire about a Japanese language version of PC-based PMW. Could one be developed? And might they volunteer themselves as its distributors? Prospects for such a product, it seem, look most promising.

For reprints of this article, contact Anne Oakley (071) 413 4336.

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