Roger Eglin reflects on 20 years of Japanese success with the British worker.
When the economic historians pronounce on whether the 1990s saw the makings of a turning point in the fortunes of British manufacturing, they may care to reflect on the anniversary that falls this spring. It was just 20 years ago that the first Japanese manufacturing plant, the Runcorn-based YKK zip factory began operations with 250 workers. A few years after it had begun, I wanted to talk to the company about its British experience. After some initial reluctance, I was allowed to talk, not to a Japanese manager, but to the woman who was personnel officer. What she told me was brimful of enthusiasm. Clearly here was one person stimulated by her contact with Japan's industrial culture.
Normally most firms prefer to leave this sort of communication to a senior manager or a press officer. But years later I see the sense of YKK's choice. If there is a secret to Japan's success it is the importance attached to people, their training and their motivation - in many ways the main theme of a recent lecture by Terry Hogg, the director of production control at Nissan's Sunderland car plant. No one could reasonably dispute the plant's status as the bellwether of the British motor industry, and quite probably the whole of British manufacturing industry. When it started in 1986, 450 people backed by an investment of £50 million assembled 5,000 cars a year. Five and a half years later, 3,300 people, backed by £700 million of investment, produced 124,000 cars in what had become a highly integrated car plant. Over this period, output of cars per head had more than trippled to 37.5 a year, more than half as much again as the best of the other British car plants.
Other Japanese manufacturers have achieved similar striking success, operating in industrial areas where British participation has been in retreat for 20 years. Yamazaki's machine tool plant at Worcester was named this autumn by the Royal Swedish Academy of Engineering Sciences as one of the 10 "best in the world" manufacturers. Yet Yamazaki, like Toyota and Nissan, achieves this with British workers and mostly British managers.
Terry Hogg's starting point was that too many British companies took too narrow a view of productivity. He summed up their attitude as: bell-to-bell working, working harder, longer, faster a with greater flexibility. Unfortunately, says Hogg, this tends to turn what should be a positive-looking initiative to something negative, focused on the three Rs - reducing overtime, restructuring and redundancy, all calculate to create a negative attitude among workers.
But even a more positive worker attitude is only going to provide part of the answer, Hogg says. The direct labour cost of a typical car is only of the order of 5-10%. For Nissan it has to be total productivity, concentrating on all aspects of the organisation from R and D through manufacturing, sales and the supply base. But the results from the total productivity approach are not always cultural argues Hogg. Nor are they unique to the Japanese. It doesn't even need a greenfield site like Nissan's or a drive to overcome seemingly insuperable odds. "It is an attitude of mind. What is required is a corporate mentality which accepts change easily, in fact embraces and encourages change. It is about people, their selection, their training, their contribution and their commitment." To achieve it Nissan spends a not inconsiderable 6% of its payroll on off-the-job training.
This all sounds straightforward you might think. As Hogg suggests, there's no special magic to it. It was at this point, just after digesting the Nissan approach, that I read a survey from Peter Chadwick Consultants, about the attitude of British middle managers and supervisors. Four key points emerged from it: 96% of the 200 people interviewed didn't consider productivity improvement as their most important goal; 90% of the training they received did not help improve productivity; 73 agreed change is necessary but saw the solution in new machines and capital spending, not within people and their attitudes and behaviour; 83% blame production and operational problems on factors outside of their control.
Yet there's hope. As Ian Clarkson, the chief executive of Peter Chadwick, points out, for many British companies the answer to becoming a world-class manufacturer is to be found within their own workforce. There's no need, he argues, to follow the latest manufacturing or management panacea or turn to the Japanese for a solution. In an odd sort of way he's right about not turning to the Japanese. To many companies are making the mistake of implementing one aspect of Japanese management such as Just-in-Time manufacturing or tight quality control. As Nissan's Hogg says there is no uniquely Japanese answer. It doesn't just depend on careful training but on taking a view of the organisation as a whole. What's the point of trying to motivate workers if the design engineers produce an impossible-to-manufacture product? Which is just the sort of approach that brought the British-owned car industry to its knees. There is a Japanese lesson. It's just a question of making sure we learn the right one.
Roger Eglin is managing editor of The Sunday Times.