Operating Strategies Case Study

Case Title:

Matsushita Electric Industrial Co.'s 'Cost Efficiencies': Should they be Transferred or Shared?

Abstract:
Prior to the Second World War, Japanese products were known to be riddled with defects. The circumstances following the war triggered a quality revolution in Japan that was led by the Toyota Motor Company. Toyota pioneered the Toyota Production System which is considered to be the originator of the famous Lean Production System of Japan. The Manufacturing efficiencies resulting from the adoption of the Lean Production System enabled the Japanese manufacturers to develop high quality goods at a low-cost. Japanese products, especially automobiles and consumer electronics, found a big market in the West.

One of the largest consumer electronics companies of Japan is Matsushita Electric Industrial Co. Ltd. From selling a single product at its inception in 1918, the company grew into a consumer electronics behemoth, manufacturing more than 5000 products, operating in 55 countries. But during the 1990s, Matsushita was unable to respond to challenges in its business environment, resulting in a decline in its profits. Kunio Nakamura became the president of Matsushita in the year 2000 and he aggressively restructured the company, laying special emphasis on remodelling the company’s manufacturing techniques. The company adopted many manufacturing reforms in its domestic factories that created cost efficiencies. Within two years, Matsushita witnessed a turnaround in its operations.

Pedagogical Objectives:

• To analyse the Toyota Product System (its inception, evolution and benefits)
• To discuss the differences between Mass Production System and Lean Production System
• To discuss the differences between the Japanese and Western management practices
• To identify and analyse the factors which affected Matsushita’s profits during the 1990s
• To discuss the restructuring effort of Matsushita
• To analyse whether cost efficiencies should be transferred or shared between the parent company and its subsidiaries.

Keywords :  Toyota Motor Corporation; Toyota Production System; Japanese quality revolution; Lean Production System; Just-in-time (JIT) system; Japanese management practices; Taiichi Ohno; Eiji Toyoda; Kaizen; Operating Strategies Case Study; Jidoka; Andon cord; Kanban cards; Kaoru Ishikawa; Shiego Shingo; Genichi Taguchi; Value Stream Mapping; 5S; Quality Function Deployment; TPM; Quality circles; Matsushita; Panasonic; National; Technics; Quasar; Kunio Nakamura; Super Manufacturing Company; Restructuring; manufacturing reforms; Corporate advantage; Cell manufacturing system; Fumio Ohtsubo