Flexibility in Japanese Manufacturing Industries: Synchronization of Production, Sales and Purchase

This paper considers how the flexible production system formed by Japanese companies is linked with sales and purchasing, and seeks to elucidate its significance. While manufacturing and categorizing diverse product lines, the essence of the flexibility of production systems lies in their capacity to adapt swiftly to changes in market trends. It is therefore necessary to investigate how production may react to market developments and what adjustments may be made for sales and purchasing. However, there exists little research conducted from this angle. This paper introduces, compares and examines the links between production, sales and purchasing in automobile, steel, electrical appliance and semi-conductor companies in Japan. By examining various different industries, it will be possible firstly to provide a clear illustration of the diverse nature of the actual state of production flexibility. Secondly, by extracting common factors, the paper examines what constitutes flexibility, clarifying the objectives common to each industry regarding reductions in lot size of planning (LSP) and shorter lengths of lead-time for scheduling prior to production (LLS). Thirdly, it considers the various factors borne of this diversity — namely why LSP and LLS differ between industries. Finally, it points out the importance, in practical terms, of considerations of product specifications combined with LSP and LLS.