2007/08/06 11:40 Takahiro Fujimoto, "Manufacturing as a System of Design Information", ISSS Tokyo 2007

2007/08/06 11:40 Takahiro Fujimoto,  "Manufacturing as a System of Design Information", ISSS Tokyo 2007

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Jim Kijima

Takahiro Fujimoto, Professor, Manufacturing Management

[Takahiro Fujimoto]

Takahiro Fujimoto

Research Center, The University of Tokyo, Tokyo, Japan

Read social systems theory when an undergraduate at University of Tokyo

  • One of first English books read with von Bertalanffy
  • Wrote paper on systems approach to irrigation

Entered business administration, particularly of manufacturing, now moving to the services sector

Manufacturing Management Research Center, University of Tokyo since 2003

Systems thinking a common approach

  • Many engineers by training, some social scientists

Root view of manufacturing:

  • Continue view of material flows
  • Would like to expand view to service sectors, by introducing the ideas of design
  • Design concept from engineering, social theories of trade theories and competitiveness from economists and management
  • Herbert Simon had tried to combine these in the Sciences of the Artificial, which is a big influence


  • Often visit factories, at least once per week
  • Look at the flows of value to the customers
  • Where does the value reside?  Materials, not really.
  • Most cases it's the design information

e.g. a cup:  it's made of plastic, sometimes it's glass or metal

  • There's someone's design thinking behind this
  • The essence of artifacts is design information

Economists haven't thought of products this way, have thought of them as things that are already designed

  • But someone designed it, somewhere
  • A missing link in standard economics

Design-based competitive advantage

  • Key concept:  design information has value
  • Firm's products and processes are artifacts that have been designed
    • This doesn't say anything about materials, could be product or a service
  • Manufacturing is the creation and transmission of design information to customers
  • e.g. Toyota people think about manufacturing this way, as value flows, and they try to make good flows of value:  fast, smooth, precise, accurate information flows to the customer
  • Monozukuri:  manufacturing capability as a distinct ability to handle flows of design information toward customers
  • Service sector is low productivity

Product-process architecture

  • Design is common denominator

Basic idea:

  • All products and services are a combination of the design information, plus the medium (material)
  • Compare to Aristotle:  object as form and material, and form is more essential
  • Products (as goods and services) are artificial, i.e. something designed
  • If the medium is tangible, it's manufacturing; if intangible, it's services

Penrose, nature of the firm

Manufacturing as the control of flows of design information between productive resources

  • Design information goes together with materials
  • Development, production and sales can all be explained by these ideas of manufacturing as design flows

Value-added time

e.g. body exterior press shop

  • Information transmission time = value-adding time
  • Information non-transmission time is MUDA (waste)

Organizational capabilities:

  • From Nelson and Winter (evolutionary economics) ideas of organizational routines, as repeated control of design information flows between productive resource

Toyota: high productivity and high quality

  • Their focus is muda
  • Muda is unnecessary non-transmission time, which includes inventory, over-production, and defects on the information receiver side
  • Toyota has 600,000 Kaisen activities, because it still has lots of muda

Toyota has 3 layers of capability:

  • Routinized manufacturing capability
  • Routinized learning capability (kaizen)
  • Evolutionary capability (capability-building capability)
    • There are many mistakes that were made, that aren't report, but the failures are source of capabilities
    • (Have written a 400-page book on this)
    • Fortune favours the prepared mind

Don't rush to connect profit performance from organizational capability, at least two intermediaries

  • Organizational capability --> Productive performance --> Market performance --> Profit performance
  • First two are arean of capability-building competition
  • Good companies are alwsys looking at productivity performance: productivity, lead time, conformance quality

Productive performance of Japanese companies was higher in the 1990s, but profits were lower, which speaks to long-term effects

  • By late 1990s, Japanese were slow to catch up on profits, suggesting weak strategy but strong operatoins

Architectural thinking and industrial classification

  • If decompose the products, are they general components or specific components?
  • Modular architecture: product function hierarchy and product structure hierarchy are one-to-one
    • Can recombine, e.g. computers, bicycles
  • Others have integral architecture, e.g. motorcycles
    • Need teams to solve simultaneous equations
    • Good retention of employees
    • Illusion that Japan is good at high-tech products, much moved to China

Integral architecture:  many-to-many mapping between function and structure

Open architecture

Three types of architectures:  closed-integral, closed-modular, open-modular

  • Closed integral:  Japanese automobiles
  • Closed modular:  American trucks are good at this, body on frame
  • Chinese products:  quasi-open modular architecture, on Chinese local markets
    • Seldom see this in India motorcycles, but do see this in China, where have mix and match of copied types

Japanese cars, 90% are product-specific, compared to computers that are only 50%

Two-staged design process, linked by trial-and-error coordination

  • Japanese are good with this, due to long-term employment

Design-based comparative advantage

  • Economists ignore where design is done, focusing on where manufacturing is done

Predictions on architecture-based compariative advantage (by country)

  • Integral axis and modular axis:
  • Japan most integral
  • China and Korea most modular

e.g. steel trade pattern, economists can't explain

  • Cars use different types of steel in different parts of cars
  • Japan exports outer panels, whereas inner panels are Korean

Implication to Japanese Industrial Policy

  • Protectionism tries to protect slowest runnings
  • Want to chang to front-runner-oriented industrial policies
  • Slowest runners need to be handled by social policies, not industrial policies