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Jan 13

Japan falls down manufacturing productivity ladder

Back in the 80s, the West was besotted by the miracle performance levels of Japan’s manufacturing sector and mistakenly concluded that TQM – Total Quality Management – and ‘culture change’ was their secret

Actually, it was mostly due to good performance measures, use of basic statistics and common sense in finding best ways to meet customer demand

Since those heady days, their apparent productivity levels have steadily declined

According to the JPC – Japan Productivity Center – in the last five years alone, labour productivity there declined by 10% leaving it at around 70% of the US figure

And according to the OECD – Organisation for Economic Cooperation and Development – Japan’s position versus others of its members was:

  • First In 1995

  • Seventh in 2005

  • Tenth in 2010

  • 14th now, below France, Germany and the UK

This downward trend is mostly due to a weaker yen plus technological advances made in other countries

Hence the Japanese government is to offer tax breaks and other incentives for companies to invest more in new technology

The next decade will certainly bring some ‘interesting times’ for this global sector

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