Operations as Strategy: Lessons From Japan

The past year has witnessed tremendous interest in Japanese management practice. Owing in part to the increasingly worldwide competitive environment, and more particularly, the survivability of certain U.S. industries (television, automobiles, steel, etc.), this interest has prompted a wide variety of published reports seeking to explain the keys to such success. Unfortunately, many of these reports present conflicting explanations of Japans manufacturing achievements, frequently emphasizing the unique cultural aspects of the Japanese environment and suggesting that U.S. firms can learn little that is directly applicable to their own situations. During the fall of 1980, the author worked with the General Electric Company as it took two dozen of its top manufacturing managers to visit leading Japanese firms. As a minimum, the program was aimed at impressing the GE managers with the seriousness of the Japanese competitive challenge. As a maximum objective, it was designed to help these managers meet that challenge through the analysis of Japanese manufacturing operations and modification of GEs manufacturing operations to incorporate applicable insights. On the basis of these visits, and the authors work in the general area of manufacturing strategy, the concept of strategic operations policy as a part of overall strategy has been identified as a key factor in Japans success. This paper describes that concept, provides examples of its applications and impact in Japanese firms, and suggests how U.S. manufacturers can apply the concept. The authors conclusion is that this aspect of Japanese management practice does more to explain differences in their performance in certain industries and competitive environments than do culturally based distinctions between Japanese and U.S. manufacturers.