HITACHI – 26 FACTORIES

Synopsis: Communication For Productivity Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

12 Dec 1984

Dear Colleague :

The enclosed article was distributed at a recent seminar on “Japanese Management” which I attended.

One session was devoted to “small Group Activities” It was conducted by Mr. Sekijima who has been with Hitachi Ltd. For last 17 years and currently designated ‘Manager – International personal Relations Section’.

The article describes the small group activity at just one of the factories of Hitachi Ltd. But Hitachi has 26 factories in all. And Mr. Sekijima gave the following statistics for the entire Hitachi organisation.

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HITACHI – 26 FACTORIES

1983 DATA

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1.  Total no. of suggestions                       58,77,000
                                                         (58.77 lakhs)

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2.  No. of employees who sent suggestions  57,617
                                                         (62,000 employees 
                                                         have joined SGA)*

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3.  Average no. of suggestions per person    102.6/year
                                                          (All-Japan 
                                                          average is 70/year)

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4.  Average saving per suggestion               $ 31

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5.  Average saving per each suggester         $ 3145

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6.  Total saving during the year                  $ 182 million
                                                           (Rs. 218 crores)

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7.  Hitachi’s sales turnover                        $ 19.4 Billion

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8.  6/7 = Saving /Sales Turnover                 1% (approx)

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9.  Best suggestion saved                          $ 4000 per month

                                                          Approx

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Other things which Mr. Sekijima told me are :

1.  Hitachi have a total of 6205 small-groups (of 8-10 employees each) of which half are of “blue-collar” workers and half belong to “white-collar” worker.

2.  In many Japanese companies, the small group activity is know as “Quality-circles”.

3.  Suggestions must relate to the “Goal/Objective” set by the Section/Unit/Department for the itself and must be job-related.

4.  The suggestions are distributed amongst various ‘topics as follows: 
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                              HITACHI          JAPAN

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1)  Improvement of Quality          36%              31%

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2)  Improvement of Mgt.              7%               5%

or Control

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3)  ­­­­­­­­­­­­­­­Cost – Reduction                   36%               42%

__________________________________________________

4)  Safety                                  11%               3%

__________________________________________________

5)  Improvement of Equipment     10%               6%

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6)  Miscellaneous                        -                   13%

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5.  “Meeting –time” for the small-group meetings is as follows :

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 Meeting –Time                         % of meeting held

                                              In Hitachi       In Japan

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              During Rest-time       

During     Morning or Evening         54%               80%

working   During Idel-time

Hours      Actual working –time

_________________________________________________

Outside    After Shift-end

Working                                     46%               20%
Hours      Before Shift-start

__________________________________________________

TOTAL                100%             100%

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6.  There are no monetary rewards for the suggestions given! The foreman or manager gives to the suggestors small token gifts such as a ball-pen or a diary – never exceeding Rs. 400/- in value.

I could not quite appreciate why each Hitachi employee sent in, over a hundred suggestions every year, when there was no monetary reward! So I posed this problem to Mr. Sekijima.

Here is his answer :-

a.  The single biggest factor motivating a Japanese employee to send in a suggestion for improvement is the RECOGNITION  he receives through acceptance and implementation of HIS suggestion. Nearly 70% of all suggestions are accepted and implemented.

b.  Then there are other ways of recognition such as

-     Publishing photograph in factory or company newsletter.

-    Requesting the worker (or the group) to make a presentation before colleagues & managers.

-    Accepting a particular suggestion for inter-dept, inter-unit or inter-factory competition.

-    Organising a lunch with the General Manager of the plant.

7.  Introduction of “small group” activities is a pain-staking process.  In Hitachi, it took nearly 8 years as follows :-

1968-1971

-    Improvement of relations between the employees and the Managers.

-    Orientation & Training of Managers.

1972-1976

-    Training of worker-leaders

-    Introduction of program at worker-level.

1977-

-    Small-group activity becomes an ordinary event for employees.

8.  Every 6 months, there is an intensive training program for “worker-leaders”. The program is conducted by engineers from quality-control, production and industrial engineering functions. The curriculum includes, Methods-study and time standards, Preventive Maintenance, Quality-control techniques and Industrial Engineering techniques.

In conclusion Mr. Sekijima added,

“If you wish to introduce such an activity in your company, everybody, starting at the top, must transplantable in your country than other Japanese techniques, because it was born in the West”.

The only way we can find out if Mr. Sekijima is right or wrong, is by trying!   

H.C. PAREKH