EVOLVING PRACTICES OF CONTROL

Many of the changes in the concepts of control discussed e arlier stem from advances in industrial practice. The following section examines the competitive pressures that have led to these changes, the form they have taken and the impact they are having on the practice of control.

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2.*»I The Competitive Pressures for Change

The implications of increased competition in manufactured goods has been widely recognized, Abernathy et al. (1983), Hayes & Wheelwright (198**) Schroeder (1985), as a major threat to existing practices of production management. The progress achieved by these emergent manufacturing societies is not a new phen­ omenon; the newness is the awareness of the challenge. The significance of this build up in competitiveness lies in the skills and competences that support the achievements, Hayes (1981). The recent wave of study visits to Japan reflect its progress in competitiveness and these have shown the depth in infrastructural effo rt needed to sustain such achievements.

Adachi et al.( 1982) show that Japanese concern for quality and improvement pre-dated their rise as a world class competitor, a fte r the second world war. They instance the e ffo rt in the 1920s of M r.Ezoe of N.G.K. spark plugs to achieve American standards of performance. This included removal from the market of the company's entire output, in a period when '...a few defects were spotted.' So resolute was this pursuit of quality, that Mr. Ezoe was eventually removed from office by the m ilitary command for refusing to compromise quality to achieve higher output, during the second world w ar. While he might not have been representative of pre-war Japanese industrialists, there is little doubt that his modern counter parts would share some of this approach. This is not to claim that the Japanese have not harnessed technological and managerial transfer from the West. Adachi et a l.(l9 82 ) trace many of the efforts at technological transfer in the automotive assembly and component industries and these include Graham- Page in 1937, Austin in 1952, and Rootes in 1952-3. They report a change in emphasis in technological transfers in the la te 1950s, switching from products to equipment. Similar 'managerial' transfers have taken place particularly in the field of quality. The e ffe c t of Shewhart, Demmg etc. has been extensively recorded elsewhere.

The search for knowledge from overseas sources was stimulated by powerful internal competition, Adachi e t a l.(l9 82 ), who reported the severity of price competition being so intense that the price of a Nissan Blue Bird in Japan declined from 700,000 to 500,000 yen in the period 1959 to 1965. Similarly, Shingo (1981) reports a long period of commitment to improvements and more e ffe ctive control by Toyota, dating back to 19<*5.

The concrete levels of achievement of Japanese manufacturing have been documented in a number of sources. Abernathy et al.(1983) report new entrants to the 'pump' market developing products at 50% of the previous m arket price and thus over a five year period driving Ingersoll-Rand out of the Japanese market; similarly, they had shown (1981) Japanese cars being landed in the U.S.A. a t 30% below American costs. Clarke & Banks (1983) support this la tte r perspective. Haydon (1980), a Ford executive, reported Toyota being able to achieve 'firs t run capability of paintshops at 95%, compared with Dagenham's 50%.' British Leyland (1985), five years later, claim to achieve a 90% capability. Haydon also reported inefficiency level comparisons of *»9% at Ford and 20% at Toyo Kogyo.

2.<»2 The Forum of New Practices of Control in Production

Many of the changes introduced by the Japanese production systems can in retrospect be linked to the process of control. C ritic a l characteristics are reductions in the operating system's complexity and removal o f unnecessary uncertainty. Shingo (1981) outlining the 'improvement of process', highlights the m ulti-functional attack of the Japanese and identifies both the value analysis and industrial engineering as central vehicles in improving manufacturing processes. It should be noted that his reference to industrial engineering is closer in practice to British 'production engineering' than work study. Although reference is made to Gilbreth and use is made of the American Society of Mechanical Engineering symbols, the technological nature of the conversion process changes discussed are closer to production engineering than work study.

2 A3 Aims and Mechanisms o f E xecutive C o n tro l o f Production

Executive control of production has been strongly influenced by the 'profit centre' model. However, a number of accountants consider this model to be inappropriate as a basis for the evaluation of production, as many of the factors determining profit fa ll outside the compass of production management. Cost centre consequently plays a more c ritic a l role in this context. Y et, as De Coster & Schafer (1979) discuss, this is an incomplete approach, as it only recognizes the efficiency and not the effectiveness of production. They advocate supple­ mentary cost data, w ith other measures, which indicate the value to the plant from production's performance. We already know from quality control, Juran (197a) that value is assigned by the customer and is changeable through time. Constable it New (1976) discuss the evaluation of production's performance by senior plant management. They do not explicitly link evaluation with strategy, but instead they concentrate on a series of trends and ratios.

A consensus has emerged, however, in the manufacturing strategy and the new paradigm literatures, that production can and should form a major ingredient in many firms' corporate competitiveness, Skinner (1978), Abernathy et al.( 1983), Hill (1985). Implicit in this recognition is the assumption that senior executives w ill seek to link the evaluation of production with their corporate objectives. Thus, the evaluation of production could be expected to include an explicit strategic perspective. Hill (1985) is clearly aware of the need for investments in manufacturing to be linked to the corporate and manufacturing strategies. He also identified a need to link the manufacturing task and the assessment of current performance. His criticism of the contribution of conventional account­ ing data to evaluating production performance is heavily based on the observat­ ions of Kaplan ( 198aa).

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