Hardships and Major Benefits of Localizing Mass Production Equipment
In this article, I will be talking about the theme of "Hardships and Major Benefits of Localizing Mass Production Equipment".
Due to high labor costs in Japan and the globalization of the economy, production engineers in Japan are likely to have experience in dealing with overseas plants.
You may either ship mass production equipment prepared in Japan to an overseas plant, or you may prepare the equipment directly in the suburbs of local plant.
In this article, I will talk about the difficulties and advantages of localizing mass production equipment.
Purpose of Localization
Around 5-6 years after I joined the company, a new policy came up inside the company, which was to prepare a mass production equipment at an overseas plant.
It was to prepare mass production equipment at an overseas plant.
Until then, we had been preparing mass production equipment in Japan and sending it to our plant in China.
The equipment manufactured by our domestic suppliers was brought to technical center in Japan, verified and then shipped to the overseas plant.
Time-related benefits of localizing equipment
If you take into account the verification process in Japan and the shipping time to overseas, it will take at least two months to complete (*transport by sea).This is the case for a single unit of equipment or subassembly unit. If the entire production line is transferred, the verification period is even longer.
By procuring the equipment locally, we wanted to eliminate this period and shorten the lead time to the launch of mass production.
Price advantages of localized equipment
In addition, Chinese equipment at that time had a price advantage over Japanese equipment.
In recent years, due to the rise in prices in China, there is almost no price advantage, but there is an advantage in tax (* 16% of the unit price of the product, which is a duty on overseas products at the time of import into China).
Because of this background, I was transferred to the China plant to be the contact person for Chinese equipment manufacturers. At that time, many new products were launched, and I had to be onsite to deal with them.
The relationship between the Production Engineering Department at the head office and the overseas plants was as follows.
The head office was responsible for launching new products while the overseas plants maintained mass production.
Once the mass production equipment was prepared in China, the work of the Production Engineering Department at the head office went away.
This is also a strange story, so I think it was a political decision at the time to send someone from the headquarters to take care of the Chinese equipment manufacturers.
In general, in all companies, the head office organization tends to push work to the mass production plant. I personally didn't care about such ’politics’ and just got the job done, no matter where I belonged.
Difficulties in the initial stages of localization of mass production equipment
Myself and my assistant in China factory handled equipment specifications, concepts, and equipment audit with suppliers.
In the beginning, I had to revise the equipment design itself over and over again. Although there was an interpreter, we were frustrated every day due to the language barrier.
When we thought the equipment was finally ready, the control and positioning methods were different, so we had to correct the equipment several times.
It took three to four times as many efforts as preparing the equipment in Japan.
Some of the suppliers made ridiculously low quality equipment.
Evaluating a new supplier before placing an order is difficult, and the only way to assess the quality of their work is by looking at the finished equipment.
At the time, we had a large number of projects, so we focused our orders on low-risk equipment, but there was still only one supplier that couldn't do the job well.
The quality of work was very unprofessional.
We ended up placing an order with that company for only one of those cases, and that company went bankrupt a short time later. After all, the initial quality of that equipment was pretty poor, so we had to rebuild it with a different supplier in less than two years.
Major Advantages of Localized Mass Production Equipment
Although the Chinese equipment was the result of such hard work, there were significant advantages.
Initially, it wasn't the lead time reduction or price advantage that the top management at the head office had expected.
The biggest advantage was that it made the work of the local engineers in the Chinese plant easier.
Until then, all the equipment they had used was Japanese equipment, which was difficult for them to understand. The displays are all in Japanese. The operation manuals are also in Japanese.
All the components of the equipment are also made in Japan.
Even if you look at the attached equipment manual, you won't know how to operate it unless it's in Chinese.
We used some Japanese components for the equipment we built in China, but at least we have suppliers in the suburbs. They can also communicate in their language.
If there is something they don't understand, they can communicate immediately in their own language. This has been a great advantage.
This had a positive chain reaction, as it makes it easier to do their work, more engineers get interested in their work, and this raises their level even higher.
Initially, localization was accomplished with such hard work, but since then, local equipment has become the mainstream.
We continued to do business with our suppliers at that time, and their companies expanded as well.
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