Rob Imrie

Japanese style subcontracting—Its impact on European industries

Abstract New partnerships between large firm and small firm are being forged in the U.K. through subcontracting. An emerging model of ‘Japanese-style’ partnerships is being introduced through Japanese direct investment and emulation by Western firms. This article reports on research into four large manufacturers and a selection of their suppliers and describes this transformation away from an adversarial form of contracting to higher trust obligational relationships. It also analyses the barriers to implementation and the pressures that it poses for the supplier firms.

Industrial change and local economic fragmentation: the case of stoke-on-trent

Abstract The proactivity of localities has been an emergent theme in geography, with a range of scholars detecting the power of local areas in mediating, and controlling, wider global forces. In contrast to this view, this paper provides an example of the strengthening capacity of international and national economic forces in influencing the structure of localities. Using the case of Stoke-on-Trent, this paper provides examples of how local economic change is illustrative of the fragmentation of local economic ties and relations.

Economic Change, Vertical Disintegration, and Buyer-Supplier Relations: Some Theoretical Considerations

Throughout the 1980s, an intense debate has developed around the notion that core sectors of industry have been reorganizing production strategies associated with mass production (Jones and Scott, 1987; Lipietz, 1986; Lovering, 1988; Wood, 1989). In particular, it is argued that new forms of production organization are redefining the utilization of technologies and labour, underpinned by the development of new productive strategies aimed at serving a wider range of variagated and fragmented markets (Kelly, 1983; Marginson et al., 1988; Piore, 1986; Williams et al., 1987). While there is a vigorous debate concerning the meaning, nature and implications of changes in production organization, there is widespread consensus that fundamental changes are occurring in advanced capitalist societies (Cooke, 1989; Hakim, 1987; Handy, 1984; Harvey, 1988). In response to a period of economic turbulence, a number of researchers have attempted to develop key concepts to clarify and explain contemporary changes in industrial organization.

Nissan Motor Manufacturing UK: Best Practice Under Pressure

The decision, in the early 1980s, by Nissan Motor to locate in the UK provoked unparalleled interest The company were the first Japanese auto producer to locate in the EEC; and the planned investment of £617 million (by 1992) is the largest Japanese EEC investment to date (although it will be eclipsed by the planned £840 investment of Toyota). It also promised 3500 direct jobs and many more in spin-off job creation at a time when unemployment rates in the UK were at an all time post-war high. The Nissan investment, however, represented more than a major investment and large job generation. It was the first test as to whether the Japanese manufacturing and management techniques, used to such effect in Japan, could be transferred to the UK automotive industry. Could concepts such as total quality control and just-in-time production be utilized to such effect in the North East of England as they are in Oppama? How would the various actors — British managers, workers and suppliers — respond to this challenge?

Lucas Girling: New Practices, Old Constraints

The Lucas Girling case study is unique in several respects. First, it is the only British company of the four. Second, it is an old established company which is attempting to introduce a new style of manufacturing organization in old, brownfield locations, in contrast to Sony and Nissan’s greenfield operations in which they have been able to introduce new working practices. Third, and perhaps most important, Lucas are a major UK company and a global multinational employing in the UK more people than either Toyota or Nissan does in Japan. However, it is also essentially a supplier, at least in its major division, automotives. Thus, while it is a major corporation and it has a large network of suppliers and subcontractors, Lucas are caught in the middle of the supply chain between the major automotive OEMs and its own suppliers, and therefore are again unique in this sample.

IBM, UK: From Control to Collaboration?

The IBM case study is of interest for a number of reasons. The company is the world’s third largest corporation, and in the UK alone employs nearly 18000 and is its third largest manufacturing exporter. Moreover, it has dominated its market at a global level in a way few other companies have managed. Even in the late 1980s it had a 70 per cent share of the European computer market for hardware, software and services. IBM has become a bye-word for certain features; its distinctive corporate culture, its innovativeness, its quality and the professionalism of the organization.

Beyond Adversarialism: The Advent of New Supply Practices?

The 1980s have witnessed the development of a number of innovations in industrial organization, characterized by some new and different forms of supplier relationships, including long term contracts, joint ventures, high technology cooperative agreements, and dedicated supplier arrangements. It is also apparent that, in response to heightened levels of global competition, companies are being forced to reappraise interlocked systems of quality and process control, stocking, delivery, and related inter-industry transactions. In particular, British and European producers are now much more aware of the potential cost savings and control to be gained from developing obligational-style buyer-supplier relations, although there is evidence that many producers are a long way off from developing the requisite systems, even in our four case study firms.

Sony UK: Supplier Development and the Cooperative Ethos

Sony’s Bridgend Colour television plant in South Wales was a milestone in Japanese investment Although not the first Japanese company to locate in Wales, it was the catalyst for considerable further investment in Wales in consumer electronics. The region now has over thirty Japanese-owned plants primarily engaged in consumer electronics, which represents the largest regional concentration anywhere in the EEC. The initial wave of original equipment manufacturers has been followed by a second wave of component suppliers. Sony remains, in employment terms, the largest single Japanese investment in the UK.

Buyer-Supplier Relations and Changes in Industrial Organization

By the mid-1980s, many commentators on the British economy were in agreement that British industry was in the process of a series of major changes in managerial styles and strategies, industrial relations, and associated working practices. The Treasury’s Economic Progress Report (1986) was typical in noting the Government’s intent on encouraging the development of ‘an enterprise culture and a more flexible and responsive economy’. This political agenda has incorporated a number of enabling measures, including the deregulation of private capital, the privatization of significant parts of the public sector, and the introduction of commercial criteria into residual state sector activities. These changes have occurred alongside a major restructuring of industrial production, work and employment, with the emergence of new forms of flexible economic and labour organization, characterized by a diverse range of new technologies, products, and services (Boyer, 1987; Jones, 1988; Martin, 1988; Wood, 1989).

Vertical Disintegration and New Forms of Work Organization: a Review of Empirical Evidence

An important trend in recent years is for companies to buy in specialist non-core services which provide openings for the decentralization of work to a host of supplier firms. This takes a number of forms including homeworking, freelance work, and, more commonly, subcontracting. However, what is particularly surprizing in the literature is the absence of any coherent or systematic set of empirical research to indicate the extent or nature of different patterns of productive decentralization. The British Institute of Management (BIM, 1985) made a similar observation about the nature of buyer-supplier relations, in noting that, Apart from futurology and some interesting studies of the interplay between the formal, black, and household economy, little research has been done to reveal ongoing trends in this field, and hardly any on the immediate practical implications for those involved.