The keynote talk of MODULARITY:aosd•13 titled with "The Spectrum of Architectural Modularity and Integrality: Toward a Balanced View for Analyzing Future Industrial Competition" by Takahiro Fujimoto http://aosd.net/2013/keynotes.html#Fujimoto
View for Analyzing Future Industrial Competition March 2013 Takahiro Fujimoto Professor, Faculty of Economics, Tokyo University Executive Director, Manufacturing Management Research Center
that Share Similar Design Information Two Pillars of Field-Based (Site-Based) Industrial Analysis ① Organizational Capability in Manufacturing ＝ The Way a Firm Creates Good Flows of Design Information to Customers better than Rivals. ② Architecture ＝ The Way Design Elements (Functional, Structural and Process) Are Divided and Connected to the Whole Genba(Field)-Based View of Industries and Firms Genba (Site, Field) Industry Firm Economy Under one capital In one area C Takahiro Fujimoto, University of Tokyo
(Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology C Takahiro Fujimoto, University of Tokyo
Existence of Ex-Post Rational Systems or Artifacts Without Depending Entirely upon Ex-ante Rational Logic 3 Ways of Explaining Existing (Observed) Social Systems or Artifacts ① Structural Logic ・・・ Explaining What It Is ② Functional Logic ・・・ Explaining How It Moves for Users ③ Emergent Logic ・・・ Explaining How It Was Generated If We Need Both Functional Logic and Emergent Logic for Explaining a Given Structure (Structural Attributes of the System), Then We Need Evolutionary Framework for This Particular Explanation. A Logic that Explains Variation, Selection and Retention of a Given Social System or Artifact. C Takahiro Fujimoto, University of Tokyo
-- Creating Good (Efficient and Accurate) Flows of Value-Carrying Design Information to Markets 2 General Tendency of Post-War Japanese Manufacturing Sites -- Coordination-Rich Sites (Genba) by Teamwork of Multi-Skilled Employees 3 General Tendency of Japanese Competitive Advantage – Coordination-Intensive Products – Integral Architecture Japanese Manufacturing Model – Designing and Producing Competitive Integral-Architecture Products by Coordination-rich Manufacturing Sites (Genba) This Model was Largely a Result of Industrial Evolution C Takahiro Fujimoto, University of Tokyo
2 Organizational Capability – Controlling Design Flows 3 Performance Measurement -- A Multi-Layer Approach 4 Product-Process Architecture 5 Capability-Architecture Fit --- Explaining Competitiveness C Takahiro Fujimoto, University of Tokyo Manufacturing (monozukuri) Capability （local concentration） Product-Process Architecture (Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology
= Value A firm’s products and processes are artifacts that has been designed. Manufacturing is essentially creation and transmission of design information to customers. A firm’s manufacturing (monozukuri) capability is its distinctive ability to handle flow of design information toward customers. Product-process architecture is designers’ basic way of thinking when creating design information for the product and processes. “Design” is the common denominator for these analyses. C Takahiro Fujimoto, University of Tokyo
Customers We focus on design (as opposed to material) side of manufacturing artifact = design information + medium c.f., Aristotle: object = form + material where form is more essential Products (goods and services) are the artificial (= something designed) manufacturing, if service if medium is tangible medium is intangible Primary source of customer value is design information medium design information material form intangible medium design information tangible medium design information C Takahiro Fujimoto, University of Tokyo
Productive Resources Manufacturing activity is design information flows between productive resources productive productive resource resource medium design information medium design information Design Information flow medium design information design Information flow material (media) flow development production sales customers firms C Takahiro Fujimoto, University of Tokyo
Dies 0.8 mm thick steel sheet Media (Material) Design Information C Takahiro Fujimoto, University of Tokyo Production = Transfer (Transcription) of Design Information
design information, embedded in press dies (steel block), is transmitted to 0.8 mm thick sheet steel (media) Information transmission time = value-adding time Information non-transmission time = MUDA C Takahiro Fujimoto, University of Tokyo body design cast iron body design sheet steel transmission press dies body panel
Design information, embedded in press dies, is transmitted to sheet steel C Takahiro Fujimoto, University of Tokyo body design cast iron press die body design cast iron press die body design cast iron press die body design cast iron press die
・・・ 2 stage transmission：① to tangible medium ② to customers service・・・ intangible medium; direct transmission to customers design info medium (tangible） medium (tangible） design info medium (tangible） design info design info production design info medium (intangible） design info Design info sales consum- ption satis- faction unsatisfied customers development satisfied customers unsatisfied customers satisfied customers development production sales consum- ption medium (intangible） ① ② C Takahiro Fujimoto, University of Tokyo
Entrance – Unsatisfied Customers Exit – Satisfied Customers Lead Time = Information-Receiving Time Reception Floor Design Talks to Customers Product & Price Design Cashier Timely and Accurate Information Transmission to Customers Productivity = Information-Sending Efficiancy Quality = Information Sending Accuracy 設計 情報 Tangible Medium Design Info 設計 情報 Tangible Medium Design Info 設計 情報 Intangible Medium Design Info 設計 情報 Intangible Medium Design Info Intangible Medium Design Info C Takahiro Fujimoto, University of Tokyo
2 Organizational Capability – Controlling Design Flows 3 Performance Measurement -- A Multi-Layer Approach 4 Product-Process Architecture 5 Capability-Architecture Fit --- Explaining Competitiveness C Takahiro Fujimoto, University of Tokyo Manufacturing (monozukuri) Capability （local concentration） Product-Process Architecture (Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology Design-Based Comparative Advantage C Takahiro Fujimoto, University of Tokyo
------ medium design info medium design info Repeated control of design information flow between productive resource medium design info medium design info medium design info medium design info medium design info medium design info medium design info medium design info medium design info medium design info medium design info medium design info Organizational capability ------- of manufacturing routine A system of organizational routines for fast, efficient and accurate flows of design information to customers routine routine routine routine routine routine C Takahiro Fujimoto, University of Tokyo
Dense and accurate information transmission between flexible (information-redundant) productive resources. (1) Higher Productivity and Shorter Throughput Time (TPS) Muda is unnecessary non-transmission time, which includes inventory, over-production, and defects on the information receiver side, (2) Higher Manufacturing Quality (Lower Defect Rate) (TQM) Building-in quality: - Errors of information transmission are avoided in the first place (vs. inspection) C Takahiro Fujimoto, University of Tokyo
unit） cycle time Worker material Work-in-process product #1 station inventory time Inven -tory Tans port cycle time production lead time Reception side (process) Transmission side (working) cycle time Worker Value adding time (transmission） Value adding time (reception） Non-value-adding time Inventory, waiting, transporting, etc. Productive resource productivity (#2station) （person-hour per unit） cycle time design information flow material flow Inven -tory inventory time C Takahiro Fujimoto, University of Tokyo #2 station
M+A Product Design (M+A+B) product design for manufacturability A supplier's Kaizen (impronements) supplier M reduction of work-in-processi inventory or piece-by-piece transfer process step 2 process step 1 B regular pace of information transmission (levelization, small lot) Worker and Equipment Worker and Equipment customer Work Design Equipment Design Parts Design (M) parts design for manufacturability black box parts system A A B B Work Design Equipment Design reduction of raw material inventory reduction of finished goods inventory designing process flow pror to work & equipment design M+A+B low cost automation in-house design of equipment revision of work designs by supervisors maximizing value-adding time flexible equipment workers participate in Kaizen (improvements) quick set-up change multi-skilled worker pull system mixed-model (small lot) assembly lshort-term levelization of production volume dealer visualizing non-value time (JIT, andon, line stop cord) levelization of product mix (heijunka) M M M supplier Kanban JIT delivery communication preventive maintenance flexible task assignment (shojinka) incremental impovement of equipment (1) Higher Productivity and Shorter Throughput Time C Takahiro Fujimoto, University of Tokyo
capability M+A M+A+B yes no yes no yes no M+A+B Product Design (M+A+B) design for manufacturability M+A A prevention from sending error messages (poka-yoke, jidoka, etc.) maintenance of process information stock (total productive maintenance, worker training, standard operating procedures) M supplier's Kaizen (impronements) supplier supplier's on the spot inspection on the spot inspection scrap or rework scrap or rework elimination of inspection of receovomg parts yes no M M? reduction of inventory or piece-by-piece transfer M+A? scrap or rework process step 2 process step 1 quick feedback of defect information M+A+B M+A+B? M+A+B? scrap or rework B final inspection Kaizen (continuous impronements) Worker and Equipment Worker and Equipment Worker and Equipment customer dramatizing the defect information (andon, jidoka, etc.) information flow material flow A,B,M information content inspection productive resource transformation Key: Figure 10 Organizational Capability Regarding Manufacturing Quality (Toyota) C Takahiro Fujimoto, University of Tokyo
Production --- Dense and Accurate Transmission of Design Information from Process to Product Development --- Early and Integrative Problem Solving Cycles For Fast Creation of Design Information Purchasing --- Long-Term Relationship, Capability-Building Competition, Bundled Outsourcing for Joint Creation of Design Information with Suppliers Toyota’s Manufacturing capability - Smooth, dense and accurate transmission of design information between flexible (information-redundant) productive resources. --- Integration-Based Manufacturing Capability C Takahiro Fujimoto, University of Tokyo
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology C Takahiro Fujimoto, University of Tokyo History Matters in Industry’s Capability-Building
the High-Growth Era May Create A Common Set of Capabilities at Manufacturing Sites of the Same Country “Economy of Scarcity” ・・ Hungry Organizations Are Forced to Become Lean Common Experience of “Poverty” (Input-Hungry Situations) When the Organization Was Young, Small and Growing. → 1 Limiting Intra-Firm Division of Labor (= Multi-Skilled Workers) 2 Promoting Inter-Firm Division of Labor (= Supplier Systems) 、 3 Promoting Coordination Inside and Between Firms (= Team Work) → Forced Increase of Productivity (High Altitude Trainings Runners) → Subsequent Increase of Inputs Results in Rapid Expansion of Outputs, But Expansion of Supplies Also Intensifies Competition Among Firms. Capability-Building Continues in the Sectors of Tradable Goods. ・・ Partly Unintended Results of Industrial Histories in the Late 20th Century. C Takahiro Fujimoto, University of Tokyo
2 Organizational Capability – Controlling Design Flows 3 Performance Measurement -- A Multi-Layer Approach 4 Product-Process Architecture 5 Capability-Architecture Fit --- Explaining Competitiveness C Takahiro Fujimoto, University of Tokyo Manufacturing (monozukuri) Capability （local concentration） Product-Process Architecture (Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology Design-Based Comparative Advantage C Takahiro Fujimoto, University of Tokyo
Productive Performance Market Performance Profit Performance other factors of environments and strategy Arena of Capability-building Competition productivity lead time conformance quality etc. price delivery perceived quality etc. organizational routine Figure 12 Capability, Competitiveness, and Profitability Organizational Capability C Takahiro Fujimoto, University of Tokyo
(Adjusted Person-Hours per Project) -- C Takahiro Fujimoto, University of Tokyo 0 500000 1000000 1500000 2000000 2500000 3000000 3500000 Period 1 1980-84 Period 2 1985-89 Period 3 1990-94 Period 4 1995-99 USA Europe Japan Adjustment scheme: (1) # of body types=2, (2) New design ratio=0.7, (3) Supplier’s contribution=0.3, (4) Product class=compact/sub-compact *Following Graphs Cited from Nobeoka & Fujimoto(2004)
per vehicle) Factories of Asian Multinationals in Asian Countries Productivity（man-hour/vehicle） (assemble) 5.1 9.7 9.8 7.5 9.7 14.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Japan Average(10) Korea&Taiwan Average(6) Taiwan Average(3) Thailand Average(6) China&India Average(6) India Average(3) C Takashi Oshika, and Takahiro Fujimoto, IMVP
Time (from Welding to Assembly) -- C Takahiro Fujimoto, University of Tokyo Throughput Time (Start of Body Assy-Final Line off) 17.1 20.1 25.5 36.3 20.5 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 日本 海外日本 北米 欧州 韓国 （hr.) JP/JP JP/NA NA/NA EU/EU KR/KR Data: IMVP2000yr. Survey, made by Jeweon Oh, MMRC (Hours)
2 Organizational Capability – Controlling Design Flows 3 Performance Measurement -- A Multi-Layer Approach 4 Product-Process Architecture 5 Capability-Architecture Fit --- Explaining Competitiveness C Takahiro Fujimoto, University of Tokyo Manufacturing (monozukuri) Capability （local concentration） Product-Process Architecture (Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology Design-Based Comparative Advantage C Takahiro Fujimoto, University of Tokyo
based on product-process architecture Product architecture, Basic way of thinking of engineers when they design functions and structures of a new product Product Function Sub-functions Product Structure Interface Interface Component Compo nent Mapping between Functional and Structural Elements Figure 4 Product Architecture C Takahiro Fujimoto, University of Tokyo
functional and structural elements Integral architecture many-to-many correspondence between the functional and structural elements Body Suspension Engine Handling Ride Fuel Efficiency PC PC System Automobile Computing Printer Projection Projector Printing Open architecture： mix and match of component designs across firm Closed architecture： mix and match only within a firm C Takahiro Fujimoto, University of Tokyo
Surface Appear- ance Corrosion Resist- ence Dent Resist- ence Form- ability Weld ability Paint ability Dimen- sional Accuracy Rigidity Iron Making Converter ◦ ◦ ◦ Secondary refining ◦ ◦ ◦ Continuous casting ◦ Hot Rolling ◦ Pickling ◦ Cold Rolling ◦ ◦ ◦ ◦ Continuous Annealing ◦ ◦ Integral Architecture Index = 0.23 = 15 ÷(8X8) Relatively modular C Ge and Fujimoto, University of Tokyo
cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software Three Basic Types of Product Architecture C Takahiro Fujimoto, University of Tokyo
electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software C Takahiro Fujimoto, University of Tokyo
consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software C Takahiro Fujimoto, University of Tokyo
electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software C Takahiro Fujimoto, University of Tokyo
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology C Takahiro Fujimoto, University of Tokyo Evolution of Architecture – a Macro-Micro Loop – There is no such thing as product-specific architecture
70’s 2000 Digital Color TV Autom obile Family Car Truck Mortor Cycle Japanese Chinese Camera Single Lenz Reflex Digital Camera Mobile Phone 1990-95 1995- VCR DVD Steel Automobile Use Construction Use JAPAN? Europe? U.S? Korea? China? Estimated Architectural Spectrum and International Division of Labor by Architecture (by Shintaku) Source:Fujimoto and MMRC（2006）
Society, Markets, Physics -- Designers’ Intentions -- or Chances Surviving Architectures Unintended Design Changes Evolutionary Dynamics of Macro-Micro Architecture -- by Performance Macro- Architecture Micro- Architecture selection retention -- by Cost C Takahiro Fujimoto, University of Tokyo
of the Whole Product ＝ Aggregation of Parts’ Architectures Macro-Architectures Affect Structures and Cultures of Industries and Firms Macro-Architectures Affects Micro-Architectures through Structures/Cultures Micro-Architectures ・・ are Selected by Designers’ Intended/Unintended Behaviors The Same Product may Have Different Architectures Layer by Layer (Vertically), or Area by Area (Horizontally) Ex Ante, Designers Intend to Improve Performances or Decrease Costs by Changing Micro-Architectures Ex Post, Micro-Architectures that Survived in Internal/External Selection Environments are Aggregated into a Macro-Architecture of the Whole System Loops of Macro-Architectures and Micro-Architectures
of Products with Different Architectures May Have Different Cost-Performance Frontiers ・ Customers of Different Tastes (e.g., Performance-Oriented or Cost-Oriented) May Select Products of Different Architecture 1 Performance-Oriented Customers May Choose Integral Architecture; 2 Cost-Oriented Customers May Choose Modular Architecture ・ Architectures, Coordination Mechanisms, Industrial Structures Selected Simultaneously 1 Integral Architecture – Organizational Coordination – Concentrated Structure 2 Modular Architecture -- Market Coordination -- Dispersed Industrial Structure ・ Organization’s Coordination Capability Building → Shift to Integral Architectureｓ Market’s Coordination Capability Building → Shift to Modular Architectures ・ Middle Range in the Architecture Spectrum Relational (Long-Term) Contracts and Other Hybrid Coordination Mechanisms. Selection of Macro-Architectures by Markets
= Modular Modular Selected Architecture = Integral Average Cost (Price) Indifference Curve of Price-Oriented Customers Intermediate Market Tastes and Selection of Architectures Performance-Oriented Customers – Tend Toward Integral Architecture Average Cost (Price) Integral Modular Intermediate Indifference Curve of Performance- Oriented Customers C Takahiro Fujimoto, University of Tokyo Performance Performance
Indifference Curve of Function -Oriented (Performance-oriented) Customers Indifference Curve of Price-Oriented Customers Price (Average Cost) Choice of Price-oriented Customers = Modular Products Note: Modified from Fujimoto (2012) Comprehensive Function-Price Frontier As an Envelope Choice of Function-oriented Customers = Integral Products Function-Price Frontier of Modular Architecture Products Function-Price Frontier of Integral Architecture Products Function-Price Frontier of Middle Range Products
System Time Rate (frequency) of Innovation 1900s 1890s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s Dominant Design (Ford T) Sloan System Toyota System Emergence Safety/Energy/ Environmental Regulations Lean System Diffusion Digital Technology Alternative Engines Downsizing of US cars “Long Tail” Abernathy-Utterback Cycle Note: The author’s subjective estimation based on Abernathy (1978), Cusumano (1985), Womack et al (1990), Clark and Fujimoto (1991), Fujimoto (1999), and other sources. C Takahiro Fujimoto, University of Tokyo
Relevant Performance for Customers Incumbent Alternative１ Alternative２ １ Christensen Model – Disruptive Technologies Repeated? Over-Quality Over-Quality Over-Quality Disruptive innovation Disruptive Innovation Complex Simple C Takahiro Fujimoto, University of Tokyo
Performance Curve ＝ Average Complexity Note ２ Automobile Case (Two Paths Co-Existing) Performance Curve、Market Size、and Average Complexity Performance (≒Complexity) Complex Simple Emergent Country 2 Range of Relevant Performance for Customers C Takahiro Fujimoto, University of Tokyo
2 Organizational Capability – Controlling Design Flows 3 Performance Measurement -- A Multi-Layer Approach 4 Product-Process Architecture 5 Capability-Architecture Fit --- Explaining Competitiveness C Takahiro Fujimoto, University of Tokyo Manufacturing (monozukuri) Capability （local concentration） Product-Process Architecture (Selected by Products） Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology
Comparative Advantage of Design Sites Fit？ Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology Design-Based Comparative Advantage C Takahiro Fujimoto, University of Tokyo
(sites, fields) in the same country or region, facing similar environmental constraints, national-regional institutions, demand patterns or other forces specific to a particular geographical area may develop similar types of organizational capabilities Products with the architecture which fits this organizational capability tend to demonstrate competitive advantage (-- if not profitability) History matters Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software C Takahiro Fujimoto, University of Tokyo Japan’s Architectural Comparative Advantage
Equation for Assembly products：52sample） Ratio of Export and Integral Architecture Index Scatter chart（assembly products：52sample） 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% -3.000 -2.500 -2.000 -1.500 -1.000 -0.500 0.000 0.500 1.000 1.500 Week Integral Architecture Index Strong Ratio of Export Ratio of Export Regression Curve C Oshika and Fujimoto, MMRC, University of Tokyo
Equation for Process-Oriented Products：43sample） Ratio of Export and Integral Architecture Index Scatter chart（Raw Materials products：43sample） 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% -2.500 -2.000 -1.500 -1.000 -0.500 0.000 0.500 1.000 1.500 2.000 Week Integral Architecture Index Strong Ratio of Export Ratio of Export Regression Curve C Oshika and Fujimoto, MMRC, University of Tokyo
f(C-A Fit)” Hypothesis Japan Linear Estimation significan t Integral Architecture Modular Architecture Korea China Coordi nation- oriented Speciali zation -oriented significant Not clear Not clear Non-Linear Estimation Integral Architecture Modular Architecture significan t significant significan t significant Not clear peciali Coordi nation- oriented Speciali zation -oriented Speciali zation -oriented Coordi nation- oriented Data Concentrated here C Takahiro Fujimoto,
More competitive in products with closed-integral architecture. based on integration-based manufacturing capability Chinese firms – mobilization capability More competitive in labor-intensive products with open-modular (or quasi-open) architecture Korean (large) firms – concentration capability More competitive in capital-intensive products with modular architecture (moving toward integral?) ASEAN firms – labor-retaining capability?? More competitive in labor-intensive products with closed-integral architecture? U.S. firms – conceptualization capability More competitive in knowledge-intensive products with open-modular architecture European firms – expression capability More competitive in closed-integral products based on brand-design-marketing capability C Takahiro Fujimoto, University of Tokyo
with Open-Modular Architecture Architectural Transformation -- From Integral to Open Architecture Quasi-Open Architecture (Mix-and-Match of Copied-Modified Parts) e.g., Motorcycle, Consumer Appliances, Cellular Phone -- Many Assemblers, Module Suppliers, Huge Production Volume Tough Price Competition, Thin Profit Rates, Export Quality?? Historical Origin – Soviet-Style National Innovation System Shortage of Design Assets Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software C Takahiro Fujimoto, University of Tokyo China’s Architectural Comparative Advantage
Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software
Sedan (Brilliant) by a local Chinese Auto Maker Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software
but Very Different Architecture but Very Different Architecture -- -- Rear Drive, Truck Architecture, Rear Drive, Truck Architecture, Toyota &Mitsubishi Engines Available Toyota &Mitsubishi Engines Available SUV(SR-V) by a local Chinese Auto Maker Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software
is more expensive) More toward integral architecture than we expected Modular Integral Closed small cars compact consumer electronics internet bicycle LEGO (building-block toy) motorcycle machine tools Figure 6 Basic Types of Product Architecture Open game software mainframe computer personal computer (PC) PC software Different architectural strategies between Chinese and Indian local auto makers? C Fujimoto and Ge, University of Tokyo ？
Market Japanese are Not Good at Science-Based Integral Products? Higher Level of Cross-Disciplinary Integration is Needed Balancing Capability Building and Complexity Reduction is Key
of Product Complexity Toyota Problem In Design Quality Out of Balance Capability- Building Environment Customer or Market Requirements Constraints imposed by Society Decisions and Behaviors of Designers Other Environmental Factors, and Chances Capability- Building Competition Capability- Building Capability Constraints imposed by Technology C Takahiro Fujimoto, University of Tokyo Cf. MacDuffie and Fujimoto (2010) Harvard Business Review
Form of Cross-Functional Integration constraints ⑤ Automation ④ TQM ③ Digital/Real Engineering Cap. ② Quality Engineering ① Architecture theory (modularization) function T. Fujimoto, University of Tokyo
21th Century? Globalization – as Realization of International Division of Labor Microscopic Intra-industrial Trade based on Comparative Advantage The Key Is Architecture-Capability Fit -- Comparative Advantage of Design Capability-Building Competition Evolutionary Learning Capability Strong Strategies and Strong Operations C Takahiro Fujimoto, University of Tokyo
the concept of relation- specific skill,” Journal of the Japanese and International Economies, Vol. 3, pp.1-30. • Baldwin, C. and Clark, K.B. (2000). Design Rules, MIT Press • Clark, K.B. and Fujimoto, T. (1991). Product Development performance, Harvard Business School Press, Boston. • Fujimoto, T. (1999). The Evolution of a Manufacturing System at Toyota, Oxford University Press • Fujimoto, T. (2007). Competing to be Really, Really Good, I-House Press, Tokyo. • Fujimoto, T. (2007) “Architecture-Based Comparative Advantage – A Design Information View of Manufacturing.” Evol. Inst. Econ. Rev. 4(1): 55-112. • Fujimoto, T. and Shiozawa, Y. (2011, 2012) “Inter and Intra Company Competition in the Age of Global Competition: A Micro and Macro Interpretation of Ricardian Trade Theory.” Evol. Inst. Econ. Rev. 8(1): 1-37; 8(2):193-231 • Ohno, K., and Fujimoto, T., ed. (2006) Industrialization of Developing Countries: Analyses by Japanese Economists, National Graduate Institute for Policy Studies • Ulrich, K. (1995). “The role of product architecture in the manufacturing firm,” Research Policy, Vol. 24, pp. 419-440. • Womack, J., et al. (1990) The Machine That Changed the World. Rawson.
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