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The Journal of Japanese Operations Management and Strategy, Vol. 1, No. 1, pp.30-43, 2009 30 STRATEGIC PRODUCTIVITY IMPROVEMENT MODEL FOR WHITE-COLLAR WORKERS EMPLOYING SCIENCE TQM Manabu Yamaji Aoyama Gakuin University Kakuro Amasaka Aoyama Gakuin University ABSTRACT One of the requisites for winning corporate competitions today is success in the global marketing for quickly offering high-quality, latest model products in response to customer needs. The key to success in global production lies in full functionalization of partnering, in which forefront divisions of technology, production, and sales as well as the white-collar sections collaborate in a cooperative strategic scheme to realize global quality and optimal production. This study proposes Strategic Productivity Improvement Model for white-collar workers, SPIM mainly in connection with the white-collar sections. Further, the effectiveness of this model is verified at the successful companies. Keywords: white-collar workers, Strategic Productivity Improvement Model, partnering INTRODUCTION With recent advances in IT and the widespread use of the Internet, the consumers in today’s market have quick and easy access to the latest information from around the world, and today’s customers select those products that fit their individual lifestyles and values. We are in an age that demands rigorous investigation of what corporate reliability means via the reliability of a company’s products—in terms of both quality and utility. Therefore, companies that do not make advances in customer-first quality management (which is the cornerstone of corporate management) will face rejection by customers and society—as evidenced in recent corporate scandals and recalls. Now more than ever, the key to corporate survival is thus successful global marketing, or activities aimed at increasing value for customers and promptly providing them with the latest high-quality models. This requires a marketing strategy carried out from the perspective of global customers. Manufacturers in particular must accurately grasp customer trends. This means that administrative and every management layer of functional division must adopt an even more global perspective and put it at the core of their corporate management strategy—which in turn will develop their manufacturing activities to meet the demands of the modern world. Specifically, the operating divisions (engineering, production, and sales) must work strategically with suppliers to achieve consistent global quality with optimized local production ahead of competitors. In other words, the success of global production rests on the ability of manufacturers to make full and effective use of partnering.

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The Journal of Japanese Operations Management and Strategy, Vol. 1, No. 1, pp.30-43, 2009

30

STRATEGIC PRODUCTIVITY IMPROVEMENT MODEL FOR WHITE-COLLAR WORKERS EMPLOYING SCIENCE TQM

Manabu Yamaji

Aoyama Gakuin University

Kakuro Amasaka Aoyama Gakuin University

ABSTRACT

One of the requisites for winning corporate competitions today is success in the global marketing for quickly offering high-quality, latest model products in response to customer needs. The key to success in global production lies in full functionalization of partnering, in which forefront divisions of technology, production, and sales as well as the white-collar sections collaborate in a cooperative strategic scheme to realize global quality and optimal production. This study proposes Strategic Productivity Improvement Model for white-collar workers, SPIM mainly in connection with the white-collar sections. Further, the effectiveness of this model is verified at the successful companies.

Keywords: white-collar workers, Strategic Productivity Improvement Model, partnering

INTRODUCTION With recent advances in IT and the widespread use of the Internet, the consumers in today’s market have quick and easy access to the latest information from around the world, and today’s customers select those products that fit their individual lifestyles and values. We are in an age that demands rigorous investigation of what corporate reliability means via the reliability of a company’s products—in terms of both quality and utility.

Therefore, companies that do not make advances in customer-first quality management (which is the cornerstone of corporate management) will face rejection by customers and society—as evidenced in recent corporate scandals and recalls. Now more than ever, the key to corporate survival is thus successful global marketing, or activities aimed at increasing value for customers and promptly providing them with the latest high-quality models. This requires a marketing strategy carried out from the perspective of global customers.

Manufacturers in particular must accurately grasp customer trends. This means that administrative and every management layer of functional division must adopt an even more global perspective and put it at the core of their corporate management strategy—which in turn will develop their manufacturing activities to meet the demands of the modern world. Specifically, the operating divisions (engineering, production, and sales) must work strategically with suppliers to achieve consistent global quality with optimized local production ahead of competitors. In other words, the success of global production rests on the ability of manufacturers to make full and effective use of partnering.

Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

31

Against this background, this study strategically deploys the next generation quality management technology, Science TQM (Total Quality Management) (Amasaka 2007; 2008), which has been proposed by the authors and verified as to its effectiveness. The authors then propose the Strategic Productivity Improvement Model for white-collar workers SPIM which improves the intellectual productivity of the white-collar sections. Then, the effectiveness of SPIM will be verified by going over the application results observed at leading companies. WHITE-COLLAR WORKERS ISSUE Global production strategy The management values shared by so-called winning companies are shifting from emphasis on materials to human resources. The companies have amassed human resources, materials, and finances. It is easy to procure materials as well as finances. However, human resources take time to develop, and therefore, is not as easy as the foregoing to procure. The companies are endeavoring to grasp the information on human resources, take hold of the work, and formulate the vision in order to compete at a higher level.

It has been increasingly difficult to differentiate companies only in terms of high product quality, cost performance, and superiority in the business process. It is imperative therefore to improve the value of human resources, but only a few companies have actually constructed a mechanism for improving human resources. Up until now, each department has acquired information on human resources from the personnel affairs division, and systems for offering such information have been insufficient. By improving the system for sharing information on human resources, similar to sharing information on materials and finances, the business assets of companies can be effectively utilized.

Moreover, the information of in-company systems has not been completely updated until the end of fiscal terms. Therefore, the accuracy of the information provided has been inferior, and the judgments regarding management tend to rely on personal experience or inspiration. In other words, information sharing has not been speedy enough. From now on, it is necessary to offer information with high precision based on the PDCA (Plan, Do, Check, Action) cycle so that decision-making on management matters will be based on facts. To that end, a system capable of analyzing all data, including human resources, from a variety of angles must be prepared. Under such a circumstance, there are many studies for globalization (Prajogo 2006), TQM and information sharing (Burke, et. al. 2005; Evans and Lindsay 1995; Grundspenkis 2007; Halevi and Wang 2007, Hoogervorst et. al. 2005; Kakkar and Narag 2007; Lagrosen 2004; Ljungström 2005; Yamaji and Amasaka, 2008).

In this study, information system, engineering control, production control and purchasing control are defined as management layer of functional division. The management layers are the core of corporate activity and therefore it is vital for it to reinforce the functions of “business management technology” so as to strengthen and enrich both internal and external management. This is also done in order to create a business linkage with the general administration department and cooperate with the on-site departments, such as development designing, production, and sales departments, as well as with business partners.

Total planning, personal division, etc. are defined as administrative divisions. It is increasingly important for the general administration-related department to advance corporate management by grasping the changing domestic and overseas environment surrounding the industry. It should also cooperate with the management layers so as to strengthen internal and external management. In order to achieve this, it is urgently necessary to position human

Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

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resource development at the core of management policy in order to enhance corporate, organizational, and human reliability as the basis of strategic quality management. It is also necessary, at the stage of utilizing human resources, to strengthen the function of improving intelligent productivity through cooperation with all the related departments.

Administrative and management layers are defined as white-collar sections, and the human resources working within the divisions are defined as white-collar workers. Additionally, the results produced by these divisions are referred to as intellectual productivity. Issues of the white-collar sections Today’s corporations clearly grasp the status of their human resources and the performance of their business processes in every division. They formulate corporate visions from a global marketing perspective and are promoting the spread of strategic quality management. With the advent of global quality competition in today’s market, it is important that

advanced companies looking to succeed in global production further refine core Japanese production strategies such as high production quality and cost competition. They must also work to further enhance corporate reliability, organizational reliability and human reliability in order to be known as world-class organizations. These efforts form the core of improving the value of human resources and the foundation of long-term corporate growth.

With the rapid spread of global production, the role and expectations toward administrative divisions and management layers have grown. Administrative divisions must further strengthen external management, and work together with management and operating divisions (technical, production, and sales) to improve the quality of business processes throughout the company. Systematic and organized human resource development is also critical. At the same time, management layers must also strengthen internal management and work with operating divisions and suppliers to carry out swift deployment of strategic global quality management, which aims for the simultaneous achievement of QCD (Quality, Cost and Delivery).

So that both administrative divisions and management layers can achieve an organic total linkage of business processes throughout the organization, the mission of each division and department must be optimized so that all roles and functions are fully coordinated. This requires that companies aim to achieve high cycling within their business processes.

In order to effectively utilize the role and function of each division, it is vital to recognize the issues related to the white-collar sections, and to work on solving them. The authors find that the issues involving the white-collar sections which need to be kept in mind when implementing strategic quality management are as follows:

1) The information is kept on a personal basis in many cases, not efficiently shared within the division.

2) They are lagging behind the other divisions, which are directly undertaking manufacturing operations, in the development of information technology (inter-division and intra-division information sharing)

3) Due to lack of communication with those outside the company, white-collar sections are ignorant of the real world.

4) They do not have systems for mid-term and long-term human resource development. Science TQM, which is proposed as a new quality management model, is strategically deployed in this study with the aim of addressing the above issues and improving the intellectual productivity of white-collar workers. The next chapter gives a brief overview of Science TQM, focusing particularly on Total Intelligence Management System (TIS) and Total Job Quality Management System (TJS), which are concerned with the intellectual

Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

33

productivity of white-collar workers. A new model is proposed comprising the core technologies of these systems. The effectiveness of the proposed model has been verified through practical application at successful companies. NEW QUALITY MANAGEMENT PRINCIPLE, SCIENCE TQM When we take a look at recent corporate activities both inside and outside Japan, there are cases where leading companies have lost customer trust. Customer trust is lost because R&D activities for enhancing QCD are stagnant due to internal and/or external chronic quality problems, they lose sight of customer needs, and fall behind in technological development. On the other hand, some companies are focusing on the customer first principle while actively innovating product development, sales and marketing. These companies are conducting company-wide quality management activities, successfully enhancing customer satisfaction (CS). The author strongly believes that the key difference between successful and unsuccessful companies lies in strategic quality management based on the customer first principle that goes ahead of time. From that aspect, the author has been proposing a new quality management principle, Science TQM (Amasaka 2004a; 2008), to many leading Japanese companies, including Toyota Motor Corporation. Science TQM (Amasaka 2004b) consists of the five elements of core competence (Total Development System (TDS), Total Production System (TPS), Total Marketing System (TMS), Total Intelligence Management System (TIS), and Total Job Quality Management System (TJS)) as shown in Figure 1. IMPROVEMENT IN WHITE-COLLAR PRODUCTIVITY It has been increasingly important for the administrative divisions to further advance the corporate management by grasping the environmental changes inside and outside the company in order to reinforce the internal and external management. For this reason, human resource development must be positioned at the core of management planning more emphatically than before so that the reliability of company, organization, and human resources can be enhanced. In the stage for utilizing (training) human resources, the function

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Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

34

of improving white collar productivity must be strengthened by partnering with the management layers. Likewise, the management layers needs to function at the core of management technology and control. Therefore, it is deemed indispensable for management layers to reinforce the function of implementing JIT in the business flows of human resources, technology, and materials, through utilizing intellectual information as well as cooperating with the administrative divisions so that the onsite manufacturing divisions can be well managed internally. The authors have verified the effectiveness of TIS (Figure 2) for the management layers and TJS (Figure 3) for the administration section (Amasaka 2004a). In order to activate the role and function of the white-collar sections, in addition to practical application of the above core technologies, the authors believe that the role and function of the white-collar sections can be integrally linked to business (high cycle-ization of the business process), as well as with the core technologies of onsite manufacturing divisions, such as TMS, TDS, and TPS to implement strategic JIT (Ohno 1977; Taylor and Brunt 2001; Womack and Jones 1994).

In this connection, what is required of the white-collar sections is to have the will and initiative to take responsibility in solving various management issues in cooperation with onsite manufacturing divisions. The authors think that the white-collar sections are expected to play the role of taking a proactive leadership role in putting together all the related divisions. In this paper, the authors focus on information management of TIS and partnering of TJS and propose a management model for white-collar sections.

PROPOSAL OF STRATEGIC PRODUCTIVITY IMPROVEMENT MODEL FOR WHITE-COLLAR WORKERS, SPIM In recent years, Japanese companies have introduced the Western-style division of labor. Such a western labor division system is designed for easy replacement of labor forces and is achievement-oriented, it evaluates the degree of personal contribution to target achievement. Therefore, when a problem arises, it is dealt with not as a personal problem, but only within their responsibility range. Consequently, many activities and actions based on such a principle have been criticized by society. On the other hand, in the former Japanese system, problems were handled by all members across departments, which was a strong point of the Japanese way.

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needs to be shared among many departments and they need to also grasp the numerical values that show company-wide trends. In that way, upon confirming abnormal numerical indications, the problem can be identified and solved at an early stage. For example, if overtime labor cost shows an unusual figure, the project manager should find out the cause by checking which division, as well as which position or which process, is showing such a trend.

In the administrative division, consideration needs to be given to possible deterioration of the work environment or lack of labor force, and in the sales division, care must be exercised to not delay delivery. Each division exchanges information with the other divisions to solve the problem as a whole company. The solutions shall be evaluated so that the information sharing of both problems and solutions can become a preventive measure and food for thought for the next plan.

Such a partnership among divisions, involves creation of a system to visualize information flow as well as its effective and practical application. To that end, a leader who links human resources is indispensable, and therefore, the cornerstone of corporate management is to foster leaders who have the understanding of the vision of management directors, a broad view of world trends, and communication skills to create a network of personnel inside the company. Simply putting, the cultivation of an entrepreneurial mind or professional mind is what the authors are intending by proposing this business model of strategic productivity improvement for the white-collar sections. In the following chapter, the effectiveness of the proposed SPIM is verified through application cases at the successful companies. APPLICATION The effectiveness of the proposed SPIM is verified through application cases at the successful companies. Strategic Intelligence Application System and Business Process High Linkage

Figure 5 – Concept of SPIM

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Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

37

System are introduced as practical applications of Strategic Information Sharing and Strategic Co-creative Action, the core technologies of SPIM. Strategic information sharing V-MICS, a global maintenance network system, and TPS-QAS, a quality management system, will be introduced as successful applications of Strategic Information Sharing, one of the core technologies of the proposed SPIM. Both cases embody the successful sharing of the kind of information that cannot be expressed in words in order to achieve advances in global quality management. Additionally, similar activities at other companies will be introduced. Administrative divisions play the role of taking a proactive leadership role in putting together all the related divisions and built these systems. Highly reliable production system V-MICS by combining DB and CG Japanese automotive industries are grappling with the global marketing, simultaneous new vehicle start-up globally and other major propositions under our policy of production where customers need the product and the quantity needed. Accordingly, it is imperative for production plants to carry out production without breakdown so as to provide customers promptly with high quality products. Accordingly, in this section the authors have proposed the Highly Reliable Production System V-MICS (Virtual-Maintenance Innovated Computer System) (Sakai and Amasaka 2005), which has been systematized and practiced by using Data Base (DB) and Computer Graphics (CG), which form the nucleus of this advanced maintenance system.

As Figure 6 shows, the hardware forms a server and client system by installing a plant server in each production plant. The worker reads the manual from the client server provided at each maintenance station via a network. The worker, if necessary, can write the special matters in the manual. In addition, the plant servers are synchronized with the central maintenance server and any change to the contents can be registered and distributed simultaneously. This enables workers at different plants, both domestic and abroad, to virtually experience the data of each process on their personal computers. They can thus share the knowledge on defects concerning the same process.

Next, regarding the software, the authors use a modified entry sheet from Excel software of the world standard Microsoft Corp. and execute the manual creation program by registering (i) procedures and descriptions and (ii) a display screen to convert the maintenance manual into a visual manual that can be read via the Internet. Moreover, using the modified Excel software, this new system can correct the images and descriptions to revise the maintenance manual. In addition, irrespective of domestic or overseas, visual manual data is handled in HTML format and can be forwarded not only to the production sites but also worldwide via the Internet. The authors, therefore, consider that conveying the fact, as it is insufficient to make data easy to understand. So, CG, which can represent what cannot be materialized in actuality, is used. It is conventionally designed for realizing actual images in the world of the computer. Its objectives were to reproduce things that existed in the past as real as possible or newly create things that do not exist at all. On the other hand, a new objective of ours was to supplement parts, which are hard to transfer by ordinary animation (video). For concrete methods, we set up targets for transferring easily understandable information by exaggerating and showing a structure by disassembling it by computer for the ease of understanding.

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Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

39

with other application software, real-time factorial analysis becomes possible using the SQC (Statistical Quality Control) analysis software. Introduction of T-QCIS has improved the Cm (machine capability) and Cp (process capability) of the overall vehicle production line as expected (Amasaka and Sakai 2007). To ensure the effectiveness of this T-QCIS, the authors have constructed the Toyota’s High-Reliability Production System, Networking of Availability and Reliability Information Manufacturing System (T-ARIM) (Amasaka and Sakai 1998) as shown in Figure 7, a network system constructed by the production engineering control division in coordination with the manufacturing division for the purpose of controlling production line operations and the reliability and maintainability of the lines. By implementing Inline-Online SQC (Amasaka and Sakai 1998), this system collects and processes Inline in-process data Inline in real-time to control the process. It shares this intellectual information with related divisions, both domestic and/or overseas, to maintain or improve the processes scientifically using causal analysis, etc. The results are reflected in prompt improvement of the operating ratio of newly constructed lines. In practice, a system is then established for checking and following up on the quantitative improvement effects by analyzing changes in the failure mode before and after measures against failures, using Weibull chart analysis and other appropriate SQC tools. Creating the NHK-QIS Quality Information System: HDD Suspension High Quality Assurance through Digitized Control Charts Recent years have seen dramatic advances -a revolution even- in information communication. Production processes featuring solid, built-in quality and a high degree of quality assurance worldwide are needed for information communication devices. NHK SPRING Co., Ltd. has therefore taken strategic steps to strengthen the foundation of its scientific quality management by creating NHK-QIS, which makes intelligent use of digitized control charts. They have thus been able to enhance built-in quality and increase the pace of quality improvements. Strategic Co-Creative Action The key to success in global production is the reinforcement of product power, or the “simultaneous achievement of QCD (Amasaka 2004a).” In order to realize this, it is vital to reinforce Japanese-style partnering, or “partnering of competition and collaboration—Japan Supply Chain Management” between automobile manufacturers (hereafter termed Assembly

Figure 7 – Example of T-ARIM Hardware System

Manabu Yamaji and Kakuro Amasaka, Strategic Productivity Improvement Model for White-Collar Workers Employing Science TQM

40

Makers) and affiliated or non-affiliated parts manufacturers (hereafter termed Suppliers) (Amasaka 2004a; b). This is also called the Japan Supply System.

For further advancement in this area, Assembly Makers should not only reinforce internal partnering with their own operational departments (such as engineering, production, and sales), but must also strengthen external partnering. This means establishing cooperative relationships with other companies while advancing and establishing global partnering through strategic collaboration with both foreign and domestic Suppliers.

The authors present “Global Development of Science TQM between Toyota and a Group of Cooperation Companies” as case of internal partnering, and “Improvement in Painting Quality of Chassis Parts of Automobiles” as case of external partnering in Toyota and suppliers. In these examples, management layers play the role of taking a proactive leadership role in putting together all the related divisions and solve problems. Global development of science TQM between Toyota and a group of cooperation companies Toyota’s quality management, SQC Renaissance (Amasaka 2004b), which is the administrative staff’s activity for improving quality management technology by utilizing Science SQC (1988 onward), became popularized and expanded through joint task team activities with affiliated and non-affiliated suppliers. In addition, this author (Amasaka, et al. 1998) drew up Toyota SQC Studying Abroad System (1990 onward) for adopting Science SQC. The system for training all Toyota SQC leaders (called senior SQC specialists) is being promoted as planned. Similarly, this author (Amasaka and Osaki 1999) succeeded in strengthening Senior SQC Leaders (senior SQC advisors) among the manager strata as a result of the propagation and expansion of Management SQC (1994 onward), the core method of Science SQC. Figure 8 shows an example of a joint task team formed between Toyota and an overseas company. This is the promotion system of Toyota Motor Thailand Science SQC (Amasaka 2004b) (1996 onward). The system has been globally developed in Europe, North America, Canada and developing countries and found effective as a strategic QCD study (Amasaka 2004a). As thus far described, Science SQC education (Amasaka and Osaki 1999) and Stratified task team (Amasaka 2004b) activities have raised the administrative staff’s problem-solving skill with excellent business results subsequently achieved. These activities and their achievements were attributable to the effective activities of stratified joint task teams formed with line, staff, management, administrative and indirect operational divisions, and related companies of affiliated and non-affiliated suppliers during the planning and implementing phases. Similarly, the activities are presently being implemented to improve the quality management technologies at overseas companies and local production plants. The activities have become a

Toyota (Japan) Toyota Motor Thailand

SQC IN TOYOTA MOTOR THAILAND

Japanese coordinator(SQC staff)

ManagerEngineer

ToyotaTQM Promotion Div. SQC Advisor

(TQM Prom. Div.)

Toyota (Japan) Toyota Motor Thailand

SQC IN TOYOTA MOTOR THAILAND

Japanese coordinator(SQC staff)

ManagerEngineer

ToyotaTQM Promotion Div. SQC Advisor

(TQM Prom. Div.)

Figure 8 – Science SQC by Toyota Motor Thailand

“Science SQC” in Toyota Motor Thailand

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strategic arrangement of moves for the so-called All Toyota Science TQM Global Development. Improvement in painting quality of chassis parts of automobiles: cooperative activities with affiliated and non-affiliated companies The second example is a case where the quality of appearance and paint corrosion resistance (resistance to SST, Salt Spray Test) were improved without increasing cost, in order to improve the market strength of automotive chassis parts (front and rear axles). Making a global initiative to achieve simultaneous fulfillment of QCD, Toyota formed joint task teams with Aisin Kako Co., an affiliate, and Tokyo Paint Co., a non-affiliate. Figure 10 shows an example where the joint task team of Toyota and Tokyo Paint raised the product value (VA=performance/cost) of the front axle (Amasaka and Sakai 2007). The task team of both companies produced 11 patents. It improved the painting material,

conversion treatment material, and facilities for conversion treatment, painting, and drying in this order (the first improved version (I) to final improved version (VI) in the Figure 9). As a result, after 10 months, the team realized (a) a 15 times higher rust prevention (index) as compared to conventional products in the final improved version (VI), (b) a 5 times higher appearance quality (index) with uniform paint film thickness, (c) the development of quick drying paint, and (d) the adoption of room temperature drying and subsequent discontinuation of drying equipment. These improvements achieved (i) a reduction of inventory in process of 1/3 and (ii) a reduction of paint cost to 85% of the conventional amount (15% cost reduction). Using a similar approach, Toyota and Aisin Kako realized identical achievements of simultaneous QCD.

Figure 9 – Improved Product Value for Front Axle

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Steel plate treatment with phosphate

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(Iron phosphate)

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D-NDDM, a Daikin-style development design process model: strategic cooperation among divisions to handle increasing specialization To handle the increasingly fast pace of specialization as work becomes more fragmented among development and design–related divisions, the authors have made an extensive review of development design business processes such as (1) technology creation, (2) optimized design, and (3) information sharing and invented D-NDDM, a Daikin-style development design process model. The model was then proven to be effective in fostering strategic cooperation among divisions in order to handle increasing specialization. Establishment of the X-MEA Xerox quality management system: ensuring high quality in overseas production The authors propose that the key to success in high-quality assurance manufacturing in overseas production is creating a new system to enhance quality management at production sites. They therefore established X-MEA, or the Xerox quality management system. Then, under the strategy of global production, X-MEA was applied to the task of improving the quality of multifunction copier assembly work at a production plant in China, with favorable results. CONCLUSION The authors proposed the Strategic Productivity Improvement Model for white-collar workers, SPIM which improves the intellectual productivity of the white-collar sections. The highest priority of this model was given to the i) Strategic Information Sharing and ii) Strategic Co-Creative Action so that the Strategic Intelligence Application System and Business Process High Linkage System can effectively function. The effectiveness of SPIM was verified by going over the application results observed at leading companies. REFERENCES Amasaka, K. (2002), “New JIT, a new management technology principle at Toyota,” International Journal of

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