Impact of Digitization and Human Capital

Part 8: Making Good Use of the Lesson from the Experience of the Semiconductor Industry

CHUMA Hiroyuki
Faculty Fellow, RIETI

Japanese have a great deal of confidence in manufacturing. However, there has been a specific case in which that confidence was crushed by the wave of digitization. What happened to the semiconductor industry about 20 years ago is the one. Many other manufacturing industries, where the automation of production processes is now reaching a level equivalent to that of semiconductor factories back then, may fall into the same fate down the road. Even today, many shop floors remain heavily reliant on the individual attributes of kumicho (group leaders: GLs), i.e., individuals responsible for a specific production line, for operational excellence, a characteristic that became a serious problem for semiconductor factories two decades ago.

This refers to a production system in which responses to any changes or abnormalities hinge on the individual skills of GLs and coordination among them. GLs, each being the head of a production unit, are also responsible for coordination with maintenance and engineering divisions. In the semiconductor industry, this system ran into difficulties in the mid-1990s as inter- and intra-process conveyance began to shift to full automation.

Semiconductor production involves numerous different processes with goods in process returning to the same process repeatedly in different sequences. Greater product complexity means greater complexity in production involving a greater number of steps and processes. As products grew more complex, it became impracticable to manage production operations on a process-by-process basis, necessitating a shift to a more holistic approach to manage multiple production processes along a chronological timeline. This led to the development and adaptation of a manufacturing execution system (MES), a software application modeled after the Toyota Production System (TPS), in the United States.

While the basic function of the MES is to make it possible to monitor, automatically in real time, the status of a specific production process or overall production activities, its usage varies significantly depending on the type of production system implemented at each worksite. Until around 2000, most semiconductor plants in Japan were using internally developed MES to manage non-TPS environments. That is, they were pursuing a push production system that calls for each unit to produce as planned irrespective of the situations of other units, as opposed to the TPS or pull production system. While GLs were responsible for the management of operations in their respective production lines, the complex timeline management of operations encompassing multiple production processes was left to young engineers. Under such circumstances, total optimization was hard to attain.

Subsequently, Japanese semiconductor plants adopted a TPS-based system and some of them have achieved high productivity. In the process, a GL-driven system for managing operations along a chronological timeline played a significant role. Japanese GLs' capabilities to respond to any changes or abnormalities are among the best in the world. Successful examples in the semiconductor industry show that providing GLs or their equivalents with informative but complicated data for management along a chronological timeline in an intuitively understandable manner can bring out their capabilities to the fullest, leading to highly efficient operations. Japan's future competitiveness hinges on whether other manufacturing industries can make good use of the lesson learned from the experience of the semiconductor industry.

>> Original text in Japanese

* Translated by RIETI.

May 26, 2017 Nihon Keizai Shimbun

March 8, 2018

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