Abstract
From April 2012 to March 2013, the author performed participant-observation research at a small-scale (less than 50 employees) Japanese automotive supplier. During the period of observation, this supplier has introduced a new production-management system under the guidance its largest customer. The paper presents the findings of this research at this supplier as a case study to analyze the process (what was transferred) and the result (what was the effect on manufacturing performance) of the transfer of manufacturing capabilities up the supply chain. A notable characteristic of this case is how the capability-transfer process was continually centered around improving the ratio of work-in-process that was finished on-time at a station. The paper findings suggest that such a focus on Delivery (which inherently contains the fastest feedback loop) as a trigger for transferring capabilities may be particularly potent at Small and Medium-size Enterprises (SMEs). While the supplier system in Japan has been highlighted as a contributing factor to the high global competitiveness of the Japanese automotive industry, there is a notable lack of research on lower-tier suppliers. This paper contributes to understanding the transfer of capabilities to lower-tier SMEs. Transferring capabilities further up the supply chain is an increasing focus of Japanese automotive companies, as they face increased cost pressure caused by heightened global competition and other factors.
