This paper is based on surveys conducted of the ASEAN operations of Japanese companies between December 2003 and February 2004. Currently, there is an urgent need for Japanese companies to restructure their Asian organizations that revolve around China. Amidst increasing investment in China, one is left to wonder what priority is allocated to existing ASEAN locations. The current study of Japanese companies explores the strategic utilization of ASEAN locations while maintaining an awareness of China. In other words, the emphasis is not on a withdrawal from ASEAN locations and a move to China, but rather strategic localization through the utilization of existing locations and the rebuilding of factories. This report comprises two sections: the first part introduces the rebuilding of existing and acquired factories and the restructuring of ASEAN operations. The second part introduces the expansion of small- and medium-sized enterprises into ASEAN locations.

Japan’s apparel industry is currently facing many issues due to market maturity. Textile manufacturer Takara Group has the ability to analyze the properties of material and detect production problems. Moreover, it is organizationally developing the ability to uncover issues by increasing product quality by capturing the designers’ intent, sharing information with apparel manufacturers, and creating their own design information at the time of production. The result is Takara Group’s practice of proactively developing employee abilities.