The waves of offshoring are settling down, at least in the digital imaging space with companies such as Canon and Sony marching ahead taking an entirely different path. Competing in a market where responsiveness is equally important, these companies outsource considerably less compared to its competitors and still operates profitably! The digital space is ripe with high demand volatility and short life cycles.
Companies often resort to offshore production in search of low labor costs and better resource availability. Though this has benefits of increased margins and lower production costs, it has lasting detrimental impacts from a sustainability point of view and achieving a resilient supply chain. In offshore manufacturing, though the economic aspects of production are considered important, the social aspects like having better control of the living conditions of laborers or even child labor are given fewer weights. The workers in a traditional assembly line also suffer from increased boredom due to mundane tasks. Other negative externalities in terms of the harm caused to the environment considering the global carbon footprint due to offshoring are also given little bearing.
So what is Seru Manufacturing? To trace its origin, we need to travel back to the 1990s- the time when hi-tech products started dominating with shorter life cycles and increased variety. It was started by some of the Japanese leaders in the electronics industry; Canon and Sony. They tweaked the assembly lines hitherto untouched since Henry Ford had it initially to suit the flexibility needs of a fast-changing industry.
A Seru Cell: Source Miyake
They adopted a kind of cellular assembly where instead of having one person working on a product for a fraction of time, they spend longer durations with the work in process inventory. Thus, there are groups of four to five highly skilled and trained workers producing larger portions of the product or in some cases the entire finished good. The groups of highly skilled workers are able to quickly switch according to the new products launched and have significantly higher learning curves.
By converting to Seru production system dismantling close to 20,000 meters in their 54 factories, Canon was able to save a workspace of 7,20,000 square meters. In addition, Canon Electronics, a subsidiary of the Canon group was able to reduce its carbon footprint by more than 50! The method is now spreading to other industries with high variety and medium volume. At Yamasaki for instance, the entire bike is produced by a single person or a group of three. Even though labor costs might be on a higher side, when coupled with increased production efficiency, better quality and moreover considering a greener and happier planet, the results are obviously in its favor.
Seeds for Happy Learning:-)
Sustainable Production System: A production system which equally weighs social, environmental and economic aspects when it comes to decision making.
Resilient Supply Chain: A resilient supply chain is one which is least affected by external as well as internal shocks, be it in the form of natural disaster or labor strikes.
Learning Curves: A graphical representation of how an increase in learning comes with greater experience.
A steep learning curve implies shorter time to learn compared to a shallow learning curve. It is used as a productivity planner.
Yin, Y., Stecke, K. E., Swink, M., & Kaku, I. (2017). Lessons from seru production on manufacturing competitively in a high-cost environment. Journal of Operations Management, 49, 67-76.
Yin, Y., Kaku, I., & Stecke, K. (2008). The evolution of seru production systems throughout Canon. Operations Management Education Review, 2.