Highlights - April 2017

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High costs of production and labor, combined with high rates of technological change, often cause manufacturers in developed countries to take their production offshore to lower-cost sources.

But research recently published in the Journal of Operations Management finds that a production system called “Seru,” which is used by the electronics industry, creates an exception to this trend.

“Seru” is a cellular assembly approach. The system, used by companies including Canon and Sony, offers promise for manufacturing in dynamic, high-cost markets.

As the researchers put it, “Seru is like going back to trade manufacturing, before Henry Ford’s assembly line innovation.  A focus is on extremely highly trained workers, emphasizing both speed and quality.”

This type of cellular manufacturing is distinguished by the ability to configure the cells quickly and by its use of the cells for assembly, packaging and testing rather than just fabrication.

Seru uses highly skilled and flexible workers to achieve the responsiveness required by the changes in demand and the fast development of an innovative product. Its strategy also prioritizes responsiveness over cost reduction.

The study analyzed Canon’s and Sony’s histories, the factors that led to the development of seru systems and their successful implementations.

The researchers conducted studies of nine sites of Sony and Canon, interviewed managers at both companies, participated in industrial seminars and meetings, and reviewed company documents and handbooks, as well as published research.

Seru is not new.  A 1992 Wall Street Journal article discusses the system, but most of the world outside of Japan has not been aware of this electronics assembly innovation.

Many companies in Japan, mostly in electronics, have applied seru to improve productivity, quality, efficiency and flexibility.  Seru is an example of production remaining competitive in a high-cost environment.

For example, the production of Sony’s PlayStation 2 console was moved from an assembly line of nineteen workers in a 700-square-foot space to a set of serus staffed by ten workers in a 484-square-foot space.  The total cost of production was reduced, and PlayStation 2...

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