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Seru (Cell) and Reverse Conversion: Part I.

Definition, Self-evolution, and Typology

Yong Yini Ikou Kakuii Yasuhiko Muraseii KazuhikoYasudaiii Research Group of Economics and Management No. 2008-E01 2008.4

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Yamagata University Akita Prefectural University Tohoku University

Seru (Cell) and Reverse Conversion: Part I. Denition, Self-evolution, and Typology

Over the past ten years, many Japanese manufacturing companies have dismantled their assembly conveyor lines and adopted a dierent manufacturing organization, called seru. Seru is the Japanese word for cell. In this conceptual study, we attempt to raise awareness of this new manufacturing concept, to articulate an important reorganization process - reverse conversion (from ow lines to seru-s), and to create a vocabulary for discussing issues that are linked to reverse conversion, seru-s, and cells. The study includes two papers. In this rst paper, we discuss the changing economic background faced by Japanese manufacturing companies that forced them converting their high-ecient but low-exible assembly ow lines to high-exible seru-s (i.e. reverse conversion). We dene the concept of seru and apply the denition to explain the self-evolution process of seru-s by employing a typology. The second paper compares cells with seru-s, and shows that there is key dierence between them in the evolvable organization element: seru is self-evolution, but we do not nd convincible evidences to support cell is also self-evolution. Except this dierence, cells and seru-s are similar. Finally, we link relevant manufacturing organizations together to get a complete image of various manufacturing organizations.

Key words: Cellular manufacturing; Reverse conversion; Job shop; Seru; Yatai; Flow line; Homogenous organization; Assembly; Innovation; Self-evolution.


Canon has evolved into a high performance organization by using seru seisan. This was said by Fujio Mitarai, the Chairman and CEO of Canon Inc. (Sakamaki 2006 p.4). Seru seisan are two Japanese words. Seru means cell and seisan means manufacturing or production. It was reported that a total length of 20,000 meters belt conveyor lines, the most popular ow line in Japan, had been dismantled from 54 factories of Canon within four years. Instead, manufacturing seru-s had been installed in these 54 factories and 720,000 square meters empty spaces had been vacated. As a result, Canon emerged as a leading company in the world. Its average productivity is even higher than Toyota and its total costs were reduced signicantly, by 55 billion Yen in 2003, and totaled 230 billion Yen from 1998 to 2003 (Weekly Toyo Keizai 2003). Canon Electronics, a subsidiary company of Canon, has increased prots by 973%, from 1.1 billion Yen to 11.8 billion Yen during the past 7 years (from 1999 to 2005). The key to this surprised progress was the implementation of manufacturing seru-s (Sakamaki 2006). Not only Canon group, most Japanese electric manufacturing giants such as Sony, Panasonic (Matsushita), Fujitsu, NEC and Hitachi have dismantled their ow lines and adopted manufacturing seru-s (Yamada and Kataoka 2001, Isa and Tsuru 2002, Iwamuro 2002, Noguchi 2003, Kimura and Yoshita 2004, Kono 2004a, Sony 2005, Takeuchi 2006). Most of them obtained great benets. A large number of successful reports and very rich set of stories about seru implementations can be found in Japanese newspapers, business magazines and journals. As will be described in the following sections, seru has become a quick-acting approach to revive the strong power of Japanese manufacturing companies and deal with the cost challenges from other East Asia countries such as China and Korea. According to a large-scale investigation on Japanese manufacturing rms (Economic Research Institute 1997), 48.2% of the respondents had adopted seru or were planning to implement it (see 2

Figure 1 for detail). Owing to the investigation was carried out nearly ten years ago, and owing to the accelerated growth of the popularity of seru in Japan, the current percentage of companies that have implemented manufacturing seru-s should be remarkably high (especially in electric industry, see Kimura and Yoshita 2004, Kono 2004a, Japan Machinery Federation 2005 p.1).

Figure 1: The situation of seru implementation in 1997. Source: Economic Research Institute

Seru is a human-centered manufacturing organizations. Typical products that are assembled by seru-s include televisions, digit cameras, computers, printers, copiers, DVD players, washing machines and other electrical products. One of the most important characteristics of Japanese manufacturing seru-s is that most of them were converted from ow lines (e.g. belt conveyor lines, see Figure 2. We call this conversion reverse conversion, we will discuss the detail in section 6). A large number of Japanese manufacturing companies have reportedly dismantled conveyor lines, abandoned large-scale automation, created manufacturing seru-s, and replaced equipment designed for high volume with small right sized machines (Shinohara 1995, Isu and Tsuru 2002). It is well-known that ow lines are often used for mass production - high production volumes and low products variety (see left side of Figure 2). Comparing with ow lines, some benets from seru-s include reductions in spaces, workforces, WIP inventories, lead-times, costs and improvement in qualities (Kimura and Yoshita 3

2004). In Japan, manufacturing seru is regarded as the most powerful approach for dealing with a changing environment which is characterized as an increase of products variety and decrease of production volumes.

Figure 2: From ow lines to seru-s

The objective of this paper is to raise awareness of seru. The paper is conceptual and foundational. We review the history of seru, create denitions, concepts and vocabularies for discussing and addressing the implications and issues that are linked to the implementation of seru. Our intention is that industrial practitioners will benet from the paper through an awareness of this new Japanese manufacturing management innovation, and that researchers will benet from the paper through an enhanced knowledge to study this new research area which encompasses a wide variety of distinct issues. This paper is organized as follows. We review the background in section 2. Section 3 reviews the history of seru. Section 4 denes seru. Section 5 provides a typology of seru. Finally, the directions for future study are indicated and the paper is summarized and concluded.

Flow lines: no more ecient

In this section, we describe 1990s business environment faced by Japanese manufacturing companies, which forced Japanese companies dismantled their high-ecient assembly ow 4

lines and adopted exible manufacturing seru-s.


Large production volume and low products variety market in 1980s: Expanding capacity by ow lines

Among Japanese plants that have adopted seru-s, many of them are from electronics and machinery industries (Yin et al. 2006). Electronics and machinery are symbols of Japanese economic miracle. During the 1980s and early 1990s economic bubble, it seems that Japanese products were unbeatable in the international marketplace. A lot of research investigations (Dertouzos et al. 1989, Prestowitz, Jr. 1991) revealed the success of Japanese industries in 1980s. Dertouzos et al. (1989, p55) indicated that Japanese rms enter a new market at the low-end of the product range; they then challenge the American producers directly in the high-end products range after obtaining competitive advantages, reputations and the eects of the learning curve. Low-end, highly reliable products, especially consumer electronics are suitable for the mass consumer market. As a result, before the burst of economic bubble in the early 1990s, Japanese electronics companies had successfully dominated the international market by emphasizing the mass production. It has been estimated that during the 1980s Japan had added production capacity equal to that of France (Einhorn, 1997). In short, the prosperous 1980s of Japanese economy was a period of expanding production capacity by using ow lines (e.g. belt conveyor lines) that often hold a large-scale automation.


Small production volume and high products variety market from 1990s: Converting ow lines to seru-s

Following the burst of the bubble economy in 1991, Japan has suered from a prolonged period of economic stagnation and malaise. Slow growth of the economy in the 1990s was 5

similar to the U.S. economy in the 1980s. Japan was losing manufacturing competitive capabilities in industries and shifting productions to overseas. There were two factors weakening the competitive capability of the Japanese industries. One was the sharp rise in value of the Japanese yen, from 145 yen per U.S. dollar in 1990 to an all-time high of 79.75 yen in April 1995. Another was the increasing competitive pressures from other East Asia countries such as China and Korea. Since 1990s, Chinas endless supply of cheap labor is pushing down prices on a growing range of industrial, consumer and even agricultural products that it sells around the world (Jiang 2004, Powell 2002, Leggett and Wonacott 2002). The ability to manufacturing nearly any low-end/mid-end product in China with high quality at a low cost has a huge impact on the other industrial countries. As a result, Japanese industries, especially electronics, were losing comparative advantages and market shares to China. In an investigation about the global market shares of 16 high-tech electronic products, China emerged as top of eight out of the 16 products (source: Nihon Keizai Shimbun 2002). Summarily, since the collapse of the bubble economy, Japanese industries were confronted with a decreased market share owing to the inside economic stagnation and outside cost competition. Moreover, the expansion of production capacity by adopting large-scale automation and ow lines during the prosperous 1980s made Japanese plants very ecient for a mass market scale but less exible for a small market scale. The Economic Planning Agency (1999) summarized the circumstance as three excesses - excess capacity, excess employment and excess debt. On the other hand, the products variety has increased rapidly. One reason is that Japanese manufacturing rms were moving from low-end/mid-end products to high valueadded high-end products ranges, which is naturally a small-volume high product-variety area. Another reason is the explosion of various technologies in the recent twenty years, which has rapidly shortened product life cycles and diversied customer needs.

Therefore, Japanese manufacturing rms were in the face of a decreased market demands and increased products variety. To survive in such an extremely tough business environment, the traditional high-volume ow lines were no longer fullled. Speedy adjustments were needed to handle transitions in product models and demands. A companys competitiveness was becoming dependent on whether or not it can respond to these transitions. In such an environment, there was a trend in Japanese industries toward converting ow lines to more exible manufacturing seru-s.

The origin and history of seru

The history of seru is short. Seru is a manufacturing organization (in most cases, a manufacturing assembly organization) which consists of one or several workers, and all assembly tasks of a product are completed within the seru (Yamada and Kataoka 2001, p.73). As discussed in section 2, the birth of seru is due to the change of the business environment. After the collapse of the Japans bubble economy, Japanese manufacturing companies were seeking for new approaches to survive in a decreasing demands and increasing product variety business environment. According to Economic New Words Dictionary (2002 version, in Japanese) and many other publications (Noguchi 2003, Kimura and Yoshita 2004, Nonaka and Katsumi 2004, Takeuchi 2006), in 1992 several new manufacturing organizations were created in one of Sonys video-camera factories after dismantling a long assembly conveyor line. Huge benets were obtained from these new manufacturing organizations and they were named as seru by the sta of Sony. The reorganization implementation in Sony was under guidance of a consultant, i.e. Hitoshi Yamada, a pupil of Ohno (the father of Toyota production system). Yamada is

an expert of Toyota production system and now he is also considered to be the primary developer of seru. Since 1992, hundreds of factories have dismantled their conveyor lines and adopted manufacturing seru-s (e.g. Canon alone converted 54 factories conveyor lines into seru-s). These companies include Japanese manufacturing giants such as Canon, Panasonic (Matsushita), Fujitsu, NEC, Hitachi and many other manufacturing rms (Yamada and Kataoka 2001, Isa and Tsuru 2002, Iwamuro 2002, Noguchi 2003, Kimura and Yoshita 2004, Kono 2004a, Sony 2005, Takeuchi 2006). Nowadays, seru has become the latest fashion for manufacturing rms, especially in the electric industry. Many manufacturing rms that have adopted seru have received guidance from consultants connected directly or indirectly to Toyota (Yamada and Kataoka 2001, Isa and Tsuru 2002, Nihon Keizai Shimbun 2004). Thus, Toyota production system (TPS) has a strong inuence on the shaping of manufacturing seru. Isu and Tsuru (2002, p.551-552) briey discuss the relationship between TPS (Ohno, 1988; Fujimoto 1999) and seru and conclude that they are not the same in production practices. According to Noguchi (2003, p.30), the article of Shinohara (1995) seems to be the rst publication related to seru. Since then, hundreds of articles have appeared in the journals, magazines and newspapers to describe seru implementations in dierent factories. There are also many books and several special magazine issues (mainly in three magazines: IE Review, Monozukuri, and Factory Management) have published to introduce manufacturing seru. Summarily, nowadays manufacturing seru is a well-known and popular manufacturing concept in Japanese industries, especially in the nal assembly processes of electrical and electronic industries. Long conveyor lines, which are symbols of mass production, were dominant in these industries during 1980s and early 1990s. However, these conveyors lines were converted to manufacturing seru-s to cope with the changed business environment

which asks for high exible manufacturing organizations.

What is seru?

In this section, we dene seru based on our ongoing eld researches, industrial experiences and explorations of the literature. All authors frequently visit manufacturing companies. Additionally, the second and third authors have many years of industrial careers before they entering into universities. We rstly provide a literature review, then we propose our denition of seru.


The existing denitions

Seru has been widely accepted by Japanese manufacturing companies as an innovation that eectively improves manufacturing performance. Although the meaning of the term manufacturing seru has a broad insight, denitions of it seem reasonably consistent among Japanese publications. Shinohara (1995) contends that removing conveyor lines, seru is a jiritsu manufacturing unit in which all required tasks of producing a product are completed by one or several workers who manage several equipment of dierent type. Tsuru (1997, p.5) observes that dismantling a conveyor line into several seru-s, the batch size of each seru is adjusted by multi-skilled workers to correspond with the uctuation in market demand. Iwamuro (2002, p.27) denes a manufacturing seru as a highly jiritsu organization that completes work orders from start-to-nal and is managed by one or several workers. Kono (2004b) summarizes several articles and describes a manufacturing seru as a method of production carried out by a limited number of workers by removing conveyor lines. Isa and Tsuru (2002) give a great detail about seru. They dene seru in the following 9

way (p.550): Cell (they use cell instead of seru) production exemplies the shift toward human-centered production systems. A cell-production system is a production system in which a single worker or small team of production workers (two to ve members) perform multiple production jobs (multitasking) in short segment lines. Cells are, with few exceptions, arranged in U-shaped lines in which unnished components enter at a point adjacent to the point that they leave as nished products. The cell design places a wide range of tools and equipment in close proximity to the workers, enabling them not only to perform a wide range of production tasks, but to customize the products as well. Cell production enables workers trained to perform multiple tasks to respond more easily to rapid variations in product demand; thus it is very suitable for small-lot production. Further, the high skills of the workers and the careful design of the cells means that fewer workers are needed than in conveyor systems. Cell production has been introduced mainly in nal assembly processes as a substitute for large-lot production, although it has also been introduced at a number of suppliers. Yagyu (2003) gives a very comprehensive denition for manufacturing seru-s. He explicitly analyzes a seru from a deep insight. According to his explanation, a manufacturing seru is constructed by two parts: seru line and support systems (p.14). Seru line: A seru line is a group of equipment located in close proximity to process parts or products by one or several workers. Support systems: To bring seru lines advantage into full play, several indispensable support systems need to be constructed. These supports systems include production planning and scheduling system, transportation system, components supply system, cross-training system and management and maintenance system.


(a). Production planning and scheduling system: materials and information ows among receiving work orders, planning, production, and shipment. (b). Transportation system: a rapid transportation system inside and outside seru-s. (c). Components supply system: components required by seru lines need to be supplied on time (most seru-s in Japan are assembly seru-s). (d). Cross-training system: a routine training system for stang multi-skilled workers. (e). Management and maintenance system: a jiritsu system which can control the execution of daily jobs in the seru, and which can rapidly respond to the change of work orders and any abnormality.

In summary, these existing denitions seem reasonably consistent, mutually contained and overlapped. They all imply that a seru involves resources (people, equipment) which are dedicated to one or several products, and that a seru needs to be a high-performance organization. Additionally, these denitions can be classied into two categories. First, Shinohara, Tsuru, Iwamuro, and Kono dene seru with emphasis on resource. Second, at the other extreme, Isa and Tsuru, and Yagyus denitions are too detailed that they include enablers such as design elements, production procedures and support systems (following Hyer and Brown (1999), we dene enablers here as specic procedures, policies, design decisions or other factors that help in changing a seru into a high-performance organization). However, according to Eisenhart (1989), Pfeer (1992), Sakakibara et al. (1992), and Hyer and Brown (1999), good concept should be parsimonious. Therefore, when we dene a seru, we should elaborate on the basic characteristics of a high-performance seru (i.e. What is a high-performance seru?), but not elaborate on the question, i.e. how to create a high-performance seru?. Obviously, enablers are key elements that change a seru into a high-performance manufacturing organization, thus we should not include them into the


denition. In this paper, we give a denition of seru that stands in the middle of the existing two categories of denitions. Our goal is to develop a concept which only includes common denominators that distinguish seru-s from other manufacturing organizations.


The denition

Our denitional framework is similar to that employed by Sakakibara et al. (1992) and Hyer and Brown (1999). We dierentiate core denitional elements from peripheral enablers. We dene a seru which has achieved its full potential (i.e. high-performance seru). The denition is given as follows.

Denition: seru A seru is a manufacturing line (an assembly line in most cases), which consists of equipment and people that are dedicated to one or several products; and which presents the following characteristics: kanketsu, majime, jiritsu.

Following our denition, a seru involves two denitional elements. These two denitional elements are fundamental building blocks of a seru. The rst denitional element describes the resource. A seru consists of one or several products and dedicated resources (people and equipment) that are used to manufacture the product(s). Moreover, the seru should employ a line layout. The second denitional element describes the characteristics of a high-performance seru. A seru which has achieved its full potential should be kanketsu, majime, and jiritsu. For each of these three Japanese words, it is not easy to nd appropriate English word to translate them. So, just as many Japanese words that are widely accepted in the areas of Industrial 12

Engineering and Operations Management (e.g. kanban, kaizen, andon, jidoka, 5S, keiretsu, heijunka, poka-yoke, etc.), we explain their meanings in the following subsections.



Kanketsu means that all required tasks of producing a product are completed from the start-to-nish within the seru. If the seru is an assembly seru, the tasks should be assembly operations which may need or need not equipment (e.g. manual works). Similarly, if the seru is a machining seru, the tasks should be machining operations which often need equipment such as machines. According to our denition, to achieve kanketsu, all required resources (people, equipment) for tasks should be available within the seru. We use example and case to show how Japanese manufacturing companies solve this problem. Most seru-s in Japan are assembly seru-s applied in electric industry. Many assembly operations in such assembly seru-s are manual works. These manual works do not need or only need very simple equipment (e.g. hand tools and workbenches) that is easy to duplicate. Therefore, equipment is not often a problem in this case. The problem is the other resource, i.e. people. For example, consider an assembly seru staed with two workers. Both workers are cross-trained and worker 1 can hold tasks 1 and 2, and worker 2 can hold tasks 3 and 4. If a new product which requires tasks 1-5 is introduced into the seru, then either worker need to be trained to do task 5. From this simple example, we can nd that continuous cross-training of workers is prerequisite for implementation of seru-s. In some cases, several same type expensive equipment are required. For example, convert a ow line which holds an expensive equipment into several seru-s. It is impossible to install the same expensive equipment to each seru. In this way, karakuri is the way to solve this problem. Karakuri means that copying functions of an expensive equipment 13

into a cheaply self-made equipment. A good example is a plant of Stanley Electric located in Northern Japan. The plant has karakuri-ed an expensive equipment which costs 30,000 thousand Yen into a simply cheap equipment which costs 200 thousand Yen, only 1/150 of original price (Yamada and Kataoka, 2001). As a result, every seru can easily install such a cheaply karakuri-ed equipment.



Majime is not only used for seru, but also used for describing supply chains. Majime holds two meanings. First, it primarily and originally means reducing the physical space between two adjacent work-places to minimum. The two work-places might be two adjacent stations in a seru line, or two adjacent members in a supply chain. Second, majime also means reducing the distance from-face-to-face between adjacent workers. This asks increasing understanding, trust, interdependence and enhancing information sharing between adjacent workers. In a supply chain, it means enhancing communications with parts suppliers and customers. The major eect from majime is a smoothly continuous process ow, which moves material and information quickly as well as to link work-places and people together. The smoothly continuous process ow results shorter lead time, smaller inventory, and fast information feedback which facilitates quick detection of defective products. The keiretsu of Japanese automotive industry is a good example of majime in supply chains (see Dyer, 1996; Ahmadjian and Lincoln, 2001; Liker, 2004). In a seru line, majime makes one-piece-ow possible, which results almost zero WIP inventory, very short lead time and high product quality. To achieve majime, all unnecessary 14

resources need to be removed from the seru, because they are the obstacles of one-piece-ow. In this sense, majime supplements kanketsu, which asks that required resources need to be available within the seru. An example from components industry highlights the power of majime. Components industry is a typical high-variety, small-volume business world. Components often have longer life cycles than the nal products because components companies not only supply components to current product models, but also supply components to old product models that are no longer produced by nal assembly companies (e.g. printers toner cartridges, cars brakes are good examples). Figure 3 depicts the relationship between volumes and product models (the number of product models can be regarded as the variety of components).

Figure 3: The business environment of components companies

Components in region I (i.e. current models) hold high volumes and low product varieties, thus ow lines are often the choice for them. For region II, because the old product models are no longer produced by nal assembly companies, the requirements of components decline quickly. Flow lines are no longer ecient, most of them are converted into seru-s. For components in region III, the production volumes are low and the varieties are high, seru-s are employed. For example, about 40% products of Denso (the biggest components supplier of Toyota) are in regions II and III (Mayumi, 2005). Each seru employed in regions 15

II or III often serves several component types and each type may hold its own process sequence. For example, consider a seru, which performs seven tasks (e.g. tasks 1-7) and serves two component types. The two component types hold following process sequences. Type 1: tasks 12357 and type 2: tasks 12467. If this is an assembly seru and the seven assembly tasks do not need or only need simple equipment, then majime can be easily achieved by using cross-trained workers (for example, a worker who can hold all seven tasks, see yatai in the next section). However, if this is a machining seru which adopts the following machine line: 12 7, majime is not easy to achieve because of machines 4 and 6 for component type 1, and machines 3 and 5 for component type 2. For each type, these are unnecessary machines that make minimum physical space impossible. Denso solves this problem by making every machine movable (Mayumi, 2005). For type 1, machines 4 and 6 are moved outside the machining seru line, and other machines are moved closely to achieve majime, and this is similar for type 2. By using wheels and rails, Denso can complete these re-layout arrangements within only 30 seconds.



Kanketsu and majime focus fairly on technical dimensions of manufacturing seru-s - how to create an eective layout, how to eciently assemble products. Whereas, jiritsu focuses mainly on managerial dimensions. It is our position that serus performance improvements cannot achieve automatically just because the technical dimensions change. It is management that determines whether and to what degree performance will be improved. Jiritsu means autonomous and self-managed, learning and evolutionary. Autonomous and self-managed mean that seru is an independent manufacturing organization. External control or intervention is not required for running a seru. Autonomous and self-managed ask that all managerial works should be completed within the seru. There 16

are two types of managerial works: routine management works and emergent management works. Routine management works include scheduling of production and workers, interfacing with suppliers and customers, supplementing workers when the seru has vacant positions, cooperating with other organizations (e.g. producing prototype product for product development department), preparing various reports and documents, purchasing consumable, and others. Emergent management works mean that respond to emergencies such as urgent orders, material delays, equipment breakdowns, absence of workers and others. For seru, learning not only means organizational learning (see Argote et al. 2003a, 2003b; Balakrishnan and Cheng, 2007), more importantly, it means knowledge creating. Topics about how Japanese manufacturing companies create knowledge organizationally can by found in many classic writings of Nonaka (Nonaka 1988a, 1988b, 1990, 1991, 1994, Nonaka and Takeuchi 1995). The objective of creating a learning organization is to construct an evolvable organization. Here, we dene evolvable organization as an organization that can change its architecture and behavior dynamically and autonomously following the learned/created knowledge. To be an evolvable organization, the seru needs to be a learning organization rstly. Next, to be a learning organization, workers of the seru need to have the knowledge of all tasks in the seru. In eect, one strategic target of seru is to eventually let all workers being fully cross-trained on all technical and managerial tasks in the seru. Such strategy is implemented by cross-training policies that include studying, experience, communication, and others. An ecient way to accumulate experience is to rotate workers within a seru. An increase in cumulative individual experience in dierent locations increases the degree of multi-skills. Rotation also facilitates mutual learning and communication among workers. In section 5, we will show how rotation drives the cross-training system, which in turn drives organization evolution. We further divide organization evolution into following two types.


Adaptive-evolution First, organization evolves in order to respond the forces of external factors. Typical examples of such external factors include market pressure, manufacturing technology. Because these external factors are usually very dicult to predict, the process of evolution is uncontrolled and subconscious. It is a result of adaption or response to external factors. We call such evolution subconscious or adaptive- evolution. Adaptive-evolution is the most general type of evolution. Almost every organization is an adaptive-evolution organization. For example, ow line is a such organization and conversion to seru is an adaptive evolution. Similarly, job shop is also an adaptive-evolution organization and conversion to cell is an adaptive evolution. Self-evolution Second, some organizations evolve in order to respond the forces of internal factors. Typical internal factors are specic goals such as explicit mission, clear image of perfect organizational architecture. Since this type of evolution are not inuenced by external factors, the process of evolution is usually conscious and can be controlled by managers. We call such evolution conscious or self- evolution. Not every organization is a self-evolution organization. Seru is a self-evolution organization because there is a consensus among Japanese manufacturing companies that the perfect seru is the so-called yatai (i.e. single-worker seru). Thus, this internal factor forces Japanese manufacturing companies evolve their seru-s into yatai-s. We will discuss the self-evolution of seru-s in great detail in the next section. A learning organization can often work as an adaptive-evolution organization to respond the changed environmental situations, i.e. external factors. However, a learning organization is not automatically becoming a self-evolution organization. Only those learning organizations that have one or several strong internal factors are self-evolution organization. An organization which is jiritsu requires to be both adaptive- and self-evolution.


Learning and self-evolution are the most important elements of seru. They are the key drivers that make seru stand out among various manufacturing organizations. We will remention them again in the second paper of this two-papers study when we compare seru with cell. In this paper, we give explicit examples of the self-evolution process of seru in section 5 by employing a typology of seru-s.


The role of enablers in the seru architecture

We have dened the concept of seru in a way that dierentiates core denitional elements from peripheral enablers. In this subsection, we briey discuss how peripheral enablers make these core denitional elements possible. Table 1 shows the impacts of enablers on the core elements of seru architecture. To facilitate the comparison between seru and cell in the second paper of this two-papers study, Table 1 employs Hyer and Brown (1999)s structure in which they discussed the impacts of enablers on the cell architecture. Many enablers in Table 1 are similar to Ohno (1988), Nonaka (1994), Hyer and Brown (1999), and Liker (2004). The reason is that seru was born as a manufacturing innovation which mixed Toyotas production theory and Sonys single-worker theory (Nonaka and Katsumi 2004; Kimura and Yoshita 2004). Because cell is a core element of Toyota production systems, there are a lot of similar enablers for both seru and cell architectures. In Table 1, double-circle ( ) represents the enabler has a strong or direct impact, whereas single-circle () represents it has a weak or indirect impact on the core element. F-to-F means face-to-face, A&S means autonomous and self-managed, and L&E means learning and evolution, respectively. From Table 1, we can nd every enabler plays an active role on the achievement of core elements of seru. For example, kanketsu are achieved through some combination of enablers such as karakuri, cross-training, and jidoka. These enablers make a seru working as an 19

independent manufacturing unit that involves all required equipment, skills, and preventing defective products from owing out the seru. Among various enablers, those managementoriented enablers such as 5W1H, explicit picture of perfect seru (i.e. yatai), 5S, kaizen act as key drivers. They can not only give a strong impact on seru performance, but also can improve the performance in a wide scope which encompasses all three core elements.


Summary of the seru

The key to the implementation of seru and what constructs high-performance seru architecture is not any of the individual elements mentioned above, but is having all the elements together as an integral system. Figure 4 shows the framework of seru architecture. Physical resources and peripheral enablers form the groundwork; and kanketsu, majime and jiritsu form the backbone of the seru architecture. Only when all these elements are present, the seru can evolve into a highperformance manufacturing organization. If the groundwork (i.e. resources and enablers) is absent, the whole architecture will collapse immediately. Similarly, if any of the three pillars (i.e. kanketsu, majime and jiritsu) is absent, the triangle roof (i.e. high-performance seru) will be unstable and may collapse.

A typology of seru-s

A typology of seru-s provides a vocabulary for discussing the implications of the self-evolution of seru. Roughly, seru-s can be classied into three types: divisional seru, rotating seru, and yatai. They represent the evolutionary trajectory of seru. Figure 5 depicts the path of how 20

Table 1: Various peripheral enablers and core elements Kanketsu Majime Jiritsu space F-to-F A&S Built-in quality (jidoka) Quality check system Multi-process operation system Maintenance system Workload leveling (heijunka) Job rotation Kanban system Cross-training strategy Equipment downsizing (karakuri) Movable equipment Supervisors leadership Fixed-position line-stop indicator (andon) Quick changeover Consensus building (nemawashi) Visual control system Personal involvement with supplier Personal involvement with customers Plan-Do-Check-Act (PDCA) cycle Poka-yoka system Waste recognition and elimination Standard work procedures Cooperation with other departments Emergency treatment system Workers use same language To report, to give updates, to consult (hourensou) 5S Continuous improvement (kaizen) Reection (hansei) 5 whys and 1 how (5W1H) Explicit picture of perfect seru (yatai) Big-room system (obeya) Group brainstorming Tacit understanding Middle-up-down management Hypertext organization Enablers



Figure 4: The seru architecture a ow line evolves into high-performance seru-s (i.e. yatai). The leftmost is the ow line. After a ow line is dismantled, the rstly adopted seru is often the divisional seru. Thereafter, divisional seru-s evolve into rotating seru-s, and nally evolve into yatai-s. The key drivers of the evolution is the organizational learning (e.g. cross-training strategy) and a strong internal factor (the consensus of perfect seru, i.e. yatai) discussed in section 4. We give details of this evolutionary process in the following sections by using simple examples.

Figure 5: The evolutionary trajectory of seru


Divisional seru

Consider a traditional assembly conveyor line with three product types, p1, p2, and p3 in Figure 6. 22

Figure 6: A ow line with 3 products and 6 workers There are six workers and each worker only perform one assembly operation. Assembly operations are numbered from OP1 to OP6, respectively. The assembly routes of the three products are as follows.

p1 : OP 1 OP 3 OP 6 p2 : OP 2 OP 3 OP 5 p3 : OP 1 OP 4 OP 6

When we dismantle this assembly line, the physical change process from the assembly conveyor line to seru-s is often not a dicult problem from the perspective either in theory or in practice (e.g. Canon has reorganized assembly conveyor lines in 54 factories within only four years! see section 1). Whereas, the dicult and costly process is the cross-training of workers (Kimura and Yoshita 2004). For the assembly conveyor line in Figure 6, there are two general ways to reorganize the system. (a). Creating three seru-s, each seru serves one product. (b). Creating two seru-s, a seru serves two products and another seru serves the remainder product. Creating dedicated seru for each product type is usually a good choice if expensive investment for equipment is not required (Yagyu 2003, p.53). In fact, as introduced in kanketsu, conversion from ow lines to seru-s is usually accompanied with equipment downsizing. Expensive high-ecient equipment is replaced by general-purpose, cheaply self-made equipment 23

(Yoshita 2004). Suppose conveyor line in Figure 6 does not use expensive equipment (or we can use cheap or self-made equipment to replace expensive old one), then we should create three seru-s, each for a product. Thus, the conveyor line in Figure 6 is converted into the three seru-s in Figure 7. In Figure 7, each seru serves one product, respectively. A key to this conversion is the cross-training process. In seru 1, worker 3 needs to perform not only operation 3 but also operation 6. Similarly, in seru-s 2 and 3, workers 5 and 4 also need to perform two operations.

Figure 7: Three divisional seru-s The job of each worker in seru-s is quite similar or same to the work she or he did in the assembly conveyor line. The major dierence is that some workers now are trained to perform two tasks. Since the seru-s adopt a divisional system (traditional ow lines also adopt strict divisional system), we call such seru as divisional seru. Similar with assembly conveyor line, almost all managerial tasks are performed by the supervisor. Workers only focus on technical tasks, i.e. the transition of material input to material output. Divisional 24

seru is also called as mini ow line because it works in a similar way with a ow line. Comparing with assembly conveyor line in Figure 6, divisional seru-s in Figure 7 are more exible and ecient in coping with the change of business environments. Several reported huge benets from the seru system include reduced space, workforce, work-inprocess inventory, lead-time and increased quality (Yin et al. 2006). From the simple example of Figures 6 and 7, if the product p1 goes into its nal product life cycle and withdraws from the market (e.g. electrical products usually have a short life cycle), then assembly conveyor line in Figure 6 does not produce any benet but divisional seru-s in Figure 7 save human resources, i.e. workers 1 and 3.


Rotating seru (rabbit-chasing seru)

As mentioned in jiritsu, a strategic target of constructing seru is to eventually let all workers being fully cross-trained on all technical and managerial tasks in the seru. Rotation is an ecient and eective way to achieve this target. Rotating seru is the specic seru that is used to perform rotation. Rotating seru acts as a transitional seru which links divisional seru and yatai together and changes divisional seru into yatai (see Figure 5). Figure 8 shows an example of rotating seru.

Figure 8: A rotating seru with 3 workers The rotating seru in Figure 8 presents as a U-shaped line. Suppose there are six assembly 25

operations (e.g. AO1, AO2, ..., AO6), and operation sequence is AO1AO2 AO6. The prerequisite for implementing rotating seru is that all three workers are able to perform all six assembly operations (i.e. fully cross-trained on all technical tasks). Every worker performs all six operations from start (AO1) to nish (AO6) without disruption. When she or he completes a product, again, she/he begins to assembly another product from the rst assembly operation (AO1). The assembly operations are often performed on xed stations, thus workers walk from station to station to complete each assembly operation. The arrow in Figure 8 shows the walking path of workers. The sight looks like a rabbit-chasing game, so rotating seru is also called rabbit-chasing seru (a worker chase the worker ahead her/him, and also is chased by the worker behind her/him). Comparing with divisional seru, rotating seru is more exible and ecient because all workers are fully cross-trained on technical tasks. However, some or all workers of the rotating seru are not fully cross-trained on managerial tasks, as a result, a rotating seru may or may not need a supervisor to hold the managerial tasks.


Yatai - perfect seru (single-worker seru)

Many manufacturing companies in Japan encourage full cross-training on all technical and managerial tasks, which leads to the emergence of so called perfect seru, i.e. single-worker seru (Shinohara 1995, Kimura and Yoshita 2004, Kono 2004b, Nonaka and Katsumi 2004). Single-worker seru even has an exclusive name: yatai. Yatai is the Japanese word for street stall, which is a small area enclosed by one or two tables for making and selling time-consuming foods such as Chinese noodles, grilled shes and others (see Figure 9). All jobs within a yatai are performed by the owner (i.e. one person), for example, purchasing and preparing the materials, making foods, selling, and nally cleaning. In short, yatai is a small but highly autonomous single-person business system. The owner of the yatai has the 26

full responsibility to manage the yatai. Similarly, a single-worker seru works like a yatai, the worker completes all assembly jobs within the seru, including all technical and managerial jobs.

Figure 9: Yatai: a jiritsu one-person business system Thus, a seru starts from a divisional seru (workers are cross-trained on some of technical tasks and none of managerial tasks), evolve to a rotating seru (workers are fully crosstrained on technical tasks and partly/fully cross-trained on managerial tasks), and nally evolve to yatai-s (the worker is fully cross-trained on both technical and managerial tasks). In the following part of the section, we use a simple example to show how yatai improves manufacturing eciency on technical dimension. Consider converting the rotating seru in Figure 8 to three yatai-s in Figure 10. Suppose the three workers have dierent skill levels, and the skill level of worker 2 is the lowest among them. Thus, worker 2 is the bottleneck in the rotating seru. Following Goldratts TOC theory (Goldratt 1984), the performance of the whole system is determined by the capacity of the bottleneck. Therefore, the performance of the rotating seru is equal to the capacity of worker 2. In contrast, if we converting the seru into three yatai-s, although the yatai staed with worker 2 still has a low performance, the other two yatai-s have high 27

Figure 10: Evolution of the seru: from a rotating seru to three yatai-s performances. As a result, the overall system of the three yatai-s has a higher performance (i.e. the average of three yatai-s) than the rotating seru. (Note that yatai-s are not dominant in all situations, especially when expensive equipment is required and/or other complicated production factors exist.) Canon is most famous for its yatai-s and cross-training system. Canon has constructed a well-known skill-level system. The skill levels are divided into four classes: 3-class, 2-class, 1-class and S-class. The highest class is S-class and S means super-person. For example, a S-class worker can assemble a product which needs 2,700 parts in only two hours (Kimura and Yoshita 2004).


Summary of the typology

It is our position that a seru is able to evolve into a high-performance manufacturing organization (yatai) only when all elements of kanketsu, majime and jiritsu are present. Moveover, jiritsu is the key driver which makes a seru becoming a learning organization, and which leads the evolutionary process. We summary the characteristics of the three types of seru-s 28

Table 2: Three types of seru Divisional Controlled by supervisor Yes Cross-trained on technical tasks Partial Cross-trained on managerial tasks Almost no Worker(s) are moving among stations Seldom

Rotating Yes/No Full Partial/Full Yes

yatai No Full Full Yes

in Table 2. Finally, note that the evolution introduced in this section is dierent from the popular concept, i.e. kaizen (continuous performance improvement). They are somewhat similar in language meanings. Both of them refer to performance improvement. However, the degree of performance is dierent, we show them in Figure 11, which redraws Figure 5 from performance and time perspectives. In Figure 11, 1 , 3 , 5 , and 7 are kaizen activities of ow line, divisional seru, rotating seru, and yatai, respectively. Whereas, 2 , 4 , and 6 are revolutions: conversions to divisional seru, to rotating seru, and to yatai. From the time perspective (i.e. horizontal axis), kaizen is a long-term and everyday work, whereas evolution is a short-term and temporary work. From the performance perspective (i.e. vertical axis), kaizen gives small and weak impact, whereas evolution gives intense and strong impact to performance improvements. Additionally, evolution change the organizational architecture fundamentally, whereas kaizen does not. We will go back to this dierence between kaizen and evolution in the second paper of this two-papers study. We use it to explain one of key dierences between cell and seru (i.e. consensus of perfect organization) which leads dierent implementations between cell and seru, from the perspective of evolution.


Figure 11: The dierence between evolution and kaizen

Closing remarks

This closing section identies the rst and foremost issue related to seru, and draws a few conclusions.


Cell versus seru: similar organization?

While the concepts introduced in this paper produce promising results in the research realm, the work is in its early stages, and more research remains to be done. We will list a lot of important research issues in the second paper of this two-papers study. Here, we give the rst and foremost issue which needs to be discussed rstly. As mentioned in section 1, seru is the Japanese word for cell. So it seems likely that seru is the same or similar concept to cell in the context of cellular manufacturing. However, even they have the same meaning in languages, we still can not assert that they are similar organizations. For example, MRP (material requirements planning) has the similar meaning in languages with Japanese word kanban. However, they are totally dierent management philosophies, one is push, another one is pull. In fact, cell and seru have dif30

ferent origins and histories. Comparing with seru, cell is a well researched manufacturing organization which has a very longer history than seru. A conspicuous dierence between them is the conversion trajectory: cells are usually converted from job shops, but seru-s are usually converted from ow lines. We use traditional conversion to express the conversion process from job shops to cells since it has a long history. Whereas comparing with traditional conversion, since the conversion from ow lines to seru-s has a reverse direction, we use reverse conversion to express this conversion process. If cell and seru are same or similar manufacturing organizations, those well developed methods in the context of cellular manufacturing can be applied to seru. However, if they are dierent concepts just like MRP and kanban, new methods are required to design, implement, analyze and discuss seru-s. By employing a descriptive model, we will show in second paper of this two-papers study that although there are many dierences between cells and seru-s, they are similar or homogenous manufacturing organizations.



The general concepts developed here ultimately might prove useful for understanding the reason of why Japanese manufacturing companies abandon their high-ecient ow lines and adopt manufacturing seru-s. The study is foundational and conceptual. We have tried to create a coherent denition of seru and to use logical arguments and examples to interpret the evolutionary process of seru-s. We discussed the changing economic background faced by Japanese manufacturing companies that forced them converting their high-ecient but low-exible assembly ow lines to high-exible seru-s (i.e. reverse conversion). We reviewed the existing seru denitions and proposed a new one that involves two denitional elements. By applying the denition, we gave an explanation for the self-evolution process of seru-s by employing a typology. 31

As seru and reverse conversion become prevalent in the Japanese industry, we are still on the start line from the academic perspective. We suggested the issue: Is seru the similar or homogenous concept to cell in the context of cellular manufacturing? as the rst and foremost question for the future research.

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