Last fall an eight-man study group visited Japan for a two-week period. The purpose of the trip was to ascertain why Japanese industry can produce automobiles and stampings at a lower cost than their U.S. counterparts and to determine what, if anything, could be done to restore our competitiveness.

Such study groups are nothing new. Japan has to be the most studied nation on earth. The problem is that most such study groups are 1) thinly disguised junkets, often at taxpayer expense or 2) they consist of well-intentioned people who really don't know enough about American industry to make valid comparisons.

Not so in this case. The eight-man group was composed of some of the most knowledgeable men in the stamping industry. They visited 24 metal stamping plants, including four of the six major automakers. They interviewed management and inspected manufacturing facilities.

The following is a consensus of what they observed as reported at the Annual Meeting of the American Metal Stamping Association together with comments of the men who made up the group. In view of the competence of those men, not to mention that they made the study tour at their own expense, M/S feels that it has a special validity.

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Automation is widely used in the Japanese stamping industry. Here a robot arm picks up a blank from a stack. Study group member Ralph Stinson took these pictures in the Shiroyama Kogyo, Ltd. plant, as well as other photos in this article.

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Another simple but highly efficient robot appendage reaches into a die to remove a finished part.

The efficiency of the Japanese automotive industry and its suppliers can be measured by a single bottom-line figure. Japanese auto manufacturers can produce a car for about $1500 less than a comparable Ford, GM, Chrysler or American Motors model. Lower wage rates are a factor but not nearly enough to account for the total difference.

The study group felt that it was significant that Japanese automakers buy from 70 percent to 80 percent of their stamping requirements from contract stampers, based on dollar volume. The other 20 percent to 30 percent are made in-plant. American automakers make 70 percent to 80 percent of their requirements in-plant; buying 20 percent to 30 percent from outside sources. (Several American automakers have announced plans to increase the amount of outside sourcing.)

The Japanese automakers operate on the premise that quality, inventories and other costs can be better controlled by the purchasing department in a "buy" situation than by in-plant controls in a "make" situation. To make this concept work, the Japanese automakers exercise very tight control over their outside specialist manufacturers. Thus they can force them to become more efficient and to assume responsibilities that help the automaker reduce its own manufacturing costs.

It is by no means an adversary relationship. It approaches being an arms-around as opposed to an arms-length relationship. In return, however, the automaker usually insists that the supplier have no other customers. The tendency is to concentrate production in a relatively small number of sources with those sources becoming "business associates."

There are disadvantages, of course, to this one-customer philosophy but it saves a lot of sales costs and wasted quotations.

The sources are expected to provide services other than blanking and forming. These services include welding and assembly. Outside sources-contract stamping companies make large subassemblies such as dashboards, floor panels, truck bodies, firewalls, catalytic converters, air filters, etc. Much of this kind of work is done in-house by American automakers.

A great deal of effort is devoted to the reduction of waste of all kinds-time, effort, material and even floor space. Space is at a premium in Japan and to conserve it, the automakers use what could be called a "just-in-time" delivery system. The supplier delivers parts in the exact amount required. Not to a loading dock but directly to the work station on the customer's assembly line-and at the exact time required.

Here palleted assemblies are being readied for shipment at Hiroshima Press Kogyo. Note the side-opening design of the truck. The truck will deliver the assemblies directly to a specific location on an automotive assembly line.

The advantages are obvious. The automaker has eliminated the cost of incoming inspection, the cost of handling and the cost of inventorying parts. At the same time, it shifts the burden of quality control to the supplier. He is responsible for the quality of every part he produces and this responsibility carries through to the ultimate consumer.