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“The State Of Process Automation In Japan”

In contrast with discrete Manufacturers, the U.S. Process industries never lost ground to Japan. Instead, Japan is following the United States' lead in adopting next generation technology - Especially at the information systems level

Control magazine
By Phil H. Shook

After a decade of imitation and billions of dollars in investment, many of America's leading discrete manufacturers are giving up on Japanese-style robots, production line computers, quality circles, and just-in-time deliveries.

General Motors and Whirlpool found that what works well for Japanese makers of automobiles, dishwashers, and auto parts doesn't always work for American manufacturers.

While discrete manufacturers scramble for a new blueprint for efficient operations, the U.S. process industries are not suffering from any such identity crisis. Executives of Japanese companies, industry consultants, and American engineers - with lots of frequent flyer mileage between the states and Tokyo - say the U.S. process industries have reached a technological and competitive standard that Japan would like to emulate.

"There is no question that the U.S. is more competitive in the process industries," says toru Tsuchiya, an official in the Industrial Systems Div. of Yamatake-Honeywell, Ltd. In Tokyo. "Although Japan has had some success with its export of certain production processes, the U.S. and Europe are still leading most process technology advances," he says. Allowing that there are major differences in market requirements in the U.S. and Japan, Tsuchiya says the two countries are on a par in food and beverage processing and that the U.S. surpasses Japan in the pharmaceutical arena.

Many admit that the American process industries are world leaders because most of the leading engineering companies and most of the know-how are in the United States. Says Matt Sekiguchi, executive vice president and chief operating officer of Johnson Yokogawa Corp., the Newnan, Ga.-based joint venture of Yokogawa Corp., Tokyo, "The U.S. is far superior to Japan in knowing how to operate a plant more efficiently."

Familiar pressures

The process industries in Japan also have some things in common with their U.S. counterparts. Suffering the effects of a severe recession, many Japanese process industries are having to make some familiar adjustments to cope with industry change.

Manufacturers are re-engineering and downsizing many of their operations. In addition, outside consultants and software houses are being called in to pick up the slack as management continues to scale back on their best resource-people. "Everyone from systems management consultants to Arthur Andersen is being called in to help re-engineer the plant," says one Japanese executive.

The recession in Japan has brought about a fundamental shift in business strategy in many process industries, says Tametsugu Taketomi, an engineering and management consultant in the Tokyo office of Arthur D. Little, Inc.

Japanese chemical companies, for example, face severe pressures created by the recession and a mismatch between supply and demand, Taketomi explains. The Japanese chemical industry has long lagged far behind the major European and U.S. chemical companies in size, technology, and globalization. "Unlike their counterparts in the automotive, electric/electronics, and steel industries, which have historically been recognized as leaders in their fields, no member of the Japanese chemical industry was counted among the worldwide top 10 firms in sales until 1990," he says.

One company battling to change to a profit orientation is Idemitsu Petrochemical, a unit of Japan's second largest oil companyh, Idemitsu Kosan. Taketomi notes that Idemitsu recently announced it would change from a growth-oriented approach to a more profit-oriented organization, which may result in layoffs - a step not seen in the Japanese chemical industry in the past

Other industry observers see this trend going beyond a singloe industry segment. "I do think there's been a shift from long-term growth and market-share goals to short-term goals due to the recession," says Tsuchiya.

While the process industries in Japan have embraced new technologies and have become more complex, Tsuchiya says many of the expert process, production, and instrumentation engineers have retired from the Japanese industrial scene. The cost of labor has shot up with the appreciation of the yen, and the process industries are under pressure to cut overhead?and that means reductions in manpower, says Johnson Yokogawa's Sekiguchi.

Japan's chemical and petrochemical industries have been hurt most by the economic downturn, says Steve Tomlinson, general manager, systems product marketing for Johnson Yokogawa. A leading manufacturer of distributed control systems (DCSs) in Japan, Yokogawa's largest customers have been in the chemical and refining sectors. The recession has reduced this business by about 6% to about 33% of Yokogawa's overall business. The power generation and pharmaceutical sectors in japan are the bright spots where there has been an upturn in business, and the primary metals sector has remained steady.

The Japanese economy is expected to rebound late this year. In the meantime, "a tremendous amount of projects" are on hold, adds Tomlinson.

Different focus

The Japanese are equal or ahead of most American companies in DCS technology but because of differences in culture and business climate, the information side is not as advanced, Tomlinson says.

In contrast to the United States, where resources are directed to sophisticated information systems necessary to meet regulatory as well as competitive demands, the Japanese direct more of their resources toward the safety and quality of the plant operation.

Relationships between vendor and end user also may be tighter in Japan than in the United States. "A Japanese chemical company, for instance, would know who their customers are and their contracts [with vendors] would be set up so product, product quality, and delivery are guaranteed," Tomlinson says.

Government and industry also work together as partners in Japan to minimize roadblocks and bureaucracy. Explains Tomlinson, "when you get back to the reporting and environmental issues, [the Japanese] work together to minimize non-value added cost in the manufacturing cycle."

In Japan, the government will sit down with industry to describe the things that have to be done and how a company can accomplish them. Tomlinson contrasts this with the U.S., where industry tries to comply with OSHA requirements that it doesn't always understand.

Also, concern for the welfare of workers is very high in Japanese plants and automation doesn't carry the stigma or threat that it does with the American labor force. "The big difference that you have is that most of the workers that are hired in Japan, stay in the same company forever," Tomlinson says. "Industries may hire fewer people but they usually don't fire or lay off people."

The Japanese also tend to focus more on quality and production aspects versus merely meeting quotas. "This brings the workers to a different level in the production process," Tomlinson says. "They are looked upon as being in charge of the quality and production versus filling this or filling that."

Another manifestation of this empowerment is that most of the control systems in Japan don't require the levels of security that exist in the United States, a situation Tomlinson links to the level of commitment of the Japanese work force. "A tremendous mount of empowerment is given to the employees. They don't have to worry as much about workers getting into the wrong area and changing things they shouldn't change."

This behavior is ingrained in workers and management. "It gets back to the people starting with a company and staying the whole time and that drives things in the industry very differently," Tomlinson says.

Closer partnerships

While there are many similar pressures on process manufacturers in Japan and the United States, there also are significzant differences in process control implementation. Japanese industry tends to rely more on engineering expertise outside of their companies than do their American counterparts. However, that wasn't always the case.

In the past, inhouse engineers would do everything from project planning to system architecture to software development to start-up, with support from vendors, says Yamatake-Honeywell's Tsuchiya. He reasons that the Japanese process industry is very secretive, and manufacturers want to keep their technology proprietary.

"But technology has gotten a lot more complex and many of the expert process, production, and instrumentation engineers have retired," Tsuchiya says. "So in the last few years, outside consultants and software houses have picked up the slack. We've sensed that the days of inhouse engineering are numbered."

Typically a vendor or an engineering house in Japan will do the configuration of any large scale controls project. Depending on the size of the project, there may be a large architectural and engineering (A&E) study involved. "When they are building a big plant I have never seen a case where there wasn't a large A&E involved," Tomlinson says.

A Japanese company wil rely on a teaming concept in which it typically will rely on the vendor or the engineering company to do the majority of the work but also have somebody involved. "Yokogawa, for example, believes that he control vendor has the expertise to implement a project," Tomlinson says. "The [end user] company will have some engineers that know what is going on but they typically don't do the implementation."

"I think [U.S.] companies are starting to see that implementation of a project is not their core business and maybe they should rely more on the vendor," Tomlinson continues. "In Japan they always have relied on their [vendor] partner in that area."

The partnership can be so strong it is difficult in some instances to tell the difference between vendor and company employee. For example, Yokogawa may have an engineer that stays three years at a chemical plant. "when they are there they think they work for that chemical company. They feel like they are part of that team even though they are still on the Yokogawa payroll," Tomlinson says.

On the environmental front, the Japanese have always shown a lot of concdrn and while they don't have as many regulations as in the United States, they do tend to lead or follow the intent of U.S. regulations. "From an environmental standpoint, I would put the Japanese on par with the U.S.," Tomlinson says.

Yamatake-Honeywell?s Tsuchiya agrees. He suggests that perhaps the cost of compliance is lower in Japan because most manufacturers have been designing "environmental friendliness" into their plants for so long. "Green technology is becoming a major export earner," he says.

PCs, open systems catching on

While Japanese DCS technology may be on a par with the U.S., the information layer of U.S. plants is more advanced because of the proliferation of government regulations and the need to provide data to a broader audience.

Tomlinson, who travels to Japan frequently to consult with officials of the parent company, says there is movement in Japan, similar to that in the United States, toward more open systems in the process industries. This is occurring as many manufacturers begin to automate for the first time. "They are having to deal with DCS systems whereas before they have been manual or semi-automatic," he says.

Sekiguchi agrees: "Open systems will allow users to acquire the cheapest in hardware and software, so in that sense [open systems[ are very natural." Tomlinson says there is much more openness between competitors in Japan. "I guess we are starting to see that in the U.S. with fieldbus," he says.

Japanese suppliers and end users of process instrumentation and control shystems are "watching WorldFIP and ISP events and activities with great interest," says Tsuchiya. The issues of open syhstems/interoperability and fieldbus are very exciting but are ! not yet as significant in Japan as they are in the United States and Europe, he says.

When it comes to system configurations in Japan, DCS controllers are used for many smaller systems that would suggest a programmable logic controller or standalone process controller. "Being in the United States, I tend to think of a DCS system as four or five hundre points," Tomlinson says. "And over ther ethey are talking 16 loops and up. That is a major difference."

Personal computers (PCs) for industrial use also have been a tough sell. "There is a long, long way to go" before Japan catches up with the U.S. in PCs, says Tsuchiya. There is a misconception in Japan that PCs are only for personal use, as their name implies. PCs in the U.S. are connected to networks, 70% of those owned in Japan are not networked at all . Perceptions are beginning to change, however, and price wars have helped Apple, Dell, and others gain ground from market leader NEC.

The Japanese are not in a position to bring more investment into the software area but it will take time, says Sekiguchi. He notes that most of the IBM compatible PCs are sold in Japan but they are run in an English-language environment. "The reason that Macintosh is so successful is that it has a very good Japanese environment."

Thus, the state of process automation in Japan is evolving rapidly as the Japanese strive to match their counterparts in a global economy. Many Japanese engineers and executives foresee the process industries as offering tremendous growth opportunities and challenges in the years ahead.

July 1994