December 1992

Edward H. Frazelle, Georgia Institute of Technology (Panel Cochair)

Richard E. Ward, Material Handling Industry (Panel Cochair)

James M. Apple, Jr., Coopers & Lybrand

Thomas C. Day, Hanover Direct

Glenn J. Petrina, Defense Logistics Agency

Alvin R. Voss, IBM

Howard A. Zollinger, Zollinger Associates


Material handling plays a vital role in all sectors of business and commerce, but nowhere is it as important to an efficient operation as it is in manufacturing, warehousing and distribution. Those who study this field and understand how material handling methods, equipment and systems can be used to increase productivity look on the material handling process and the technologies available as strategic competitive factors. Cost reduction (capital and operating), increased throughput, improved response times, work place safety, and total quality are measures of performance that have strategic implications for a business. These factors are all directly affected by how well an organization performs its material handling functions.

These factors alone are enough to cause business leaders to want to study this field and to research best practices and available technology worldwide. The strategic advantages that many say Japan has in a wide variety of industries (e.g., automobiles and consumer electronics) present a particular impetus for studying developments in and applications of material handling in Japan. Japan's competitive position in high technology manufacturing helped motivate the National Science Foundation and the Department of Defense to commission an expert panel to conduct a study of material handling in Japan that would include visits to Japanese suppliers and users of material handling technologies.

This report synthesizes the findings from approximately sixty site visits, attendance at major Japanese trade exhibitions, a review of current literature, and discussions with numerous Japanese experts in the field. Although much of the research was conducted during the first five months of 1992, visits dating back to 1990 provided additional valuable information. A summary of the conclusions drawn from this study follows:

  1. Prior to 1960 Japan trailed the United States in industrial productivity and in the application of modern production methods, especially in the use of state-of-the-art material handling technology. All that has changed.

    In the late 1950s the Japanese Productivity Center sent a team to the U.S. to study what was being done in material handling and to recommend measures for implementation in Japan. The result was the licensing of U.S. material handling technology for production and use in Japan. Today, we see spin-offs and derivations of that early technology, which has improved vastly in several areas. Japan is not only using its own material handling technology and equipment domestically, but Japanese suppliers are selling them on a worldwide basis, including in the United States. Japan is now a leader in several equipment/technology categories.

  2. Productivity improvement--and the strategic advantages that accompany such improvement--have provided the rationale for Japan's quest for the best production methods and technologies over the last thirty years. However, that rationale today is being amplified manyfold by changing demographic, social, and business conditions in Japan. The result has been an acceleration in the application of automated material handling systems that dwarfs what we see occurring in the United States.

    The evidence is fairly clear that factors such as declining population, aging work force, changes in work preferences, and the ever-present congestion and lack of space are fueling the use of automation. The corollary in this case is that demand (application and use of automated material handling technologies) fuels supply, which translates into a rationale for ongoing research and product development. In many cases, economies of scale in the production of material handling equipment can also be associated with high demand levels.

  3. Automated material handling equipment and systems in Japan are not deployed exclusively in large, complex integrated systems. The result is many examples of simple, stand-alone installations.

    This factor partially explains the extremely high Japanese material handling equipment installation statistics in comparison to those in the United States. In the United States such installations are often called "islands of automation," and are generally viewed as less than desirable. In Japan, however, stand-alone installations mean greater control and cost savings. Two business factors have contributed to greater use of simple, stand-alone installations in Japan. One is the general Japanese attitude that simple is best. The other is the availability of Japanese users willing to make use of such systems without demanding often costly modifications and "bells and whistles." A benefit of this phenomenon is that it has allowed Japanese suppliers to concentrate on research and development that focuses more on issues such as product reliability and maintainability.

  4. The Japanese government has taken an active policy role in stimulating the application of automated material handling systems.

    The 1958 study team is perhaps the earliest, albeit an indirect, example of Japan's active government policy. A more direct example has been the Japanese government's policy of making funds available at attractive lending rates for capital projects that address demographic changes in the Japanese work force. The strategic significance of investments, coupled with a long-term view of their benefits (versus short-term payback), has long been recognized as something that differentiates Japanese attitudes about capital investments in business infrastructure from attitudes in the United States. The added motivation of having access to capital at attractive rates for the specific purposes stated above only compounds the advantages enjoyed by Japanese manufacturers.

  5. Research and development in the field of material handling, though very active, is apparently performed exclusively within the confines of private industry.

    This is no different from what takes place in the United States or elsewhere. In the United States, however, there is evidence of greater academic interest in the field of material handling. This has led to the direct incorporation of material handling into U.S. college curricula, and to more independent research associated with the operational design and control of material handling systems. This is not to be confused with electro-mechanical design or testing. There is little to no work of this type underway at U.S. or Japanese universities. Nevertheless, there is greater evidence of industry sponsorship of college and university material handling education and research in the U.S. than in Japan. There is somewhat of a dichotomy here because the rate of investment in material handling automation in Japan far exceeds that in the United States, regardless of what is done in or by universities.

  6. Industrial productivity in Japan still lags behind the productivity of U.S. industry, but the two have been converging rapidly.

    Japan's material handling practices have contributed significantly to its gains in productivity. The gains have been made possible by the enlightened attitude of Japanese business managers, the types of products and systems that Japan's material handling industry delivers to the market place, and the way that Japanese suppliers and users work together to accomplish an objective.

  7. An assessment of whether Japan is ahead or behind in its material handling technology depends on the technology being examined.

    A broad spectrum of equipment categories is analyzed in Table 25.

Japan Compared to U.S. in Material Handling Technologies

(See Key)
[table 25]

Published: March 1994; WTEC Hyper-Librarian