In the last lecture, there is an opinion pointing out that Japanese “sacrifice mind” causes the success of interoperability in Japanese auto industries. …Perhaps, that has effected to some extent, but I believe it is not, at least, a main reason. (If Japanese “sacrifice” culture had mainly caused success of achieving interoperability among inter-companies , all the Japanese businesses would have succeeded in constructing efficient standardized and interoperable systems among them. Of course, it is not true. ) In my opinion, there is another big reason, Japanese Keiretsu System in auto industries, which has contributed to incentive to adopt standardized systems among the companies.
Traditionally, Japanese auto-industry had constructed Keiretsu system. Japanese auto-manufactures, like Toyota, Nissan and Honda, mainly had dealt with specific auto components suppliers for a long term and these components suppliers had dealt with specific subtier suppliers for a long term. This pseudo-vertical integration gave each manufacturer a big power to force components companies to adopt the manufacturer’s standardized system. Also, this meant that each supplier had incentive to adopt the manufactures standardized systems. The investment to adopt the specific standard could be rewarded because they could believe that they could continue to contract a specific auto-manufacturer for a long term. In this way, standardization was prevailed in each Keiretsu, vertical integration. It is often said that this vertical system contributes Japan auto-industry’s success.
In contrast, U.S. auto-manufactures usually seem to adopt bidding when they contract suppliers. Manufactures don’t necessarily continue to contract the specific suppliers for a long term, vice versa. This system, of course, contributes to keeping price of parts to be cheaper, but parts suppliers don’t have incentive to adopt the specific standard adopted by the specific manufacturer because the investment for standardization is not guaranteed to be recouped. I think this is a big difference between Japanese and U.S. automakers’ business model that might affect standardization.
I’m not so familiar with automaker’s business. So, this is only my hypothesis. However, I think it is possible that the exsistence of a powerful entity and long-term contracts may drive Japanese automakers to adopt standardization. Yes, this reason is also mentioned in the lecture. If players are assured to recoup their investment for standardization, they will adopt a certain standard. If not, they will not adopt and cooperate.
However, recently, Keiretsu system in Japan is changing. This system tends to keep prices of parts higher than bidding system, and there is a movement for automakers to increase ratio of trading with non-Keiretsu companies. For example, after its business crisis at the end of 90’s, Nissan declared to quit its Keiretsu System in order to cut its cost of parts.
This movement seems to drive automakers in Japan to build inter-Keiretsu standardizations. (I’m not sure whether this is succeeded or not.)