Do Varieties of Digitalisation Matter? From Industry 4.0 in Germany and Lean Augmentation in Japan towards Digital Transformation

Type de publication:

Conference Paper


Gerpisa colloquium, Bordeaux (2024)


Research Question: It has been observed that automotive firms in Japan follow a distinct approach of using digital technologies (Holst et al. 2020; Mokudai et al. 2021). Further, the Japanese approach has been contrasted with an idealised German vision of Industry 4.0. Specifically, the contrasts between these approaches lie in following areas (Holst et al. 2020): First, Japanese cases lack a centrally formulated digitalisation strategy commonly found in Germany. Instead, Japanese case firms conduct experimental trials of digital technologies on the shopfloor to solve concrete issues related to productivity improvement, process quality and reliability. Second, Japanese cases are characterised by a low-cost approach in that experiments with digital technologies are not necessarily using cutting-edge technology but inexpensive components. In comparison to Germany, this means that advanced analytics and functionalities are not or underutilised. Simultaneously, these functionalities are embedded in novel and expensive machinery, which limits their deployment in Germany to large firms, and leads small-and mid-sized enterprises (SMEs) towards incremental deployment (Hirsch-Kreinsen 2019). Thus, the Japanese low-cost approach could be interesting for German SMEs as it demonstrates that firms can engage digitalisation without having to commit extensive resources. Third, the Japanese approach displays respect for practical knowledge of shopfloor operators, meaning that IT experts and operators work without hierarchical distinction to solve concrete issues. This stands in rather strong contrast to German firms that display a strong tendency to be management- and/or engineer-led without utilising the practical know-how of shopfloor operators as input. Finally, the Japanese case firms display a strong orientation to the shopfloor (gemba), expressed by the aim to keep data generated by digital technologies on the shopfloor and to conduct continuous improvement (kaizen) based on these data.

However, Japanese automotive firms in Central Eastern Europe have been described as deploying digital technologies in a way that is consistent with the German vision of Industry 4.0, that is increased automation and labour skill development for remaining operators (Olejniczak et al. 2020). This strongly suggests that distinct digitalisation approaches exist but that they are altered if they are placed within different structural framework conditions. This has been consistently documented for lean production (Kochan et al. 1997; Janoski and Lepadatu 2021) or Japanese factory organisation in general (Abo 1994), so should be presumed that digitalisation approaches are also subject to such hybridisation.

To move beyond the contrast that compares concrete empirical cases in Japan with ideal types from Germany, this study builds on case studies of German and Japanese automotive firms. Grounding the analysis in empirical case studies allows to overcome stylised comparisons by operating at an identical level of analysis. Field research was conducted in Germany in March 2023 and in Japan in February and early March 2024.

Methodology: The study uses a multiple-case research design. To analyse empirical observations, it applies a classification pattern developed by Mokudai and colleagues (2021). Findings from field research in Germany and Japan are reported. One particular firm case will be highlighted because it was possible to study a German automotive firm in its country of origin as well as its Japanese subsidiary. Thus, the unit of analysis is subject to the same internal policy towards digitalisation but placed in two national contexts with different vocational training and industrial relations systems. Hence, structural influences of these national systems can be analysed without accounting for differences rooted in firm-specific digitalisation strategies.

Findings: Regarding recent field work in Japan, findings reinforce previous research findings that Japanese automotive firms mainly deploy digital technologies to strengthen the existing lean paradigm of production. Applications that are time and labour saving are deployed. Simultaneously, there is a significant outlier case among Japanese firms, namely Nissan. Nissan’s approach to digitalisation as implemented at its model plant for digital transformation in Tochigi is rather similar to the ideal type of Industry 4.0 with more highly automated processes throughout the factory. The case of Nissan reaffirms research on firm-specific development trajectories in the automotive industry (Freyssenet et al. 1998; Freyssenet 2009), including firm-specific approaches to automation and work organisation (Shimokawa, Jürgens, and Fujimoto 1997). Regarding the German subsidiary in Japan, the initial digitalisation effort started in 2016 but reportedly yielded little results, partly due to a disconnect between German managers and Japanese shopfloor operators. A renewed digitalisation effort started in 2019 seems to be more successful as Japanese middle management is stronger interacting with shopfloor operators. Overall, findings lead to the conclusion that while there are structural factors at the national-level that influence firm decisions, firms retain significant agency to develop firm-specific approaches to digitalisation.

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