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In the land of rising quality.

A quality product, supported by a quality 'total delivery system,' is the first step to success in Japan.

Quality. Over the past few years no other concept has received so much attention from business. In the next decade no other concept should receive more attention.

I do not know when Weyerhaeuser had our first business with Japan, but I have read newspaper accounts of Weyerhaeuser shipping lumber to help rebuild Yokohama after the great Kanto earthquake in 1923. Our first Japanese manager opened our Tokyo office almost 30 years ago.

In the two decades that I have lived and worked for Weyerhaeuser in Asia, nothing has left more of an impression on me than the intense devotion to quality. Beyond all doubt, and by a wide margin, Japanese are the most demanding customers in the world. That intense focus comes, in part, from a long history of Japan's retail price maintenance. Since there has been relatively less price competition, Japanese domestic consumers and competitors have focused on quality. Regardless of its origins, the devotion to quality is a reality.

The title of this article refers to Japan as the land of rising quality. The standard of quality is not constant. It is dynamic.

Weyerhaeuser supplies a wide variety of paper and building products to Japanese customers. One of these products is newsprint. We operate a newsprint mill in the state of Washington as a joint venture with a Japanese paper company. It is close to a billion-dollar investment, capable of recycling every newspaper sold each day in Washington, Oregon, and Idaho. It employs several hundred Americans and contributes over a quarter of a billion dollars each year to U.S. exports to Japan.

A few years ago the mill was acknowledged to supply some of the finest newsprint available in the world. Our Japanese customers ranked it of the highest quality. Now, just a few years later, they say our quality needs to improve. We continued to produce the same newsprint, but our customers' standard of excellence changed. Our quality did not decline -- it has continued to improve -- but Japanese newsprint makers met our standard and then surpassed it in some ways. Now we are working to outdo them again.

Quality involves more than the technical attributes of the product. It requires the basic quality of the product plus the total delivery system that gets the product to the customer packaged the way he wants it, when and where he wants it, in the quantities he wants, damage-free.

For example, in reference to selling paper in Japan, the president of one of Japan's largest paper companies explained, "The problem depends on whether you think of the paper business as selling a product or a system -- a system which includes stable supply, stable price, transportation, timely claim resolution, and constant product quality improvements. Although it may be difficult to differentiate the quality of one sheet of paper from another, the total service can be very different."

Weyerhaeuser operates our own shipping lines. We are in the shipping business for one reason only: to satisfy our customers' quality needs. Not only must our products be of the highest quality but we must make absolutely certain they are delivered to our customers damage-free and on time.

The Yomiuri Shimbun is the largest circulation newspaper in the world -- almost 10 million copies every day. It cannot tolerate shipment delays. With our own ships, we control the schedule. If newsprint becomes even a little damp, it is worthless to the publisher. So, our ships have special dehumidification and temperature control systems in the holds. They feature rain tents, large canvas tarps that cover the entire hatch to keep everything dry when the ship is loading and unloading, no matter what the weather. Newsprint tends to dent very easily. If even an inch or two becomes damaged on the side of a roll, it cannot run through the presses. The cranes on our ships use vacuum lifts to load and unload newsprint to avoid indentations on the paper. Weld seams in the holds of the vessels are sanded down flat to keep the seams from denting the paper.

Structural lumber used to be packaged with metal bands and loaded into ships using steel cables. This tended to cut into the edges and corners of the wood, causing appearance damage. These edge dents do not affect the structural properties of the lumber -- it just didn't look good. Now, even if the lumber will be completely concealed with the walls of a home, it has to be perfect. We wrap it with plastic and load it with soft nylon web slings.

Need for Quality People

To have a quality system requires quality people. Lifetime employment in Japan is not just a theory -- it is a real two-way commitment. Hire the best, treat them the best, and you will have very loyal, reliable employees. Weyerhaeuser has several employees with over 20 years of service in Japan. They know our customers; they know our markets; they are our greatest asset in Japan. In America, sometimes we say, "The customer is King." In Japan the saying goes, "Okyakusama wa Kamisama desu" -- "The customer is God." That is hardly a subtle difference. Japanese are fanatical about quality. They are fanatical about taking care of customers. It is a day-and-night commitment of our Japanese staff.

Over the past 30 years we have made a very conscious decision to select the strongest customers we could find in every country. Our key customers are long-term partners -- not all equity partnerships, but they are real partnerships. If the U.S. is a "market economy," then Japan might be referred to as a "network system." You need time to build up a network of friends and customers. It takes a long time to establish relationships. But once you create a true partnership, that partner doesn't leave you easily.

Barriers Still Exist

A quality product -- a quality system -- is the first step to success in Japan. Without the necessary quality at a competitive price, you will not succeed. But, unfortunately, quality alone is sometimes not sufficient. There are barriers to doing business in Japan. Trade practices and policies are not open to the same degree as in the U.S. I heard Sony Chairman Akio Morita say one day, "Strictly speaking, the Japan market is open. It's just that the door is so small that it's sometimes hard for the foreigner to get in."

The barriers have to do more with behavior than laws. It is easy to change laws, not so easy to change behavior. But there is simply no reason for these trade barriers to exist in a country with Japan's position as a world leader and economic power in the 1990s. It is inexcusable. Japan has benefitted from free trade, perhaps more than any other country. To overcome these barriers, we support the U.S. government's market-opening actions.

Finally, there is no substitute for being there year in and year out with patience and perseverance. Someone once said, "In the realm of ideas, everything depends on enthusiasm. In the real world, all rests on perseverance."

William E. Franklin is President of Weyerhaeuser Far East Ltd., with responsibility for management of Weyerhaeuser operations in Asia. He joined Weyerhaeuser in 1954 and first moved to Tokyo as Vice President-Japan in 1973. Following several other appointments, he returned to Tokyo in his present position in 1986.
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Title Annotation:Accessing the Japanese Market; product quality crucial to success in Japanese market
Author:Franklin, William E.
Publication:Directors & Boards
Date:Sep 22, 1992
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