It is the large companies that are seen by foreign competitors and that are considered the backbone of the Japanese manufacturing industry and economy, but in reality small and medium-sized companies make up 99 percent of Japanese industry and should be seen as the real foundation on which the Japanese economy rests. The large companies could not exist without the support of millions of unknown small businesses spread throughout the country.
west flexible manufacturing systems (FMS) to allow for more freedom in production, but still the retooling process is one many companies want to eliminate. To this end, they farm out much of this business to subcontractors, and these companies in turn are faced with redesigning and producing a product three or four times a year and may subcontract the design or manufacture of a dozen key components to still smaller companies.
These methods have worked well in the Japanese system, though they do create problems for outsiders. It is difficult to compete with this system when our own method of subcontracting is so different. For one thing, we cannot pass off costs to the subcontractors as can the large Japanese firms. Thi