There are obvious material signs of the arrival of Japanese steel makers here at the Great Lakes steel plant of National Steel Corp., just west of Detroit. The biggest is a huge processing line that will produce high-quality coated steel coils, built under the direction of National's partner, Nippon Kokan K. K., Japan's second-largest steel maker.
But in the long run, the more important changes at the plant also will include far more subtle cultural influences on American steel makers that come from the small number of Japanese steel executives and technicians who have come to Great Lakes this year.
"They've given us a different point of view," said Ed Sambuchi, general manager of the Great Lakes plant. He recalled one white-glove examination of the plant by a team of technicians from Nippon Kokan (NKK), whose focus was microscopic details of the plant -- the direction of nozzles that shoot gasses into steel vessels, the size of valves, even the dirt and debris on finished steel coils.
Americans, raised in a culture of abundance, find it foreign to worry about the small improvements in quality and productivity that come from attention to details so small, Sambuchi said. The Japanese, raised in a land with few natural resources, have learned to conserve everything, and it has become an important edge in steel-making competition, Sambuchi said: "The Japanese don't think of spilling anything. And if you do spill, you've got to pick it up and find a way to use it."
The Japanese advantage can be grasped in terms of the yield from steel-making -- the amount of prime, high-quality finished steel obtained from each ton of raw liquid steel. "It all depends on the product, but in broad terms, the Japanese prime yield from raw steel is running anywhere from 10 to 15 percent higher than the average for the industry in the United States," said Robert D. McBride, president of National Steel Corp. It's the difference between a yield of 75 percent here and 90 percent in Japan.
"That yield is one hell of a lot of money," McBride said. "We're targeted for 1986 for about a 3 percent yield improvement. That equates to $61 million to the bottom line if we achieve that."
"The key thing is quality. That's where they beat us. That's where they made the investments," McBride said.
"If you're superior in quality, you have much more leverage in calling the shots in pricing in the market-place. To me it's the ultimate answer. If you put everything the Japanese have done in one word, they've put their neck on the line from a quality standpoint," he said.
"Our problem was, when the only tool you have is a hammer, every problem looks like a nail. Our hammer was volume. It was the answer to everthing. When the market was down, you kept the plant going and built inventory, because that kept your costs in line in the plant. And you went out and sold that inventory when the market picked up.
"When the market was good, you pounded the hell out of that volume and kicked the price up and made money." It worked fine -- until lower-cost and higher-quality steel imports began hitting the American market in the 1970s.
By then, the Japanese lead in technology and know-how was almost insurmountable, McBride said.
"It comes down to very small details," said Susuke Doi, a former NKK official who now is executive vice president and a director of National Steel. The dedication to detail has deep philosophic and religious roots, he added. "In the Orient, since the time of Confucius, you are taught to consider yourself not perfect. You must be improving daily. So the most important thing is to examine yourself and what is your shortfall and what you must accomplish. In the United States, when you accomplish something, you tend to think it is near perfect.
"Very often, somebody is told, there is something wrong with you, and you must be trying very hard to improve. Then more or less he's feeling defensive. In Japan, you should find each day something to improve. There is no end. "Personally, we try to give this way of thinking across to the people of National Steel. I think it is very successful. We have seen already many good signs. It is very difficult to change overnight the basic attitude of thinking.
"But there are many people who agree that constant improvement is necessary," Doi said.