This week, the Wall Street Journal has published a three-part series of articles focusing on Japan’s high profile technology and consumer electronics companies and their stumbles in the market.  (Paid subscription required or free metered view on web pages) Reporter Daisuke Wakabayashi has penned a superb series and we highly recommend our readers take the time to read all three of these articles because of some significant messages that can be applied to cross-functional supply chain management strategies. We enjoyed these articles so much that we plan to dedicate a separate more in-depth editorial in our upcoming Supply Chain Matters Q3-2012 Newsletter that will be available in October.

The articles outline how certain Japanese consumer electronics companies, who once dominated the market in product innovation and market success, are falling victim to global market forces that they failed to accept.  It describes a culture of hardware and manufacturing capability based arrogance, an overdependence on Japan’s domestic market, a misreading of changing consumer preferences and dynamic changes occurring in the mobile handset and other markets.  One profound quote: “While the rest of the world saw the IPhone for what it was- a game changing product- some executives in Japan dismissed it, believing their phones were already smart enough.” Also described is the acknowledgement that money cannot be made in the high definition television production market after many years of unprofitable results.  Yet, as we read of this conclusion, we now know that Apple is actively pursuing a new product concept in television viewing, perhaps providing another game-changing event.

Sound familiar?

The series goes on to describe how companies such as Panasonic, Sharp, Sony and others are now scrambling to reinvent themselves as providers of electronic medical devices, solar power generation, and rechargeable batteries for industry.  The open question is what learning, if any, these Japanese providers will apply in the understanding of a broader value chain of bundled hardware, software and associated services that define the innovative products in these new market segments.

From our Supply Chain Matters lens, we would hasten to add the importance of having agile and responsive supply chain capabilities along with sales and operations planning processes that have the power to push back on highly optimistic product output plans that are not aligned with market demand signals or market realities.

Bob Ferrari