Transfer of The Development Process and Project Organizational Systems Between Japan and the U.S. by HIDEO OBITSU B.Eng., Urban Engineering The University of Tokyo (1976) Submitted to the Department of Urban Studies and Planning in Partial Fulfillment of the Requirements for the Degree of Master in City Planning at the Massachusetts Institute of Technology May 1987 @ Hideo Obitsu 1987 The author hereby grants to MIT permission to produce and to distribute copies of this thesis document in whole or in part. Signature of Author Department of Urban studies and Planning May 11, 1987 0 A-. Certified by ,. Bernard J. Frieden Professor, City Planning Thesis Supervisor Accepted by Phillip L. Clay Director fthe MCP Program MASSACHUSE TTS INSTITUTE OF TECHNOLOGY JUN o 8 1987 LIBRAR'Ir- FRdo Transfer of The Development Process and Project Organizational Systems Between Japan and the U.S. by Hideo Obitsu Submitted to the Department of Urban Studies and Planning on May 11, 1987 in partial fulfillment of the requirements for the Degree of Master in City Planning ABSTRACT The main subject of this thesis is the development project process and the differences in project organizational systems in different environments. Through the case study of the Toyota Kentucky (KY) Project and three other comparable projects, Nissan Smyrna (Tennessee), Toyota Tahara (Japan), and Fuji Gunma (Japan), the differences in project development systems between Japan and the U.S. are examined. It is found that the American development environment is more flexible and dynamic, especially because of the possibility of a fast-track program, than the Japanese environment. Specifically, differences and similarities in the project organizational systems, such as, traditional, design-build, and construction management, between the two countries are studied. A framework of the project organizational systems is built and used to analyze the project organizations in the four automotive plant projects as well as to define the differences and similarities between the two countries. The influence on the project organization of a fast-track program to achieve the shortest possible project duration time is examined in the Toyota KY Project. For the base of the analysis of the four project organizational systems, a theoretical model developed by Minden is used and its validity is simultaneously evaluated by the applicability to the projects. Additionally, the organizations of the client (Toyota Motor Corporation) and the design-builder (Ohbayashi Corporation) for the Toyota KY Project are analyzed. Thesis Supervisor: Dr. Bernard J. Frieden Title: Professor of City Planning Acknowledgments I would hereby like to acknowledge the following people for their help and support with this thesis. The nature of my research has required the cooperation and assistance of professors, professionals in the field of building construction, and my family. Special thanks go to my thesis advisor, Professor Bernard Frieden, and the readers, Professor Henry Irwig and Michael Joroff, the Director of the Laboratory of Architecture and Planning. I would like to thank Dr. James Womack for his introduction to professors, professionals, and books regarding automotive industry, and Dr. Chris Sawyer-Lancanno for his careful English editing. Special thanks go to many professionals and managers in the Toyota KY Project for Ohbayashi Corporation, Mr. Ohba, Mr. Mizoguchi, Mr. Robert Jordan, Mr. Suzuki, Mr. Nagashima, Mr. Muro, Mr. Muramatsu, Mr. Kanai, Mr. Matsunaga, and many managers and engineers. I would like to thank Mr. Noma for the information on OHB in the U.S. and Mr. Robert Lefebvre for the information on Giffles Associates. I am especially grateful for the support of many managers and engineers from Ohbayashi Corporation in Japan, Mr. Tanabe, Mr. Sato, Mr. Osaki regarding the Toyota Tahara Project, Mr. Kuroki, Mr. Kujirai, Mr. Imagawa, regarding the Fuji Gunma Project, Mr. Hanzawa, Mr. Kataoka, Mr. Harada, Mr. Shouda, Mr. Aoyagi, and other managers and engineers who provided much information about Japanese construction. I am as well grateful to Dr. Koshizuka and Mr. Mizushima regarding information about local governments' incentives for corporations in Japan. Ohbayashi Corporation also deserves special thanks for its full financial support for our family's stay in Cambridge for two years. Finally, I am deeply indebted to my family, Hiromi, my wife, and Sayaka, our daughter, and our parents who arranged a comfortable and cheerful environment that is the real reason for completing this thesis. 3 Lstf Tables, IFigures and Project Summairies Tabes 1-1: Projects and Differences if Host Importarit -actors 2-3-1: Factories of TMC 2-3-'2: Outline of Histor y of TMC 2-3: Subsidiaries of TMC in the U.. 2-3-4: Outl ine of Toyota (roup Companies 3-2.2-1: Staties' Incentives for Japanese Auto Manufacturers -2-: Reouired Permissions for Projects in KY- IFigures- I-1: International Construction Market 1-2: Where Top 250 Won Foreign Contracts I -3: Japanese Contractors' Overseas Proj ects 1-4: Major Market For Japanese International Contractors 1 -5: International Contracts O-f Japanese Top 6 Contractors 2-4-1-1-a: Schematic Plan of Tahara Project 2-4--1-1-b: Section of Press Shop in Tahara Project 2-4-1-1: Development Process Chart of Toyota Tahara 2-4-1-2: Toyota Tahara Project Schedule 2-4-1-3: Outline of Project Organization of Toyota Tahara 2-4-1-4: TMC' s Organization for Toyota Tahara 2-4-1-5: OH's Site Organization for Toyota Tahara 2-4-2-1-a: Schematic Plan of Fuji Gunma 2-4-2-1-b: Section of Assembling Shop in Fuji Gunma 2-4-2--i: Develtopment Process Chart of Fuji G unma 2-4-2-2: Fuji Gunma Proj ect Schedule 2-4- 2-: Outl ine of Project Organization of Fuji Gunma 4 Fi Cur g an i z at i on f or i GunLu a 2-42-4--4: OHbE - sr gar i z at i on f or Fu.j i Gunma 2-4-1 Scherati c Pl an of Nissan Smyrna 24-31: Development Process Chart of Ni ssan Smyrna 2-4-3-2: Nissan Smyrna Project Schedule 2-4 -3-3: Nissan Smyrna Project Schedule (2) 2-4 4: Outline of Project Organization of Nissan Smyrna NMMC's Organization for Nissan Smyrna 2-4-3-6: Daniel's Organization for Nissan Smyrna Toyota KY Project in Jan. 1987 3-1-a Schematic Plan of Toyot a KY 31 -b: Section of Main Shop in Toyota KY 3-1-c: Perspective Drawing of Toyota KY 3--d: Si te Plan of Toyota KY Si te Plan of Toyota KY (2) Development Process Chart of Toyota KY Toyota KY Project Schedule 2-1 Toyota KY Project Schedule (2) 3-1- : Diagr am of Merit Shop Diagram of Saturn Project Pact 3-2-2: Outline of Project Oroanization of Toyota KY OHB's Organization Chart for Toyota KY OHB's Site Organization Chart for Toyota KY 4-1-1: Flow Chart of Classification of Project Systems 4- 1--2: Outline of Alternative Contractual Approach Framework of Project Organi zati onal Systems 4-1-4: Minden's Deinition in the Framework 5 4.-1 -5 c i ic L O rg a n i Zt i on a L St- o Fouri Pro ctS 1--- i4- : Pr (-:- r eent Method DeF;i an 1odel Var -i abI eE 52-1: C n iotnency Factors of Four Proa ects in the Mat ri 5-2-2-a: Application of the latrix -For Toyota KY 5-2-2-b: Application of the Matrix for Nissan Smyrna 5-2-2-c: ApDlication of the Matrix for Toyota Tahara 5-2-2-d: Appl i cati on -of the Matri -for Fuj i G unma 5-2- 3 ActLUal and Optimal Systems a-f the Projects in the Fr amewor k 15-2- Japanese Project Organizational Systems in the Fr amewor k 5-3-1: Cost Control Mechanism in Toyota 1K.Y and Nissan SmVrna Mintzbergr s Framework for Organizational Analysis 5--: TMC and Nissan's Organization for the Projects 5-4-1: OHB's Organization -or Toyota KY and Projects in Japan Schematic IPIroject Summaries 2--4-1-1: Project Summary of Toyota Tahara 2-4-2-1: Project Summary of Fuji Gunma 2-4-3-1: Project Summary of Nissan Smyrna 3-1 Project Summary of Toyota KY TARLE OF CONTENTS Aic know l edgments F'. 3 Li st of Tabl es. F gures and Proj ect SLmmar ies P. 4 1 I ntroduct i on F. 9 2 Back grouind i nf ormationOf: Toyota Kentucky Project P. 18 2-1 Trade friction, Japanese direct investment, and Japanese international (::ntractors 2-2 History of The Ohbayashi Corporation in the U.S. P. 33 2-3 Outline of the History of Toyota Motor Corporation P. 41 2-4 Other automotive plant constructions P. 52 2-4-1 Toyota Tahara Project (in Japan) 2-4-1-1 Project Summary 2-4-1-2 Devel opment Process and Organi zati on 2-4-2 Fuji Gunma Project (in Japan) F. 68 2-4-2--1 Project summary 2-4-2-2 Development Proc ess and organization 2-4-3 Nissan Smyrna Project (in the U.P.) P. 32 2-4.-3-1 Project suIMMarV 2-4-3-2 Outline of Ni ssan Motor Manufact uring Corporation U.S.iA. 2-4-3- Developmen t Proc ess and Organi z ati on 3 Toyota Kentucky Project P. 102 3-1 Project summary 3-2 Development Process and Schedule P. 109 3-2- 1 Pl anni ng /F'r e-desi gn st age 3-2-2 Design stage 3 Procurement stagre 7 3 --- 4 Con r"t uc t.