4 - The three customer companies

Summary

This chapter gives an overview of the customer-supplier and subcontracting relationships from the perspective of three customer companies, namely JJ Electric in Japan, GB Electronics in Britain, and Toshiba Consumer Products (UK) Limited (TCP). All three companies have survived in a changing market and technological environment by adapting strategies in various areas including supplier relations. Some attempts are made to trace changes over time, but the description remains largely a snap-shot at a point in time, circa late 1980s. Is JJ Electric characterised by more long-term obligational (OCR) supplier relations than GB Electronics? Is TCP's practice closer to that of JJ Electric or GB Electronics? Is JJ Electric becoming more arm's length (ACR) in its dealings with suppliers in order to cope with uncertain demand and currency fluctuations? At the same time, is GB Electronics becoming more OCR in order to survive in global competition? Answers to these questions will unravel in the course of this chapter.

JJ Electric

Background

JJ Electric is a company of considerable size, but by no means the largest in the electrical and electronics industry in Japan. The company employs around 38,000 regular workers and had a total sales turnover of just over 2000 billion yen (approximately £9 billion at £1 = ¥230) in the 1986/7 financial year.