Service Management in Japan

A German service manager ventures to Japan. Here in the ServiceLobby, he reports on the cultural differences that also influence the service business. What are the differences between the Far East and the domestic market and how can they be dealt with? - A guest article by Christoph Müller

Japan and Germany have a few things in common; both are large industrialized nations, for example. However, there is of course much more that distinguishes our two societies. That is why I would like to outline the differences that I have experienced in terms of service and corporate culture.

How are Europeans perceived in the Japanese business world?

Few foreigners live in Japan. 97 % of the population are of Japanese descent. The remaining 3 % are also largely made up of other East Asian population groups. So as a German engineer, you are definitely exotic. And a European who speaks fluent Japanese is always a special surprise for the locals.

On the one hand, this fact ensures that I am often given preferential treatment. New acquaintances show great interest in the reason why I came to their country. On the other hand, I am often told that as a foreigner I can't understand how things work in Japan. But the bottom line is that the benevolent environment makes it easy to settle into the culture, even if a lot of things take some getting used to.

What should I pay particular attention to when dealing with Japanese colleagues?

The cultural differences should not be underestimated. Japan is a very collectivist country. Individuals are reluctant to make independent decisions in the business world here. In the past, the "ringi" process was often used here, whereby a decision is written down and signed by all responsible parties before implementation.

Although this process is being used less and less, it is still encountered in many places today. Even today, it is still the case that you first check with everyone to see whether problems could arise before you change anything. That's why, from a Western perspective, you need a lot of patience to introduce changes. In Europe, people tend to try things out first and then evaluate them afterwards.

Another aspect is that the Japanese have very pronounced hierarchical structures and also make authority strongly dependent on a person's age. There are always situations in which you can observe that the person who appears to be the oldest is automatically perceived as the person with the highest hierarchical status.

Misunderstandings can also arise due to differences in communication behavior. For example, Japanese people like to confirm that they are listening to the speaker by repeating the Japanese word "Hai". This can literally be translated as "yes". However, this does not necessarily mean agreement, but rather that the message has been received. Strangers sometimes mistakenly think that they are already in agreement. As you can imagine, this sometimes leads to resentment.

What are the biggest differences in the Japanese working world compared to Germany?

Japan has a very conservative image of work, which is only changing slowly. Topics that I heard on the news as a child will be topical in Japan in 2023: be it the emancipation of women, the introduction of more flexible working hours or immigration. In recent years, there have been many positive improvements in the regulation of overtime and vacations, but it still seems a long way from European standards.  

How does the service business differ?

I notice that manufacturers are often only approached when there are problems with a machine/device. Both in a business and private environment. There are few freelancers who offer repair services and third-party companies that offer services are usually certified by the manufacturer. This is very helpful for manufacturing companies, as there is little to no competition in the service business.

On the other hand, it is a major hurdle for companies that want to start a new business in Japan. If you cannot provide the desired service, this makes the customer's decision to buy more difficult and many then opt for the local provider after all.

The service level in Japan is generally very high, even if it sometimes seems excessive to me. For example, many customers value the mere presence of service staff. At the first moment, it is often more important that someone is there to look after the customer than that the right person is on site to solve a technical problem.

Selling service contracts in Japan

The sale of service contracts is not necessarily easier in Japan, but it is different. Customers here are increasingly interested in "all-round carefree" packages. As I understand it, this is partly due to the strict budgeting of the factories. Unplanned costs have to be confirmed via complex and lengthy approval procedures. For this reason alone, factory managers are often interested in service contracts that make their costs more predictable. What these contracts often have in common is that the service technicians' working time at the customer's premises is free of charge.

What are the expectations of service providers?

Our clients expect us to be on site quickly and to do our job both conscientiously and thoroughly. It may be somewhat counter-intuitive, but in Japan it is often more important to be available quickly and then deal with the issue thoroughly than to actually minimize the time it takes to solve the problem.

If I had to rank 5 quality dimensions of a machine according to their importance for Japanese customers, I would do it as follows: High productivity is probably the most important, closely followed by high system availability. After that, high product quality is important. Slightly less important are lower operating costs and comprehensive safety requirements. Services should also be based on these requirements.

Recently, the footprint of machines has also become increasingly important. This does not necessarily mean the ecological footprint. It is simply that many factories are very small and every centimeter is important. It is also important, especially in the age of digitalization, that online tools must also be offered in Japanese in order to be accepted.

Are the Japanese in the service sector (more) open to innovative technologies such as predictive maintenance or VR remote maintenance? 

In personal discussions, many Japanese customers show an interest in such systems and see their advantages. Unfortunately, it is often difficult to actually introduce them afterwards. Obstacles in language or communication regarding data security mean that progress on these topics is slow.  

What is the biggest difference in the service business between Japan and Germany? 

Although Japanese and German "engineering" are very similar in parts, they are quite different in detail. The Toyota production system has strongly influenced Japan. In particular, "Saihatsuboshi", the prevention of recurrence of a problem, is of central importance. While in Germany it is often assumed that this is an exceptional case, even exceptions are scrutinized very closely in Japan.

This happens in every conceivable situation. I had a conversation with a customer about the wrong sticker being applied to a piece of equipment. To my surprise, the customer immediately produced documents showing that the same mistake had been made three years ago.

What are the no-gos in the Japanese service business?

Japanese customers always want to understand why a defect has occurred. It is therefore essential that you explain how a failure occurred and how it can be prevented in the future. This is especially true when it comes to high-priced spare parts.

Also, never issue an invoice if there are still outstanding problems. By asking for payment prematurely, you can quickly annoy the Japanese. This also applies, as described above, if the customer has not yet been told what the reason for the problem was and how the situation has been improved.

In addition, technicians should always observe the customer's house rules. For example, do not cross roads and paths without first pointing your finger in both directions, if this is required. Helmets, caps and safety goggles must also be worn in the manner required on site. Talking on the phone while walking is often frowned upon. It depends on the customer, but site regulations must be strictly adhered to, otherwise the customer will not feel respected.