1963: Establishing the Shiga Gamo Plant
Introducing the "Hourly Efficiency" System
Kyocera was growing steadily and soon outgrew its original, rented facility, so in 1963 the Shiga Gamo plant was built. Kyocera, started with only 28 employees, now had over one hundred. Not only that, but Kyocera's product line had expanded as well. Faced with the issues of a fast-growing company and more complicated production processes, it became difficult to understand the financial condition of the entire operation — unlike the early days of managing a small factory. With this thought in mind, Inamori came up with a standard management system, unique to Kyocera, called the "Hourly Efficiency" (H/E) System. This system can be used by everyone in the company to quickly understand profit and loss in real time.
Production Amoeba example:
The essence of management, in short, is "Maximize revenues and minimize expenses." As shown in the formula above, managers only need to focus on three elements to increase their H/E: (1) increase Net Production; (2) minimize Expenses; and (3) maximize work efficiency to minimize Working Hours. With the introduction of the H/E System, Kyocera was able to evaluate divisional performance fairly across the company. This system made it possible for everyone to see what needed to be done to increase profitability (H/E Added Value) in each division.
By establishing the Amoeba Management System, which was built on the H/E System, Kyocera implemented a process where every employee could easily understand their department's goal, and work toward achieving that goal from their respective functions. The H/E System makes it possible for Kyocera to remain highly profitable, full of vitality, and efficient despite the company's large scale.