NEC started exporting telephone sets to China in 1904. In 1905, Iwadare visited Western Electric in the U.S. to see their management and production control. On his return to Japan, he discontinued the "oyakata" system of sub-contracting and replaced it with a new system where managers and employees were all direct employees of the company. Inefficiency was also removed from the production process. The company paid higher salaries with incentives for efficiency. New accounting and cost controls were put in place, and time clocks installed.