[Nyororin]

Obviously there is going to be a difference if when it comes to technological capabilities - but I do not believe that a location or group of people themselves are incapable of producing high quality goods. It is a matter of training and management.

Sharp televisions are assembled in Japan... From parts made both in Japan and elsewhere. What "counts" as I pointed out, is final assembly and quality checks.

It is still cheaper to produce pieces outside of Japan and run them through multiple quality checks than it is to produce the things in Japan and run them through the SAME quality checks.
It seems you are assuming that if the pieces were produced inside of Japan they would not be put through the same checks. There is no difference - the same checks are done no matter where the parts were made or assembled. If the production costs are lowered, the total cost is lowered. It has nothing to do with quality checks.

To clarify even more; Let us assume that all parts are produced and assembled in Japan. The factory will produce, then run internal checking as part of the production process. Then the pieces will be run through a line dedicated to quality checking before being boxed and sent on to assembly. At the assembly plant, they are again checked when received prior to being sent down the line for assembly. After assembly, they are again checked in a dedicated quality check line... And then boxed for sale.
In a factory OUTSIDE Japan -
A factory trained by a Japanese company representative (usually with a number of Japanese management staff) produces parts according to the same rules as a Japanese factory. This includes a regular quality check as part of the regular line. Then produced pieces will be run through a quality check line (usually where the Japanese staff supervises and participates) before being boxed for shipment to Japan. Parts arrive in Japan, and are checked for quality before being put into the assembly line. There is another dedicated quality check after assembly.

The ONLY difference in the actual process is the addition of "shipment to Japan". The exact same quality checks occur in the exact same places in the time table under the exact same policies. The cost cutting is in the labor costs. A Japanese factory worker usually makes around 1500/hr. The same worker in China or another low cost country is usually less than 1/5th that.

Problems arise when quality checks are ignored at some point, or when there is no real training or observation of factory policies.