How to improve operations in 2015?Part II of II

How to improve operations in 2015?Part II of II

Part II of II

Quick summary

KAIZEN™ – the concept: KAIZEN™ is defined as ongoing improvement involving everyone in the organization. Kaizen, according to Imai, is the basic philosophical concept underlying the best Japanese management. KAIZEN™ is the umbrellaconcept that covers most of the uniquely Japanese management practices that have helped Japanese companies start from zero in the 1950s to become world class competitors in the 1980s. The graphic illustration below conveys the idea.

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 4, figure 1.1

Improvement: Let’s see the difference between Japanese gradualist approach (Kaizen) to the great-leap-forward approach (Innovation) favored by Western companies.

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 24, figure 2.1

KAIZEN™ by Total Quality Control: Total quality control depends on data, specifically data related to customers’ requirements, and recognition that the next process is the customer. In addition, quality drives profits. Thus management should focus on quality, as well as quantity, delivery time, safety, cost, and employee morale. When problems occur, workers should question the previous process and ask why five times. Total quality control should be customer-oriented, not manufacturing oriented. When problems and defects are created upstream, the downstream customer suffers. Therefore the emphasis is on cross-functional quality management including vendors, suppliers, subcontractors as well as all internal activities.

Let’s see PDCA continuous improvement approach below:

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 76, figure 3.2

KAIZEN™ – the practice: Let’s see how KAIZEN™ is used at different levels within the organization. This is referred as three segments of Kaizen. The following graphic illustration provides a fairly good summary of the ideas presented in this chapter:

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 81 – 82, figure 4.1

Cross functional management: Although a lot of emphasis is placed on quality and cost, meeting schedules in terms of volume and delivery is perhaps even more important. Scheduling requires a tremendous cross-functional effort. Imai san provides a matrix to show how cross-functional management is required for scheduling and delivery, as well as quality and cost. It shows that quality, cost, scheduling and delivery need to be considered at every stage including product planning, product design, production preparations, purchasing, manufacturing, and sales. The illustration below shows how the marketing, engineering, and production functions need to be involved at various stages of the process, rather than each function doing their part and then dumping their work onto the next function downstream.

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 132, figure 5.5

KAIZEN™ approach to problem solving: It is important to define a problem and indicate how problems should be viewed if the implementation of a KAIZEN™ strategy. First a problem is anything that inconveniences people downstream including downstream processes as well as the ultimate customer. The thing that makes problems difficult to solve is that the people who create the problem are usually not the ones who experience the resulting inconvenience. The first step in the KAIZEN™ approach to problem is to create an environment where everyone is sensitive to the inconveniences they cause other people. Another key idea is in how a problem is viewed by everyone in the organization. A KAIZEN™ oriented organization views problems as opportunities for improvement rather than as something to be hidden for fear of being blamed for the cause. Another related point is that most problems are cross-functional and their solutions require cross-functional cooperation.

Top management commitment:The main points in this section include: Quality is everybody’s job and poor quality means poor management. Management’s short-term results oriented thinking must be replaced with a longer-term view since KAIZEN™ efforts take three to five years to produce results. A KAIZEN™ strategy must come from the top. Improvement is needed in many different areas and a commitment from top management is essential to build a climate for Kaizen. Some additional points are illustrated in the following graphic.

Source: Kaizen: The Keyto Japan’s Competitive Success, page no 205

Changing the corporate culture: Imai san says that the need to improve supplier relations and emphasizes that a successful KAIZEN™ strategy means customer satisfaction. Improved relations with suppliers require more understanding of each other’s needs, and developing more trust between buyer and seller. Another point is that companies need to change the way they think about defects from a percentage basis to a parts per million basis. As one observer pointed out, executives who think of defects in terms of percentages belong in a museum. A KAIZEN™ strategy requires that everyone in the organization get involved and this requires the right corporate culture. Developing the appropriate culture means constant efforts to improve industrial relations, emphasis on training workers, developing leaders among the workers, small-group activities, recognition for worker’s KAIZEN™ efforts, and bringing discipline to the workshop.

Imai san defines corporate culture as “factors of industrial structure and psychology that determine the company’s overall strength, productivity, and competitiveness in the long term; such factors include organizational effectiveness, industrial relations, and the capacity to produce quality products economically.” Managers who are mainly concerned with short-term profits will be reluctant to spend time improving the company’s culture. KAIZEN™ requires a commitment from top management and everybody else in the organization.

Many concepts and techniques have been developed by Japanese companies using a KAIZEN™ strategy including a customer oriented philosophy, the PDCA cycle, cross-functional management, policy deployment, process oriented thinking, and tools such as systems diagrams, and quality tables3. These concepts, techniques and tools are also applicable in business organizations in other countries and in nonprofit and government organizations as well. The goal is for the KAIZEN™ strategy to be applied, not only in business organizations, but in all institutions and societies all over the world.

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