PATRIOTISM · LEADERSHIP · SERVICE · PROFESSIONALISM
PAMANTASAN NG LUNGSOD NG SAN PABLO
COLLEGE OF BUSINESS ADMINISTRATION
MODULE - IV
Kaizen and Management Concepts and Systems
by: PROFESSOR MARINO D. UMALI
Learning Objectives
After this lesson, students will be able to:
✓Define Kaizen as a philosophy
✓ Describe the different voncepts of Kaizen
✓Explain the systems under Kaizen
✓Apply the philosophy of Kaizen in everyday activities.
Introduction:
Kaizen is a philosophy that calls for people and their organizations to experience ongonig improvement at every level. By
focusing on a small, incremental change rather than dramatic innovation, Kaizen seeks to construct effective and efficient
processes and quality output.
Kaizen at the workplace means continuing improvement inveolving everyone, managers and workers alike. The Kaizen
business strategy involves everyone in organization working together to make improvements without large capital
investments.
•KAIZEN CONCEPTS
Kaizen - is a Japanese word meaning continuous improvement. It is made up of two characters which are
“kai”meaning change and “zen “ meaning good.
It is used to describe a company culture where everyone from the CEO to the front desk clerk, regularly evaluates
his work and thinks of ways to improve it.
The concept is that small steps on a customary basis will lead to large improvements in due course. Kaizen entails
relatively little expense
Kaizen originated in Japan as a result of WW II, Ironically it evolved in a part from American business leaders
like Dr. W. Edwards Deming who came to help restore the country. It was introduced by a 1951 training film created by
the American Economic and Scientific Section although Dr. Deming is largely credited for instituting the principle of
Kaizen in Japan.
Kaizen’s elimination of waste through the maintenance and improvements of processes became fundamental to
Japanese management philosophy. It has since stretched around the world to companies and organizations wishing to
follow the success of Japanese businesses.
TOYOTA is known as the initial company that stated Kaizen. The application that Toyota used was called
Toyota Production System. where all line personnel is expected to discontinue their moving production in the case of
irregularly and suggestions for improvement are awarded reward. They succeeded in eradicating all the waste. Kaizen is
used to replace the terms productivity, total quality control (TQC), zero defects (ZD) and Just in Time (JIT). Therefore,
Kaizen is the main concept for all these practices.
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In quality circles, a specialized team develops and designs ideas concerning how to improve the company’s
performance.
Suggestion system encourage employees to submit suggestions for improving work process es and customer
satisfaction.
Teian aizen on the other hand, represents a theory-based approach and refers to strategic improvements that are
prejudiced by top management. He, the implementation of the latest processes and practices plays the most dominant role.
The overall goals of teian kaizen are improved business and manufacturing practices. The most prominent teian kaizen
methods include total quality control and just in time management.
KAIZEN AND MANAGEMENT
It is also essential that management is trained and behind the effort. Kaizen will result in many more suggestions
for improvements and changes and will take away from a strict focus on moving items quickly through the existing
production process. Management must be prepared to recognize some time away from current work to focus on changes
with longer-range impact.
Management has two major components:
1. Maintenance function- is to maintain current technological, managerial and operating standards.
- under this, the management must first establish policies, rules, directives and standard operating procedures
(SOP) and then work towards ensuring that everybody follows SOP, The latter is achieved through a combination of
discipline and human resource development measures.
2. Improvement function - is aimed at improving current standards.
- management work constantly towards modifying the existing standards, once they have been aster-ed and
establishing higher ones.
- Improvement can be broken down between innovation and KAIZEN.
INNOVATION
-involves a drastic improvements in the existing process and requires large investments and big efforts. Kaizen
signifies small improvements as a result of coordinated continuous efforts by all employees.
A manager has to act as a bridge between senior management and the entire workforce.
1. The role of a manager is to act as facilitator in the workplace.
2. A manager must communicate the benefits of total quality management to all other members of the
organization.
A manager is always strong source of inspiration for other employees. He needs to practice TQM himself before
expecting others to believe in the same principles. Customer feedback should be cautiously screened and taken into
consideration while creating the company’s major strategies. A manager must also provide frequent reports to staff
members stressing the scope for improvement.
PROCESS VS RESULTS
Process oriented thinking mostly center on how process are carried out through the assessment of performance
indicators generated by measuring or observing the process flow.
Result-oriented thinking basically disregards how processes flow and work. Instead process
results/outcomes are obtained, monitored and evaluated systematically.
Example:
Micro level performance indicator include lead time, cycle time, throughput time, and defective part ratio. While
macro-level performance indicators consist of the profit or customer satisfaction which would be monitored in result-
oriented thinking.
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Kaizen focuses on improving the process rather than on achieving certain results. Such managerial attitudes and
process thinking formulate a major difference in the manner an organization masters change and achieve improvements.
this concept of process -oriented thinking indicates that there must be some problems in a process if the outcomes are not
encouraging to the firm.
Kaizen recognizes the connection between outcomes and processes. If the results from an organization are of poor
quality, the processes used to achieve those results necessitate concentration. This understanding is a component of the
framework of Japanese society, even on the personal level and explains why Kaizen is so successful there.
The way processes are addressed is a key element of Kaizen. While in the West, innovation or radical change is
often sought. Kaizen hunts for for constant incremental change, which generates remarkable result eventually . Since the
changes in kaizen are small, errors can effortlessly be corrected with no involvement of much risk or expense. This is
likely to make kaizen process less wasteful than innovation, where error can have tremendous loss effects.
P (Process-Oriented) Criteria R (Result-Oriented) Criteria
Long-term orientation Short-term orientation
Efforts for improvement are important Performance and results are important
It has cared how the processes work and how the resu Degree of goal achievement is important
lts are obtained.
Process-oriented indicators are followed Result-oriented indicators are followed
Awards are determined on the basis of how processes Awards are determined on the basis of the results of the processes.
flow
Standard is the best, safest and easiest way to achieve and maintain a defined quality level.
Standard should be:
1. Be simple, clear and conspicuous
2. Be the best, easiest, safest way-should only have one at a time
3. Preserve know-how
4. Be guidelines that enable performance
5. Measurement of tasks delegated
6. Assure quality, cost, delivery and safety
7. Show the relationship between cause and effect.
With Standards:
1. Management becomes possible
2. There is a basis for training
3. There is a basis for audit or diagnosis
4. We prevent problems from recurring and control variability.
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PUTTING QUALITY FIRST
Kaizen also talks about improving performance in terms of three dimensions which are quality,
cost and delivery (QCD).
QUALITY - is typically among the most essential criteria customers use to make a purchase.
- is usually customer-defined and referred to as a perceived characteristics and features
of a product. This includes the quality of processes that go into it.
Kaizen requires the quality is a primary goal. There could be so many goals for the firms
to achieve, such as goals of quality, cost and delivery. However, the firm should always
put quality a priority.
Kaizen recognizes that without a quality product organizations will not be able to
compete.
COST- is generally looked at coming from the manufacturer’s viewpoint as the overall cost of
making and selling a product. An important factor here is the elimination of waste in many
aspects of work, such as production, inventory, repair, rejects, motions, processing and so on.
DELIVERY- refers to bringing the necessary quantity of products to the right place at the right
time. The company may offer better prices using reduced costs and attractive delivery terms.
However, this does not guarantee competitiveness if the quality of goods and services fall
short of consumer expectations.
Some cost-oriented managers do not resist the lure of cutting costs at the expense of quality.
This could work well in the short-term but would likely endanger not only profitability but also
the reputation and market position of the product in the long term.
SPEAK WITH DATA
Kaizen is a problem solving process. Since Kaizen deals with addressing problems or
limitations, every situation must be correctly understood. Kaizen has no room for “seat of the
pants” operations. In order to correct the problems in a process, defecting the problems is the
first thing to do.
Sound data must be gathered and evaluated for Kaizen to work for improvement. Without this
data, the company will be flying blind it. It will never able to tell what is working and what
needs to be improved.
Data is a lifeblood of Kaizen.
THE NEXT PROCESS IS CUSTOMER
This means that all workers think that the next process is the customers. So, all workers
in any process on no account pass on flawed parts or imprecise pieces of information to those in
the next process, particularly when the organization has a strong commitment to consumer
satisfaction.
If all workers have to be cautious about what they are doing the customers get high
quality products and services as a result.
Kaizen promotes the concept of internal and external customers. By regarding every
process in a series as a customer of the proceeding process, every stage of production can be
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concentrated for a quality result. It each internal customer is delivered high quality goods, this
external customer will have a higher quality product to purchase.
Kaizen views the whole work in a specific organization as a series of interrelated
processes where each consists of a supplier and customer. The supplier provides the process
with inputs such as materials and or information. The supplier can be another process within the
organization or someone outside the organization. Same goes to the customer, the customer is
either someone in the organization. (internal customer) or the final customer out in the market
(external customer)
KAIZEN SYSTEM
The system of Kaizen have to be understood . Kaizen encompasses many of the
components of Japanese businesses that have been seen as a part of their success. Today quality
control/total quality management, just in time delivery, total productive maintenance,
suggestion system, policy development, suggestion systems and small group activities are all
included within the Kaizen system of running a business.
TQM CONTROL
Total quality control(TQC) and total quality management (TQM) are widely used in
manufacturing, education, government and service industry now.
- have been developed as a strategy to help management in becoming more competitive
and profitable through helping it to improve in all phases of business.
In Japan, TQC activities are not limited to quality control alone, Elaborate system of
Kaizen strategies has been developed as management tools within the TQC approach.
TQC in Kaizen is a movement intended at improvement of managerial performance at all
levels.
According to the Japan Industrial Standards, implementing quality control effectively
necessitates the cooperation of all people in the company, including top management,
managers, supervisors, and workers in all areas of corporate activities such as market research
and development, product planning, design preparation for production, purchasing, vendor
management, manufacturing, inspection, sales and after sale services, as well as financial
control, personnel administration and training & education.
Quality control carried out in this manner is called company-wide quality control on total
quality control.
Quality control in Japan deals with quality of people. It is the fundamental concept of the
Kaizen Style TQC. Building quality into its people brings a company a half-way towards
producing quality products.
TQC of Japan vs. West
Main Differences between TQC Practices in Japan and West
Japan
* Deals with quality of people
* Customer-oriented
* Upstream
* Process-oriented aimed at improving the total performance
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* Company-wide, everybody’s responsibility
The West
* Deals with quality of products
*Manufacturer-oriented
*Downstream
*Product-oriented, aimed at detecting and eliminating defective parts
* Responsibility of quality control managers
JIT Production System
Many people have misconstrued Just in Time (JIT) production. I one of the most frequent
misunderstandings, a company expects its supplier to deliver just-in-time. However, JIT
production has something to do with internal process. JIT is a revolutionary way to trim down
cost while at the same time meeting the customers delivery needs.
Example: new stock will be ordered automatically when stock reaches the re-order point level.
Elements of JIT
1. Make stable and level the Master Production Schedule(MPS) with uniform plant
loading create a uniform load on all work centers through regular daily production and mixed
model assembly.
2. Decrease or eliminate set up times. Aspire for single digit set up times less than 1o minutes
or one touch set-up. This is done through better planning, process, redesign, and product re-
design.
3. Trim down lot sizes, Decreasing set up times allows economic production of smaller lots,
cooperation with suppliers which is necessary to realize reduction .
4. Shrink lead times. Production lead times can be reduced by moving work stations closer
together, applying group technology and cellular manufacturing concepts, reduce wait-in-line
length and improving the coordination and cooperation between successive. Delivery lead times
can be decreased through close cooperation with suppliers, perhaps by inducing suppliers to be
located very near to the factory.
5. Preventive maintenance. Use of machine and worker idle time to preserve equipment and
avoid breakdown.
6. Flexible workforce. Workers should be trained to work on several machines, to carry out
maintenance tasks, and to do quality inspections.
7. Oblige supplier quality assurance and execute a zero defect quality program. Small lots
(single unit) conveyance. Make use of a control system like Kanban system (or other signaling
system) to transport parts between work stations in smaller quantities. In its better sense, JIT
with materials Requirements Planning (MRP) system is used to transport the parts between
work stations.
Reason for move from batch mode to Just-In-Time (JIT)
1. Batch production system is the most inefficient way to make products.
2. Difficult to meet customer requirements, which come in varying orders, like varying volumes
in varying time frames and soon.
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The term total productive maintenance is attributed to Nippondenso, a company that
created parts for Toyota. However, Seichi Nakajima is regarded as as the father of TPM because
of his numerous of contribution to TPM.
One of the main objectives of TPM is to increase the productivity of plant and equipment
with a modest investment in maintenance.
3. Preventive maintenance - is the concept wherein, operators produced goods using machines
and maintenance group was dedicated with work of maintaining those machines.
The intention of productive maintenance was to get the most out of plant and equipment
effectiveness to attain optimum life cycle cost of production equipment.
Another objective of TPM is to increase the overall equipment effectiveniess (OEE) of
plant equipment. TPM also addresses the causes for accelerated deterioration while creating the
correct environment between operators and equipment to create ownership.
OEE has three factors which are multiplied to give one measured called:
OEE = Performance x Availability x Quality
Each factor has two associated losses making 6 in total, these 6 losses are as follows:
1. Performance - running at reduced speed and minor tops.
2. Availability- breakdown and product changeover
3. Quality - startup rejects and running rejects.
The objective finally is to identify then prioritize and eliminate the causes of the losses.
EIGHT PILLARS OF TPM
1. Focused Improvement
2. Autonomous maintenance
3. Planned maintenance
4. Quality maintenance
5. Cost Deployment
6. Early Equipment Management
7. Training and Education
8. Safety Health environment
Types on Maintenance
1. Breakdown maintenance - it means that people waits until equipment fails and repair it.
2. Preventive maintenance - it is a daily maintenance (cleaning, inspection, oiling and re-
tightening), design to retain the healthy condition of equipment and preventive failure through
the prevention of deterioration.
a. Periodic maintenance (time based maintenance(tbm) Time based maintenance
consists of periodically inspecting,
servicing, and cleaning equipment and replacing parts to prevent sudden failure and process
problems.
b. predictive maintenance - This method in which the service life of important part is
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predicted based on inspection or diagnosis, in order to use the parts to the limit of their service
life.
3. Corrective maintenance - it improves equipment and its components so that preventive
maintenance ca be carried out reliably.
4. Maintenance prevention - it indicates the design of new equipment. Weakness of current
machines are sufficiently studied (on site information leading to failure prevention, easier
maintenance and prevent of defects, safety and ease of manufacturing) and are incorporated
before commissioning a new equipment.
POLICY DEVELOPMENT
People follows policies, good or bad. The need therefore, is for organization in
developing countries to realize the importance of clear, well defined policy statements on
quality, reflecting managements commitment and orientation and to propagate them through
various modes, such as circulation of documents, newsletters, training, meetings, pledge cards
and personal contact.
SUGGESTION SYSTEMS
Suggestion system is regarded as individual-oriented kaizen, Suggestion system
encourages all workers to talk about their suggestions orally with supervisors and put them into
action right away, even before submitting suggestions forms.
The suggestion system is an integral part of an established management system that aims
at involving employees in Kaizen.
The number of workers suggestions is regarded s important criteria in reviewing the
performance of the workers supervisor and the manager of the supervisor. The Japanese
management encourages employees to generate a great number of suggestions and works hard
to considere and implement these suggestions, often incorporating them into the overall Kaizen
strategy.
Three Stages of the Suggestion Systems
1. Encouragement - management should make every effort to help the workers provide
suggestions no matter how primitive for the betterment of the worker’s job and the workshop.
This will help the workers look at the way they are doing their jobs.
2. Education - management should stress employee education so that employees can provide
better suggestions. In order for the workers to provide better suggestions. they should be
equipped to analyze problems and environment. This requires education.
3. Efficiency - after the workers are both interested and educated, should management be
concerned with the economic impact of the suggestions.
Benefits of a Suggestion System
Here are the benefits of a suggestion system:
1. Improves one’s own work and the working environment.
2. Engages and empowers employees.
3. Creates ownership and trust.
4. Improves motivation and morale.
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5. Improves customer satisfaction
6. Improves profitability.
Factors to be considered in suggestion systems to be successful and effective
1. Formation of suggestions committee to plan and manage the suggestions systems.
2. Defining the suggestions process including a feedback system.
3. Promoting the suggestions system.
4. Evaluation system
5. Award system
6. Sustaining the suggestions system.
Most suggestions remain to be suggestion because of:
1. Delays in approving ideas
2. Complex approval process
3. Backlog of suggestions needing approval on implementation
4. Less than 99% of ideas implemented
5. Inappropriate kaizen suggestions.
6. Allowing anonymous suggestions.
7. Unfair rewards
8. Motivating by cash only
9. Lack of promotion and support of the kaizen suggestions program
10. Lack of timely implementation.
SMALL GROUP ACTIVITIES
Small Group activity is also known as focused or continuous improvement in English.
SGA finds its origin in the Japanese industry where it is called Quality Circle. SGA is a method
for problem solving in teams by structurally searching for the root causes and eliminating them.
The members of the team learn to use techniques (cause and effects diagram, Fishbone
diagram) to find and eliminate root causes. The team is also taught communication skills,
working in teams and decision making in order to use each others knowledge and experiences.
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The structure of the SGA project is dervied from the PDCA circle from Dr. W. Edwards
Deming and exist of 8 steps, on the basis of the SGA circle. THe SGA team works
independently and reports the progress by means of communication boards.
The introduction of SGA leads to the following results.
1. Team building
2. Improved communication
3. Higher involvement
4. Learn how to analyze and solve problems.
profmarckus
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