Kaizen Guide by BSC Designer

Guide to the Kaizen Method
Kaizen denotes continuous improvement. Kaizen
aims to eliminate all wastes in business processes
through standardization in the processes and
activities of a business entity. Change making and
result monitoring make Kaizen highly effective.
Kaizen Method Guide | Copyright © 2010 BSCDesigner.com

KAIZEN
Low Cost
What is Kaizen?
Continuous
Improvement
Kaizen denotes continuous improvement. Kaizen aims to
eliminate all wastes in business processes through
standardization in the processes and activities of a
business entity. Change making and result monitoring
make Kaizen highly effective.

Assess/Reassess
Plan and Design
Implement
Evaluate
What is Kaizen?
Kaizen activities that address issues over a period of one week had
become the industry norm and they had been named as ‘Kaizen events’.
These small models are used to understand problems and issues in the
business processes, arrive at solutions, and apply them to improve the
processes and eliminate wastes.

Improvement in
productivity and
quality
Reduction in
the cost of
operations
Enhanced
customer
satisfaction
Common Points between
Kaizen and Balanced
Scorecard
Kaizen and Balanced Scorecard
Balanced scorecards are believed to bring in the 3R
advantages to every business.

Finance Education and Growth
Balanced
Scorecard
Strategy
Internal Processes Customer Relationship
Kaizen and Balanced Scorecard
The 3Rs are known as doing Right things, doing them Right, and doing them at the Right
time. Balanced scorecards are based on four crucial perspectives related to any business.
They are 1) business process, 2) learning and growth, 3) financial, and 4) customer. When
balanced scorecards are integrated with Kaizen, business success is ensured.

Kanban, business process
reengineering, and modular
function deployment are
implemented by expert
consultants or cross-functional
project teams as alternatives to
Kaizen.
However, Kaizen is executed by
the individual employees that do
the actual work. Kanban, BPR
and MFD have defined
beginnings and ends.
Kaizen is a never-ending process
with each sub-process
repeatedly subjected to Kaizen.
The alternatives work in
medium-term, repetitive cycles
and could involve complex
technologies.
Comparison of Kaizen to Alternatives and Superiority of Kaizen

Change in
desires and
preferences
of customers
Difference in
the activities
of the
competitors
Policy
changes by
the
governments
Fluctuation
in supply-demand
situations
Employee
turnover
within the
business
Comparison of Kaizen to Alternatives and
Superiority of Kaizen
Kaizen functions in processes in which the variables are controlled by the individual Kaizen teams with low level
technologies, in highly repetitive, short cycles. The speed and degree of change are immediate and measureable in
Kaizen and acceptance levels by the employees are quite high. From cost perspective also, Kaizen is the cheapest
process. Due to the above reasons, Kaizen is far superior to Kanban, BPR, and MFD .

Day 1 - FOCUS
1. Build a description of the target work process
2. Walk through the target work process
3. Build the mission statement
4. Set goals for the Kaizen event
5. Define the Do’s and Don’ts
Day 2 - EVALUATE
1. Gather information
2. Analyze the amounts and sources of
waste
3. Summarize the results of the evaluation
Step-by-step guide on using Kaizen to
solve business problems
The major guidelines in execution of Kaizen are
1) A well-defined map of work process for the execution of Kaizen.
2) A detailed guidance on tasks, with explanation on the execution of each single component of every process.
This would include the tasks, the steps, the rules for making on-the-spot decisions, and relevant milestones.

Day 3 - SOLVE
1. Generate improvement ideas
2. Trim improvement ideas
3. Conduct an experiment
4. Select improvement ideas
Day 4 - ACT
1. Create action plans
2. Execute improvement ideas
3. Measure results
Step-by-step guide on using Kaizen to
solve business problems
3) Creation of Kaizen-specific tools such as checklists, role descriptions, announcements, forms, and
spreadsheets that define the scope of each event, prepare the people involved in the event to execute it,
conduct the event with proper documentation of what had been done, extract results from the event, and
prepare follow-up measures for further improvements in processes to sustain the momentum of change for
successful contribution to the growth of the business.

Change in
desires and
preferences
of customers
Difference in
the activities
of the
competitors
Policy
changes by
the
governments
Key success factors of Kaizen
Fluctuation
in supply-demand
situations
Employee
turnover
within the
business
The main reason for the success of Kaizen is its basic
principle that anything and everything could be
improved continuously.

Key success factors of Kaizen
The small and incremental changes
that are imperceptible accumulate
over a period to substantial changes,
without the need for major radical
changes or innovations.
Further, the smaller changes become
a way of life for the employees.
Instead of resenting such changes,
they start appreciating them and
participate eagerly in the Kaizen
program.
Hence, the Kaizen events are
employee-friendly and gentle
programs that do not disturb the
employees or force them to adapt
themselves to sudden large changes.
Kaizen accepts the fact everything in
the world is continuously changing
and adopts itself to change.

The Secret for Success of Kaizen
The chief difference between Kaizen and other business process
management systems is that Kaizen takes into consideration all the
factors that influence the business environment on a constant basis.
Product and
process
quality
Cost of
products and
processes
Technology
Employee
motivation
Safety
aspects
Logistics Environment
Vendors
Final Customer

The Secret for Success of Kaizen
Factors that normally impact
business processes are product
and process quality, cost of
products and processes,
technology, employee
motivation, safety aspects,
logistics, and environment.
Changes in all these critical
factors are reflected upon by
Kaizen from the stage of vendors
through the business processes
inside the organization to the
final customer stage.
This is the key to the enormous
success of Kaizen in modern
business process management.

Canon, Inc.
Canon is a multinational
corporation with
headquarters in Japan.
• Canon specializes in optical and imaging products, such as cameras, computer printers,
photocopiers, and steppers. Canon was facing heavy competition from several other
leading manufacturers of similar products both in Japan and in other foreign countries.
In 1975, Canon management decided to set a very ambitious goal for the company.
Canon began the pursuit of its
mission with a strong
commitment to comprehensive
elimination of all wastes from
its processes.
• A unique matrix management system was put in place, which incorporated several
small group activities to elimination of waste, revitalization of the workforce, and
continuous improvement in all business processes. The ongoing process improvement
activity was prominently displayed in every part of the company’s plants. These
included status charts that were updated on a daily basis in each work center and
riveting handmade posters that promoted the improvement focus targeted for the
month displayed in all strategic points in the factories.

Canon, Inc.
The Canon Production
System based on Kaizen
was a huge success that
surpassed all expectations.
• The company was able to increase productivity
at an overwhelming rate of 3% per month. New
products were introduced at unprecedented
rates with the latest technologies.
• Nine waste categories were identified. They
were work-in-progress, quality, facilities,
expenses, indirect labor, talent, motion,
product design, and new product run-up.
• This classification of wastes resulted in
employees becoming conscious of problems,
recognizing the necessity of their self
development, and changing their mindsets
from operational improvement approach to
systems improvement techniques.

Fidelity Investments
Fidelity manages
several mutual funds
programs.
• It arranges fund distribution, and offers investment advisory services,
retirement services, discount brokerage services, life insurance, wealth
management, security clearance and execution, and other similar financial
services.
In Fidelity, Kaizen was
introduced by the
Chairman and CEO,
Edward Johnson III.
• He ensured that the top management of Fidelity was fully committed to the implementation of
Kaizen techniques and principles at all levels. He set up a separate group totally devoted to the
promotion of Kaizen. This was followed by the appointment of the best talent in the industry
that was capable of managing the Kaizen process.
• Training and education of the employees on a continuous basis on the Kaizen practices was
made compulsory. The implementation of Kaizen in Fidelity Investments was achieved by
dividing the power in the organization between numerous small divisions.
• Each division was named a business unit or a company. Aggressive entrepreneurship and
leadership qualities were promoted in these business units. Employees were integrated into the
Kaizen programs with a strong sense of ownership in the company and in their work.

Fidelity Investments
The strategies and activities
within that company were
planned and executed through
internal resources and
initiatives.
• The results achieved by such approach
truly benefited Fidelity in its global
operations for running each division or
company in a smooth and seamless
manner. The corporate quality became
part of the Kaizen promotion team.
• The quality management helped Fidelity
in the organization, operation, evaluation,
and continuous improvement of all
aspects of its business for maximizing
customer satisfaction to the highest
levels. This led to significant increase in
profitability on a long-term basis.

Gold Seal Engineering Products Ltd.
Gold Seal
Engineering
Products Ltd.
• Gold Seal Engineering Products Ltd. is a manufacturer of plastic and rubber
components in India with 3 separate plants. The company specializes in
rubber and PVC profiles, body trimmings, and seals for automobiles. Gold
Seal exports around 15% of its production to European countries like UK,
Italy, France, Germany, Portugal, and the Netherlands, apart from Australia,
Southeast Asia, East Africa and the Middle East.
Started the Kaizen process
implementation with
world-class manufacturing
methods.
• Such as like single minute exchange of die, variations of the
Kanban system and the most important 5S principles of Kaizen,
Sort, Straighten, Sweep, Standardize, and Self-discipline.
• The single minute exchange of die method was applied to reduce
the production set-up time by about 33%. The engineers of the
company were included in a special training program focusing on
the standardization of the procedures of changeovers and internal
operations streamlining. Standard operating procedures were
extended to include all manual work.

Gold Seal Engineering Products Ltd.
Through the implementation of Kaizen,
Gold Seal achieved substantial benefits
within 6 months. The lead time went
down by 25%, the production space
increased by 45%, scrap reduction
reached 75%, response time was
reduced by 42%, and machine down
time was reduced by 60%.
• Numerous improvements in time and space
utilization were attained, such as leveling, and
repainting of the workspace. This led to improved
material flow and safety in the shop floor. The
increase of 45% production space was mainly due to
the implementation of the 5S principles. All these
improvements were achieved by Gold Seal without
resorting to any extra capital investment. Apart from
the above benefits, the standard operating
procedures increased 50% and workforce flexibility
got enhanced by nearly 57%. The awareness among
the employees on productivity improved
dramatically. Staff motivation and quality awareness
also went up significantly.

Shwee Shwian Food Co.
Shwee Shwian Food
Co. is a medium-sized
factory
situated in northern
Thailand.
• The company has a got a factory for production of preserved ginger, which is
mainly exported. Fresh ginger is procured from various forms and washed in
machines.
• The biggest problem for Shwee Shwian was the high soil content in raw
ginger, with nearly 12% of the total weight of the raw ginger consisting of soil
coating. This required large quantities of water for washing the ginger in the
factory, leading to lot of waste in water volumes. Further, the lower net
ginger weight after washing resulted in considerable financial loss.
The company categorized
the suppliers into three
groups.
• The first group consisted of those who were not provided any awareness and
incentive programs. The second group was presented with a soil content
reduction awareness program.
• The third group was offered an incentive for supplying raw ginger with lesser
soil content. The performance of each group in output quality of ginger with
amount of soil content was measured and tabulated. Based on the results,
the awareness and incentives programs were fine-tuned to improve the
knowledge of the farms in producing better quality ginger, reducing soil
content, and increasing overall productivity.

Shwee Shwian Food Co.
After observing the success achieved through
the incentives and awareness programs with
the two groups, these programs were
extended to include all the farmers in the
three groups. In the factory, the water that
was used for washing was reduced by 20%.
• The consumption of electricity due to
lesser pumping of water came down by
7.8%. This resulted in cutting down the
operating costs by 55%, a substantial
savings for the company.
• In the year 2000, the company invested
$4,835 in incentive and awareness
programs but achieved a huge savings of
$76,522. This was mainly due to the
higher quantities of raw ginger received
by Shwee Shwian with lesser soil content
by applying the Kaizen techniques and
principles in an innovative manner.

Rojee Tasha Stampings Ltd.
Rojee Tasha
Stampings Ltd.
• Rojee Tasha Stampings Ltd. is a manufacturer of stamped metal
components and critical sub-assemblies for automobiles.
• The company is established in India and is catering to the manufacturers of
passenger and commercial vehicles in India. However, one of the major
concern areas for the company was frequent machinery breakdown.
• The company needed to improve its time utilization and reduce rejections
and reworking volumes, along with decrease in maintenance down times.
Rojee Tasha
Stampings
•Rojee Tasha Stampings decided to implement important Kaizen principles such as
the 5S activities and single minute exchange of die methods.
•The first step was taken by the recruitment of a highly qualified maintenance
engineer. The engineer was able to bring down the machinery breakdown
response time and implemented a comprehensive preventive maintenance
program in the company.
•The other engineers identified ten major issues that affected quality output and
remedies for taking action that covered all the production areas were
undertaken, based on the recommendations of the engineers and the workers.

Rojee Tasha Stampings Ltd.
When the suggestion of the two
workers of the press machine was
implemented, the changeover time
was reduced from 62 minutes to a
mere 13 minutes, a reduction of
around 80%.
• This was successfully implemented in the second press
machine also. This huge reduction in changeover time
was combined with a 30% increase in time
management led to a net decline of 50% in through-put
time.
• Thus, the Kaizen technique implementation increased
the production space in Rojee Tasha Stampings by
43%. Machine down time was reduced by 100%, a
stunning feat in any organization.
• The production lead time came down by 50%, the
changeover time for the main press machines was cut
down by 80%, and the product rejection by customers
dropped by 50%. All these factors resulted in a 36%
increase in turnover for Rojee Tasha Stampings.

Kaizen Advantages and Limitations
Kaizen represents the changes for the better in business
processes. Kaizen related to all activities that help in the
improvement of the business process on a continuous basis.
Kaizen is all inclusive, covering
the internal and external
processes, such as design,
production, raw materials, work-in-
progress, finished goods,
delivery logistics. It is extended
to vendors and suppliers,
employees at all levels, and
customers.
Since waste elimination is the
fundamental principle of Kaizen,
it automatically enhances
product and process quality. The
constant monitoring of changes,
remedies, and results helps the
management to implement
Kaizen in small experiments that
are slowly extended to include
all the operations of the
organization in a phased manner,
with the minimum extra
investment in finance,
workforce, and inventories.
Kaizen involves small changes
that are administered in minor
increments. Kaizen accepts the
basic fact that change is a
fundamental factor of human
life. Internal and external
changes like customer
preferences, competitor
activities, government polices,
raw materials supply and
demand, employee turnover,
motivation levels of employees,
etc. are all taken into
consideration when Kaizen is
implement.

Kaizen Advantages and Limitations
Kaizen represents the changes for the better in business
processes. Kaizen related to all activities that help in the
improvement of the business process on a continuous basis.
Even when major or large-scale change
initiatives are undertaken for huge
projects, they should be sustained by
continuous changes to suit constantly
arising changes in the workplace and
elsewhere. This is where Kaizen scores
over other business process models.
Strategic planning of business processes
in any organization is a clever
combination of the metrics of balanced
scorecards and the subtle principles and
techniques of Kaizen.
However, certain limitations exist for
Kaizen. Kaizen could never work for all
kinds of situations or each type of
improvement. Certain changes are
possible only through substantial
financial investments or recruitment of
new employees with higher skills. These
changes would be beyond the scope of
Kaizen and the management should
apply other principles and techniques to
handle such situations.

5S Principles of Kaizen
Standardize
Sweep
Straighten
Sort
Self-discipline

Kaizen FAQs
What is the exact definition of Kaizen?
• In Japanese language, Kaizen means ‘improvement’, ‘continuous
improvement’, and ‘change for the better’. Kaizen is usually practiced as
Kaizen events to focus on continuous improvement in engineering,
manufacturing, management, and all other supporting business
processes.
How should a Kaizen meeting be arranged?
• Each Kaizen meeting should have a set agenda, which should be
distributed to the participants before the commencement of the
meeting. The objectives of the Kaizen event should be communicated
clearly to the participants before the beginning of the session. All
successful Kaizen events are conducted with the attendance of
employees from various department

Kaizen FAQs
What are the major steps in a Kaizen event?
• When the management possesses a clear idea of the direction of the business
and strives to streamline the processes, the management is able to distribute
projects evenly among the workers. This helps in running the business
smoothly. These goals are accomplished by creating and staging appropriate
Kaizen events. Kaizen events are usually 3-days or 5-days events.
How is the Kaizen event managed in a particular situation?
• After the identification of a problem area, a team of persons varying from 6 to
12 is picked up. The team members indulge in a brainstorming session to
extract suggestions and ideas for improving the work area and resolve the
problem. After deliberation and consultation, a plan for the Kaizen event is
selected and a schedule is drawn to implement the Kaizen event and to follow
up the event with a review of the result. Based on the result, the event is
further modified, if there is a need for further improvement on the plan.

Checklist for Kaizen
Development of clearly understanding the Kaizen process is the first step in successful
implementation of Kaizen events. For complete customer satisfaction, the Kaizen
principle should embrace the three basic building blocks that are the keys to value
addition to the customer. They are known as quality, cost, and delivery (QCD)
collectively.
The second point in the checklist is to identify the corporate objectives. The top
management should carry a SWOT analysis of the business program of the organization.
They should assess existing systems and structures for achieving cross-functional goals
and for effecting changes in organization, control, planning, and employee practices.
Targets for predetermined periods like 3 years, 5 years, etc. should be set and the
management should commit itself firmly to the targets.
A well-thought-out and planned Kaizen program is usually broke down into three key
segments. They are management-oriented Kaizen, group-oriented Kaizen, and
individual-oriented Kaizen.

Checklist for Kaizen
The management should allocate adequate resources for conducting the Kaizen
events properly.
A comprehensive training plan should be developed to help the employees
understand the business process continuous improvement, the cross-functional
activities, and the techniques for problem solving.
The training and development of the employees should focus on the 4P principles
related to quality improvement. They are process control, problem identification,
problem elimination, and permanence.
A suggestion system should be put in place to involve the employees in proactive
manner. Good suggestions should be recognized and rewarded.
Constant review is the final step in Kaizen. Each step of change should be assessed
for further improvement.

Kaizen Guide by BSC Designer

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Kaizen Guide by BSC Designer