KAIZEN COSTING THE PERFORMANCE OF THE ORGANIZATIONS

TABLE OF CONTENTS
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Table Of Contents 1 1.1 Introduction 2 1.2 The Concept Of Kaizen Costing 2 1.3 Kaizen And Management 4 1.4 Kaizen -The Three Pillars 5 1.4.1 Housekeeping 5 1.4.2 Waste (Muda ) Elimination 7 1.4.3 Standardization 10 1.6 Kaizen And Total Quality Management (Tqm) 13 1.7 Kaizen And Suggestion Systems 14 1.8 Goals Of Kaizen Vs. Quality, Cost And Delivery 15 1.9 Common Disconnects/Roadblocks In Kaizen Implementation 16 1.10 Advantages Of Kaizen Costing 17 1.11 Disadvantages Of Kaizen Costing 18 1.12 Conclusion 19 References 19

1.1 Introduction
Kaizen means improvement, continuous improvement involving everyone in the organization from top management, to managers then to supervisors, and to workers. In Japan, the concept of Kaizen is so deeply engrained in the minds of both managers and workers that they often do not even realize they are thinking Kaizen as a customer-driven strategy for improvement. Kaizen is a Japanese philosophy for process improvement that can be traced to the meaning of the Japanese words ‘Kai’ and ‘Zen’, which translate roughly into ‘to break apart and investigate’ and ‘to improve upon the existing situation’. It is using common sense and is both a rigorous, scientific method using statistical quality control and an adaptive framework of organizational values and beliefs that keeps workers and management focused on zero defects. It is a philosophy of never being satisfied with what was accomplished last week or last year. Improvement begins with the admission that every organization has problems, which provide opportunities for change. It evolves around continuous improvement involving everyone in the organization and largely depends on cross-functional teams that can be empowered to challenge the status quo.
1.2 The Concept of Kaizen Costing
Kaizen costing is a process wherein a product undergoes cost reduction even when it is already on the production stage. The cost minimization can include strategies in effective waste management, continuous product improvement or better deals in the acquisition of raw materials. Kaizen costing is a cost reduction system. Yashihuro Moden defines kaizen costing as "the maintenance of present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level."
Moden has described two types of kaizen costing: * Asset and organization specific kaizen costing activities planned according to the exigencies of each deal * Product model specific costing activities carried out in special projects with added emphasis on value analysis
Kaizen costing is applied to products that are already in production phase. Prior to kaizen costing, when the products are under development phase, target costing is applied. ‘Kaizen costing is based on the belief that nothing is ever perfect, so improvements and reductions in the variable costs are always possible’
The cost-plus method is one of the most traditional and common pricing techniques. In fact, virtually all companies in the UK used cost-plus pricing until they started to realize that they were operating in price-competitive markets. Until then, they had naively assumed that consumers would be willing to pay whatever price they arrived at by adding a percentage to the estimated cost of the product or service. This cost-plus approach has gradually been replaced by target costing. This addresses the pricing issue from the other direction. It must be accepted that in a competitive market a company has little influence over the selling price of its product.
Organizations use market research to establish the number of units they are likely to sell and the unit price that customers are willing to pay for the product. From this selling price, a company subtracts the profit required to meet its profit objective, arriving at a target cost. In most cases this cost will be lower than the current cost, especially if the product is subject to the learning-curve phenomenon, which would result in a “cost gap”. The firm’s objective is to bridge this gap i.e., to cut the cost by using tools such as value analysis and functional analysis. Achieving the target cost requires a concerted effort from the whole company. Some firms choose a team of managers from all the main departments, whose main aim is to examine every aspect of the product and the manufacturing process to remove unnecessary costs and anything that does not add value, while maintaining quality and functionality. In some cases this may lead to a complete product redesign.
Once the design has been approved, production can begin, which is where Kaizen costing starts. The method can be defined as a focus on obtaining small, incremental cost reductions (rather than big changes at longer intervals) during the production phase of the product’s life cycle. Kaizen costing is based on the belief that nothing is ever perfect, so improvements and reductions in the variable costs are always possible. Like its big brother TQM, it becomes part of the culture, involving all members of the organization. Everyone is encouraged to offer ideas that, however small, could lead to a reduction in variable costs, which could in turn lead to a reduction in the selling price and, hopefully, a growth in sales. Alternatively, the price could be maintained and the resulting increase in profits could be used to reward the shareholders or be reinvested in other projects. It’s easy to see how Kaizen costing is aligned closely with lean manufacturing, whose main aim is to cut waste through continuous improvement. This is achieved by identifying the best resources and most efficient processes to remove waste from production.
The concept of Kaizen costing (meaning “constant improvements through small steps”) also came from Japan. The basic concept of Kaizen costing is the idea is that devoting attention to cost reduction while a product is on the market can lead to significant cost advantages. Though generally 80% of costs are determined during, the design phase, Kaizen costing addresses the remaining 20% and gathers ideas for cost reduction of future products. Kaizen costing is the process of cost reduction during the manufacturing phase of a product. When kaizen costing is used, improvements occur in small steps. Every employee is responsible for looking for ways to improve production processes and reduce unnecessary costs. Kaizen goals are set based on actual results from the prior year. The goal is to reduce actual costs from the current year in the coming year
Companies that gain their competitive edge through low costs do not stop at the design stage. They continuously work to decrease costs throughout the item’s production using a lifecycle cost perspective. Target costing is used early on, and then Kaizen costing techniques are used once a product moves to the market.
1.3 Kaizen and Management
Management has two major components: 1. Maintenance, and 2. Improvement.
The objective of the maintenance function is to maintain current technological, managerial, and operating standards. The improvement function is aimed at improving current standards.
Under the maintenance function, the management must first establish policies, rules, directives and standard operating procedures (SOPs) and then work towards ensuring that everybody follows SOP. The latter is achieved through a combination of discipline and human resource development measures.
Under the improvement function, management works continuously towards revising the current standards, once they have been mastered, and establishing higher ones. Improvement can be broken down between innovation and Kaizen. Innovation involves a drastic improvement in the existing process and requires large investments. Kaizen signifies small improvements as a result of coordinated continuous efforts by all employees.
1.4 Kaizen -The three pillars
According to M. Imai, a guru in these management philosophies and practices, the three pillars of kaizen are summarized as follows:
1. Housekeeping
2. Waste elimination
3. Standardization
The management and employees must work together to fulfill the requirements for each category. To be ensured success on activities on those three pillars three factors have also to be taken into account.
1. Visual management, 2. The role of the supervisor,
3. The importance of training and creating a learning organization.
More analytically on each one pillar of Kaizen:
1.4.1 Housekeeping
This is a process of managing the work place, known as ‘’Gemba’’ (workplace) in Japanese, for improvement purposes .Imai introduced the word ’’Gemba ‘’, which means ‘’real place’’, where value is added to the products or services before passing them to next process where they are formed. For proper housekeeping a valuable tool or methodology is used, the 5S methodology. The term “Five S” is derived from the first letters of Japanese words referred to five practices leading to a clean and manageable work area: * Seiri (organization) * Seiton (tidiness) * Seiso (purity) * Seiketsu (cleanliness) * Shitsuke (discipline)
The English words equivalent of the 5S's are sort, straighten, sweep, sanitize, and sustain. 5S evaluations provide measurable insight into the orderliness of a work area and there are checklists for manufacturing and non-manufacturing areas that cover an array of criteria as i.e. cleanliness, safety, and ergonomics.Five S evaluations contributes to how employees feel about product, company, and their selves and today it has become essential for any company, engaged in manufacturing, to practice the 5S's in order to be recognized as a manufacturer of world-class status. On the following table the 5S approach is presented briefly for each one from the five activities. Seiri | SORT what is not needed. Use the red tag system of tagging items considered not needed, and then give everyone a chance to indicate if the items really are needed. Any red tagged item for which no one identifies a need is eliminated (sell to employee, sell to scrap dealer, give away, and put into trash. | Seiton | STRAIGHTEN what must be kept. Make things visible. Put tools on peg board and outline the tool so its location can be readily identified. Apply the saying "a place for everything and everything a place’’. | Seiso | SCRUB everything that remains. Clean and paint to provide a pleasing appearance. | Seiketsu | SPREAD the clean/check routine. When others see the improvements in the Kaizen area, give them the training and the time to improve their work area. | Shitsuke | STANDARDIZATION and self-discipline. Established a cleaning schedule. Use downtime to clean and straighten area. |
As some of the benefits of employees of practicing the five S could be referred to as follows: Creates cleanliness, sanitary, pleasant, and safe working environments; it revitalizes Gemba and greatly improves employee morale and motivation; it eliminates various kinds of waste by minimizing the need to search for tools, making the operators' jobs easier, reducing physically strenuous work, and freeing up space; it creates a sense of belonging and love for the place of work for the employees.
1.4.2 Waste (Muda ) Elimination
Muda in Japanese means waste. The resources at each process (people and machines) either add value or do not add value and therefore, any non-value adding activity is classified as muda in Japan. Work is a series of value-adding activities, from raw materials, ending to a final product. Muda is any non-value-added task. To give some examples, there are presented here Muda in both manufacturing and office settings described below

In Kaizen philosophy, the aim is to eliminate the seven types of waste (7 deadly wastes) caused by overproduction, waiting, transportation, unnecessary stock, over processing, motion, and a defective part, as discussed below;
Muda of overproduction-Overproduction may arise from fear of a machine's failure, rejects, and employee absenteeism. Unfortunately, trying to get ahead of production can result in: tremendous waste, consumption of raw materials before they are needed, wasteful input of manpower and utilities, additions of machinery, increased burdens in interest, additional space to store excess inventory, and added transportation and administrative costs.
Muda of inventory- Final products, semi-finished products, or part supplies kept in inventory do not add any value. Rather, they add cost of operations by occupying space, requiring additional equipment and facilities such as warehouses, forklifts, and computerized conveyer systems .Also the products deteriorate in quality and may even become obsolete overnight when market changes or competitors introduce a new product or customers change their taste and needs. Warehouses further require additional manpower for operation and administration. Excess items stay in inventory and gather dust (no value added), and their quality deteriorates over time. They are even at risk of damage through fire or disaster. Just-in-time (JIT) production system helps to solve this problem.
Muda of defects (repair or rejects)- Rejects, interrupt production and require rework and a great waste of resources and effort .Rejects will increase inspection work, require additional time to repair, require workers to always stand by to stop the machines, and increase of course paperwork.
Muda of motion- Any motion of a person’s not directly related to adding value is unproductive. Workers should avoid walking, lifting or carrying heavy objects that require great physical exertion because it is difficult, risky, and represents non-value added activities. Rearranging the workplace would eliminate unnecessary human movement and eliminate the requirement of another operator to lift the heavy objects. Analysis of operators' or workers leg and hand motions in performing their work will help companies to understand what needs to be done.
Muda of processing- There are many ways that muda can happen in processing. For example, failure to synchronize processes and bottlenecks create muda and can be eliminated by redesigning the assembly lines so, utilizing less input to produce the same output. Input here refers to resources, utilities, and materials. Output means items such as products, services, yield, and added value. Reduce the number of people on the line; the fewer line employees the better. Fewer employees will reduce potential mistakes, and thus create fewer quality problems. This does not mean that we need to dismiss our employees. There are many ways to use former line employees on Kaizen activities, i.e., on value-adding activities. When productivity goes up, costs will go down. In manufacturing, a longer production line requires more workers, more work-in-process and a longer lead-time. More workers also means a higher possibility of making mistakes, which leads to quality problems. More workers and a longer lead-time will also increase cost of operations.
Machines that go down interrupt production. Unreliable machinery necessitates batch production, extra work-in-process, extra inventory, and extra repair efforts. A newly hired employee without proper training to handle the equipment can consequently delay operation, which may be just as costly as if the equipment were down. Eventually, quality will suffer and all these factors can increase operation costs.
Muda of waiting- Muda of waiting occurs when the hands of the operator are idle; when an operator's work is put on hold because of line imbalances, a lack of parts, or machine downtime; or when the operator is simply monitoring a machine as the machine performs a value-adding job. Watching the machine, and waiting for parts to arrive, are both muda and waste seconds and minutes. Lead time begins when the company pays for its raw materials and supplies, and ends when the company receives payment from customers for products sold. Thus, lead time represents the turnover of money. A shorter lead time means better use of resources, more flexibility in meeting customer needs, and a lower cost of operations. Muda elimination in this area presents a golden opportunity for Kaizen. There are many ways to cut lead time. This can be done through improving and speeding up feedback from customer orders, having closer communications with suppliers, and by streamlining and increasing the flexibility of Gemba operations.
Another common type of muda in this category is time. Materials, products, information, and documentation sit in one place without adding value. On the production floor, temporary muda takes the form of inventory. In office work, it happens when documents or pieces of information sit on a desk or in trays or inside computer disks waiting to be analyzed, or for a decision or a signature.
Muda of transportation- In workplace ,gemba, one notices all sorts of transport by such means as trucks, forklifts, and conveyors. Transportation is an essential part of operations, but moving materials or products adds no value. Even worse, damage often occurs during transport. To avoid muda, any process that is physically distant from the main line should be incorporated into the line as much as possible.
Because eliminating muda costs nothing, muda elimination is one of the easiest ways for a company to improve its Gemba's operations and reduce cost of production.
1.4.3 Standardization
Standards are set by management, but they must be able to change when the environment changes. Companies can achieve dramatic improvement as reviewing the standards periodically, collecting and analysing data on defects, and encouraging teams to conduct problem-solving activities. Once the standards are in place and are being followed then if there are deviations, the workers know that there is a problem. Then employees will review the standards and either corrects the deviation or advice management on changing and improving the standard. It is a never-ending process and is better explained and presented by the PDCA cycle (plan-do-check-act), known as Demming cycle, shown on figure 1

Figure 1: PDCA cycle
The cycle of kaizen activity can be defined as: * Standardize an operation and activities. * Measure the operation (find cycle time and amount of in-process inventory) * Gauge measurements against requirements * Innovate to meet requirements and increase productivity * Standardize the new, improved operations * Continue cycle ad infinitum
Standardization process is a very important one that has few key features, presented below: * Represent the best, easiest, and safest way to do the job, * Offer the best way to preserve know-how and expertise, * Provide a way to measure performance, * Show the relationship between cause and effect, * Provide a basis for both maintenance and improvement, * Provide objectives and indicate training goals, * Provide a basis for training, * Create a basis for auditing or diagnosis, and * Provide a means for preventing recurrence of errors and minimizing variability.
1.5 Kaizen and innovation
Kaizen practices improve the status quo by bringing added value to it. Kaizen does not replace or preclude innovation. Rather, the two are complementary. After Kaizen has been exhausted, ideally, innovation should take off, and Kaizen should follow as soon as innovation is initiated. Kaizen will support the improvement of existing activities, but it will not provide the giant step forward. It is important for the firm to maintain a balance between innovation and a Kaizen strategy that focuses on improvement. It is top management's job to maintain this balance between Kaizen and innovation, and it should never forget to look for innovative opportunities.
If efforts are continued toward a clearly defined goal, it is bound for Kaizen to yield positive results. However, Kaizen is limited in that it does not replace or fundamentally change the status quo. As soon as Kaizen's marginal value starts declining, one should turn to the challenge of innovation. Kaizen signifies small improvements made in the status quo as a result of ongoing efforts. Innovation involves a drastic improvement in the status quo as a result of a large investment in new technology and/or equipment or a totally re-engineered product/process. On the following table are classified according to some important factors the differences between kaizen and innovation.
Top management introduces Kaizen as a corporate strategy; middle management uses Kaizen practices in improving functional capabilities and helps employees develop proper skills for problem solving. Supervisors improve communication with the workers, formulate plans for Kaizen and provide guidance to workers. Workers engage in Kaizen through small group and team activities and practice the tools for continuous improvement.
Breakthroughs are essential for improvement, but continuous incremental improvement is the key to quality leadership. True breakthroughs are hard to predict. The Japanese place a high priority on continuous incremental improvements (Kaizen) that, over time, leave behind the competitors who are depending on the ‘magic idea’ for success. Workers, supported by managers, are a major source of these improvements. Taken together, infrequent innovations and continuous improvement result in superior productivity gains. Applying Kaizen to routine work is the key to success. Working on special projects is important, but in the long run, it is the day-to-day application of Kaizen practices to routine work that gets results.
It is true that Kaizen practices alone cannot "reinvent a better way of doing business." But a better way of doing business can be improved through Kaizen principles, as shown earlier. Another benefit of utilizing Kaizen practices to supplement innovation is that the Kaizen mindset of teamwork and a "can do attitude" will eventually absorb easily a radical change introduced by innovation.

1.6 Kaizen and Total Quality Management (TQM)
Kaizen is a kind of umbrella concept that includes initiatives and activities like TQM, suggestion systems , to mention but a few.TQM is a journey, a movement centered on the improvement of managerial performance at all levels. It deals with: * Quality Assurance, * Employee Involvement, * Cost reduction, * Safety, * Continuous Improvement, and * Productivity improvement.
Moreover, TQM journey deals with management concerns such as organizational development, cross-functional management, and quality deployment. In other words, management has been using TQM as a concept and a tool for improving overall performance. TQM integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach focused on continuous process improvement. The activities are ultimately focused on increased customer-user satisfaction.
The importance of people in the total process is emphasized on TQM journey. Considerations such as culture, incentives, teamwork, training, and work involvement are typical. The optimum effectiveness of TQM results from an appropriate mix of the social and technical systems. It is common practice to emphasize the technical aspects of improvements, such as machine or computer-related, with less emphasis on people and their roles in the process. Improving quality and productivity to achieve competitiveness emphasizes the need for an enterprise to capture the potential inherent in the workforce by enabling each employee to do his or her job right the first time. This requires that top management to demonstrate to all employees that it is personally committed and continuously pursuing efforts to improve quality.
On TQM journey the focus is to: * Emphasize continuous improvement of processes (kaizen), not compliance to standards, * Involve all functional units, not just the Quality Control/Assurance function, * Motivate and involve employees to become the driving force behind improvement, * Satisfy the internal and external customers, * Understand the effects of variation on processes and their implications for process improvement.
So it is self-evident that employee involvement and a process-oriented approach to manufacturing are cornerstones on journey to TQM. The team-based structures and activities fulfill both requirements by fostering greater individual participation and enhancing the organization's ability to pursue processes across functional boundaries.
1.7 Kaizen and Suggestion Systems
One of the most frequently discussed aspects of Kaizen as it is practiced in Japan, is suggestions and proposals system, as a part of the Kaizen constituents as described in the beginning. During 70s many Western business persons visited Japan to see suggestion systems in progress as part of kaizen umbrella-concept and when returned home started efforts on their companies by initiating and establishing systems like that. Although some quality experts agree that idea processes (or suggestion programs) are dead, a well-designed idea program will significantly add to an organization's quality arsenal while helping it cut costs and improve its performance.
Through suggestions, employee participate in continuous improvements activities in the workplace and play a vital role in upgrading standards. Employee suggestions or ideas management systems serve a duality of purpose. In one hand, serving as a productivity enabler and on the other hand as a culture change enabler. This duality is being served quite different in Japan than in Western countries. Suggestion systems are anchored on; 1. Making the job easier 2. Removing drudgery from the job 3. Removing nuisance from the job 4. Making the job safer 5. Making the job more productive 6. Improving product quality 7. Saving time and cost
1.8 Goals of Kaizen vs. Quality, Cost and Delivery
In a market economy, the customer is king, and satisfying customers' expectations for products and services in terms of Quality, Cost, and Delivery (QCD) should be the ultimate goal of every business. So the ultimate goal of Kaizen strategy and activities aim at improving Quality, Cost, and Delivery (QCD), thus QCD target has become a top priority for survival in business. A market sensitive company must have a strong dissatisfaction with its status quo on existed QCD status. It should review its current competitive position on that and its strengths and weaknesses and take into account the changing environments and consumer behaviors. A company that is happy with the status quo is not qualified to stay on market, so it should answer the following questions the soonest possible: * What are the targets to be achieved in terms of QCD? * What will be the deadline for achieving such targets?
To do the above, one of the best ways is to motivate and challenge its employees, to set clear targets with numerical values and a deadline to achieving such a target. On the targets must be involved activities improving quality during each process in terms of organization's internal customers until the process ends with external customers.
Quality runs throughout the process from purchasing, developing, designing, producing, selling, distributing, and servicing the products or services. According to Imai, jobs of developing a new product or service, or designing a new process, always start with paperwork or blueprints. Bugs or malfunctions can be rectified quite easily, instead of malfunctions that are identified later and can be very expensive to be corrected. The Japanese management team uses the quality assurance system diagram or Quality Function Deployment (QFD) as a powerful tool.
Quality is followed by cost effectiveness, which refers to the overall cost of designing, producing, selling, and servicing the product or service. According to Imai, cost reduction in work place does not mean cost cutting. It is about cost management. The cost management teams oversee the process of developing, producing, and selling products or services of good quality while retaining a lower cost. A huge waste of resources can happen in the way a product is designed, made, and sold. The current business competition for quality and cost is intensifying. Thus, improving quality while reducing cost is the only option for survival. Cost reduction should come as a result of better cost management. The key is to build a management system that reduces cost while achieving quality. Cost management encompasses a wide spectrum of activities including: cost planning to maximize the margin between costs and revenues, overall cost reduction in Gemba by eliminating muda (waste). Cost reduction through waste elimination can be done with the methodologies based on waste elimination discussed before.
Delivery on the other hand, means delivering the requested volume in time, such as practicing a just-in-time production system. Delivery could be part of quality of product or service. So any diverge from prescribed standards can hurt the quality as well.
Management also encompasses such activities as policy deployment, standardization, training and education. Where training is concerned, most companies today have the tendency to put too much emphasis on teaching knowledge. In Kaizen, group learning places great emphasis on improving the fundamental values that are derived from common sense, self-discipline, order, and economy. Quality, Cost, and Delivery are closely related subjects.
1.9 Common Disconnects/Roadblocks in Kaizen Implementation
Technical Factors * Little visible technical impediment on kaizen. * Measurement metrics for kaizen efforts
Social Factors * Overly formalizing the kaizen process will collapse the improvement program. * Competition between departments on kaizen can be both positive and negative. * Negative workers-management friction will impede the kaizen process. * Lack of management commitment to kaizen can impede the improvement program.

1.10 Advantages of Kaizen Costing
There are certain basic principles which are followed in various Japanese companies which are listed below: - 1. Focus on customers: The Kaizen philosophy has only one prime objective of customers ‘satisfaction. Kaizen permits no middle ground it’s either you provide best products and customer satisfaction or not. All the activities should aim at providing customer withwhatever he wants and should help the firm long term objective of customers’satisfaction at the same time building up good relationship. It is a responsibility of each and every person working in a Kaizen company to make sure that the product is up to the mark and it satisfies customers need. 2. Make improvements continuously: There is not a best way to do a thing; there is still a better way. In a Kaizen company, the search for excellence just does not end. We should work on the improvement implemented and see if we can make it even more effective. 3. Acknowledge problems openly: Every company has certain problems related to finance, competition, change in demand etc. Kaizen companies are no exception, but by fostering an appropriately supportive, constructive culture it becomes easier for any team to get its problem in the open. The whole organization works as a team to solve the problem. The problems are openly shared by the management with the employees which avoids rumors. It simply means FIGHT WITH YOUR PROBLEMS DON’T RUN AWAYFROM THEM. 4. Promote openness: There seems to be less functional ring fencing i.e. only the senior managers have private cabins. Otherwise the workplace is generally open and in many companies even the dress code and canteen for everyone is the same. 5. Create work teams: Each individual in a Kaizen company belongs to work team headed by a leader. Working in various overlapping teams draws employees into corporate life and reinforces the mutual understanding. 6. Cross- functional teams: kaizen states that no individual or team has all the required skill and knowledge to complete a task. Cross-functional teams help in getting all the valuable information’s from the view of all the related people. It calls for letting ideas to flow as wide as running on moon 7. It is process centered. It is thus able to identify exactly where things are going wrong and change the processes so that mistakes do not occur. Wasteful processes are reduced, and this in turn reduced waste of resources. 8. There is reduced need for inspection since there is less scope for error. 9. The long term and short term goals of the company are identified easily and there are systems to ensure that these goals are achieved.
1.11 Disadvantages of Kaizen Costing 1. Some companies need to bring about an immense change in their mind set and style of functioning. This is sometimes very difficult and the initial problems created can be very bad for business overall. For instance, companies need to have a very open style of communication in order to put this management style into practice. Also, many employees think very territorially and are unwilling to let go 'their' work areas. 2. Very often, the initial excitement around using a new management style dies down all too soon. As a result, companies are not able to get the results they are looking for. Further, it makes people believe that this management technique will not work at all. 3. Changing people's attitude to accept something different and by implication foreign (the answer to that again would be to remove the foreignness by emphasizing the points of similarity. 4. Getting people to think in the long term is difficult. 5. Convincing people that quality is not costly, but actually saves money, time and effort is not easy. 6. Getting away from 'inspection' culture, which admits failure even before it occurs is challenging. 7. Diehard managerial practice which thrives on territoriality and the big-brother syndrome. 8. Too much involvement needed from management. It is hard work, but managers work already.
1.12 Conclusion
Realizing the Kaizen methodology as originated in Japan in response to the oil crisis in the early ‘70’s, is easy to understand why it developed so much. Also the kaizen attitude helps to explain why Japanese firms are so exploiting new technology, even when they are not its originator. Kaizen-driven firms do not suffer from “not invented here” syndrome. Ideas are not the exclusive outcomes of R&D department, corporate planning, or market research; every new idea is welcomed and new ‘channels’ are forsaken. Kaizen practices can deliver breakthrough improvements in the range of 40-60%. Nonetheless, some managers even now do not recognize the tremendous value that Kaizen can bring. In today’s world, competition is so tough that if organizations don’t have this kaizen spirit, they won’t survive as the customers are more and more demanding. Thus, a good understanding of Kaizen will help an organization to use it well to bring about great success and consequently, to cut costs and increase productivity.
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