As the business world continues to globalise, consumers across the planet have access to an increasing range of products and services at competitive prices. And while businesses enjoy the influx of opportunity that comes with the global market, customer expectations rise unrelentingly, meaning they face competition that is as fierce as ever. Also, in an age of rapid technological evolution – the so-called “second machine age” – new products and services are being developed at breakneck speed, and long-standing business models are being upended by the unlikeliest of upstarts.
What is it, then, that separates those that thrive from those that fall by the wayside? The answer, largely, lies in a firm commitment to operational excellence, to meeting customer demands with supreme efficiency.
What is Kaizen?
The Japanese philosophy of Kaizen (known as Lean in the U.S.) has helped drive Japanese firms and businesspeople to the peak of efficiency. Mostly developed under the tutelage of Taiichi Ohno at Toyota Motor Corporation, the Kaizen (Kai means ‘change’ in Japanese; Zen means ‘for the better’) methodology was first introduced to the West by Masaaki Imai in his book Kaizen: the Key to Japan’s Competitive Success, and has since been adopted in industries across the world.
Kaizen focuses on existing processes – not investing capital – to attain incremental and breakthrough improvements by eliminating Muda (or waste).
The seven classic types of Muda – any process that does not add value to a customer’s requirement – are:
(Employees failing to utilise their skills to the fullest extent can also be considered a Muda.)
Relentlessly identifying and eliminating (or minimising) these Muda, Mura (inconsistencies) and Muri (strain) on a daily basis is a fundamental tenet of the Kaizen approach. In the words of Masaaki Ima, Kaizen is an organisational philosophy that strives for Everyday improvement, involving Everyone in the organisation and where Every Process is being improved.
While improvement tools can fade after implementation, Kaizen creates a culture of continuous improvement takes time and requires, again in Imai-san’s words, tremendous commitment and self-discipline from everyone and especially from the top management of the organisation.
A few key tenents of Kaizen culture:
- Developing problem solving capabilities
- Creating a ‘No Blame’ culture
- Going to the Gemba (literally ‘Real Place’ in Japanese or place where the value-added work is done) to see the reality
- Managing by facts and data, not by opinions
- Focusing on process and not results
- Welcoming problems and solving them on a daily basis
Typical Benefits for Organisations Implementing Kaizen
Companies that have implemented Kaizen have seen the following results:
- Inventory – Cut by 90%
- Productivity – Increased by 100%
- Defects – Decreased by 50%
- Throughput Time – Reduced by 90%
- Operational Costs – Reduced by 30%
- Floor Space – Reduced by 50%
While it is thought that Kaizen is applicable only in manufacturing, the methodology has been successfully implemented in service and transactional industries such as hotels, hospitals, banks, insurance firms, shared service offices, and even in government departments.
For example, a large international hotel recently made the following improvements through Kaizen approach:
- 50% reduction in guest check-in and check-out times
at Front Desk
- 58% reduction in room turnaround time in Housekeeping
- 55% reduction in linen turnaround time in Laundry
- 30% improvement in guest satisfaction in Restaurant
- 15% increase in on-time delivery at Room Service
Ultimately, what is considered “excellent” today will certainly not be seen as such in five years. And while stop-gap efforts to improve processes will date, Kaizen’s model of ongoing improvements through training, consulting and benchmarking make it crucial to organisations climbing to, and remaining at, the top of their fields.
Vijay Allaham is a partner of Kaizen Institute (West Africa), and in charge of developing Kaizen in Cambodia and Southeast Asia. Kaizen Institute is a global management consulting firm founded by Sensei Masaaki Imai of Japan and is a pioneer in implementing Kaizen/Lean philosophies, tools, techniques and methodologies in a wide variety of industries across the globe for the last 30 years. Kaizen Institute operates in more than 50 countries, from 35 offices all across the world.
Contribution by Vijay Allham | Pixabay