In an age where the bottomline dictates corporate cultures and the lifestyles of people on its payroll, sometimes a simple and common-sense approach solves the complex calculations of loss and profit, efficiency and productivity in an organisation.
One such approach is Kaizen, a simple Japanese management technique which identifies and eliminates non-value adding activities in a company to help workers be more productive.
Masaki Imai, a Japanese management guru specialising in Kaizen, was in Dubai recently to deliver lectures to some senior management professionals at the "Quest for Excellence" conference organised by the Department of Economic Development (DED) which promotes quality management and best practices among private sector organisations.
Many companies hire consultants to either solve their problems or find out the root of the problems, which many management gurus say could have been solved merely with the application of common sense. Such was the case with Toyota Motor Co. when it began to produce small passenger cars right after World War II.
It was manufacturing a small number of vehicles in those days, when Ford Motor Company was rolling out 7,000 units a day. Not only did the lower production rate force the prices up, but due to the complex working environment, the timing required to put together a unit took longer in those days. At the same time, these factors delayed the delivery of vehicles to the customers.
So the management at Toyota had to find a solution to minimise the cost and maximise profit by eliminating non-value adding activities at the factory.
While most companies produce, stock, supply and then sell, based on a market forecast or outlook, one senior manager at Toyota used a simple idea to reverse the bottomline in favour of the owners. "Instead of manufacturing products based on a market study or forecast, what Toyota did, in those days, was that it first procured orders and then manufactured cars. This put the delivery deadline on prime focus to the management, who found it difficult to cope with the short delivery time frame," said Imai.
"This system put a lot of pressure on the supply chain, manufacturing and assembly plant where workers used to work against time to meet the deadlines. It was like a madhouse and forced the management to think and change tactics.
"It was Taitchi Ohno, a senior executive at the Toyota production line, who first spotted the non-value adding activities in the company and thought if these could be eliminated by doing things in a more organised manner, it would help the workers deliver faster.
"So he introduced a system in the factory wherein a worker put everything he needed next to him. It eliminated time wastage as he had everything he needed to add to the parts of the vehicle that he was working on and after fixing the pieces or components to the parts, he would pass it on to the next worker to do his bit.
"This enabled each worker to produce more in a day than before as they did not have to move around to gather the stuff and add them to the parts. It drastically cut non-value adding activities and maximised production.
"This enabled Toyota to deliver the cars on time or within the minimum time frame. It helped Toyota expand fast and increased its bottomline fast. This is now known as the 'just in time' or 'lean production' method," Imai said.
This is how the now famous Japanese school of thought, 'Kaizen', developed. 'Kaizen' in Japanese means 'improvement'.
Imai, who wrote two books on Kaizen, is the founder and chairman of the Kaizen Institute, a global management consulting company, which was established in 1986. From a management point of view, Kaizen is a culture of sustained continuous improvement focusing on eliminating waste in all systems and processes of an organisation. "The Kaizen strategy begins and ends with people," Imai says.
"With Kaizen, an involved leadership guides people to continuously improve their ability to meet expectations of high quality, low cost, and on-time delivery. There are two elements that construct Kaizen improvement/change for the better and ongoing/continuity. Lacking one of those elements would not be considered Kaizen."
Japanese gurus later added another term to the Kaizen management 'Gemba' which means 'real place' where the real action takes place.
In business, Gemba is where the value-adding activities to satisfy the client are carried out. Gemba Kaizen is making continuous improvement at the real place where the action is going on, and which can make your organisation better. Gemba Kaizen showed the Japanese how a simple and common-sense approach can change the financial equation of a company and make it efficient and profitable.
Gulf News
