Kaizen+Management Final+Ppt
-
Upload
manohar-pathak -
Category
Documents
-
view
157 -
download
4
Transcript of Kaizen+Management Final+Ppt
KAIZEN MANAGEMENT
Kaizen - Japanese term that focus upon continuous improvement of processes in manufacturing, engineering, game development, and business management.
Applicable to :- All functions in the industry All employees from CEO to workers
KAIZEN PHILOSOPHY
Elements of Kaizen
Teamwork
Personal discipline
Improved morale
Quality circles
Suggestions for improvement
Kaizen Process
Recognition of problem
Standardization
Suggestion system for
improvement
WHAT IS KAIZEN COSTING ?
Continual Cost Reduction Design of the Product Development of the Product Production Of the Product
Applied to product that is already under production
Time prior to Kaizen Costing is Target Costing
Need was felt in the American Way of Production
STANDARD PRACTICE V/S KAIZEN COSTINGStandard Practices Kaizen Costing Concept
Usually a Cost Control system concept is adopted
Goal is to meet Cost Performance Standards
The Standards are usually set Annually or Semi Annually.
Cost Variance Analysis is done only when Standards are not met.
The traditional costing approach compares actual costs with standard costs, which are based on static conditions, and views employees as a cause of unfavorable variances.
A Cost Reduction Concept is adopted
Goal is to achieve Cost Reduction Standards
Set and reviewed Monthly and Continuous Improvement methods are applied all year long.
Cost Variance analysis is done to determine to check if Target Kaizen Cost meet the Actual Cost Reduction Amount.
Kaizen costing compares actual costs with target cost reductions under dynamic conditions, and views employees as the primary source of the solutions to problems
PRIOR TO KAIZEN COSTING – TARGET COSTING
Prior to the kaizen costing it uses the target costing, actual costing system is implemented during the initial design stage
Projections and plans become the annual profit budget or “target”:
In this the first step is
•Sales forecast – expected variable cost=Standard Cost•Budgeted Contribution Margin – expected changes in variable cost•Adjusted contribution Margin – expected fixed cost= budgeted operating Profit
So the target costing took place before the Kaizen costing
During planning, a target cost is set that results in GAP. Major cost reductions are broken down into smaller reductions
and form their own activities where they are easier to handle. Individual activities when experimented with new costs have a
status as either initiated, preliminary, final, verified, or rejected. Each activity bears its own investment and contribution according to an investment estimate.
GAP ANALYSIS : TOTAL COST – KAIZEN COST?
Activity commences only when the investment estimate has been approved and resources with the appropriate competence have been allocated and planned.
Under the kaizen system, new cost reduction targets are set each month by which the existing gap between the target and current costs is to be met; kaizen activities are then carried out throughout the entire operational year so as to meet cost targets.
GAP ANALYSIS : TOTAL COST – KAIZEN COST?
The process of improvement every time a gap analysis is done is called the PDCA (plan, do, check, and act) cycle.
This helps in the devising of countermeasures to eliminate the root-cause of the problem, and prevent its recurrence.
Sales increase either increase sales price Or increase the sales volume.
Sales Volume increase α Variable cost and Mfg F.C. are necessary for maintaining continuous growth
Amount of Kaizen cost should be achieved mainly by reduction of variable cost (esp. Direct Material cost and Labour cost) while Non-Mfg dept. (Head office, Sales and R&D) target F.C. for reduction.
PDCA MANTRA
WHAT SHOULD BE CONSIDERED ?
“Human beings think our way is the best, but at Toyota we are told we have to always change. We believe there is no perfect way, so we continue to search. The aim is to break current condition through Kaizen.”
--- Shiochoro Toyoda, Chairman, TMC
OHNO – Great believer of Kaizen initiated Kaizen in Toyota in
1950.
One of first company to use practices such as Kanban,
Jikoda, JIT through integration with Kaizen.
Aims:
Increase efficiency.
Reduce waste irrespective of major/minor activity.
TOYOTA MOTOR CORPORATION
IMPLEMENTATION OF KAIZEN CONCEPT
Seven types of waste identified at Toyota
Overproduction ahead of demand
Unnecessarily movement of materials and
products
Excessive inventories
Production of defective products
Idle time
Over processing
Unnecessarily movement of people
KAIZEN IN TOYOTA
Pre – Production:
Costing method: Design stage included
Setting of target cost for component
Standard time for production
Product Plan
Shop floors to meet target cost and standard time
The above cost and time were referential cost and
standard time
If workers do not meet target cost and standard time then
Kaizen pursued to decrease cost and time
It workers meet target cost and standard time then further
reduction through Kaizen to increase efficiency
KAIZEN: PRIOR TO 1990 – ORGANIZED KAIZEN
Setting up of cost councils to reduce material cost
Control of costs through division of responsibilities amongst group
leaders, chief leaders and engineers
Formation of try teams of skilled workers to establish production
time and then involving them to implement Kaizen at production
level
Main aims were to establish
Standard time
Standard work
Line stop system
Further increase in production efficiency by
Reduction in standard time through process improvement
Reduction in labour cost through reducing workers in unit
(Shojinka)
KAIZEN COSTING
KAIZEN IMPLEMENTATION AT WORKER LEVEL
Each worker was expected to question every process and
test all assumptions
Errors were viewed as learning opportunities
Implementation of quality circles and employee suggestion
systems
Each team member as quality inspector and any one stop
production line on observing problem
(More than 90000 employee suggestions were reported
every year & few employees gave more than 1000
suggestions)
In early 1990s Acute labour shortage
Emergence of high wage jobs and shortage of young
manpower
Low birth rates in Japan in two decades
Strained work atmosphere
Exodus of young workers from company
Required New Approach:Modified Kaizen – Human Friendly
NEED FOR IMPROVEMENT
THE MODIFICATIONOrganized Kaizen (prior to 1990) Modified Kaizen (Post 1990)
Production targets were decided by management during product development
Plants allowed to set their own annual production targets
Production efficiency was calculated stringently
Determination of production efficiency to make it less constrained
Standard time based on best standard time marked in the past
Standard time fixed by measuring the time really required for workers operations
Skilled male workers were reference for determining standard time
Young female and aged workers were reference for determining standard time
Standard time was marked during design and development stage before mass production
Standard time was fixed on actual time for workers operations and three months after launch of mass production
Production efficiency was calculated considering permanent workers only
Production efficiency was calculated considering permanent as well as temporary workers in Kaizen group
Routine TPS system without considering workload of individual worker
Introduction of TVAL to measure workload of all operations
Basic wages related directly to production allowance and overtime work
Introduction of grade allowance and age allowance
Reconstruction of assembly line so that workers can
work easily and execute their operations
Organizing a human centered TPS
Form a Kaizen mind in everyone so that he/she willingly
does Kaizen
Quality and worker security assurance
Efficient logistics
Minimum production time
High Investment Returns
THE MODIFICATION
1993 1994 1995 1996 1997 1998 1999 2000 20010
2000
4000
6000
8000
10000
12000
1000
2500
4000
5300
64007100
8000
9150
10700
Cumulative cost savings (100 mn yen)
COST SAVINGS THROUGH QUALITY INITIATIVES & TPS
Reduction in annual working hours by 300 working
hours
Successive two shift work without night shift to
reduce overtime
Increased worker participation in Kaizen activities
Increase in employee strength from 108167 to
110534 in 1994 and to 215648 in 2001
Nourishing ‘Kaizen mind and ability’ of the workers
to accept and welcome changes
Flexibility to changing business dynamics
BENEFITS SEEN BY TOYOTA
1996 1997 1998 1999 2000 20010
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
Net revenue
BENEFITS SEEN BY TOYOTA
1996 1997 1998 1999 2000 20010
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
Net Income
BENEFITS SEEN BY TOYOTA
Reduces Waste in areas such as inventory, waiting times, transportation, worker motion, employee skills, over production, excess quality and in processes.
Immediate results Focuses on creative investments (instead of
Capital intense) that continually solve large numbers of small problems
Continual small improvements that improve processes and reduce waste
Helps in employee retention
BENEFITS OF KAIZEN
Kaizen is seen as a short term project
Overemphasis on mapping kaizen to KPIs
When implemented in a heavily bureaucratic
organization
Management pays lip service to kaizen
Where training on kaizen isn’t provided
Where management does not support kaizen
initiatives
WHY KAIZEN FAILS ??
Thank You