CONTINUOUS IMPROVEMENT (KAIZEN)
According to Masaaki Imai, Founder of Kaizen Institute, “KAIZEN means improvement. Moreover, it means continuing improvement in personal life, home life, social life, and working life. When applied to the workplace KAIZEN means continuing improvement involving everyone – managers and workers alike.” Kaizen means “Change for the Better.” There are 5 Fundamental KAIZEN Principles that are embedded in every KAIZEN tool and in every KAIZEN behavior. The 5 principles are: Know your Customer, Let it Flow, Go to Gemba, Empower People and Be Transparent. The implementation of those 5 principles in any organization is fundamentally important for a successful Continuous Improvement culture and to mark a turning point in the progression of quality, productivity, and labor-management relations.
A Gallup poll of US workers in 2018 showed that just 34% of employees were engaged. Most employees (53%) were “not engaged”, while 13% were “actively disengaged”. Based on such a poll, Doanh Do from The Lean Way wrote: “One of the main benefits of Kaizen is getting employees actively involved and engaged with the company. Having more engaged workers leads to more efficient processes, lower turnover, and higher rates of innovation. Engaged employees feel that they have an impact on the company’s performance and are more likely to try out new ideas. Additionally, organizations with more engaged employees can achieve higher competitiveness, enhance customer satisfaction, and have an improvement culture of solving problems through teamwork.”
The continuous cycle of Kaizen activity has seven phases:
- Identify an opportunity
- Analyze the process
- Develop an optimal solution
- Implement the solution
- Study the results
- Standardize the solution
- Plan for the future
Margaret Rouse, a great blogger from TechTarget writes since executing Kaizen requires enabling the right mindset throughout the company, 10 principles that address the Kaizen mindset are commonly referenced as core to the philosophy and they are:
- Let go of assumptions
- Be proactive about solving problems
- Don’t accept the status quo
- Let go of perfectionism and take an attitude of iterative, adaptive change
- Look for solutions as you find mistakes
- Create an environment in which everyone feels empowered to contribute
- Don’t accept the obvious issue; instead, ask “why” five times to get to the root cause
- Cull information and opinions from multiple people
- Use creativity to find low-cost, small improvements
- Never stop improving
A similar succession of Kaizen is distilled into four steps – plan, do, check, act, or PDCA. It is also known as the Shewhart cycle or Deming cycle. The PDCA cycle is a four-step model for carrying out change. Just as a circle has no end, the PDCA cycle should be repeated continuous improvement. Furthermore, the PDCA cycle is considered a project planning tool and the procedure is as follow:
- Plan: Recognize an opportunity and plan a change.
- Do: Test the change. Carry out a small-scale study.
- Check: Review the test, analyze the results, and identify what you’ve learned.
- Act: Take action based on what you learned in the study step. If the change did not work, go through the cycle again with a different plan. If you were successful, incorporate what you learned from the test into wider changes. Use what you learned to plan new improvements, beginning the cycle again.
Procurement & Kaizen
Celia Friedman and Gregory Kochersperger from Oliver Wyman, wrote a wonderful blog titled How Continuous Improvement Methods Contribute To Procurement. The key quote from the post is “To develop a lean mindset in procurement, organizations must align the function with broader, company-wide strategies.” Furthermore, they list the key factors to successful lean procurement as follow:
Within the post, both highlight the following conclusion: “the lean approach adapts procurement to a company’s core strategy, whether that is based around costs, quality, and/or growth. Embedding lean methods across your organizational DNA – while adhering to a disciplined set of guiding principles and avoiding common pitfalls – will enable procurement to fully realize cost management objectives. Effectively, setting the foundation for leanness to become procurement’s guiding principle for productivity.”
The Lean Procurement strategy mentioned uses a lean team approach to optimize the total end-to-end procurement process by eliminating wasted activities and making ordering efficient.
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