Unit 11

1. Unit 11 Perekayasaan Semula (Reengineering) dan Kaizen

2. Bahagian 1. Kaizen

3. KAIZEN Assoc. Prof. Dr. Jegak Uli

4. Unit Objectives • To understand the basic concept of kaizen • To compare Western and Japanese approach to management • To compare the innovation and kaizen-based strategy • To describe the elements and umbrella of Kaizen

5. KAIZEN – THE CONCEPT • KAIZEN as originally defined in the book of: "KAIZEN, the Key to Japan's Competitive Success", by Mr. Masaaki Imai, is: • KAIZEN means improvement. • Moreover, KAIZEN 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.

6. KAIZEN – THE CONCEPT • Kaizen means improvement • Kaizen means ongoing improvement involving everyone, including both managers and workers • Kaizen philosophy assumes that our way of life – be it our working life, our social life, or our home life – deserves to be constantly improved

7. KAIZEN – THE CONCEPT • The message is “not a day should go by without some kind of improvement being made somewhere in the company” • Simply staying in business required unending progress, and Kaizen has become a way of life

8. KAIZEN – THE CONCEPT • 1. Means improvement • 2. Ongoing improvement involving everyone – top management, managers, and workers • 3. “There will be no progress if you keep on doing things exactly the same way all the time” • 4. It is everybody’s business

9. Western West’s innovation-and results-oriented thinking Innovation strategy is technology driven and thrives on fast growth and high profit margins Practice of reviewing people’s performance strictly on the basis of results and not rewarding effort made Japanese Japanese kaizen and its process-oriented way of thinking Its messages is one of improvement and trying to do better It does not mean that innovation can or should be forgotten. Both innovation & Kaizen are needed WESTERN VS JAPANESE APPROACH TO MANAGEMENT

10. JAPANESE MANAGEMENT Has two major components: • 1. Maintenance – activities directed toward maintaining current technological, managerial and operating standards • 2. Improvement – those directed toward improving current operating standards • 3. Improvement can be broken down into KAIZEN and INNOVATION

11. JAPANESE MANAGEMENT In Japanese management, three (3) functions should happen simultaneously within any organizations: • Maintenance, • Innovation, and • KAIZEN.

12. 1. Maintenance • By maintenance, we refer to maintaining the current status, the procedures are set and the standards are implemented. • People in the lower level of organization mostly do that, they maintain their standards.

13. 2. Innovation • By Innovation, we refer to breakthrough activities initiated by top management, buying new machines, new equipment, developing new markets, directing R&D, change of strategy etc.

14. 3. KAIZEN • In the middle there is KAIZEN, small steps but continuing improvement. • KAIZEN should be implemented by the lower/middle management and the workers, with the encouragement and direction of the top. • The top management responsibility is to cultivate a KAIZEN working climates and cultures in the organization.

15. Kaizen signifies small improvements made in the status quo as a result of on going efforts Innovation involves a drastic improvement in the status quo as a result of large investment in new technology and/or equipment JAPANESE MANAGEMENT

16. WESTERN MANAGEMENT • Western perception of management is given in Figure 3 • There is little room for KAIZEN concept • The worst companies are those which do nothing but maintenance – no internal drive for kaizen or innovation

17. Innovation: Creativity Individualism Specialist-oriented Attention to great leaps Technology-oriented Information: closed, proprietary Functional (specialist) orientation Seek new technology Line + staff Limited feedback Kaizen: Adaptability Teamwork (systems approach) Generalist-oriented Attention to details People-oriented Information: open, shared Cross-functional orientation Build on existing technology Cross-functional organization Comprehensive feedback Comparison of Innovation and Kaizen-based Strategy

18. Important Elements of Kaizen 1. A systematic and collaborative approach to cross-functional problem-solving 2. A custom-driven strategy for improvement – seek to satisfy the customer and serve customer needs 3. A system approach and problem-solving tools

19. Important Elements of Kaizen 4. A process-oriented way of thinking and people’s process-oriented efforts for improvement 5. A gradual rather than abrupt change 6. Everybody’s business

20. Customer orientation TQC (total quality control) or CWQC (Company-wide Quality Control) Robotics QC (Quality Control) Circles Suggestion system Automation Discipline in the workplace TPM (Total Productive Maintenance) Kamban (signboards, cards or chits) Quality improvement Just-in-time (JIT) Zero defects (ZD) Small-group activities Cooperative labor-management relations Productivity improvement New-product development The Kaizen Umbrella

21. Problem-solving is the Starting Point of KAIZEN • The starting point of kaizen is to recognize the need • This comes from recognition of a problem • If no problem is recognized, there is no recognition of the need for improvement • Complacency is the arch enemy of KAIZEN

22. Problem-solving is the Starting Point of KAIZEN • It emphasizes problem-awareness and provides clues for identifying problems • Once identified, problems must be solved • Thus Kaizen is a problem-solving process • Kaizen requires the use of various problem-solving tools • Improvement reaches new heights with every problem is solved – the improvement must be standardized

23. Kaizen and QC Circles, TQC , CWQC • A QC circle is defined as a small group that voluntarily performs quality-control (QC) activities within the shop • The small group carries out its work continuously as part of a company-wide program of quality control or TQC (total quality control) or CWQC (company-wide quality control) and improvement within the workshop

24. Kaizen and QC Circles, TQC , CWQC • Over the years, QC has been elevated to SQC (statistical quality control), and then TQC or CWQC • TQC and CWQC mean company-wide Kaizen activities involving everyone in the company, managers and workers alike • QC circles have played an important part in improving product quality and productivity

25. Insemination of KAIZEN into the Organization • Not a day should go without some kind of improvement being made somewhere in the company. • When KAIZEN is adapted in organizations and management perspectives, however, it is easier to talk about it than to implement it. • It is very natural that people will propose some kind of change in their own work place, when they become unsatisfied with their present conditions. • Some of the improvements could be carried out right away.

26. Insemination of KAIZEN into the Organization • Perhaps, the boss won't even notice them. • However, when approval is required, several kinds of responses from the boss could have taken place. • The ideal situation is that the boss encourages their subordinates to carry out their ideas. • The boss then appreciates the efforts or gives recognition.

27. Insemination of KAIZEN into the Organization • That's what people expect when they propose something. • The positive response given by the boss will then develop trust with the subordinates and stimulate other improvements. • Cumulatively, this will create momentum for continuing improvement.

28. BASIC TIPS FOR KAIZEN ACTIVITIES • Discard conventional fixed ideas. • Think of how to do it, not why it cannot be done. • Do not make excuses. Start by questioning current practices.

29. BASIC TIPS FOR KAIZEN ACTIVITIES • Do not seek perfection. Do it right away even if for only 50% of target. • Correct it right away, if you make mistake. • Do not spend money for KAIZEN, use your wisdom.

30. BASIC TIPS FOR KAIZEN ACTIVITIES • Wisdom is brought out when faced with hardship. • Ask 'WHY?" five times and seek root causes. • Seek the wisdom of ten people rather than the knowledge of one. • KAIZEN ideas are infinite

31. Bahagian II: Perekayasaan Semula (Reengineering)

32. Reengineering: some basic concepts Assoc. Prof. Jegak Uli

33. The Official Definition • The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

34. The Key Words • dramatic -- improvements not marginal, not 5 or 10 % but quantum leaps. • radical -- going to the roots of things. Starting over, reinventing. • process -- a group of related tasks that together create value for customers e.g.. order fulfillment. • redesign -- the design of processes, how work is done

35. What Reengineering is Not • it is not downsizing • it is not restructuring • it is not a fad -- it works, brings about huge improvements • it is not more of the same -- it is revolutionary. Focus on end to end processes and not specialization of labor

36. The Three Cs • CUSTOMERS -- more sophisticated, demanding, more alternatives, more knowledgeable • COMPETITION -- no longer local and gentle, but more global and cutthroat. • CHANGE -- change from trad.focus on planning, control, and managed growth to emphasis on speed, innovation, flexibility, quality, service, and cost.

37. Top Ten Ways to Fail • 1. Giving only lip service to reengineer • 2. Don’t focus on processes • 3. Spend a lot of time analyzing the current situation • 4. Proceed without strong executive leadership • 5. Be timid in redesign

38. Top Ten (contd.) • 6. Go directly from conceptual design to implementation • 7. Reengineer slowly • 8. Place some aspects of the business off-limits • 9. Adopt a conventional implementation style. • 10. Ignore concerns of your people

39. The Primary Ingredients • Leadership • The Reengineering Team

40. The Tools of Reengineering Leadership • SIGNALS -- Explicit Communications • SYMBOLS -- Personal Behavior • SYSTEMS -- Measurements and Rewards

41. Process oriented Holistic perspective Creativity Restlessness Enthusiasm Optimism Persistence Tact Team player Communication skills The Profile of a Reengineer

42. The Content of Reengineering Work • Understanding the old processes and customer requirements • Inventing a new process design that shatters old assumptions • Constructing the new process-- details of operations, taking care of implications, training • Selling the new way

43. The Context of Re-e Efforts • Uncertainty -- uncertainty eliminated gradually • Experimentation -- iterative. Designing on paper must be followed by trying in reality • Pressure -- must proceed at fast pace. Always operate under conditions of great urgency and intensity

44. Focus of Team Members • Must share dedication to three things: • The process being reeingineered • The needs of the customer of that process • The team itself

45. Example of team characteristics • CARING • DARING • SHARING

46. Problem, Rule, and Assumption • PROBLEM -- a specific performance shortcoming of the process e.g.. slow cycle time. • RULE -- a specific aspect of the process design that causes the problem e.g.. must have specialist for each task. • ASSUMPTION -- a belief that gives rise to the rule e.g.. the work is complex

47. Principles for Overcoming Resistance to Change • Resistance is natural and inevitable --Expect it. • Resistance is not always apparent -- Find it. • Resistance has many motivations -- Understand it • Deal with people’s concerns not their arguments -- Confront it • There’s no one way to deal with resistance -- Manage it

48. The Key Mechanisms for Overcoming Resistance • INCENTIVES -- positive and negative • INFORMATION -- dispel uncertainty and fear • INTERVENTION -- one-on-one connection • INDOCTRINATION -- make change seem inevitable • INVOLVEMENT -- make people part of the effort

49. Selling the Change • Impediments to communications • Ten Principles of Reengineering communications

50. Impediments to Communications • Disbelief • False familiarity • Fear of layoffs • The rumor mill • Sloppy execution -- incomprehensibility, abstractions, complexity, and clichés