Kaizen (Continuous Improvement)

1. Kaizen (Continuous Improvement) • ‘If you’re not making progress all the time, you’re slipping backwards.’ [Sir J. Harvey Jones] • There are 2 key elements to Kaizen: • Most improvements are based around people and their ideas rather than new technology • Each change may be small but the cumulative effects can be substantial. For it to work, management must establish a positive culture. What are the characteristics of this culture?: • 1 Employee, 2 Jobs: Employees should do the and look at ways to improve it (as, after all, it is the people on the job who know most about it). A firm’s greatest resource is their staff. This also has a significant effect on job security. • Teamwork: Members of each cell are responsible for its quality. Kaizen aims to tap into the cell’s knowledge by organising each cell into a quality circle which aims to find solutions and make recommendations. To be successful, employees must have real decision making power. • Performance Targets and Monitoring: These are vital. They have 3 main benefits: - quality faults are easier to detect and those involved can put forward solutions - targets are used to judge if Kaizen is successful - setting and monitoring quantitative targets enables benchmarking surveys to take place.

2. Problems with Kaizen Implementation • Culture: Kaizen needs employee commitment and motivation. Resistance can come from: -Management: Autocratic managers see de-layering, employee empowerment etc. as a threat • -Employees: Don’t want change, is it an excuse to get more from them? • Training Costs: It can be expensive and can take time. • Justifying the cost of Kaizen: It is hard to assess the value of programmes designed to develop the stock of human capital within the company. Therefore, budgets are often difficult to win for Kaizen programmes. Limitations of Kaizen • Diminishing Returns: Improvements will fall as time goes by. Once the main problems are solved, only little ones remain. Staff will also become less motivated. • Radical Solutions: Sometimes one doesn’t just need to ‘tweak’ systems, you need to overhaul them. In such cases some feel Kaizen is not radical enough. Issues for analysis • Kaizen is more useful early on in a P.L.C., otherwise it will only slow down decline, and not stop it. • Market leaders use Kaizen as they are ahead of the market; others often need more radical solutions.