THE UNIVERSITY OF SYDNEY BUSINESS SCHOOL
CEMS/INTERNATIONAL MANAGEMENT PROGRAMME
MMGT6001 Strategy and Entrepreneurship written assignment on:
KAIZEN – CONTINUOUS IMPROVEMENT – LEAN MANAGEMENT
Term 2 2011/2012
TABLE OF CONTENT
What is Kaizen?
Western style of management vs. Japanese style of management
Types of Kaizen
Today, all manufacturing industries are trying to increase their productivity and respond to rapidly changing customer needs. All the companies declare that their priority is to provide customers with the highest quality, on the other hand they are also trying to reduce costs as much as possible. Thanks to globalization, today’s competition has become really tough. There are several managerial approaches how to face globalization. Some of them have been successfully applied all over the world. However, there have been also tools, which many of the companies did not succeed with. One of such tools is Japanese method called Kaizen. Kaizen is a Japanese method of management which helps manufacturing companies to remain competitive and keep their market share through continuous improvement of manufacturing system processes. In this MMGT6001 Strategy and Entrepreneurship assignment, I will focus on main features of Kaizen philosophy, on its main advantages and disadvantages, on how Japanese way of management differs from that of western world and last but not least on why western companies often fail when applying Kaizen. What is Kaizen?
Word Kaizen comes from Japan. ‘Kai’ means ‘change’ and ‘Zen’ means for ‘better’. Sometimes we are talking about so called ‘Gemba Kaizen’, which means continuous improvement. Continuous Improvement is one of the core strategies how to reach perfection in production (Dean and Robinson, 1991). Continuous improvement means endless effort for improvement where everyone is involved (Malik and YeZhuang, 2006). According to Imai (1986), “kaizen is a continuous improvement process involving everyone, managers and workers alike.” Kaizen is able to increase productivity of the firm and helps to produce products of high-quality using minimal efforts. Kaizen is not only a managerial method, but rather a managerial philosophy. The concrete form of its application is not given, it has only a skeleton and its frames are not exactly defined. It is a very general and simple concept, which is why kaizen is so powerful, but has weaknesses at the same time. Firms applying this method have huge freedom upon its implementation, so it can be adjusted according to the firms needs. In practice, this freedom is not being very successfully used though. There are various kaizen programs, which can differ, but the essence stays the same. The common features are: * Continuous process - Kaizen says that there is no end for improving something * Incremental improvements - compared to restructuralization or innovation, Kaizen is about little incremental changes. Basically, it says that company can always make a process better. * Participation - Kaizen tries to include all the employees It is an infinite process of improvement by little incremental changes, where all the company is included, i.e. including the blue-collar workers (operatives). Those very often are the closest to the place where the products or services are being made and therefore where the value for the customer is being created. Their ideas are very often much more practical and closer to reality than the ideas of the managers, as they sometimes lose the touch with reality when sitting in the office. The blue-collar workers are not only a pair of hands, but also one brain full of potential ideas for improvement (Ghalayini et al., 1997). Unfortunately, most of western companies do not realize it. Process orientation
Continuous improvement is focused particularly on...
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