Improvement Methods

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Kaizen Process: Global Overview

Kaizen is a process used by many companies to improve their operations. It is a Japanese word that means “continuous improvement” and calls for all members of a company to work towards improving all processes. Toyota has adopted Kaizen as one of its core values. This research looks at how prominent/widespread the use of Toyota's Kaizen process is among manufacturers outside of Japan.

Methodology

Research identified many industries that have adopted the Kaizen Process in their operations. However, no statistics covering how many companies have adopted these principles exists in the public domain.

We primarily researched online general research websites like Statista for statistics discussing Kaizen. Although there are some reports about Toyota's Kaizen process, none of these reports give any statistics on how many companies are using the process outside of japan. Research was then broadened to include leading business news websites like Forbes, NYT, Wall Street Journal and CNN specifically looking for statistics of the Kaizen process for companies outside of Japan. However, none of these websites had such data.

We then searched for scholarly case studies and industry reports in leading research websites like the Stanford Business Review MCA- Management Consulting Agency, The Case Centre, Harvard Business Review, The Urban Institute, Oppla, ProQuest and The Keystone Policy Center's databases. However, no statistics on the number of companies using the Kaizen process outside of Japan were found. Instead, case studies of companies that have successfully used the process were found.

BACKGROUND INFORMATION

Kaizen is a Japanese word that means "continuous improvement" and is a strategy where all employees jointly work towards achieving a common goal. It is a philosophy where all employees are actively involved in the company's processes and it becomes their way of thinking. Kaizen is often used together with Six Sigma, Lean, Total Quality Management and 5S. The Lean process is found to be used by many companies outside Japan.

KAIZEN PROCESS USERS

As of 2017, 55% of managers reported implementing a Lean process in their companies' supply chains. In addition, 61% of manufacturers had implemented or showed plans to implement a Lean process by 2014. Leading countries using Kaizen processes include America, United Kingdom, Belgium and India. The process is used in various sectors like hospitals, governments, and manufacturing among others.

GREAT WESTERN BANK

To help accelerate the recovery process from the 2008-2009, Great Western Bank implemented the Kaizen process. In this program, the bank mainly focused on simplifying processes, both for employees and customers. The bank implemented a 30% reduction in steps needed to open a checking account reducing the process from 34 to 24 steps. Through this strategy, the company improved service delivery to customers in addition to lowering costs of provided services.

HERMAN MILLER

Herman Miller produces the popular Aeron office chair. The company applied the Kaizen approach to streamline its manufacturing process. In this strategy, the company changed heights of assembly lines, moved supplies, and used ergonomics to streamline the processes. As a result of this strategy, the company recorded a 1,000% increase in productivity in a period of 14 years. In addition, as a result of the Kaizen approach, the company's production time per chair dropped from 82 seconds to 17 seconds.

LOCKHEAD MARTIN

Lockhead Martin is a global aerospace and security company that uses the Kaizen strategy. Because of using this process, the company has reported a 38% reduction in manufacturing costs. In addition, the company has reported a 50% reduction in inventory, while the delivery time has dropped from 42 months to 21 months. Lockhead Martin also managed to reduce the time needed to allocate moving stock to its appropriate place from 30 days to just four hours. The company used Kaizen when developing its Joint Air To Ground Missile System to improve the manufacturing process. Following the successful implementation of these changes, the company was awarded the 2000 Shingo Prize for Excellence in Manufacturing.

MAYO CLINIC

The Mayo Clinic was motivated by how Toyota used Kaizen and adopted the strategy. The medical health and wellness provider applied the Kaizen method to waiting times, patient records, and management of hospital resources. Due to application of these changes, the hospital improved quality in mortality rates as well as reduction in surgical infection rates. Time allocated for patients and safety of patient records all improved as a result of adopting the new changes. Using this strategy, the hospital developed a mechanism to provide all doctors easy and quick access to information.

LEYLAND TRUCKS

Leyland Trucks launched a robotic spray booth for truck chassis, becoming the first assembly plant in the world that did this. Following the implementation of the Kaizen process, the company has been able to collect more than 200 new ideas on how to streamline the production process. There has also been a 17% reduction in hours needed to work on a single truck as well as 20% reduction in inventory. In addition, employees working was reduced by 23%, time deliveries increased by 95%, while mechanical defects reduced by 10%. Finally, employee injuries reduced by 45% as a result of implementation of the Kaizen strategy.

SIEMENS OOSTKAMP

Siemens Oostkmap specializes in production of electronic components. The company employed the Kaizen method to help spot problems in its production process. In this strategy, the company fully communicated its problems to employees, and got them involved in the recovery process. Employees made changes, set goals and used charts to track their progress. Following the implementation of the Maizes process, the company reduced the cost of inventory by 30%. In addition, Siemens Oostkmap reduced its lead times from 12 days to half a day. Finally, the company reduced its product types by 33%.

FORD MOTOR COMPANY

To help recover from the 2000 recession, Ford launched the Kaizen process to streamline and speed up its processes. In this strategy, the company focused on implementing efficient processes by reducing manufacturing times through correction of procedures, and as a result, the company added more that 5,000 jobs in the US.

GUJARAT, INDIA

The Indian state of Gujarat used the Kaizen methods to train its employees how to deliver more functionality to the public sector. In this strategy, the state trained more than 80 employees in two weeks.

NESTLE- AMERICAN FOOD MANUFACTURER

Following the implementation of the Kaizen process, Nestle has managed to reduce waste in addition to lowering the time needed to manufacture products.

NIKE

American sports shoe maker, Nike had become famous for low wages and as a result, was low demand. To recover, the company employed the continuous improvement that involved empowering employees, partners, and customers. They started offering incentive to contract factories so that they can improve working conditions of their employees. Nike introduced a scoring system called Manufacturing Index to assess the factories. As a result of this strategy, the company engaged workers, eliminated waste and employed managers that are value-oriented. Nike changed its processes to focus on producing high quality materials at low cost.

AMAZON

The e-commerce giant uses Kaizen principles to govern its operations. The company automated most of its operations, leaving only the complex ones for human employees. As part of the strategy, the company launched the Andon-Cord process to help get rid of cases of defective products. In this process, the company uses distribution centers manned by managers who are dedicated to constantly improving the workflow. As a result of this process, the company has reported a 50% reduction on the rate of defects. In addition, the company has reported 40% faster lead times and 20% improved productivity. Finally, Amazon reduced the time needed to introduce a new model by 30%.

PIXAR

Pixar also applies the Kaizen strategy in its processes. Initially, the company seemed to have great ideas, which were not bearing fruits. The Kaizen process was introduced to stir up its processes and improve production. As a result of the new strategy, the company discovered that there was a disconnect in its chain of communication. Some managers in the company did not feel respected and appreciated and others felt they were being silenced. In response, the company initiated open-end conversations with employees to bypass the traditional channels for communication. By working on its communication processes, Pixar has been able to improve on the quality of its products.

Sources
Sources

Quotes
  • "Great Western Bank was no exception. After the financial crisis of 2008-2009, banks were struggling to survive. Great Western decided to implement the Kaizen approach in banking.[1] They became involved in Kaizen through their parent company, National Australia Bank Ltd., which had already implemented the Kaizen philosophy for several years."
  • " Kaizen is really about simplicity,” he said. “How do you make it simpler to do business with us? Where do we confuse the customer? Where do we make the customer duplicate efforts? Where are we asking unnecessary questions?”[2]"
  • "In the case of Great Western Bank, it used to take 34 steps for a customer to open a checking account. After implementing Kaizen, they reduced it to 24 steps. That is a nearly 30% reduction in the process. The company pulled apart the process, analyzing each action and evaluating what to change. "
  • " “By improving our process, we provide better service at a lower cost,” Karels said.[3]"
  • "Herman Miller is an American office furniture company best known for producing the Aeron chair, one of the most well-known task chairs in the world. Seen in movies, television shows, and commercial offices everywhere, Herman Miller was hoping to bring down costs in order to stay competitive across the world. To do that, they decided to pursue a Kaizen approach to manufacturing furniture in 1998."
  • "At Herman Miller, adjustments included something as minute as the placement of a bin of washers a mere six inches closer so the employee needed to move a bit less to reach for one. It involved changing the height of the assembly line so that people would have to bend over, losing a fraction of a second. Kaizen pushed the company to embrace the beauty of ergonomics."
  • "Employees at Herman Miller were to encouraged to make changes. And they did. They averaged 1,200 “plan-do-check acts” every year – tiny changes to the assembly process. Under Oba’s tutelage, they realized that the biggest thing was to empower people to change the work in ways that mattered to them,” said Eric VanDam, Herman Miller’s director of operations in seating.[5]"
  • "Thanks to this approach of trying to make tiny improvements to every part of the process, the company experienced a 500% increase in productivity and 1,000% increase in quality by 2012. "
  • " The Aeron chairs, which used to take 82 seconds to produce, were manufactured in just 17 seconds after the improvements made through their Kaizen approach. "
  • " Lockheed Martin is a global security and aerospace company that employs approximately 100,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services."
  • "A 38% reduction in manufacturing costs, despite volume reductions"
  • "A 50% inventory reduction "
  • "Reduction in “Order-to-delivery” time from 42 months to 21.5 months "
  • "Reduction in the time to move parts from receiving to stock from 30 days to four hours "
  • "And, in 2000, using the application of Kaizen methodologies to further implement lean manufacturing, the plant was awarded the Shingo Prize for Excellence in Manufacturing.[6]"
  • "the leadership at the Mayo Clinic believed that if a company like Toyota could use Kaizen, they could do it as well by adapting the philosophy to health care."
  • "In their view, they saw innumerable advances in medicine and technology over the last half century, while the health care system continued to perform far below acceptable levels in the areas of ensuring patient safety and addressing patient needs. "
  • "They saw that they many moving parts of the healthcare system could benefit from Kaizen, including methods, waiting times, handling of patient records and the best use of resources."
  • "Mayo Clinic used Kaizen to improve quality in[8]: Outcomes achieved such as mortality rates and surgical infections Compliance with evidence-based processes known to enhance care Volume of patients with complex diagnoses and procedures successfully treated The safety record of the institution The amount of time spent with each patient Making sure each patient is treated with respect, kindness and dignity by every member of the Mayo team Making sure appointments are on time Ensuring all test results and other patient information are available to every doctor whenever they are needed"
Quotes
  • "A good example of how Kaizen is implemented at Leyland relates to the introduction of a robotic paint spray booth for the truck chassis. This was a huge leap forward Leyland was the first assembly plant in the world to use robots on a moving conveyor to paint its chassis. "
  • " At the end of the project the team leader stated that 'the culture at Leyland in terms of the pride that the employees take in being the best is unique. You only have to spend a week at Leyland to see why they are number one: the employees.' More than 200 ideas for improvement were suggested by ground-level employees. The changes they suggested led to:"
  • "a reduction in truck hours of over 17% 20% reduction in line-side materials (inventories) 23% reduction in walking (the distance that employees had to cover to carry out their work 57 miles per day in total). At Leyland, over 10% of the 1,000 workforce consists of qualified continuous improvement practitioners. These people run and monitor progress through Six Sigma."
  • "muliti-million pound savings resulting from Six Sigma a rise in on-time delivery to over 95% 10% reduction in mechanical defects per unit 45% reduction in reportable injuries and 10% in minor injuries in the same period. The important thing to remember about continuous improvement is that, as the process improves, the targets in the KPIs will also advance. This delivers an ongoing cycle of improvement."
Quotes
  • "Siemens Oostkamp produces electronic components such as relays, connectors, and coils. The combination of fewer orders from their parent company and increasingly intense global competition forced them to look for new markets."
  • "To put the kaizen activities in motion, self-managed work teams were formed in which the goals of kaizen were carried out with methods that the teams developed themselves."
  • "With each employee a part of a team, they became more conscious of problems on the line and were able to solve the problems themselves. With this new clarity, they suggested and implemented small, incremental changes. And using the newly collected data, they assigned themselves specific goals to shoot for."
  • "Visual management was evident everywhere. Large charts were displayed that showed plant goals with numerical data and trend charts for each item. Tools had specific, clearly marked homes, and floors were marked showing designated areas for supply carts and finished products."
  • "The just-in-time model revealed that changeover times at the molding department were taking too long. They instituted a new procedure that minimized the batch size and the number of boxes of work-in-process, thus decreasing the changeover times."
  • "They were able to reduce the cost of inventory by 30%. Lead time for their brake coils went from 12 days to half a day. Before kaizen, they kept a three month inventory of cable connectors; this is no longer necessary because the lead time has been reduced to three hours. The number of product types has been reduced by 33%. Storage area was reduced by 10%. The employees are now problem solvers. When a defective product was found, it used to take days to find the problem. Now they can see it right away and make adjustments."
Quotes
  • "Create a culture of continuous improvement where all employees are actively engaged in improving the company. Nurture this culture by organizing events focused on improving specific areas of the company."
  • "Kaizen (Continuous Improvement) is a strategy where employees at all levels of a company work together proactively to achieve regular, incremental improvements to the manufacturing process. In a sense, it combines the collective talents within a company to create a powerful engine for improvement"
  • "Kaizen is about organizing events focused on improving specific areas within the company. These events involve teams of employees at all levels, with an especially strong emphasis on involving plant floor employees"
  • "As a philosophy, Kaizen is about building a culture where all employees are actively engaged in suggesting and implementing improvements to the company. In truly lean companies, it becomes a natural way of thinking for both managers and plant floor employees."
Quotes
  • "Great Western Bank is a U.S. bank that has been around for decades. According to ArgusLeader.com, opening a checking account at Great Western used to take 34 steps. Thanks to Kaizen, this has been reduced to 24. "
  • "They have also been able to work on internal processes, reducing the amount of money they spend on ordering office supplies. Great Western Bank shows how Kaizen can be used to improve internal as well as external processes."
  • "Ford focused on efficient processes and was able to recover from rough times during the Great Recession of the late 2000s to lead the company back to success; in 2014, Ford announced that they would be creating over 5,000 jobs in the United States."
  • "Herman Miller had adopted Kaizen and enjoyed a resulting 500% increase in productivity and 1,000% increase in quality since 1998. Their Aeron chairs, which used to take 82 seconds to come off the line, can now be produced in just 17 seconds"
  • "Lockheed Martin is a well-known aerospace technology company that does a tremendous amount of business with the United States government. "
  • "In 2010, while developing its Joint Air-to-Ground Missile (JAGM) system, Lockheed Martin held multiple Kaizen events at plants in Florida and Alabama to help improve the way that the JAGM is manufactured. Lockheed Martin’s use of Kaizen shows how the concept can help businesses launch a new product or service."
  • "Gujarat is one of the most significant states in the country of India, the world’s largest democracy. In late 2012, the Kaizen Institute of India reported that the Education Department of the Gujarat government commissioned two weeks of Kaizen training for more than 80 employees, as an attempt to improve the functionality of its public sector. "
Quotes
  • "Ford decided to focus on implementing practices that allow them to make their processes more efficient and finding ways to reduce times by slowly but surely, correcting procedures in ways that ensure that every single time a process is repeated, it is done in a more efficient manner than before."
  • "Nestlé is a great example of how Kaizen can be used across different industries, in this case, the food industry with one of the most important firms worldwide who have implemented Kaizen. "
  • "Lean production has been an aspect of Kaizen that Nestlé has taken seriously and they have made great improvements in the reduction of waste by lowering the time and materials wasted on their processes."
  • "The Mayo Clinic is a nonprofit medical practice and medical research group that decided to follow the lead of Toyota by closely studying how Kaizen was able to help such a complex manufacturing operation to improve their practices."
  • "Methods, waiting times, handling of patient records and the best use of resources are areas in which Kaizen can make a different and has done so in the case of Mayo Clinic and other healthcare organizations worldwide."
  • "In the period from 1992 through 1997, the company was able to notably reduce its costs of manufacturing while lowering their defect rate to 3.4 instances per plane; and also lower their order to delivery time from 42 months to just below 22. "
  • "Using kaizen methodologies to meticulously apply lean manufacturing, Lockheed Martin was awarded the Shingo Prize for Excellence in 2000. Another notable accomplishment was in the area of material management, where they were able to reduce the time to move parts from receiving to stock from 30 days to just four hours."
Quotes
  • "The Nike product has become a synonym for slave wages, forced overtime, arbitrary abuse and was facing weak demand and unrelenting criticism."
  • "Based on this, NIKE’s culture of empowerment model is three-pronged: attract, develop, and empower. Most importantly, the people of NIKE, Inc. are seen as its ultimate value stream. By implementing a culture of empowerment that employs continuous improvement (CI) to deliver high-quality products, on time, at a low cost, Nike could incentivize its contract factories to improve the working conditions, reduce waste and inefficiencies, and safeguard employee satisfaction."
  • "To ensure everyone is performing at NIKE‘s standards, the company developed a scoring system for their contract factories ranking them from gold to silver, bronze, yellow or red levels. The Manufacturing Index (MI) in use assesses each factory in terms of lean, labour, health and safety, energy and carbon, and sustainability. This system gives environmental and human resource management performance equal weight alongside business metrics."
  • "Nike aimed at creating an optimized production process that reduces impacts, eliminates waste, enables skilled and engaged workers to drive quality and productivity, and that is strategically led by managers who see value in an empowered workforce. In targeting these high requirements, Nike doesn’t leave the partner hanging dry. It actually spends time, energy and resources helping the contract manufacturing partner raise the bar in all areas of their manufacturing and reach new standards through various incentives. For example, the brand requires partners below the bronze level to pay for 3rd party audits, while partners above the bronze level are rewarded with audits paid by NIKE."
  • "So far, factories are making progress in meeting compliance with the new supplier standards and 86% of contract factories rated bronze or better at the end of 2015: "
  • "ike is fully behind the so-called “circular economy” concept, which focuses on re-use and sustainability management across the full product lifecycle. Nike envisions a transition from linear to circular business models and a world that demands closed-loop products, designed with better materials, made with fewer resources and assembled to allow easy reuse in new products."
Quotes
  • "Former head of global operations Marc Onetto says the spirit of Lean management has always been at the centre of the company. Writing for McKinsey, Onetto explains, “Since the day he created Amazon, Jeff Bezos has been totally customer-centric. He knew that customers would not pay for waste - and that focus on waste prevention is a fundamental concept of Lean.”"
  • "They follow the Lean principle of autonomation; keep people for high-value, complex work and use machines to support those tasks. They enforce standard work, combining the elements of a job into the most effective sequence for efficient production. They have also implemented the andon-cord for eliminating defects. This is where in the case of a repetitive defect, a customer service agent has the power to take the product off the website until the defect has been fixed"
  • "And Kaizen - the philosophy of continuous improvement to maximise efficiency and match or exceed customer needs - governs the way the company runs. Warehouses process more than 35 orders every second, which is almost unheard of in the retail space. And every distribution centre has a manager dedicated to ensuring continuous improvement in the workflow."
  • "They first shared the significant benefits they gained from Lean in 2012 in their ‘FY10/11 Sustainable Business Performance Summary’ document. The report revealed they had gained a 50% reduction in defect rates, 40% faster lead times, a 20% improvement in productivity, and a 30% reduction in time taken to introduce a new model. "
Quotes
  • "Pixar Animation Studios. Pixar has taken a continuous improvement model that reduced risks of expensive movie failure by using quality control checks and iterative processes."
Quotes
  • "Gradually a pattern began to emerge: Someone had a creative idea, obtained funding, brought on a lot of smart people, and developed and sold a product that got a boatload of attention. "
  • "But then those companies did something stupid — not just stupid in retrospect, but obvious at the time stupid. I wanted to understand why. What was causing smart people to make decisions that sent their companies off the rails? "
  • "Production managers told me that working on Toy Story had been a nightmare. They felt disrespected and marginalized."
  • "Not a single production manager had dropped by to express frustration or make a suggestion in the five years we worked on Toy Story. Why was that?"
  • "I started sticking my head into people’s offices, pulling up a chair and asking them for their view on how Pixar was and wasn’t working. These conversations were intentionally open-ended."
  • " Communication would no longer have to go through hierarchical channels. The exchange of information was key to our business and I believed that it could — and frequently should — happen out of order, without people getting bent out of shape."
  • "We realized that our purpose was not merely to build a studio that made hit films, but to foster a creative culture that would continually ask questions. "
  • "Toy Story 2 taught us that we must always be alert to shifting dynamics because our future depends on it. Everything we did — everything associated with our name — needed to be good."
  • "Don’t confuse the process with the goal. Working on our process to make them better, easier, and more efficient is an indispensable activity and something we should continually work on — but it is not the goal. Making the product great is the goal."
Quotes
  • "LNS also found that 61 percent of manufacturers had established or planned to establish, at minimum, a Lean manufacturing group starting in 2014."
  • "Additionally, 29 percent of the total number of manufacturing professionals surveyed said that they would completely shift to Lean manufacturing processes starting in 2014."
  • "But less than a third of those same people said that they would fully commit to the Lean method."
Quotes
  • "Or, maybe you've heard it tossed around with other continuous improvement methodologies like Six Sigma, Lean, Total Quality Management, 5S, and the like. Kaizen methodology is more mindset than toolbox, so it actually can (and probably should) be implemented alongside other BPI methodologies like Six Sigma and 5S. "