Kaizen Costing

HISTORY OF KAIZEN

The story of Kaizen started in 1930s when Sakichi Toyoda (the founder of Toyota), which manufactured automatic looms at the time, like to tell his co-workers: “Open the window; it is a big world out there”. In 1950, Toyota implemented quality circles leading to the development of Toyota Production System where Kaizen is one of the key in the system. Toyota Production System is a system of continuous improvement in quality, technology, processes, company culture, productivity, safety and leadership. This system has led to major benefit such as faster delivery, lower cost and greater customer satisfaction. In 1986, Masaaki Imai introduced to the Western world the Japanese term Kaizen and made it famous through his book, Kaizen: The Key to Japan's Competitive Success. Then, in 1997 Imai introduced an evolved form of Kaizen in his book Gemba Kaizen: A Commonsense, Low-Cost Approach to Management, to reassert the importance of the shop floor in bringing about continual improvement in an organization. Today, Kaizen technique has been particularly distinguished as the best methods of the performance improvement within the companies all over the world.

CHARACTERISTICS OF KAIZEN

        Kaizen costing involves setting standards and then continually improving these standards to achieve long-term sustainable improvements. The system does not strive for perfection, rather seeking gradual improvements in the existing situation at an acceptable cost. Kaizen also has no limit level of improvements that can be implemented. It is a never ending improvement process because the step of improvement is keep continuing.

THE 5 ELEMENTS IN KAIZEN

For any Kaizen system to be successful, there are 5 elements that must be considered. The first element is teamwork. In corporate or business set up there is a need for all employees to work as a team towards the common goal of achieving the desired improvement on production.

The second element that significantly contributes to the success of the Kaizen system is personal discipline. Discipline is paramount to all types of success. The employee should have self-discipline in time management, quality assurance, loyalty to the company and its public.

Besides, the employer, or the senior management, should put in place motivational strategies in their Kaizen concept such as good working conditions, merit promotions, better remuneration, and worker benefits such as paid leaves, allowances, medical care, bonuses, and loans among many others. All these give employees the security of employment as well as a sense of belonging.