Kaizen in Business: A Commitment to Continuous Quality Improvement

Project Idea

There are a lot of businesses in India that have to encounter problems connected with insufficient production volumes and poor quality of the final product. The project at hand has the ultimate objective to investigate how the implementation of the Kaizen approach to quality improvement in the selected Indian company (involved in manufacturing front and rear axles for heavy and medium vehicles) can affect the quality of operations in an assembly line. The study will review all the changes HV Axles Ltd. introduced and evaluate the results over the period covering six months in order to prove the capability of Kaizen to create a competitive edge.

The main value of the study consists in the possibility of practical application of its results in improving the manufacturing process in other companies. Moreover, the analysis will reveal that in the selected company, Kaizen was not implemented in accordance with all the major guidelines. The upper management of the company was worried about its effect on the behavioral and organizational aspects of manufacturing. They understood that a great number of changes had to be introduced in technology as the company brought a new high-tech equipment to restructure the process of production in such a way that it would allow implementation of Kaizen.

Although too little attention was paid to adaptation of employees to the new system, which implies that they had to cope themselves. This neglect of behavioral factors accounts for the fact that not all possible improvements were achieved. Although the company was quite satisfied with the improved quality, upgraded equipment, and throughput time, it still failed to get maximum benefit from Kaizen. Investigation of their mistakes could be beneficial for other companies as it will help them understand how the approach should be applied to achieve better results.

Quality Method Used in the Project

The quality method used in the project is Kaizen tool. Kaizen is a Japanese word that stands for “improving” or “making better” and refers to any kind of improvement no matter how insignificant it may seem: it concerns one-time and continuous changes, small- and large-scale ones. The approach was chosen as it simultaneously improves all aspects of the production (including supply chain management) and involves all people working for the company from assembly line workers to the CEO.

The approach is universal and can be successfully used in a number of different fields (automobile industry, health care, banking, etc.). In Japanese, Kaizen mostly refers to industrial and business organizations (as it was first practiced by Japanese businesses in the post-war period and later heavily promoted by Toyota), whereas in English, the word is not associated with any particular sphere but usually signifies continuous improvement.

There are two major types of Kaizen that differ mainly in the scope of their implementation: flow Kaizen is meant to transform the flow of data and materials, which presupposes the entire restructuring of the manufacturing process while process Kaizen implies the improvement of individual workplaces as well as the ways workers perform their jobs. In the given case, the company opted for a combination of both processes, though the emphasis was made on the first type.

The success of the model is explained by the fact that it teaches workers to look for small ideas for change that can be tested immediately, which is quite different from classical improvement models that presuppose huge time gaps between the appearance of a concept and its practical application. Kaizen is aimed to eliminate excessive amount of work and teach people how to do the same job using less time and effort. People are encouraged to use experimental methods in their workplace and thereby reduce waste. This allows claiming that Kaizen is not a well-defined plan or strategy but rather an approach or philosophy of doing things.

Implementation of such a human-oriented method leads to increased productivity since it encourages participation in quality improvement processes and creates a feeling of belonging. The approach gives workers maximum freedom in developing and expressing their creativity as it can be used individually or in a group of any size (which also improves teamwork). If Kaizen is applied on the largest possible scale (to improve the work of all departments), it becomes the basis for total quality management (which is the case with the company used in the project).

There are five basic elements of Kaizen:

• teamwork and cooperation;
• individual discipline of employees;
• high morality;
• quality circles;
• change suggestions.

In order to understand Kaizen, it is important to know related concepts:

• Productivity is understood as the ratio between output (the amount of quality goods produced) and input (the amount of resources that were required for the production including machines, tools, labor, and materials).
• Cycle time is a period of time needed to complete a certain number of tasks that comprise one cycle.
• Takt time is a period of time that is supposed to be sufficient for manufacturing a product that the client orders (is usually calculated by ratio of net available time by the demand). It is highly important for Kaizen to reduce takt time as it allows meeting the customer’s requirements.
• Muda is a term applied to any process that increases the cost of the production but does not add any value, which leads to the waste of resources. There are seven kinds of muda: 1) muda of over-production; 2) muda of waiting or non-productive time; 3) muda of transportation or logistics; 4) muda of processing; 5) muda of equipment; 6) muda of motion; 7) muda of defective parts and reworking.
• Muri is a term used to signify excessively hard work and the strain that may have a negative impact on productivity.

The cycle of Kaizen consists of four activities referred to as PDCA cycle:

1. Plan: define goals and processes that are to be performed in order to obtain the required output. Future improvement largely depends on the accuracy of planning.
2. Do: introduce the improvement developed at the initial stage after preliminary testing (on a smaller, experimental scale).
3. Check: study the results of the experiment to see if they correspond to the required outcome. If they fail to meet expectations, changes must be introduced in order to enable effective execution of the innovation.
4. Act: if it was proven at the previous stage that the change is a real improvement, it automatically becomes a new standard for action. In case the result turns out to be worse than before the change was introduced, the current standard will remain as it is. There is also a possibility that the result will be different from the expected but not negative. This means that additional testing is required.

Kaizen also implements 5Whys interrogative technique in order to identify the root cause of the issue and sucessfully eliminate it together with the negative effects produced. The technique is based on the ongoing repetition of the question “Why?” until all the answers are found and the problem is understood completely. Each question provokes the next one up to the point at which the information is sufficient to find a solution. However, the company should be ready that not all the problems have only one underlying root cause, which means that several series of questions may be required to find out multiple causes. In order to implement this Kaizen technique successfully, an organization must follow some guidelines:

• all the parties involved should be a part of the 5Whys process, which would allow conducting a thorough investigation of the issue;
• it is better to organize a meeting and use whiteboard to give the problem under discussion a visual representation;
• after the problem is written down, it must be ensured that all people understand its essence;
• causes and symptoms should not be mixed up;
• it is important to preserve the logical sequence of questions without omitting even those than seem too obvious;
• if there are multiple root causes, all of them should be identified before Kaizen is implemented;
• questions should be answered accurately and precisely, avoiding any kinds of digressions;
• conclusions must not be pre-mature even if they seem evident;
• all answers should be based on objective data without any personal opinion on the topic;
• the process should be freed from any kind of bias: it is crucial to assess ideas suggested by people but not their personalities;
• The ultimate response to 5Whys should not be formulated in the form of an accusation: no one should be blamed for the problem since such an approach to solving it is not productive;
• the answer to the questions should presuppose that the problem will never occur again;
• all the questions and answers must take the customer’s perspective as the principal one.

Taking all Kaizen rules and techniques into account, we are going to analyze how the company selected for the project managed to follow them. In cases when it failed to use the principles of Kaizen, negative impacts will be estimated to demostrate how the outcome could have been improved if the approach had been used without non-productive deviations.

Application

The organization selected for the project is HV Axles Ltd. situated in Jamshedpur, Bihar in India. It was founded in March, 2000 and is currently involved in the production of front and rear axles). The company supplies its products to Tata Motors’ Jamshedpur and Lucknow plants as well as to the Army. HV Axles Ltd. goods are manufactured according to the customer’s design. The present-day capacity of the company is 24,000 axles a year.

The total volume of sales amounts to $50 million – $100 million. The organization employs 1154 people. The division selected for the project has 846 workers (most of which are permanent). The assembly line is supposed to produce 300 axles per one shift; however, only 210 are produced, which is a clear indicator of existing inefficiencies. The major problems include lack of proper education or training to operators, lack of involvement of the employees, improper distribution of labor and use of resources, etc. The task is to find all the factors that produce a negative impact on the manufacturing level of the company. The list of the challenges that are to be addressed include:

• the number of operators that is bigger than the number of work stations (56 to 35);
• inefficiency of the production;
• high manufacturing costs;
• low turnover of the organization;
• lack of proper quality management system;
• overcomplexity of the production process.

Kaizen was implemented by the company in order to improve the level employees’ preparation (yet, as it has already been mentioned, failed to provide adaptation mechanisms required to accept the new system of manufacturing), create continuous improvement programs, develop alternative strategies, and provide ideas of various non-financial incentives (coupons for free meals, milk and other dairy products, additional days off, etc.).

Project Plan

The project is going to provide a detailed overview of the changes that were introduced by the company within the framework of Kaizen, which is necessary to find out how Kaizen can increase competitive advantage of an industry or a business.

At the first stage of the research, we will introduce the topic, providing a brief overview of the problem and outline the purpose and methods of our project as well as the results we hope to achieve.

In order to make the project evidence-based, the second stage of it should be devoted to the review of literature related to the issue. This will create the basis for our study and provide arguments supporting our choice of the research topic. The second stage will consist of the following small steps:

• studying numerous publications related to the topic;
• creating a critically informed selection for further analysis;
• providing description of the chosen pieces followed by the analysis of their theoretical and practical implications;
• identifying the value of the selected literature for the project.

At the third stage, we will make the reader acquainted with the extended list of related terms for him/her to understand the issue more profoundly.

Such thorough preparation will allow passing on to the case study of the selected company at the fourth stage. A detailed profile will be provided that would make it possible to find out the root cause of the problems the company has to encounter.

At the fifth stage, we are going to track how the organization implemented Kaizen to restructure its manufacturing process. Each step and aspect will be analyzed separately in order to identify what was done right and in which spheres strategic mistakes were committed.

The fifth stage of our project is going to be devoted to comparison of figures. We will juxtapose quality indicators before and after implementation of Kaizen. For example, the comparison of takt time will give us enough evidence to judge how successfully the time waste problem was addressed by Kaizen.

The next stage will discuss the results of the findings and analyze how properly the approach was implemented. It will identify the mistakes and suggest ways to improve the outcome. Also, the limitations of the study are going to be mentioned.

The final part of the project will summarize all the key points of the study in order to make a well-grounded conclusion concerning the effectiveness of Kaizen in creating a competitive edge. This section is also going to propose directions for future research.