Kaizen CostingKaizen Costing

Kai Change

Zen Better

Change for Better

Indian Connection

Small Drops of Water togetherUltimately result in a lake

Implementing Kaizen- few rules

List your own ProblemsGrade problems as to minor, difficult and majorStart with the smallest minor problemMove on to next graded problem and so onRemember improvement is part of daily routineNever accept status quoNever reject any idea before tryingEliminate tried but failed experimentsHighlight problems rather than hiding

Kaizen Philosophy

Approach to Traditional Organisation Kaizen Environment

1 Attitude Let it go Continuous Improvement

2 Employees Cost Assets

3 Information Restricted Shared

4 Interpersonal Commercial Human Relationship

5 Managerial Belief Routine Change

6 Management Culture Bureacratic Participative

7 Management Function Control Supportive

8 Management Stress Functional Cross Functional

ProcedureForImplementation

Form small groups from 6-10 personsGive them numbers-Kaizen 1,Kaizen-2…Appoint an evaluator of the groupArrange weekly meetings of group (6-12 months)Submit progress of improvement in writingAllow each member to expressNo disturbance when others are speakingHowever Clarifications can be sought instantantly

Evaluation

0 Marks for no improvement made

0 to 30 Marks depends upon improvement tried but failed

30 to 50 Marks for small to moderate improvement

50 to 75 Marks for good improvement

> 75 Marks for extraordinary improvement

EvaluationOther factors

A Attitude

S Safety

T Productivity

E Energy Saving

M Money Saving

Change in Attitude

Benefits of Kaizen

Tangible Benefits

Reduction in Production Time

Reduction in Rejection

Energy Saving

Improved QualityIntangible Benefits

MotivationTeam BuildingSense of belongingnessEnvironment conservationChange in attitude

LessonsforFailure

Lack of interest and support from management

Lack of training of Listening skills, Presentation Skill, Communication Skill

Criticism of failure from fellowmembers

Ignoring Basic Concept ( Improvement is part of daily routine)

Work Pressure -sideliningthe Kaizen

Kaizen Costing

Kaizen Costing

Cost Reduction in

Design of the Product Development of the Product Production Of the Product

Kaizen Costing-definition

Kaizen costing is the maintenance of present levels for products Currently being manufactured via systematic efforts to achieve the desired cost level

KC is applied to product that is already under Production

Time prior to KC is Target Costing

Product Specification

Price Targets

Profit Targets

Cost Targets

Major Product/Process Changes

Does DesignMeet Target

Costs?

Estimated Life Cycle Cost

Are Life Cycle CostsAcceptable ?

Start Production

Minor Product/Process Changes

Product Scrapping

ProductPlanningPhase

LifeCycleCosting

ProductionPhase

ScrappingPhase

Cost Reduction by 5%

Kaizen Costing Calls

Establishment of cost reduction target amount and its accomplishment throughKaizen activities---continuous improvement

Kaizen Costing

Product Development,Design &Manufacturing

Target Costing

KaizenCosting

Training, Learning Before goal of Target Costingor Kaizen Costingis imposed on the Organisation