Lean management is an approach to running an organization that supports the concept of continuous improvement, a long-term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality.
Lean management seeks to eliminate any waste of time, effort or money by identifying each step in a business process and then revising or cutting out steps that do not create value.
The lean management practice Kaizen is a tool that improves quality, productivity, safety and workplace culture. Kaizen may be applied in manufacturing and administration alike and focuses on small, daily changes that result in major improvements over time.
Kaizen first surfaced during the effort to rebuild Japan after World War II. At that time, several U.S. business consultants collaborated with Japanese companies to improve manufacturing. Kaizen later then spilled over to Europe in about 1985 when the Kaizen Institue was established in Switzerland by Masaaki Imai.
The collaboration resulted in the development of several new management techniques, one of which was Kaizen. Kaizen comes from two Japanese words: Kai (improvement) and Zen (good). Over time, it became widely known as “continuous improvement.”
Unlike many business practices, Kaizen’s strength comes from requiring all workers – from the CEO to the shop floor assistant – to participate by making suggestions to improve the business.
The Dual Nature
Kaizen is part action plan and part philosophy:
- As an action plan, 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.
Kaizen Action Plan
A typical Kaizen event goes something like this:
- Set goals and provide any necessary background.
- Review the current state and develop a plan for improvements.
- Implement improvements.
- Review and fix what doesn’t work.
- Report results and determine any follow-up items.
This type of cycle is frequently referred to as PDCA which brings a scientific approach to making improvements:
- Plan / Problem Finding (develop a hypothesis)
- Do / Display (run experiment)
- Check / Clear (evaluate results)
- Act / Acknowledge (refine your experiment; then start a new cycle)
Kaizen offers a number of tools to be applied in order to achieve continuous improvement. Some of those tools are presented in the KAIZEN Tool Box (in German).
Interestingly, Kaizen as an action plan is exactly what develops Kaizen as a philosophy. When Kaizen is applied as an action plan through a consistent and sustained program of successful Kaizen events, it teaches employees to think differently about their work.
In other words, consistent application of Kaizen as an action plan creates tremendous long-term value by developing the culture that is needed for truly effective continuous improvement.
The 5S Methodology
However, some believe the method may origin back as far as the 16th Century and Venice shipbuilders.
The 5S methodology as a today’s part of Kaizen may therefore be a lot older than other sets of lean techniques and tools for process improvement such as Six Sigma.
Six Sigma which is rather based upon mathematics than philosophy and often implemented on a project basis was introduced by engineer Bill Smith while working at Motorola in 1986 and Jack Welch made it central to his business strategy at General Electric in 1995. Here is a breakdown of each “S” of the 5S methodology in Kaizen:
- Sort (seiri) – Distinguishing between necessary and unnecessary things, and getting rid of what you do not need.
- Remove items not used in area – outdated materials, broken equipment, redundant equipment, files on the computer, measurements which you no longer use.
- Ask staff to tag all items which they don’t think are needed – this improves understanding about need and use.
- Classify all equipment and materials by frequency of use to help decide if it should be removed – place ‘Red Tag’ on items to be removed.
- Establish a ‘holding area’ for items that are difficult to classify – hold item for allotted period to enable others not on 5S team to review.
- Straighten (seiton) – The practice of orderly storage so the right item can be picked efficiently (without waste) at the right time, easy to access for everyone. A place for everything and everything in its place.
- Identify and allocate a place for all the materials needed for your work.
- Assign fixed places and fixed quantity.
- Make it compact.
- Place heavy objects at a height where they are easy to pick from.
- Decide how things should be put away, and obey those rules.
- Shine (seiso) – Create a clean worksite without garbage, dirt and dust, so problems can be more easily identified (leaks, spills, excess, damage, etc).
- Identify root causes of dirtiness, and correct process.
- Only one work activity on a workspace at any given time.
- Keep tools and equipment clean and in top condition, ready for use at any time.
- Cleanliness should be a daily activity – at least 5 minutes per day.
- Use chart with signatures/initials shows that the action or review has taken place.
- Ensure proper lighting – it can be hard to see dirt and dust.
- Standardize (seiketsu) – Setting up standards for a neat, clean, workplace.
- Standardization of best practices through “visual management”.
- Make abnormalities visible to management.
- Keep each area consistent with one another.
- Standards make it easy to move workers into different areas.
- Create process of how to maintain the standard with defined roles and responsibilities.
- Make it easy for everyone to identify the state of normal or abnormal conditions – place photos on the walls, to provide visual reminder.
- Sustain (shitsuke) – Implementing behaviors and habits to maintain the established standards over the long term, and making the workplace organization the key to managing the process for success.
- Toughest phase is to Sustain – many fall short of this goal.
- Establish and maintain responsibilities – requires leader commitment to follow through.
- Every one sticks to the rules and makes it a habit.
- Participation of everyone in developing good habits and buy-in.
- Regular audits and reviews.
- Get to root cause of issues.
- Aim for higher 5S levels – continuous improvement.
Widely applied as part of Kaizen is not only the 5S methodology but also the logistic control system KANBAN which may constitute an important part of the supply chain management (SCM). SCM is the active management of supply chain activities to maximize customer value and achieve sustainable competitive advantage.
→ Learn more about KANBAN in the project SCM & Co.
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