Kaizen Costing by yaofenjin

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									Kaizen Costing
Kai Change

Zen Better

Change for Better
Indian Connection

 Small Drops of Water together
   Ultimately result in a lake
Implementing Kaizen- few rules

List your own Problems
Grade problems as to minor, difficult and major
Start with the smallest minor problem
Move on to next graded problem and so on
Remember improvement is part of daily routine
Never accept status quo
Never reject any idea before trying
Eliminate tried but failed experiments
Highlight 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

5 Managerial Belief       Routine                      Change

6 Management Culture      Bureacratic                  Participative

7 Management Function     Control                      Supportive

8 Management Stress      Functional                    Cross Functional
                 Form small groups from 6-10 persons
                 Give them numbers-Kaizen 1,Kaizen-2…
                 Appoint an evaluator of the group
                 Arrange weekly meetings of group (6-12 months)
                 Submit progress of improvement in writing
                 Allow each member to express
                 No disturbance when others are speaking
                 However Clarifications can be sought instantantly

             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

                A   Attitude

                S   Safety

                T   Productivity

                E   Energy Saving

                M   Money Saving

Other factors
Change in Attitude
Tangible Benefits

Reduction in Production Time

Reduction in Rejection

Energy Saving
                               Intangible Benefits
Improved Quality

                               Team Building
                               Sense of belongingness
                               Environment conservation
                               Change in attitude

Benefits of
Lack of interest and support
from management

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

                                        Criticism of failure from fellow

                                                       Ignoring Basic Concept
                                                      ( Improvement is part of daily routine)

                                                                    Work Pressure -sidelining
                                                                    the 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
Phase              Profit Targets

                   Cost Targets

           Major Product/Process Changes
Cycle                 Does Design
Costing               Meet Target

             Estimated Life Cycle Cost

                    Are Life Cycle Costs
                       Acceptable ?

                  Start Production         Production
           Minor Product/Process Changes
                 Product Scrapping         Phase
Cost Reduction by 5%
Kaizen Costing Calls

Establishment of cost reduction target
amount and its accomplishment through
Kaizen activities---continuous improvement
                       Kaizen Costing
Product Development,
Design &
Manufacturing                  Training,
                        Before goal of Target
 Target Costing         Costing
                        or Kaizen Costing
                        is imposed on the
  Kaizen                Organisation

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