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
  Relationship

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




Procedure
For
Implementation
             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




Evaluation
                A   Attitude

                S   Safety

                T   Productivity

                E   Energy Saving

                M   Money Saving


Evaluation
Other factors
Change in Attitude
Tangible Benefits

Reduction in Production Time

Reduction in Rejection

Energy Saving
                               Intangible Benefits
Improved Quality




                               Motivation
                               Team Building
                               Sense of belongingness
                               Environment conservation
                               Change in attitude

Benefits of
Kaizen
Lack of interest and support
from management

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

                                        Criticism of failure from fellow
                                        members


                                                       Ignoring Basic Concept
                                                      ( Improvement is part of daily routine)



                                                                    Work Pressure -sidelining
                                                                    the Kaizen




Lessons
for
Failure
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
Product
                   Price Targets
Planning
Phase              Profit Targets

                   Cost Targets

           Major Product/Process Changes
Life
Cycle                 Does Design
Costing               Meet Target
                        Costs?


             Estimated Life Cycle Cost

                    Are Life Cycle Costs
                       Acceptable ?


                  Start Production         Production
                                           Phase
           Minor Product/Process Changes
                                           Scrapping
                 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,
                               Learning
                        Before goal of Target
 Target Costing         Costing
                        or Kaizen Costing
                        is imposed on the
  Kaizen                Organisation
  Costing

								
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