Journal qf Manu[acturing Systems
Vol. 15/No. 2
Case Study
Applying Kaizen and Automation to
Process Reengineering
JrJungLyu, National Cheng Kung University, Tainan, Taiwan
Abstract
Kaizen and automation are two different approaches to
improve the performance of manufacturers. Both approach-
es have been widely discussed and reported in related liter-
ature. This paper proposes a framework to integrate kaizen
and automation to reengineer a manufacturing process. A
case project shows the procedure of process reengineering.
This study concludes that using an animated simulation
model is an important step during process redesign. This
research also shows that a nearly 50% improvement in labor
productivity at the case company is possible with the
streamlined manufacturing process.
Keywords:Automation, Simulation,Quafityand Productivity
Improvement
Introduction
Improving quality and productivity to gain a com-
petitive advantage has always been a major issue for
most manufacturing industry leaders. Furthermore, as
stated by Giffi et al., "sustained competitiveness can-
not be created overnight and will never be reached if
manufacturers focus on only some of the elements in
the manufacturing equations.'" A manufacturer,
therefore, should always try to use advanced manu-
facturing technology to adopt better management
skills, to "right size" the corporate organization struc-
ture, and to consider any other appropriate approach-
es to gain a superior return over the long run.
Kaizen and automation--two quite different
approaches to improve quality and productivity of
manufacturers--have been widely discussed recent-
ly?,3 Both approaches have been applied to numerous
industries, and many successful experiences have
been reported. Kaizen, meaning (continuous)
improvement, is as a key factor in the economic suc-
cess of Japanese industries. With "traditional" tech-
niques such as quality circles (or small-group activi-
ty) and management circles (plan-do-check-act),
kaizen may turn a profitless company into a prof-
itable one without an enormous investment in equip-
125
1996
ment. Using automation, on the other hand, is to adopt
advanced manufacturing technology so that produc-
tivity can be raised dramatically. Many companies
have implemented flexible manufacturing cells
(FMCs), flexible manufacturing systems (FMSs), or
computer-integrated manufacturing (CIM) to link
enabling technology with their manufacturing
processes. Many studies state that automation is the
start of another wave of the Industrial Revolution.
The purpose of this paper is to illustrate how the
approaches mentioned above can be merged. An
industry project serves as a practical framework to
integrate both concepts. Specifically, this research
looks at how the kaizen approach and the automation
approach can be unified into process reengineering.
Using process reengineering means to radically
rethink a manufacturing process that has existed for
many years to reduce costs and improve efficiency
and effectiveness? An animated simulation model is
also developed to study the performance improve-
ment of the case company. The final section of the
paper discusses further development of this project.
Company Background
The manufacturer studied in this paper is the pipe
shop of China Shipbuilding Corp. (CSBC). The pipe
shop was established about 20 years ago and cur-
rently does not meet the shipyard's minimum pro-
duction requirements. The shop's competitors, on
the other hand, can provide a higher pipe production
rate at a much lower cost. When CSBC is trans-
formed from a nationally owned company into a pri-
vately owned, profit-oriented company in the near
future, the pipe shop may face the difficulty of sur-
vival. Another factor is that, because the shipbuild-
ing industry is a so-called 3K (kiken, kitanaei, and
kitsui--meaning dirty, dangerous, and hard work,
respectively) industry, 5 the pipe shop is also facing
the problem of recruiting qualified workers.
Journal of Manufacturing Systems
Vol.15/No.2
1996
The pipe shop can produce pipes in all size ranges
in both ferrous and. nonferrous materials for the
shipyard; however, its production rate of 150 pipes
per day cannot meet the requirements of the ship-
yard, and overtime or subcontracting is necessary,
resulting in increases in cost. A flowchart, shown in
Figure 1, demonstrates the manufacturing process of
the pipe shop. Williams and Oglesby6 present a more
detailed description of the piping design, fabrica-
tion, and installation in commercial shipbuilding
practices.
There are 67 workers currently in the pipe shop,
and the production rate per worker per day is much
lower at competitive companies. Among the reasons
for the low labor productivity, based on the observa-
tions of the managers, are inadequate plant layout
Incomingrawpipes I
Cutting
t
I and group technology (GT). To design and imple-
Bending
I I
WeLding
Grinding
I Cleaning/coating [
Figure 1
Traditional Manufacturing Process of Pipes
126
and obsolete machines. The pipe shop layout is
shown in Figure 2.
From the executive manager's point of view, the
situation is clear: Is it possible to increase the pro-
duction rate of the pipe shop with a smaller work-
force? Two types of approaches--kaizen and
automation--were proposed by consultants from
Japanese shipyards and Western countries' ship-
yards, respectively. The concepts and practices of
these two approaches are briefly explained in the
following sections.
Automation Approach
Automation is one of the most competitive tools
available to manufacturers. A company may take
advantage of the new technologies so that its manu-
facturing process and operations can outperform
those of other companies. The contents of automa-
tion technologies involve not only computer-aided
design (CAD), computer-aided manufacturing
(CAM), robotics, computer numerical control
(CNC), and many hardware/software products, but
also include concepts and techniques such as design
for manufacturing (DFM), value engineering (VE),
ment new technologies and to build "the factory of
the future" is, therefore, not simply the purchasing
and installation of some turnkey solutions for the
industry. Careful financial justification of the invest-
ment and adequate education and training are also
required. Latorre and Zeidner 7 review the process of
designing and implementing automation technology.
Consultants from American and European ship-
yards gave advice regarding the automation of the
pipe shop. Some suggestions are as follows:
• There are three overhead cranes in the pipe shop,
and one of them is always broken down. Because
the utilization rate of cranes is very high, the pipe
shop apparently should purchase one more crane.
• Another bottleneck of the pipe shop is the bend-
ing process. Because of the time needed to
change the fixtures--up to 1.5 hours for a large
bender machine--the suggestion is to improve
the pipe marking method during the cutting
process. That is, once the raw pipes are cut, a
computer-aided marking machine is used to
mark the pipes required to be bent in the
process. Workers can then classify cut pipes to

Cleaning and coating zone
Electric transfer car rail
Cutting zone
Bending zone
Raw pipes storage area
Joining zone
Figure 2
Original Layout of Pipe Shop
reduce the number of fixture changes during the
bending process.
The capacity of the welding zone is inadequate,
and many pipes are waiting to be welded on the
shop floor. Automated welding machines should
be purchased in the near future.
Kaizen Approach
When the kaizen approach is applied to manufac-
turing, it becomes CIM (continuous improvement
manufacturing)? CIM utilizes seven tools--Pareto
charting, histograms, fishbone techniques, control
charting, scatter diagrams, graphs and flowcharts,
and check sheets--to execute problem-solving
activities in the factory. The basic mechanism of the
kaizen approach makes any possible improvements
under the PDCA (plan-do-check-act) cycle, stan-
dardizes the improvements, and continues for
another PDCA cycle. With quality improvement
activities, managers and workers are encouraged to
use innovation and risk-taking as an opportunity to
better meet customers' requirements. Kaizen has
been proven useful in various areas, including new
product development and safety improvement. A
complete discussion regarding kaizen can be found
in Imai. 8
127
Journal q/ Mamf/acturing System~'
gol. 15/No. 2
1996
Inspected pipes
Welding Grinding
zone zone
Inspection
Overhead cranes
area
Welding zone
Consultants from Japan strongly discouraged the
managers of CSBC from adopting the automation
approach. They felt that the productivity of the pipe
shop could be further improved using kaizen. Some
examples proposed by the Japanese consultants are
as follows:
• Fixtures on many welding machines can be
improved by the workers themselves through
quality control circle activities, thereby increas-
ing the efficiency of the welding zone.
° It is well known that outfitting is a very labor-
intensive task. Consultants suggested that pipes
be classified, based on the so-called outfitting
zone of the shop, into different working units
after the pipes are cleaned and coated. These
pre-outfitting efforts will barely increase pipe
handling time but will greatly reduce the out-
fitting time.
• After some cross-department meetings between
the pipe shop and the design division of the ship-
yard, consultants suggested that the change in
the manufacturing process from "welding pipes
after pipes bent" into "bending pipes after pipes
welded" is possible and can increase the effi-
ciency of the pipe shop.
Journal of Manufacturing Systems
Vol. 15/No. 2
1996

Unified Framework
Advice from different approaches sometimes
Envision future of company
causes confusion for managers regarding the priori-
ty of the actions and the subsequent performance
measurement. A unified framework depicted in
I L
Figure 3 demonstrates how the kaizen approach and Organizeteam and set goal [

the automation approach are merged for process I PLAN

reengineering to achieve dramatic performance 1

improvement. The framework includes eight stages
Examine existing process
and a PDCA cycle for continuous improvement
efforts. The sequence of activities involved in
process reengineering is as follows:
Identify process reengineering
opportun t es and current capab ty
• Envision the future o f the company. The manag-
er must use creative thinking to suggest a new
process that can effectively improve the manu-
I
facturing environment. In the case study, a top J Design new process
DO
manager applies group technology to rearrange
the pipe shop and proposes an "optimum" pipe
shop layout without constraint. Under this pro- Implement new process and modify
posed layout of the pipe shop, the length in each infrastructure

production line is much shorter, and the flow

time of the materials is reduced. This draft lay-
out has inspired an interest to redesign the man-
ufacturing process.
• Organize a team and set a goal. A process is a
collection of activities or tasks that takes input,
adds value to it, and provides output to accom-
plish an objective. Most of the process reengi-
neering projects require a multifunctional team
with members from different departments due to
the cross-departmental nature of the processes. In
the case study discussed, a team consists of
design division managers and pipe shop man-
agers. The goal of the team is to study the possi-
bility of a 25% increase in production rate and a
decrease of five workers in the pipe shop. This
project team will review the suggestions from dif-
ferent approaches and decide how to implement
an improvement program to achieve the goal.
• Examine the existing process. It is a common
practice to start the redesign of a system by doc-
umenting the existing system. This serves as a
benchmark for the future system and an impor-
tant basis for any improvement projects. It took
about two months for the project team to review
the existing manufacturing processes. The docu-
ments established are included in the final pro-
ject report and will not be discussed here.
I
Measureperformance
CHECK
ACT
Standardize new process
Figure 3
Framework for Process Reengineering
Nonetheless, using a flowchart to map the
process flow was very useful in analyzing the
manufacturing processes.
Identify process reengineering opportunities and
current capability. To identify possible process
reengineering opportunities, managers must have
more insights into the processes either from the
enabling technologies or from new management
techniques. As discussed in the previous sec-
tions, studying two approaches for the case com-
pany resulted in some suggestions and identified
many possible modifications. Some of them are
simply small revisions in the existing plant, but

128

one of the concepts from the kaizen team result-
ed in a dramatic redesign of the manufacturing
process. This concept provides an opportunity
for performance breakthrough, which project
team decides to work on.
• Design the newprocess. With input from previous
stages, the project team can design a new process.
Persons involved in process reengineering should
constantly question which processes or tasks
could be shut down, reengineered, or improved.
In the case study, the project team adopted the
idea of "bending pipes after pipes welded"
instead of the existing "welding pipes after pipes
bent" concept in redesigning the manufacturing
processes of the pipe shop. The team members
have discussed the new design from different
aspects--management (impact of human
resource), equipment (feasibility of hardware and
software), and facilities (accompanied layout of
the new manufacturing process) to refine the new
manufacturing process. For example, managers
from the design division had calculated the per-
centage of pipes that could fit well in the new
design process, based on drawings of some exist-
ing ships, and convinced every team member that
the new concept was feasible.
• Implement the n e w p r o c e s s and modify the infra-
structure. This stage is regarding the implemen-
tation of the new process. Note that the reengi-
neered process should be fine-tuned as problems
surface before and after installation. There is
always a tradeoff in the implementation stage
with cost, technology, and other issues. That is
why the framework proposed has an iterative
nature. During the case study period, the project
team found that the animated simulation model,
which will be discussed in the following section,
is an important tool for effective communication
among the team members and for the prediction
of possible bottlenecks and expected perfor-
mance of the new process.
• Measure the performance. Finally, one must
determine the level of success of the reengineer-
ing project in terms of the goal set in the previ-
ous stage. As shown in many reports, an
improvement of 50-60% in cost and productivi-
ty is a realistic objective. 9 A detailed discussion
regarding the performance of the new process is
shown in the following section.
129
Journal qf Manufacturmg Systems
Vol. 15/No. 2
1996
Standardize the new process. Before beginning a
new process reengineering project, it is neces-
sary to standardize the new process if the orga-
nization tries to keep the performance as good as
expected. Availability of qualified human
resources, adequate equipment, and related doc-
uments are all important elements in standardiz-
ing the new process. In general, educating and
training personnel in the new process environ-
ment is critical to maintain the same, if not bet-
ter, performance.
There are many books and papers that discuss
process reengineering. For example, Hammer and
Champy ~° and Roberts" are good sources to use to
gain a better understanding of how to undertake a
radical reinvention of the process. Because the new
process is so dramatically different from the original
process, it is common practice that top managers
may feel that it is too risky to perform such a "revo-
lutionary" change. During the interim of the case
project, top managers hesitated regarding imple-
mentation of the new process, and project team
members had difficulties agreeing on the possible
performance improvement. With the use of an ani-
mated simulation model, the new layout could be
justified. The next section discusses the simulation
model development.
Simulation Model
Simulation is well recognized as a very useful
technique for the design and evaluation of complex
manufacturing facilities. !~ As computer hardware
technology keeps advancing and more animated
simulation software becomes commercially avail-
able, several studies have been conducted regarding
the visual interactive simulation of a manufacturing
system during the past decade.~3,14These studies, in
general, have shown that the inclusion of animation
as a simulation tool can enhance the presentation to
users and improve the communication between man-
agers and system programmers. With the addition of
interactive control ability, users can halt the simula-
tion experiment at any moment to view the statistics
and/or change some parameters; insights into the
system's behavior are then understood.
The procedure to develop a visual interactive sim-
ulation model, accompanied with the practices in the
case project, is shown as follows:
Journal of Manufacturing Systems
Vol. 15/No. 2
1996
• Define the goal. A good simulation model is one
that covers only the system of interest and can
provide answers for managers. An accurate def-
inition of the goal is always required. The major
concern of this project was the estimated pro-
duction rate and the necessary number of work-
ers on the shop floor for both the existing and
new manufacturing process environment. The
time to complete the simulation experiments
also had to be as short as possible.
• Collect and input data. Sufficient and correct
data must be available to formulate a simulation
model and to execute the computer experiments
thereafter. Information such as demands, routing
files of the parts, processing time of the parts,
moving time from location to location, and so on
is usually required. Traditional time and motion
studies and statistical analysis were conducted in
this project to find the necessary information.
Performance data from the new facilities was
collected from vendors.
• Draw layout andpartflow diagram. For an ani-
mated simulation model, it is necessary to draw
the layout for the background during the execu-
tion of the simulation model. During the project,
the size of the pipe shop and the position of each
machine were measured. Layouts for the new
process and for the existing process of manufac-
turing pipes were drawn. A part flow diagram
f Cuttinroom
g )
lud Isad lull
uuu lr j
Storage ~ @,
•" WELD2
I~[i Bigpipe Legend • Smalpilpe 1
Mediumpipe
Revised Plant Layout Shown in Simulation Model
was also a necessary input of the software to
show how the parts move during the manufac-
turing process in the plant. Figure 4 shows a
revised plant layout input in the computer.
Verification and validation. The computer simu-
lation model needs to be verified if it is to work
as intended and reflect the operation of the real
system. An animated simulation model is much
easier to verify and validate because users can
monitor the results of each activity on the
screen. The output generated from the simula-
tion model, based on the existing process, pro-
vides a benchmark to compare its "reality."
Results and analysis. Output, such as the aver-
age production rate or the utilization of each
workcenter, can easily be found and collected by
simulation packages. Users can also experiment
with alternative layouts to improve the perfor-
mance of the system. The project team used sim-
ulation as a communication channel to examine
the possible results of using different operating
parameters in the job shop.
In this study, Promodel PC version 5.0 is selected
as the simulation software package) 5 This package
provides an easy input/output interface, dynamic
graphics presentation ability, and various analysis
tools at an affordable price. The simulation models
were built and executed on an IBM-compatible 486
|
~ , BEm~ND2 ~, lOJ
WELD3 , @
I- 1
Figure 4
130

PC. Development of a simulation model for the pro-
ject, including debug, took less than two weeks;
however, it took more than three months to collect
and verify the necessary input data.
Results and Analysis
Two types of analyses, static and dynamic, were
conducted. Static analysis is well documented in
many plant layout textbooks. One can calculate the
moving distance of a pipe during the production
process. The procedure is simply to put the layout on
the table and go through the manufacturing process
flowchart and part flow diagram to determine how a
pipe is manufactured in the factory and how much
moving distance is required. For example, it was
found that the moving distance of a large straight
pipe could be reduced from 228.5 meters in the
existing layout to 136 meters in the new layout.
Various similar calculations were done, and they all
illustrated that the new layout was promising.
Compared to the static analysis, simulation then is
considered dynamic analysis. Most simulation mod-
els approach the manufacturing system dynamically
so that arrival rates of demand and equipment uti-
lization, for example, are all input as dynamic vari-
ables. Users examine the state of the simulation
model evolving over simulated time, such as watch-
ing a conveyor system in a factory.
Assuming the pipe shop operates 8 hours a day
and 260 days a year, the output of the experiments on
the simulation model depicts that the average pro-
duction rate can be increased from 150 pipes daily to
195 pipes daily after the process is redesigned. The
number of workers required in the proposed layout
can be reduced from 67 to 60 workers. The labor pro-
ductivity can therefore increase from 2.24 (150/67)
to 3.25 (195/60)--a nearly 50% improvement in pro-
ductivity. This dramatic improvement is due in part to
the streamlined manufacturing process (kaizen
approach) and to the use of some new facilities
(automation approach). With the managers' knowl-
edge that 10 persons are planning to retire in the next
two years, the proposed layout can also reduce the
pressure of recruiting workers.
Another important simulation output shows that
use of the overhead cranes can be reduced from 96
to 70 times daily in the new manufacturing process
environment. This result is consistent with the top
manager's ideal plant layout vision. The implication
131
Journal qf Manu[hcturing Systems
Vol. 15/No. 2
1996
of this finding is that there is no need to purchase a
new overhead crane, although this had been suggest-
ed during the automation evaluation.
An interesting observation is that the managers
feel that the workers will have more pride and
responsibility in the proposed new manufacturing
process. That is, after related activities are designed
and integrated into each workcenter in the new lay-
out, the job of each worker is enriched. Workers are
now involved in a larger portion of the manufactur-
ing process and should be more motivated to
improve their own working environment. Therefore,
quality and productivity could be improved due to
the human factor.
Because the pipe shop is a division of CSBC, a
nationally owned company, all the investments pro-
posed were presented to the government for
approval, which was granted. Currently, the pipe
shop has started the purchasing process.
Conclusions and Future Research
Although the automation approach and the kaizen
approach are quite different, this research shows that
it is possible to combine both approaches for process
reengineering. Based on the empirical results from
the pipe shop in the case study, the improvement is
dramatic. The following points summarize the infor-
mation resulting from this project:
1. Think about the process instead of products and
departments.
2. The proposed framework is effective and seems
to be general enough to be applied to other types
of process redesign.
3. A cross-department team is required, and good
communication among team members is neces-
sary.
4. Simulation is very important in process reengi-
neering.
5. In redesigning a manufacturing process, human
factors should be carefully considered.
6. Improvement performance in process reengi-
neering can be very dramatic.
As discussed above, use of a simulation technique
is important in process reengineering. Although
most simulation packages have a much better inter-
face compared to that used in the past decade, man-
agers and engineers in the case pipe shop felt that
Journal of Manufacturing Systems
Vol. 15/No. 2
1996
the design and implementation of a simulation
model was too difficult for them. A decision support
system for simulation modeling 16 seems to be a rea-
sonable solution to this dilemma.
Acknowledgment
The author thanks Mr. Ming-Hwa Phae for his
programming efforts and Mr. Nan-Sun Lin for his
helpful comments during the research period. The
author is also grateful to Southern Illinois
University at Carbondale for providing facilities
during his sabbatical visit.
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Author's Biography
JrJung Lyu is an associate professor in the Department of Industrial
Management Science at National Cheng Kung University (Tainan, Taiwan).
He received his bachelor's degree in engineering science and master's
degree in industrial management from National Cheng Kung University
and his PhD in industrial and management engineering from the University
of Iowa. He has participated in many projects supported by the National
Science Council (Taiwan), China Shipbuilding Co., Taiwan Power Co., and
private companies. He has also published several papers in international
journals and written a book entitled Management Information Systems.