RIZAL TECHNOLOGICAL UNIVERSITY

Cities of Mandaluyong and Pasig

BA-MGT 103
OPERATION MANAGEMENT
(TQM)
 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

SESSION NO. 4

MODULE NO. 4: KAIZEN: Concepts and Systems

Objective

After reading this chapter, the student should be able to:

1. Define kaizen as a philosophy
2. Describe the different concepts of kaizen
3. Explain the system under Kaizen
4. Apply the philosophy of Kaizen in everyday activities.
Kaizen is a philosophy that calls for people and their organization to experience
ongoing improvement at every level. Through focusing on small, incremental
change rather than dramatic innovation, Kaizen seeks to construct effective and
efficient processes and quality outputs.
Kaizen at the workplace means continuing improvement involving everyone,
managers and workers alike. The kaizen business strategy involves everyone in
an organization working together to make improvements without large capital
investments.
KAIZEN CONCEPTS:
Kaizen is a Japanese word meaning continuous improvement. It is made up
of two characters which are “Kai”, meaning “ Change” and Zen” means “good”. It is
used to describe a company culture where everyone, from the CEO to the front desk
clerk, regularly evaluates his work and thinks of ways to improve it. The concept is
that small steps on a customary basis will lead to large improvements in due course.
Kaizen entails relatively little expense.
Kaizen originated in Japan as a result of World War II. Ironically, it evolved in
part from American business leaders like W. Edwards Deming who came to help
restore the country. It was first introduced by a 1951 training film created by the
American Economic and Scientific Section (ESS), although Dr. Deming is largely
credited for instituting the principles of Kaizen in Japan. Kaizen’s elimination of waste
thorough the maintenance and improvement of processes became fundamental to
Japanese management philosophy. It has since stretch around the world to
companies and organizations wishing to follow the success in Japanese Business.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

A lot of people have misunderstood about Kaizen. People have the stereo
type that kaizen can make dramatically changed immediately, and bring the profits
right away. Ho0wever, this is not true. Improvements under kaizen are small and
incremental, but the kaizen will bring the huge results over time. Japanese
management and Western Management, they are inclined to focus on the worship of
innovations which is pretty much relying on the changes in the technological
breakthroughs.. On the other hand, for the Japanese management, Kaizen is not
usually remarkable incident. However, innovation is one shot improvements and its
consequences are often problematic. While the Kaizen process, which I based on
common sense, low cost approaches and low risk approach. Guarantees gradual
progress that pays overtime
Two Types of Kaizen:
a. Gemba kaizen (actual workplace) - is an action oriented approach and refers
improvement activities that are carried out in the actual workplace, like on the
shop floor or on the manufacturing line.
b. Teian Kaaizen (plan) – represent to a theory based approach and refers to
strategic improvements that are prejudiced by top management.
KAIZEN MANAGEMENT –
Management has two major components which are maintenance and
Improvement. The objective of Maintenance function is to maintain current
technological, managerial and operating standards. The maintenance function, the
management must first establish policies, rules, directives and standard operating
procedures (SOP) and then work towards ensuring that everybody follows SOP. While
the Improvement Function is aimed at improving current standards. The Improvement
Functions is achieved through a combination of discipline and human resource
development measures.
Under the improvement function, management works constantly towards
modifying the existing standards modifying the existing standards, once they have
been mastered, and establishing higher ones. Improvement can be broken down
between innovation and Kaizen.
Innovation involves a drastic, improvement in the existing process and requires
large investments and big efforts. Kaizen signifies mall improvements as a result of
coordinated continuous efforts by all employees.
A manager needs to work closely with the senior management, human
resource professionals to develop perfect implementation strategies. A manager has
to act as a bridge between the senior management and the entire workforce.
1. The Role of manager is to act as a facilitator at a workplace. It is the duty of a
manager to assist employees in implementing TQM. As a manager, it is also his
responsibility to choose and assign right and individuals who can work as line
managers and take charge of the whole project. The employees to be selected
must be reliable and diligent and capable as much as necessary to handle a key
project like TQM. It is the manager’s responsibility to allocate resources for TQM,
schedule time for different training programs and be grateful for employees who
come up with a variety of improvement ideas and strategies which would aid the

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

organization bring better quality products. Further train subordinates to guarantee

smooth implementation of TQM without any obstacles.

2. A manager must communicate the benefits of total quality management to all other
members of the organization. Call employees on a common platform and address
the benefits and importance of TQM. Make them understand how successful
implementation of TQM programs would give way to high quality products which not
benefit the organization and the employees as well.
A manager is always a strong source of inspiration for other employees. He
needs to practice TQM himself before expecting others to believe in the same principle.
Customer feedbacks should be cautiously screened and taken into consideration while
creating company’s major strategies. A manager must also provide frequent reports
to staff members stressing scope of improvement.
Process vs. Results-
Process is the holy grail of kaizen. Managers often concentrate on results too
much
and pay too little attention to the process. Kaizen will change that behavior. The kaizen
manager realizes that improving the process will improve the result. This is why
kaizen’s main focus is on the process.
In Process oriented mostly centers on how processes are carried out through the
assessment of performance indicators generated by measuring or observing the
process flow. While in Result oriented basically disregards how processes flow and
work
Kaizen recognizes the connection between outcomes and processes. If the
results from an organization are of poor quality, the processes used to achieve those
results from organization are of poor quality, the processes used to achieve those
results necessitate concentration. This understanding is a component of the
framework of Japanese society, even on the personal level, and explains why Kaizen
is so successful there.

Innovation versus kaizen

The manner in which processes are addressed is a key element of kaizen.
Since the changes of Kaizen are small, errors can effortlessly be corrected with no
involvement of much risk or expense. This is likely to make Kaizen processes les
wasteful than innovation, where error can have tremendous loss effects.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

The manner in which processes are addressed is key element of Kaizen.

While in the West, innovation or radical change is often sought. Kaizen hunts for
constant incremental change, which generates remarkable results eventually. Since
the changes in kaizen are small, errors can effortlessly be corrected with no
involvement of much risk or expense. This is likely to make kaizen processes less
wasteful than innovation, where error can have tremendous loss effects.
The Features of Process and Result criteria.

P (Process-Printed) criteria R (Result-Oriented) criteria

Long-term orientation
Efforts for improvement are important
It is cared how the processes work and
how the results are obtained
Process-oriented indicators are followed
Awards are determined on the basis of
how processes flow
Rewards are generally based on
recognition and honor geared to the
effort made.
Discipline, time management, skill,
development, participation and
involvement, morale and communication
are important.
A supportive and collaborative role is
seen among managers in process-
oriented management.
Short-term orientation
Performance and results are important
Degree of goal achievements in
important
Result-oriented indicators are followed
Awards are determined on the basis of
results of the processes
Rewards are generally related to
financial performance.
The results and reaching goals in
designated time frame are important.
Control-centric behavior is more
common among results-oriented
managers.

Quality gurus strongly note that a combination of process-oriented and result-

oriented management should be implemented throughout the entire operational
system instead of focusing on just one orientation (either process or result) as this
heightened focus may not be enough to generate successful continuous improvement
strategy. Continuous improvements can be either a team management or top
management initiative. In order to be able to utilize these two management
approaches appropriately, the basic features of process-oriented and result-oriented
management should be studied prior to getting on a continuous improvement journey.
PDCA Cycles:
The PDCA cycle is a system used to ensure the continuation of the kaizen
principles. It is a vital part of the process.
Plan refers to establishing a target and a strategy for improvement. This is a
must. Without a target, how do you know if you have achieved success?
Do refers to the implementation of your plan.
Check is when you determine if your plan actually improved the process.
Act is the process of standardizing the improved procedure so that it can be
continued and so that the problem will not return.
By following the PDCA cycle, you will ensure that your process improves and
does not degrade.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

Central philosophy of Kaizen are two cycles that involve processes for
improvement and for maintenance SDCA (Standardize, Do, Check, and Act) with
LEAN principles. The SDCA cycle is simply a refinement of the PDCA (Plan, Do,
Check, and Act) cycle. The goal of both processes is to stabilize production. Many
companies use this process to improve their product or service.
When using SDCA you start out with standardization first, putting what you
know to be the best known standard in place that meets the internal and external
customer needs. Once you determine the correct standard you continue the process
by putting it into place with the "Do" phase and "Checking" the effectiveness of your
change based on the performance measures before you change and after. Otherwise
how are you going to know it was the right standard, so you must stay true to the
process just as PDCA. When you have determined it's meeting the expectation then
the "Act" is to make it the new documented policy or procedure and share it with other
affected areas. This becomes the benchmark for improvement.
The following are the phases of cycle when improving:
1. Planning Phase – Planning is the most vital phase of total quality management. In
this employee have to come up with their problems and queries which need to be
addressed. They need to come up with the various challenges they face in their
day to day operation and also analyze the problem’s root cause. Employees are
required to do necessary research and collect relevant data which would help them
find solutions to all the problems.

2. Doing Phase – In the doing phase, employees develop a solution for the problems
define in planning phase. Strategies are devised and implemented to overcome the
challenges faced by employees. The effectiveness of solutions and strategies is
also measured on this stage.

3. Checking Phase – Checking phase is the stage where people actually do a

comparison analysis of before and after data to confirm the effectiveness of the
processes and measure the results.

4. Acting Phase – In this phase employees document their results and prepare
themselves to address other problems.

When using SDCA you start out with standardization first, putting what you
know to be the best known standard in place that meets the internal and external
customer needs. Once you determine the correct standard you continue the process

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

by putting it into place with the "Do" phase and "Checking" the effectiveness of your
change based on the performance measures before you change and after. Otherwise
how are you going to know it was the right standard, so you must stay true to the
process just as PDCA. When you have determined its meeting the expectation then
the "Act" is to make it the new documented policy or procedure and share it with other
affected areas. This becomes the benchmark for improvement.
Maintenance cycle, SDCA is invoked when a failure occurs. Standardization
seek to stabilize processes so they can be improved. Through understanding is a
failure occurred because of poor or non-existent standard or because an existing
standard was not followed, managers can implement specific actions to correct it. One
a standard is put into place and put into practice, it become the focus of the PDCA
cycle.

SDCA CYCLE

Standard is the best, safest and easiest way, to achieve and maintain a defined
quality level.
Standard should be:
1. Be simple, clear and conspicuous
2. Be the best, easiest, safest way-should only have one at a time
3. Preserve know – how
4. Be guide lines that enable performance
5. Measurement of tasks delegated
6. Assure quality, cost, delivery and safety
7. Show relationship between cause and effect
With Standards:
1. Management becomes possible
2. There is a basis for training
3. There is a basis for audit or diagnosis

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

4. Problems are prevented from recurring and control variability.

Putting Quality first
Kaizen requires that quality is a primary objective, more than timeliness or even
cost. Kaizen recognizes that without a quality product, organizations will not be able to
compete.
Quality is always the highest priority in a kaizen system. But quality does not
only refer to the finished product, it also refers to the processes and standards that
create the product. It runs through all phases of company activity: design, production,
management, sales, and service. It is both the goal and the method of the production
cycle.
Speak with Data
One of kaizen’s biggest strengths is that it solves problems. But in order for the
model to work, you must gather relevant data that can be analyzed. Without this data
you will be flying blind. You will never be able to tell what is working and what needs
to be improved. Data is the lifeblood of the kaizen system.
The Next Process Is the Customer
Each product is made by a series of processes, one coming before the next.
The kaizen model stresses the importance of quality in each stage of manufacturing.
The worker responsible for each stage should never pass a defective part (or
inaccurate information) to the next stage. This is what is meant by “the next process is
the customer.” If every worker embraces this philosophy, the end result will be a
dramatic drop in defective products.

Visual Management
Another major concept of kaizen is visual management. The opportunities for
improvement may present themselves on a daily basis, but if you are not able to see
them, they will be missed. One of the primary methods used in kaizen is creating an
environment where tools, supplies, and processes that are out of place or out of sync
can be seen right away.
These are just a few concepts used to ensure kaizen is successful in the
workplace. Many tools and strategies fall under the umbrella of kaizen and it is
important to familiarize yourself with them. With so many tools at your disposal, you
can ensure your kaizen efforts are successful.
KAIZEN SYSTEM
Kaizen is a Lean manufacturing tool that improves quality, productivity, safety,
and workplace culture. Kaizen focuses on applying small, daily changes that result in
major improvements over time. ... Kaizen (改善) comes from two Japanese words: Kai
(improvement) and Zen (good), which translates to “continuous improvement.
Kaizen (Continuous Improvement) is a strategy where employees at all levels
of a company work together proactively to achieve regular, incremental improvements

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

to the manufacturing process. In a sense, it combines the collective talents within a

company to create a powerful engine for improvement.
It optimizes the flow of the production system and performs waste removal
activities on the overall value stream. For example, the purchase of a new forklift
which optimizes two or more production stations would be flow kaizen. This type of
kaizen focuses on removing waste from individual processes.
The foundation of the Kaizen method consists of 5 founding elements:
1. teamwork,
2. personal discipline,
3. improved morale,
4. quality circles, and.
5. suggestions for improvement.
TQM CONTROL:
A core definition of total quality management (TQM) describes a management
approach to long-term success through customer satisfaction. In a TQM effort, all
members of an organization participate in improving processes, products, services,
and the culture in which they work.
Total Quality control and Total Quality Management are widely used in
manufacturing, education, government and service industry now. TQC/TQM have
been developed as a strategy to help management in becoming more competitive and
profitable through helping it to improve in all phases of business. TQM necessitates
hat the company uphold some quality standard in all phases of its business. This
needs ensuring that thing are completed right the first time and that defects and waste
are remove from operations.
TQM Tools
Here follows a brief description of the basic set of Total Quality Management
tools. They are:
1. Pareto Principle
The Pareto principle suggests that most effects come from relatively few causes.
In quantitative terms: 80% of the problems come from 20% of the causes (machines,
raw materials, operators etc.); 80% of the wealth is owned by 20% of the people etc.
Therefore effort aimed at the right 20% can solve 80% of the problems. Double (back
to back) Pareto charts can be used to compare 'before and after' situations. General
use, to decide where to apply initial effort for maximum effect.

2. Scatter Plots
A scatter plot is effectively a line graph with no line - i.e. the point intersections
between the two data sets are plotted but no attempt is made to physically draw a line.
The Y axis is conventionally used for the characteristic whose behavior we would like
to predict. Use, to define the area of relationship between two variables.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

Warning: There may appear to be a relationship on the plot when in reality there is
none, or both variables actually relate independently to a third variable.
3. Control Charts
Control charts are a method of Statistical Process Control, SPC. (Control system
for production processes). They enable the control of distribution of variation rather
than attempting to control each individual variation. Upper and lower control and
tolerance limits are calculated for a process and sampled measures are regularly
plotted about a central line between the two sets of limits. The plotted line corresponds
to the stability/trend of the process. Action can be taken based on trend rather than on
individual variation. This prevents over-correction/compensation for random variation,
which would lead to many rejects.
4. Flow Charts
Pictures, symbols or text coupled with lines, arrows on lines show direction of flow.
Enables modelling of processes; problems/opportunities and decision points etc.
Develops a common understanding of a process by those involved. No particular
standardization of zymology, so communication to a different audience may require
considerable time and explanation.
5. Cause and Effect , Fishbone, Ishikawa Diagram
The cause-and-effect diagram is a method for analyzing process dispersion. The
diagram's purpose is to relate causes and effects. Three basic types: Dispersion
analysis, Process classification and cause enumeration. Effect = problem to be
resolved, opportunity to be grasped, result to be achieved. Excellent for capturing team
brainstorming output and for filling in from the 'wide picture'. Helps organize and relate
factors, providing a sequential view. Deals with time direction but not quantity. Can
become very complex. Can be difficult to identify or demonstrate interrelationships.
6. Histogram or Bar Graph
A Histogram is a graphic summary of variation in a set of data. It enables us to see
patterns that are difficult to see in a simple table of numbers. Can be analyzed to draw
conclusions about the data set.
A histogram is a graph in which the continuous variable is clustered into categories
and the value of each cluster is plotted to give a series of bars as above. The above
example reveals the skewed distribution of a set of product measurements that remain
nevertheless within specified limits. Without using some form of graphic this kind of
problem can be difficult to analyses, recognize or identify.
7. Check Sheets
A Check Sheet is a data recording form that has been designed to readily interpret
results from the form itself. It needs to be designed for the specific data it is to gather.
Used for the collection of quantitative or qualitative repetitive data. Adaptable to
different data gathering situations. Minimal interpretation of results required. Easy and
quick to use. No control for various forms of bias - exclusion, interaction, perception,
operational, non-response, estimation.
8. Check Lists

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

A Checklist contains items that are important or relevant to a specific issue or

situation. Checklists are used under operational conditions to ensure that all important
steps or actions have been taken. Their primary purpose is for guiding operations, not
for collecting data. Generally used to check that all aspects of a situation have been
taken into account before action or decision making. Simple, effective.
JUST IN TIME
The just-in-time (JIT) inventory system is a management strategy that aligns
raw-material orders from suppliers directly with production schedules. ...
The JIT inventory system contrasts with just-in-case strategies, wherein producers
hold sufficient inventories to have enough product to absorb maximum market
demand.
JIT was originally formed in Japan as a response to the country’s limited natural
resources, leaving little room for wastage. Today, Just in Time systems are used by
many businesses, and it has influenced related lean inventory management
techniques like IBM’s Continuous Flow Manufacturing (CFM). The rise of dropshipping
has made JIT inventory management more appealing for retailers, as it allows them to
sell a product before buying it, then purchase the item from a third party and have it
shipped directly to the customer.
JIT Investory pros and cosns
With the right approach, utilizing a JIT inventory management strategy has a
number of potential benefits for businesses:

• Lower inventory holding costs – with inventory purchased or produced at

short notice there’s no need to have unsold inventory taking up valuable
warehouse space.
• Improved cash flow – without the need to store large volumes of inventory at
all times, capital expenditure is reduced, and cash can be invested elsewhere.
• Less dead stock – because inventory levels rely on customer demand, there’s
less risk of unwanted stock left sitting in your warehouse.
On the flipside, though, Just in Time inventory management isn’t without its
potential disadvantages:

• Problems with order fulfillment – if a customer orders a product and you

don’t yet have it in stock, you run the risk of not being able to fulfill the order in
a timely fashion.
• Little room for error – doing JIT right means having accurate demand
forecasts and insights into customers’ buying habits at all times. Any
miscalculation could have a significant negative impact on business operations.
• Price shocks – with a Just in Time system, you don’t have the luxury of waiting
around for the best prices on goods. When prices go up, profit margins go
down.
Examples of successful JIT in action
JIT inventory management is used today by businesses in industries ranging
from retail to fast food to tech. Toyota is one of the most famous examples of Just in
Time manufacturing simply because it was one of the first to implement this strategy
effectively. Here are some other examples of JIT in action:

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

Apple
This consumer electronics giant keeps as little inventory on hand as possible.
By lowering the amount of stock on hand, Apple carries a lower risk of overstocking
and chalking up dead stock in its warehouses. As explained by Tim Cook, CEO of
Apple, “Inventory is fundamentally evil. You kind of want to manage it like you’re in the
dairy business. If it gets past its freshness date, you have a problem.”
Kellogg’s
Given that Kellogg’s produces mostly perishable goods, it shouldn’t come as a
surprise that they use the Just in Time inventory management method as an efficient
stock management system. Kellogg’s makes sure that just enough products are made
to fulfill orders and limited stock is kept on hand.
Xiaomi
Similar to Apple, Xiaomi manages a small inventory by releasing limited
quantities of its mobile phones per week. The drawback to this strategy is that eager
consumers have to wait for the items to hit the stores – resulting in potential lost sales.
Still, Xiaomi still benefits from keeping costs down and eliminating wastage.
Zara
Zara epitomizes “fast fashion” by owning their supply chain and being able to
bring items to market extraordinarily quickly.
The brand believes that inventory = death. It commits six months in advance to
only 15 to 25 percent of a season’s line. And it only locks in 50% to 60% of its line by
the start of the season, meaning that up to 50% of its clothes are designed and
manufactured right in the middle of the season.
If a certain style or design suddenly becomes popular, Zara reacts quickly by
designing new styles and getting them into stores while the trend is still peaking,
satisfying seasonal demand and exploiting changing customer preferences.
Tesla
Despite Tesla’s phenomenal growth in the past few years, the company is still
one of the smallest auto manufacturers in the world and cannot independently enjoy
the same economies of scale. In contrast, Tesla takes complete ownership of the
supply chain and has been vocal in their rejection of the traditional franchise-dealer
sales model.
By keeping little inventory and essentially producing on demand, Tesla can
minimize the amount of capital and risk tied up with storing excess inventory. In
addition, the wait encourages additional customization, a premium that many of their
paid customers might not have chosen to pay for if they could immediately drive a
stock car off the lot.
JIT and lean system
Thompson writes, “Just-in-time manufacturing is focused on efficiency, while
lean manufacturing is focused on using efficiency to add value for the customer. ... You
can use Lean to create a JIT process but JIT is the piece of the Lean method that
eliminates the waste of excessive inventory.

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Just-in-Time manufacturing

Just-in-time' is a management philosophy and not a technique.

It originally referred to the production of goods to meet customer demand

exactly, in time, quality and quantity, whether the `customer' is the final purchaser of
the product or another process further along the production line.

It has now come to mean producing with minimum waste. "Waste" is taken in
its most general sense and includes time and resources as well as materials.

Elements of JIT include:

1. Continuous improvement.
2. Attacking fundamental problems - anything that does not add value to the
product.
3. Devising systems to identify problems.
4. Striving for simplicity - simpler systems may be easier to understand, easier to
manage and less likely to go wrong.
5. A product oriented layout - produces less time spent moving of materials and
parts.
6. Quality control at source - each worker is responsible for the quality of their
own output.
7. Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
8. Good housekeeping - workplace cleanliness and organisation.
9. Set-up time reduction - increases flexibility and allows smaller batches. Ideal
batch size is 1item. Multi-process handling - a multi-skilled workforce has
greater productivity, flexibility and job satisfaction.
10. Levelled / mixed production - to smooth the flow of products through the factory.
11. Kanbans - simple tools to `pull' products and components through the process.
12. Jidoka (Autonomation) - providing machines with the autonomous capability to
use judgement, so workers can do more useful things than standing watching
them work.
13. Andon (trouble lights) - to signal problems to initiate corrective action.

Total Productive Maintenance (TPM)

Almost all industrial production processes are carried out with the aid of
machines, as a result of which each production-oriented organization is largely
dependent on its machinery. When a breakdown or a long-term disruption occurs of
machines, equipment or important tools, this will automatically have far-reaching
consequences for the total production.

Total productive maintenance (TPM) is a method of maintaining and improving

the integrity of production and quality systems through the machines, equipment,
employees and the supporting processes. TPM can be of great value and its target is
to improve core business processes. The phrase TPM was first used in 1961 by the
Japanese company Denso. This supplier to the automotive industry, carried out an
improvement project with continuous improvement as their starting point and they
introduced autonomous and preventive maintenance to machines. TPM is especially
meant for companies with a lot of machines that involve high maintenance costs.
Another objective of TPM is to increase the overall equipment effectiveness (OEE) of
plant equipment. TPM also addresses the causes for accelerated deterioration while

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creating the correct environment between operators and equipment to create

ownership.

TYPES OF MAINTENANCE:

1. Breakdown maintenance – It means that people waits until equipment fails

and repair it. Such a thing could be used when the equipment failure does not
significantly affect the operation or production or generate any significant loss
other than repair cost.

2. Preventive maintenance - It is a daily maintenance (cleaning, inspection,

oiling and re-tightening), design to retain the healthy condition of equipment
and prevent failure through the prevention of deterioration, periodic inspection
or e1quipment condition diagnosis, to measure deterioration. It is further
divided into periodic maintenance and predictive maintenance. Just like human
life is extended by preventive medicine, the equipment service life can be
prolonged by doing preventive maintenance.

a. Periodic maintenance – (Time based maintenance-TBM) it consists of

periodically inspecting, servicing and cleaning equipment and replacing
parts to prevent sudden failure and process problems.
b. Predictive maintenance – this is a method in which the service life of
important part is predicted based on inspection or diagnosis, in order to use
the parts to limit of heir service life. Compared to periodic maintenance,
predictive maintenance is condition based maintenance. It mages trend
values, by measuring and analysing data about deterioration and employs
a surveillance system, designed to monitor conditions through an online
system.

3. Corrective maintenance – it improves equipment and its components so that

preventive maintenance can be carried out reliably. Equipment with design
weakness must be redesigned to improve reliability or improving
maintainability.

4. Maintenance prevention – it indicates the design of new equipment.

Weakness of current machines are sufficiently studied (on site information
leading to failure prevention, easier maintenance and prevents of defects,
safety and ease of manufacturing) and are incorporated before commissioning
a new equipment.

POLICY DEVELOPMENT

People follow policies, good or bad. The need, therefore, is for organizations
in developing countries to realize the importance of clear, wee- defined policy
statements on quality, reflecting management’s commitment and orientation and to
propagate them through various modes, such as circulation of documents, newsletters,
raining, meeting, pledge cards and personal contacts.

It needs to state the level of defects or errors that is acceptable. The policy
needs to state the relationship between the company and the customer. The policy
should be direct and concise and should clearly define management’s commitment to
quality. The policy on quality has to be a statement that will not be misunderstood. It
has to cover conformance to requirements, time and money.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

One the policy is written, management needs to determine how to explain to

employees. The best methods is for top executive to meet personally with groups of
employees to ex0plain policy. This also ensures that the commitment and interest of
top management is properly understood by all.

SUGGESTION SYSTEMS

Suggestion system is regarded as individual-oriented kaizen. Suggestion system

encourages all workers to talk about their suggestions orally with supervisors and put
them into action right away, even before submitting suggestion forms. However all the
workers don’t need to expect to get economic benefits from each suggestion. The
proce4ss to think and have the idea of each worker is vital. This system is different
from Western management which emphjasis on the economic benefits and financial
incentives of suggestion systems.

The suggestion system is an integral part of an established management

system that aims at involving employees in kaizen. The number of worker’s
suggestions is regarded as important criteria in reviewing the performance of the
worker’s supervisor and the manager of the supervisor. The Japanese management
encourages employees to generate a great number if suggestions and works hard
overall kaizen strategy. Management also gives due recognition to employee’s efforts
for improvement. An important aspect of the suggestion system is that each
suggestion, once implemented, leads to an upgraded standard. According to the Japan
Human Relations Association, the Japanese-style suggestion system stresses the
morale boosting benefits of positive employee participation, while the American-style
suggestion system stresses the suggestion's economic benefits and provides
economic incentives.

Three Stages of the Suggestion System

1. Encouragement. In the first stage, management should make every effort to help
the workers provide suggestions, no matter how primitive, for the betterment of the
worker's job and the workshop. This will help the workers look at the way they are
doing their jobs.

2. Education. In the second stage, management should stress employee education

so that employees can provide better suggestions. In order for the workers to provide
better suggestions, they should be equipped to analyze problems and the
environment. This requires education.

3. Efficiency. Only in the third stage, after the workers are both interested and
educated, should management be concerned with the economic impact of the
suggestions.

Benefits of Employee Suggestion Programs

1. Improve Employee Morale
A well-designed employee suggestion program enables employees to improve
their own work processes. This improves employee morale.
2. Increase Job Satisfaction
Participating in employee suggestion programs increases employee job
satisfaction as employees feel they are positively influencing their organization.

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3. Create Ownership & Engagement

By enabling employees to play an active role in the future direction of their
organization, employee suggestion programs create a sense of ownership and
increase employee engagement.
4. Build Team Spirit
Well-designed employee suggestion programs enable employees to collaborate
together on fleshing out suggestions as well as implementing them. This builds
team spirit.
5. Reduce Costs – Increase Profitability
Organizations such as Toyota have achieved substantial cost savings by asking
employees to suggest ideas to reduce costs. This leads to increased profitability
for your organization.
6. Increase Revenue
Organizations such as GE and P&G have introduced new product lines as a
result of their employee suggestion programs. This leads to increased revenue
for your organization.
7. Improve Customer Satisfaction
Organizations such as Starbucks leverage their employee suggestion program
to identify ways to serve their customers better, this leads to improved customer
satisfaction.
These are some of the top benefits you can achieve via a well-designed employee
suggestion program.

For suggestions system to be successful and effective, the following

factors have to be considered.

1. Formation of a suggestions committee to plan and manage the suggestions

system.
2. Defining the suggestions process, including a feedback system
3. Promoting the suggestions system
4. Evaluation system
5. Award system
6. Sustaining the suggestion system.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

Small Group Activities (SGA)

Small Group Activity is also known as focused or continuous improvement in
English. SGA finds its origin in the Japanese industry where it is called “Kobetsu
Kaizen" or Quality Circles. SGA is a method for problem solving in teams by
structurally searching for the root causes and eliminating them. After standardization
of the solution the reoccurrence of the problem is prevented. The feeling of
ownership is intensified because those who are directly involved solve the problem in
a multifunctional team [9].
The composition of the SGA is a team of people working on solving a specific
problem or improve an important issue (optimal team size of 5-8 people). Team
members can come from one or a variety of mini-businesses. The team determines
the leader of the team members, who leads the team and organize its work. Who is
in the team depends on the subject, which the group deals with. A significant
proportion of people having direct contact with 342 the subject is crucial. A very
important part line workers due to the development of their teamwork skills.

SGA deal with two types of issues:

1) The idea – simple and easy solution that can be implemented immediately (e.g.
raising the height of the conveyor belt after which attracts displays for palletizing,
thereby facilitating the work of the person which palletizing),

2) Subject to improvement – a more complex issue, on which it must consider and

work on a group of people, often from different departments. The time to implement
such a topic could take several months (e.g. increasing the efficiency of the line).

The members of the team learn to use techniques (e.g. cause and effect
diagram, Fishbone-diagram) to find and eliminate root causes. The team is also taught
communication skills, working in teams and decision making, in order to use each
other's knowledge and experience

Small Group of Activities

A Kaizen includes small-group activities-informal and voluntary group

organized to carry out specific tasks in a workshop environment. The quality circles
are the most popular type. Quality circles are designed to address not only quality
issues but also such issues as cost, safety, and productivity. Quality circles are
regarded as group-oriented kaizen activities

Small Group Activity (SGA) is also known as focused or continuous

improvement in English. SGA finds its origin in the Japanese industry where it is called
Quality circles (QC). SGA is a method for problem solving in teams by structurally
searching for the root causes and eliminating them. After standardization of the
solution the reoccurrence of the problem is prevented. The feeling of ownership is
intensified because thse who are directly involved solve the problem in a multi-
functional team.

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 RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig

The members of the team learn to use techniques to find and eliminate root
causes. The team is also taught communication skills, working in teams and decision
making, in order to use each other’s knowledge and experience.

SGA Improvement Circle

The structure of an SGA project is derived from the PDCA- circle from Dr. W.
Edward Deming and exists of 8 steps on the basis of the SGA circle. The SGA team
works independently and reports the progress by means of communication board.

The Introduction of SGA leads to the following results:

1. Team Building
2. Improved communication
3. Highest Involvement
4. Learn how to analyze and solve problems.

Read the story of Toyota’s Kaizen Story

Toyota's history goes back to 1897, when Sakichi Toyoda (Sakichi) diversified
into the handloom machinery business from his family traditional business of carpentry.
He founded Toyoda Automatic Loom Works (TALW) in 1926 for manufacturing
automatic looms. Sakichi invented a loom that stopped automatically when any of the
threads snapped. This concept of designing equipment to stop so that defects could
be fixed immediately formed the basis of the Toyota Production System (TPS) that
went on to become a major factor in the company's success. In 1933, Sakichi
established an automobile department within TALW and the first passenger car
prototype was developed in 1935.
Sakichi's son Kiichiro Toyoda (Kiichiro) convinced him to enter the automobile
business. After this the production of Model AA began and Toyota Motor Corporation

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was established in 1937. Kiichiro visited the Ford Motor Company in Detroit to study
the US automotive industry.
He saw that an average US worker's production was nine times that of a
Japanese worker. He realized that the productivity of the Japanese automobile
industry had to be increased if it were to compete globally.

Back in Japan, he customized the Ford production system to suit Japanese

market. He also devised a system wherein each process in the assembly line of
production would produce only the number of parts needed at the next step on the
production line, which made logistics management easier as material was procured
according to consumption. This system was referred to as Just-in-Time (JIT) within the
Toyota Group.
The JIT production was defined as 'producing only necessary units in a
necessary quantity at a necessary time resulting in decreased excess inventories and
excess workforce, thereby increasing productivity.' Kiichiro realized that by relying
solely on the central planning approach, it would be very difficult to implement JIT in
all the processes for an automobile.
Note:
We will be having a series of question and quizzes on this story.

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