KAIZEN

COSTING
GROUP MEMBERS

GROUP MEMBERS
•MUHAMMAD ISA BIN MOHD NOH
2014593469
•JAMALIAH BINTI JAAFAR
2015971065
•NOOR ALIAH BINTI MOHD NADZRI
2015791233
•NOR SYAHIRAH BINTI MARZUKI
2015971065
•NORAIN BINTI ISLAN
2014176869
•NOR SYAZLINA BINTI SAZALI
2014208808
•ELINA HAJAR AISHAH BINTI BAHRIN
2014671984

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INTRODUCTION
“Kaizen” is the philosophy of continuous improvement. Lean
manufacturers use kaizen to help eliminate waste. With
kaizen, manufacturers continuously improve standardized
processes, equipment, and other daily production
procedures. The main requirement is that existing
procedures be standardized and documented so that
improvements can be evaluated objectively.

Although primarily associated with manufacturing,

businesses practice kaizen across all functions. Industries
including healthcare, finance, psychotherapy, life-coaching,
government, and banking have also adopted kaizen.

Beyond improving workflows, kaizen helps facilitate a

culture of ownership wherein workers identify and correct
inefficiencies. This provides an added benefit of eliminating
process wastes by reducing non-value added activities.

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Kaizen is a term that has its origins in Japan which was
popularized by Masaaki Imai and it is a concept of two Japanese
words, KAI means change and ZEN means better (Rof, 2012).
Kaizen is defined as continuous and in process that involves the
whole organization. Translated from Japanese, the word
“kaizen” translates to “changing something for the better.” It was
originally used by Japanese businesses after World War II,
influenced by teachings in American business and quality
management.

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 OBJECTIVE
To reduce cost of components and products by pre-specified amounts

How?

By identifying the best resources

and most efficient processes to
remove waste from production.
Example

Company can cooperate with suppliers that

can provide good quality of material that can
provide good quality material with a low
price.

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 Eliminating waste
One of the main ways to reduce costs is through the elimination of the main types of waste:

Over production
• Produce more than customers have ordered.

Inventory
• Holding or purchasing unnecessary inventory.
Waiting
• Production delays/idle time when value is not added to the product.

Defective units
• Production of a part that is scrapped or requires rework.

Motion
• Actions of people/equipment that do not add value.

Transportation
• Poor planning or factory layout result in unnecessary transportation of materials/work in
progress.

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ELEMENTS OF KAIZEN

Team
Work

Suggestion
Personal
for
Discipline
Improvement

Quality Improve
Circle Morale

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ELEMENTS OF KAIZEN

Team Work •All employees must work as a team towards the common goal of
achieving the desired improvement on production.

•The employee should have self-discipline in time management,

Discipline quality assurance, loyalty to the company.

•The employer or the senior management should put in place

Morale motivational strategies such as good working conditions, merit
promotions, better remuneration and many others.

Quality Circles •Employees will have opportunities to share ideas, skills, technology
and other relevant resources.

Suggestion for •The provision for the opportunity to air suggestions freely no
Improvement matter the worker’s rank.

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ADVANTAGES VS DISADVANTAGES

*Employees Satisfaction *Requires Permanent change of

*Process Centered Management System

*Create Work Teams *Does not Produce Required

Results
*Cross-functional
*Difficult to Convince People
*Increasing Employees Moral
*Reduced Errors
*Promote openness

*Acknowledge Problems
openly

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 COMPARISON
KAIZEN COSTING
VS
ACTIVITY BASED COSTING
FEATURE ABC KAIZEN
Control Location Within cost system Outside cost system
Feedback time frame Long term Short term
Connection between cost Connection is made Connection through cost
system and strategic through cost accounting accounting is not critical
decision
Primary focus on cost Fixed cost Variable cost
Relate transaction to Direct Indirectly
cost accounting
Nature of methodology Comprehensive cost Tool for motivation and
accounting and enforcement
management
methodology
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 EXAMPLE

REAL EXAMPLE
Kaizen costing was used in Japanese automobile
companies were developed by Toyota Company as cost
management techniques in 1960 that was named Kaizen
Costing (Toyota Motor Corporation, 1978). Yasuhiro and
John (1993) expressed that Kaizen costing through
continuous improvement or kaizen activities acts as target
cost reduction and Kaizen costing activities keep the current
level of production cost and begin to reduce production cost
according to the company's plans

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 EXAMPLE

HOW IT’S WORK IN TOYOTA

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 EXAMPLES

COMPANIES USE KAIZEN

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CONCLUSION
Kaizen is way of thinking and philosophy which can be used in all
institutions. The concept of kaizen includes continuous improvement
in all areas and also kaizen costing which is mainly associated with
cost improvement.
Kaizen costing is an important branch of the kaizen concept which
follows philosophy of kaizen. This costing system is an emerging
method to change and continuous improvement of cost in an efficient
manner.
A good understanding of Kaizen will help you use it well to bring
about great success in your company. You will be able to increase
your organizations competitiveness by cutting costs and increase
productivity if kaizen is successfully implemented.

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THANK
YOU