An economy for action
Introduction
Economics is the art of making the best possible use of available resources, with the objective of economic science to explain how men organize their efforts to value the world's resources.
Thus economic science can be defined as a strategy to combat scarcity. Economic activity aims to satisfy human needs, that is, the set of desires that can animate men.
Within this context, kaizen as a philosophy and system has the ability to focus on obtaining the highest feasible levels of productivity. Based on determining the needs of consumers, kaizen studies and analyzes the best way to produce goods and services with the highest level of quality, at the lowest cost, without generating environmental problems.
This concept of kaizen also concentrates its objective of continuous improvement, valid both for the company within the context of the company's economy, which leads to constantly improving levels of quality, productivity, costs, response and delivery times, and levels of satisfaction of the clients, consumers, investors and personar of the company.
At the macroeconomic level, continuous improvement implies reducing inflation rates, increasing employment, reducing the unemployment rate, increasing total and per capita GDP, while protecting ecology and caring for scarce resources.
One may wonder if a kaizen economy is feasible. The answer is yes. To the extent that the continuous improvement of different parameters and indicators is aimed at, at the micro or macro level, it is feasible to make use of the philosophy and mechanisms aimed at achieving a better use of resources in order to increase the profitability or achieve a better use of resources.
In times like today, continuous improvement is not only a necessity and an obligation for companies, but also for public or private organizations, with or without ends, as well as for the state and the nation, as a way to achieve the objectives and both operational and strategic goals.
At both corporate and government levels, the elimination of waste and waste is essential. Governments have a lot to do and the pressures to which they are exposed are increasing every day, so improving the effectiveness and efficiency of their activities and processes is essential.
In the same way that kaizen can be operated in companies from different industries, it is also feasible to apply it to both civil entities and government agencies.
When it comes to controlling or reducing expenses, kaizen is a formidable strategy and methodology conducive to obtaining it.
Kaizen as the art of eliminating waste
If we conceive kaizen as the art of eliminating waste, the importance of this fact is clear both at the micro and macro-economic levels. Eliminating waste and waste implies generating more goods and services with lower levels of inputs, which entails lower costs, lower prices or more competitive prices, higher exports, and a considerable increase in the cash flow of companies and their profitability, such as as well as an increase in the Gross Domestic Product of the countries.
In these times a less waste of resources also brings with it lower levels of pollution and a better use of natural resources.
Continuous improvement towards the systematic elimination and / or reduction of waste is essential. Governments must and can ostensibly improve the use of their resources to generate as many goods and services as possible for the community, and on the other hand, companies can not only be more profitable for their owners and satisfactory for their employees and customers, but also more optimal for the community as a whole.
Today more than ever it is necessary to disseminate, promote, train and train both publicly and privately, and for all levels and levels the importance of both safeguarding and better use of resources, identifying waste for the purposes of its prevention and elimination, but also the urgent need for continuous improvement as a system aimed at raising performance levels corresponding to the different social, economic, financial, labor, health and cultural indicators, among others.
The circles of quality control that are so useful to the objectives of the companies can also be so at the level of official organisms, as well as at the level of consumers and taxpayers. Who can be better controllers of the quality of the services and products offered and generated, than those who as consumers or taxpayers are in daily contact with said goods. Your organization should not be an element of pressure, but a tool for feedback aimed at improving public services, the quality of the environment, and the benefits of companies.
Properly addressed observations and recommendations can be highly significant in order to make companies more competitive, and more responsible to government entities.
It is necessary to teach from primary school what waste means, empowering and training students to make their elimination both an individual, an organizational / business, and a social or community objective.
Politicians and public administrators must make the elimination of waste a goal within state policy, as well as one of the main axes of electoral proposals and organizational missions within the public function.
Lower levels of waste imply greater use of scarce resources, lower levels of pollution and pollution, continuous improvement in productivity levels and a more effective and efficient use of the material and human capacities of companies and society.
If there is a waste that must be the fundamental axis of a state policy, it is the difference between the production capacity of a country and the real production. That difference implies unemployed labor, machinery and investments used below their capacities, unused monetary resources or unemployed in the coffers of the state or banks. All of which is totally and totally inadmissible, much more when you have high levels of individuals below the poverty line.
Analysis of causes and search for solutions
If we have waste or waste, we have causes or reasons that motivate or generate them. Removing those reasons requires detecting them. Both in the corporate (micro) and national (macro) order, it is necessary to make use of the "Five Why?" (CP) in order to get to the root cause of the problems, and not stay only in the most visible or superficial symptoms or causes.
In this way the successive questions allow us to get to the root cause and in this way give a realistic and systematic solution to the problem.
What it is about is not merely knowing economics, but really understanding the operation of companies and the state, and how to analyze and solve effectively and efficiently the different problems. What it is really about is not theorizing but solving the problems. Without theory there is no understanding, but without action there is no progress. The theory must be put to the test by means of concrete actions, which allow us to determine how correct it is.
Critical points
If there is something that is essential in the kaizen vision, it is the determination of the critical points. They are made up of those elements, aspects, or factors that, if they occur, can generate serious consequences for the organization and even lead to a disaster situation.
Examples of critical points are the cold chain in the transport of medicines or certain types of food, the lack of liquidity in the face of a bank run at a financial institution, or the power cut in the middle of a surgical operation.
For a country, critical points would be given by an outbreak of foot-and-mouth disease in its livestock activity, the fall in the price of its main export products, the power cuts in its main industrial areas or the occurrence of some natural disaster.
Once the critical points have been determined, the next step is to adopt precautions to avoid the occurrence of negative events, and if they occur, have contingency plans to quickly deal with such circumstances.
Negative analysis consisting of thinking about what can go wrong in order to adopt the necessary measures to prevent its occurrence, is a way to systematically face the different critical alternatives.
Faced as a system, the attitude of prevention faced by each and every one of the sectors and members of the organization constitutes a form of continuous improvement.
Many economic plans that in principle generate important returns for a company or a country, end in disaster due to the absence of prevention systems and contingency plans. Not thinking about what can go wrong and how to deal with it constitutes a very serious flaw, and a lack of strategic aptitude.
A company must continually think about what can go wrong, not because of a negative inclination in attitude, but as part of systemic thinking that leads to the timely recognition of the interrelation between various components and elements of the company or country, and its environment. The speed in the era of globalization does not allow us to only face problems in a reactive way. It is necessary to always anticipate the following movements as any good chess player does.
Waste at the organization level and at the country level. From micro to macro.
It is considered as waste all those activities that consuming resources do not generate added value. In this sense, waste is all use above the minimum necessary, in terms of human, material and financial resources, in the processes and activities aimed at the generation of products and services.
The traditional waste and waste at the company or organization level are according to the following kaizen criteria:
- Excess inventories Overproduction Excess movements Excess transport Waiting times Production failures and reprocessing tasks Processing failures
They generate an overuse of resources such as hours of work, physical space, financial and opportunity costs, among many others.
State agencies suffer from the same types of waste listed above, but at the macro level of a society or nation the waste is the sum of those already listed plus those that are generated as a result of erroneous policies and lack of adequate plans and controls.
It is the responsibility of the state and its various organizations to discover, monitor, prevent, prevent and eliminate the occurrence of different wastes that may take place at the macroeconomic level, with serious consequences for the social and human development of its inhabitants. List the different types of waste implies accounting for the following:
- Unemployment and underemployment of the workforce. Idle capacity of machinery, equipment and facilities. Overproduction of goods. Excess installed capacity Environmental pollution Destructive use of renewable resources Infrastructure of inefficient means of communication Generation of various external diseconomies Laws or regulations that hinder the best use of human, material and financial resources
But we must analyze the activities or processes that generate waste:
- Pollutant activities or activities with a high degree of pollution, Justice, security, health and education activities that, using resources, produce low-quality services, bureaucratic activities at public and private levels generated by state regulations, which make use of of huge resources without generating added value. Control activities that do not protect citizens and only have the effect of generating a negative vicious circle. Legislative activities that hinder economic and social development. Actions in fiscal and monetary policy that generate immense waste of human and material resources.
Sweeping away the obsolete paradigms
There are ways and ways of thinking and analyzing reality that no longer respond to the needs and requirements of these new times. The vast majority of the political class at the level of underdeveloped or developing countries suffers from the inability to think systemically. Thought that responds to a mechanistic form tends not to see or discover problems, and much more so to find solutions.
These paradigms pigeonholed in the minds of politicians, officials, and unionists tend to preserve the status quo, leading to maintaining unchanged tax, labor, and corporate regimes that are not adequate to the new economic and technological realities. This is a generator of lower investments, capital flight, higher unemployment, and high levels of non-productivity.
Educating for continuous improvement and new realities
In many countries we have politicians who are true specialists in continuous deterioration. Instead of having more jobs, better remunerations, a higher quality of life and education, they are generators with their irresponsible, immoral, unethical, ineffective and inefficient behavior, of increasing corruption, destroying jobs, generating inflation, demolition of productive structures and entrepreneurs.
It is time for a state policy to implement education for continuous improvement, based on an ethical and disciplinary approach, which makes creativity and innovation a source of wealth and improvement for citizens.
Only by cultivating students' love for improvement, improvement, and the quality of everything they do or do, adding a strong inclination for research and development, will we have a conscience destined to overcome the serious problems that plague today's societies..
The Fosbury Effect tells us that if individuals and organizations continue to do what they have always done they will continue to achieve what we have always achieved.
Thus, at a certain level of productivity and degree of efficiency, the arrival of new competitors with different techniques and methodologies will generate an urgent need to adapt to the new reality.
It is in this aspect that the management of knowledge at the level of government, educational institutes and companies takes on a transcendent importance. Failure to update the new requirements of what Marx calls the economic infrastructure will make individuals, companies and countries unable to cope with the ever higher levels of competitiveness.
The diffusion of the Circles for Quality and Productivity
Governments and business entities must disseminate the implementation of the Circles for Quality and Productivity as a way of engaging the workforce due to its full participation in activities aimed at the continuous improvement of levels of quality, productivity, costs, levels of satisfaction and response times.
Not only private companies and organizations can benefit from the participation of those people who, due to their knowledge and experiences, are involved in the activities and processes that generate products and services, but also state entities and organizations.
It is time to make full use of benchmarking in order to copy and adapt the best techniques, methods and systems that generate positive results in other parts of the world to the various companies, cultures and countries. In this case, it is a matter of taking the Quality Control Circles of Japan and suitably adapting them to the different entities according to their cultural and social framework.
A full development of the circles for quality and productivity (CCP) will allow a sustained growth in the productivity levels of the various private companies and state organizations, and as a result of the total productivity of the country, with what it has of important as a basis for improvement in workers' income levels.
Kaizen systems in public administration
Public administration can greatly benefit from applying systems and methodologies such as: total productive maintenance, just in time production systems, small group activities, suggestion systems, total quality management, policy deployments and quick tool changes.
Whether it is administrative-bureaucratic work, or service activities (health, education, security, transport, and communications, among others), the State can greatly benefit from a new and revolutionary way of understanding reality and solving problems.
Not committing to the defense of the status quo and systematically looking for better and simpler ways or ways of carrying out both activities and processes allows a glimpse of a broad horizon in the possibilities of making the use of resources more efficient.
Kaizen is a constant commitment to the destruction of ineffective paradigms for understanding and solving current and future problems. Bringing down these paradigms allows us to promote new ways of understanding and understanding reality, from which to generate new ways of executing organizational activities and processes.
Kaizen Budget
Budgeting must take a new turn, and that turn must abandon mere budget lines to move to place special emphasis on added value for customers or consumers in the case of companies, or for taxpayers in the case of public administration., as well as the productivity of each item entered in the budget.
Thus, those items that do not clearly generate an added value compatible with the mission of the company or the state must be discarded, while the efficiency in the use of resources must be perfectly protected.
This type of budgeting must not only prevent the generation of waste, but must serve as the basis for the continuous and comprehensive improvement of each and every one of the sectors, processes and activities of the organizations, whether they are private or state.
Said budget increases its usefulness as it is coordinated with the evolution of learning and experience curves. Thus, given a certain projection of activities, the levels of productivity and respective costs can be calculated, from which to include them in the calculation of the respective budgets.
Failure to do so implies considering that both the individuals who work for the organizations and themselves do not have the capacity to improve and be more efficient in the development of their activities.
Today, a budgeting system continues to take place that completely ignores the increase in the productive capacities of employees (learning curve), as well as the ability of companies to apply, as a product of time and experience, better and more evolved production, be these goods or services.
Kaizen and exports
If countries must compete to place their products and services in international markets in such a way as to ensure the provision of the necessary foreign currency to acquire international products and services, at the same time as employing the national workforce, needless to say, the strategic importance which takes kaizen as a continuous improvement methodology aimed at producing better products every day at a lower cost, all of which means being more competitive.
From there we return to the crucial importance of education for continuous improvement. In today's markets it is not acceptable not to improve. Continuous improvement and innovation are part of the life of the world's strongest economies.
Publicizing and spreading the benefits of continuous improvement is not only a necessity, but an obligation for governments and leaders. Only continuous improvement will allow not only economic growth, but most importantly, sustainable economic development based on the most productive use of resources.
Kaizen was the foundation on which the competitiveness of Japanese companies and the economic and social development of the Rising Sun nation were built. Today kaizen is the foundation of the productive capacity of Southeast Asia.
Societies that gloat year after year in the same problems and conflicts are prevented from growing. In order to grow, problems must be solved. Problems are a great opportunity according to kaizen to generate improvements. What is not admitted is the survival of these problems. In other words, it implies never giving a real solution to root problems.
In this way the days, weeks, months and years pass, differentiating those societies infected with the spirit of improvement from those that reject identifying with the discipline of continuous improvement. Between the company and the society that improve day by day and those that do not, a gap is opening every day that is later very difficult to close.
Statistical Process Control at the micro and macro level
At the company level, Statistical Process Control (CEP) is not used in its fullness, rather it must be recognized that the companies that make use of it use it only in matters pertaining to quality, and still do not understand it in their real worth. That is why it is possible to speak of Deming's legacy as an unfinished revolution, since it has not yet become aware of not only the capacity of the tool in question, but what is more serious, come to understand the real meaning of the system and their behavior.
The CEP has many more uses than quality control and assurance, at company level it can be used for the control and improvement of management indicators, costs, response times, cycle duration times, productivity levels, levels of satisfaction among many others.
The CEP allows us to recognize and distinguish the variations and behaviors of the system from those that are special to it. Recognizing this implies being able to know the capacity of the system to operate within certain ranges and therefore act accordingly in order to improve said behaviors or results, and detect abnormal and special behaviors in time to account for them. consolidate the continuity of positive results or eliminate the factors or causes of negative effects or results. Distinguishing the variations characteristic of the process from the special ones avoids the adoption of incorrect measures or decisions.
From the aforementioned, it is clear that the use of the CEP is not only useful for use in companies but also for state agencies and to monitor the behavior of the country's economic and financial variables. Using the CEP in order to control the behavior of the different economic variables will allow a great advance in the prediction work, as well as in understanding the economic and financial behavior.
The CEP should be used to monitor both processes and results. By controlling the former, the effects on the results are assured or anticipated in time.
The Paretian Analysis. Its strategic and operational importance
The Italian scientist Vilfredo Pareto discovered in his research that twenty percent of the causes are responsible for eighty percent of the results or what is the same as twenty percent of the results are attributed to eighty percent of the facts. That is what has been defined as the vital few and the trivial many.
If this is so, then applying this analysis to the causes of the various economic, financial, educational, health and safety problems, among many others, would allow officials to detect the few but vital causes of most of the problems and inconveniences, in order to work on them in order to solve them.
This would allow to greatly increase the results in terms of quality, productivity, costs and levels of satisfaction.
Acting systematically and constantly on the vital few generates a great leverage effect in order to achieve greater results in the least amount of time possible and with the least possible cost, shaping the Paretian Continuous Improvement System. System that allows to systematically approach the solution of the most pressing problems, avoiding the dispersion of energy and achieving a greater and better focus on the proposed solutions and decision-making, especially taking into account budget constraints and limitations. It is a way to achieve the greatest benefits with the least amount of resources.
Paretian analysis can be used both for existing problems, as well as for analyzing budget lines and the behavior of various expenditures.
Kaizen as a new economic doctrine
It is not enough to make plans or set action policies, today it is necessary to know how to carry them out and obtain successful results. Investors, employees and workers, consumers, and society as a whole need to be satisfied in their needs.
Needs that turned into demands oblige public and private leaders to adopt an increasing commitment to the most effective and efficient use of resources, protecting the environment, generating authentic added value for consumers and taxpayers (citizens), and helping to build a more just and equitable society.
Kaizen is an overwhelming force for the continuous and systematic improvement of those who adopt it. The question is both to adopt it, and to adapt it to the needs and socio-cultural profiles of the organizations and countries that want to make use of it.
Kaizen is simplicity and fluency in search of a better functioning of the processes. Today, advanced organizations are turning very strongly towards a horizontal organizational system, which allows for greater satisfaction for customers, consumers, users and citizens, as well as their staff and their suppliers.
Reduce costs, increase cycle speed, eliminate unnecessary activities, generate greater added value is the watchword of the moment. So it is time to question the added value of educational services, health, justice, among many others.
How many budgetary resources are really allocated to education and how many to merely bureaucratic tasks? How is the opinion of students, parents and teachers taken into account when generating educational systems?
Is it generating a true added value in education that allows future well-paid jobs for individuals, and labor capacity for companies? How many resources for health are lost in bureaucratic-administrative expenses? How much prevention and how much reactive medicine?
If an immensity of resources are wasted in a country, and these resources can help improve the living conditions of its citizens, it is obvious that kaizen has a clear message to give, as a philosophy and system aimed at systematically discovering, preventing and eliminating waste.
Waste implies higher costs, therefore less competitive capacity, fewer jobs, wasted material resources.
The state must promote its own continuous improvement, as well as give impulse to the systematic improvement in the performance of companies through tax awards.
Conclusions
In a world with a continuously growing population, with resources that are increasingly expensive to exploit, the only viable solution is to eliminate the wasteful factors that prevent having a greater production using the same or lesser amounts of resources.
The option is not only feasible, but also necessary. More medicines, food, education, and benefits are possible without disturbing the ecological balance, nor unnecessarily destroying material resources.
Japan started from great needs and scarce resources, especially after the end of the Second World War, but with kaizen they were able to face their restrictions in terms of physical space and shortage of supplies. But these people knew and were able to face these contingencies through study, discipline, and planning put at the service of continuous improvement focused on quality.
Kaizen opens our eyes to a different way of thinking and acting accordingly. Governments, businessmen and trade unionists that do not evolve in the face of the continuous change of technological, economic, scientific, social, cultural, political and legal environments seriously jeopardize the ability of society to face new realities by being more competitive.
Kaizen combines both methodological, technical and philosophical aspects, making it possible to continuously improve different parameters that are proposed as operational and strategic objectives, either for the running of a company or organization, or in the case of a country's macroeconomics..
It must be recognized that it is no longer enough to say that a country is losing competitiveness or is declining in its levels of productivity, but it is necessary to give the tools and guidelines to successfully overcome these drawbacks.
It is within this spirit that the kaizen economy must be considered as a technique and a philosophy for action.
Bibliography
- Kaizen applied to public management - Mauricio Lefcovich - www.gestiopolis.com - 2003Kaizen applied to continuous improvement of quality, productivity and cost reduction - Mauricio Lefcovich - www.monographies.com - 2003
