Cost reduction through kaizen costing

A world in constant and rapid changes requires companies and institutions that adapt to them, not only reacting to the fait accompli in the fastest and most flexible way possible, but also proactively anticipating them, if they really want to succeed through a greater participation in the market, increased profitability levels on investment, greater added value per employee and better response to satisfaction from customers. Achieving this implies working on three fundamental axes that are interrelated, they are: costs - quality - delivery (CQD).

cost-reduction-costing-kaizen

Not only is it enough to achieve a certain level, which can be considered satisfactory for a moment, but also to continuously improve performance to achieve new and better levels, since what has been good or excellent until yesterday is no longer so today. and even less will be tomorrow. It is not only about creating or improving the services or products offered, but also doing it as quickly as possible, at the lowest cost, with the highest quality, adjusting to the tastes and preferences of the users of the chosen target, and with the best systems delivery to respond in quantity and time to customer demand.

As can be seen from what has been previously developed, change has become a fundamental element in the current and future society and economy. Change has always existed, but never in the accelerated way we currently live. Information and communication systems, and the great development of computer systems give rise to a spiral of continuous and accelerated changes, which implies the growing need for companies to have optimal information and analysis systems. Whoever has more and better information beforehand, and can analyze it optimally will not only have a better chance of surviving in the medium and long term, but also gain an advantage over their competitors.

Thus, in order to operate in a changing environment, the company must have an Information System that allows it to be in continuous knowledge of what is happening not only in the local, regional or national market, but also globally (what happens in another place in the world sooner rather than later it will reach its direct area of influence), in terms of tastes, new products and services, new designs, processes, materials, form of commercialization, quality levels and costs. This need is much greater for those companies that compete directly in the global market, although today very few companies or services are not affected. Another fundamental component is having the ability to analyze, which includes technical and computer skills.By technical capacity it should be understood the training and professional skills to understand and understand the signals both external and internal of the company, and by computing capacity it is meant having the appropriate hardware and software to perform data analysis quickly and accurately.

It is not enough to have information and proceed to its analysis, but these activities must also be carried out within and together with a Proactive Planning methodology, which implies not only anticipating future events, but creating these and making them come true. This means making the internal changes in products, services and processes necessary to anticipate competition and consumer wishes. There are two fundamental ways to carry out these changes, through Reengineering, or through a Continuous Improvement Process.

Interrelated with all these processes and methods we have Benchmarking, a tool with which the company can compare its products, services and processes with the best levels achieved by competitors, as well as with those that do not present levels for certain functions or processes that deserve to be adopted and adapted to the requirements of the company. It is not only about comparison, but also about covering these differences in competitiveness or excellence.

Through Reengineering, deep, fundamental and radical changes are made in the way and methodology in which business processes operate. It constitutes a rethinking in the way of operating, putting into discussion every aspect and way of carrying out the processes, be these those of production, services, financial, commercial and others that make the operation of the company.

Due to the radical nature of the changes, by whom they are carried out (fundamentally guided by consultants, beyond the participation of company staff) and by the investments necessary for their implementation, they must not only face resistance to change, but also the risks of profound changes.

In contrast, the Continuous Improvement Process presents a greater participation of the personnel (either by means of special teams, quality circles, and suggestion system), small but cumulative changes, less resistance to change, and low costs. Of course, it requires a high degree of discipline, every day tasks must be carried out to control and perfect the standards.

Various consulting firms and companies have created various Continuous Improvement systems in order to adapt them to the needs and cultural characteristics of the company and its environment. Although there are a diversity of prevailing methodologies or systems, the two most important currently are Kaizen and Six Sigma, both of which coincide in their fundamental aspects with the theories developed by Deming, Juran and Ishikawa.

Kaizen has its origin in Japan and is the product of the sum of a varied series of instruments, methodologies and tools, developed over time in numerous companies, within a common philosophical framework in which the need for improvement is emphasized. continuum of individuals in their different aspects, as a man, as a citizen and as a worker or businessman. Everything is perfectible and you have to have the availability, aptitude and discipline to improve every day every little activity, process, product and service.

Among the techniques and tools that Kaizen makes use of, we have: kanban, Just in Time, Quality Circles, TPM (Total Productive Maintenance), TQM (Total Quality Management), the 5 S, poka- yoke, autonomy, suggestion and alert systems, visual management, andon, Taguchi loss function, work cells and U-shaped distribution, Statistical Process Control, SMED (rapid setup times system), the Statistical Management Tools, the new management tools, the Quality House, the deployment of the quality function and value engineering among many others.

Among the authors and consultants who contributed to its development are prominent figures from Japan: Ohno, Shigeo Shingo, Karatsu, Ishikawa, Kano, Karatsu, Omae, Tanaka, Taguchi and Masaaki Imai, the latter was the one who compiled and combined in two contributions bibliographic the essence of Kaizen, being also the founder of the Kaizen Institute, which provides consulting and training services in various countries.

Of the companies we can say that there is no large Japanese company that does not apply kaizen, being the most renowned for the importance they had in the development and implementation of the various tools and methodologies: Toyota, Honda, Suzuki, Toshiba, Sanyo, Cannon, NEC, Minolta, Casio, Seiko, Citizen, Komatsu, Mazda, Sony, Nissan, Fujitsu, Mitsubishi and Subaru among other large Japanese corporations.

In addition, these same tools are being applied by these companies in their subsidiaries located abroad, as well as by European, North American and Latin American companies, among the latter we can mention: Matarazzo, Alpargatas, and the Buenos Aires Insurance Company.

2. Kaizen as a Continuous Improvement System

Getting deeper into Kaizen we can say about it, that it is a way of thinking that puts common sense into practice. It is a way of thinking and acting that is not exclusive to managers and engineers, but also includes supervisors and hierarchical employees or not. In addition to putting common sense into practice, it is about the need to develop a learning organization that allows you to achieve higher goals every day.

Within the company the gemba is of fundamental importance (workplace or that place where value is added, in manufacturing therefore it refers to the production area), and in this kaizen must be practiced following three fundamental rules that are housekeeping, the elimination of molting and standardization.

Housekeeping is a fundamental ingredient for good managerial management, through it, employees acquire and practice self-discipline. Employees without self-discipline make it impossible to supply good quality products or services to the customer.

Eliminate muda (waste) is to identify and dispense with all those activities that do not add value. The workers in the gemba add value or do not add value. This is also true for other resources, such as machines and materials. Suppose that the employees of a company add nine parts of change for each part of value. Your productivity can be doubled by reducing the dump to eight parts and increasing the added value to two parts. Eliminating shedding may be the most cost-effective way to improve productivity and reduce operational costs. Kaizen emphasizes the elimination of molting in the gemba, rather than increasing investment in the hope of adding value.

Small improvements in many processes, which take place day after day and week after week in the gemba, add up gradually, leading to significant improvements in quality, cost benefits, and improvements in productivity.

The third rule of procedure in the gemba is standardization. Standards can be defined as the best way to get work done. It is necessary to maintain a certain standard in each process in order to ensure quality. Maintaining standards is a way to ensure quality in each process and to prevent the reappearance of errors.

Traditional managers and entrepreneurs turn to buying new machines or hiring more staff, especially when business prospects are clear. Kaizen-minded managers tend to make better use of existing resources, thereby increasing productivity levels.

To develop kaizen, teamwork, the optimal development of human relationships and collective intelligence are essential. In a world with a high level of competitiveness, each company must ensure that its members work as a team to be able to fight together in the search for scarce resources. Winning the customer is essential, conquer and delight him, make him a partner and participant in the development of products and services to achieve full satisfaction from them. The executive as the brain of the organization requires all its employees and operators as terminal nerves to inform it about the operation of the processes and the needs and desires of users and consumers.

But the worker must not only put his hands to work, but also his brain, as a form of self-development and as a fundamental resource of the company to achieve victories in the competitive field of the market.

Collective intelligence is the confluence of knowledge, experiences and decisions of the group of individuals that make up the organization as a whole, for which it is essential to maximize the quality of the company's internal communication systems. Functional or sectorized work is no longer permissible, without interrelation between the various sectors, and even between the members of the same sector. Concurrent engineering and matrix organizations have emerged as ways to overcome those old limitations that nonetheless persist in many companies. In addition, collective intelligence converges with systemic thinking, which implies analyzing and making decisions focusing on systems. A system is a set of interacting elements that make up a unified whole in pursuit of a goal.Thus, when proceeding to analyze the problems of the company and the possible solutions, you must concentrate on the interrelation of the various elements and components that comprise it.

Optimal human relationships constitute that special chemistry that determines that a company with the same processes, machines and products as another, is superior to the latter due to that special set of interrelationships of individuals that allows optimal teamwork to be achieved through excellence in communication and decision-making systems.

Going from an organizational orientation to a process orientation is a very difficult cultural shift. This requires a fundamental rethinking in the management of the organization. the change is not easy. Everyone is in favor of change. They all think that he must change, that she must change, that they must change, but change me? No chance. Why do I need to change? It has already been shown that this is the correct way to do things. Change is a simple process. It requires a great deal of thought, a well-conceived plan, a complex approach, and consistent leadership.

The twelve standards that should be used in the change process are:

The organization must believe that change is important and valuable for its future There must be a vision that outlines the picture of the desired future state, which all people see and understand, Real and potential barriers must be identified and removed The entire organization should be behind the strategy of turning the vision into reality Organizational leaders need to model the process and build an example Training should be provided for new techniques required Evaluation systems should be in place so that results can be quantified Provided continuous feedback to all Training should be provided to correct unwanted behavior Recognition and reward systems should be in place to effectively reinforce the desired behaviorThe fundamental importance of teamwork, good human relationships, and excellence in communications should be emphasized. Demand discipline to consistently achieve new goals.

4. What is a process?

There is no product and / or service without a process. In the same way, there is no process without a product or service.

A process is any activity or group of activities that uses an input, adds value to it and supplies a product to an external or internal customer. Processes use an organization's resources to deliver definitive results.

A production process is any process that comes into physical contact with the product that will be delivered to an external customer up to that point at which the product is packed.

A company process is those service processes and those that support production processes. A business process consists of a group of logically related tasks that use the organization's resources to deliver defined results in support of the organization's objectives.

5. Processes and kaizen

As we have already expressed before, for kaizen it is essential to eliminate the change (waste / waste) constituted mainly by those activities or processes that do not add value.

So we have to:

Business processes constitute a significant part of the organization's costs.

There is a significant opportunity to improve market share by improving business processes. Process improvement allows you to make better business decisions and implement them more quickly. Process improvement helps improve and control operations.Process improvement improves production flow.

Kaizen is a systematic methodology that has been developed in order to help an organization make significant progress in the way it runs processes. The main objective is to ensure that the company has processes that:

Eliminate errors Minimize delays Maximize use of assets Promote understanding Be easy to use Be customer friendly Be adaptable to changing customer needs Give the organization a competitive advantage Make more productive use of staff

6. Selection of processes to improve

The selected processes should be those in which management, gemba employees and / or customers are not satisfied with the status quo. Typically, one or more of the following symptoms will be the reason for selecting a process for improvement:

Problems and / or complaints from external customers Problems and / or complaints from internal customers High cost processes Processes with long cycle times There is a better known way (benchmarking) There are new technologies Excessive inventory levels Lack and / or too much use of space Need to reduce the time of cycle and / or overcome the existence of bottlenecks Possibilities or needs to improve quality and productivity levels

7. Processes and costs

Costs can be defined based on:

The use or consumption of resources for the purposes of the production of goods or services, or the consumption of resources or energy to achieve the entity's purposes.

Since the products or services are the result of a process, both the levels of quality, as well as delivery, productivity or costs, depend on the interrelation of a series of factors, which are the product of the same variability of their behavior over time. give rise to variations in the levels mentioned above.

All these factors affect the total cost of the company, its products or services, as well as its various types and levels of costs. Each of them operating on the levels of quality and productivity, of each of the activities or processes give rise to costs. Within a normal framework the changes in each item and between the items are compensated in such a way that the cost levels evolve within certain limits (Upper and Lower Control Limits), which constitutes the capacity of the process to generate goods or services within a certain cost level.

Special reasons may be the cause of variations not common to the process. One of the fundamental tasks is to identify the special and normal causes of variation in costs to act accordingly. These are not the same adjustments that will have to be made in the case of common causes of variation, when the variations are for special reasons (not random). Treating a common cause as if it were a special one would cause more variation. Whether the costs exceed the Upper Limit or if it crosses the Lower Limit must be analyzed. In the first case to overcome the problem that causes the highest costs, and in the second to learn from what happened in order to operate at lower costs.

These costs are part of a standard and these standards must be continuously improved through the cycle: Plan-Perform-Evaluate-Act (PREA), but previously the balance and normalization of the processes must be achieved through the cycle: Standardize-Perform-Evaluate- Act (EREA).

Once an improvement process has begun, new and improved standards can be installed, and efforts made to stabilize the new processes, initiating a new stage of maintenance and subsequent improvement.

This graph not only serves as elements of reasoning, but by deducing the variables corresponding to each of the curves, important advances can be made in the analysis work through simulations.

12.2. Improve productivity

Productivity improves when fewer inputs generate the same output, or when output increases with the same amount of inputs. Inputs, in this case, refers to elements such as human resources, equipment, public services and materials. Production implies elements such as products, services, performance or added value. Reduce the number of people on the line; the fewer the number of employees on the line, the better. Not only does this reduce cost, but more importantly, it reduces quality problems, as fewer hands present a less chance of making mistakes. When productivity increases the cost is reduced.

According to the American economist Paul Krugman, "depression, rampant inflation, or civil war can make a country poor, but only productivity growth is the engine of economic growth for both a country and an individual organization".

It should be noted that although a higher level of quality implies better levels of productivity, productivity may be the result of other factors. The improvement in food, lighting, cleaning, leadership, among others, has a favorable impact on productivity levels. These factors are today considered to be part of Total Quality Management.

12.3. Reduce inventory

Inventory takes up space, prolongs production lead times, generates transportation and storage needs, and absorbs financial assets. Products and work in process that take up space in the factory or warehouse area do not generate any added value. On the contrary, they deteriorate in quality and can even become obsolete overnight when the market changes or when competitors introduce a new product.

12.4. Shorten the production line

In manufacturing, a long production line requires more people, more work in process, and a longer total cycle time. More people on the line also means more mistakes, which lead to quality problems.

12.5. Reduce downtime of machinery

A machine that stops, interrupts production. Malfunctioning machinery necessitates batch production, additional work in process and inventory, and additional repair efforts. Consequently, quality also suffers. All of these factors increase the cost of operations. Such problems are similar in the service sector. The idle time of operation in the computer or communication system generates an undue delay, greatly increasing the cost of machinery operations. When a newly hired employee is assigned to a work station without proper equipment handling training, the consequent delay in operation can be almost as costly as if the equipment was stopped.

12.6. Reduce space

As a rule of thumb, manufacturing companies use four times the space they actually need, twice the number of people they require, and ten times the cycle time they actually need. Generally, gemba kaizen eliminates conveyor belts, shortens production lines, incorporates separate workstations within the main production line, reduces inventory, and decreases transportation needs. All of these improvements reduce space requirements. The additional space freed up by the gemba kaizen can be used to add new lines or can be reserved for future expansion. A similar improvement can be introduced in a different manufacturing environment.

12.7. Reduce total cycle time or lead time (processing time)

Total cycle time or lead time begins when a company pays for raw materials and supplies and ends only when the company receives payment from its customer for products sold. Thus, the waiting time represents the turnover of money (charging for this fundamental reason the application of kaizen to the treasury processes, as well as to those of credit management and collections). A shorter lead time means better use and rotation of resources, greater flexibility in meeting customer needs, and lower cost of operations. Waiting time is the true measure of management's ability, and reducing this interval should be the primary concern of management.The move in the waiting time area represents an excellent opportunity for kaizen.

Ways to shorten lead times include improving and speeding up customer order feedback and better communicating with suppliers; This reduces the inventory of raw materials and supplies. Modernizing and increasing the flexibility of gemba operations can also reduce production lead times. When everyone in an organization works toward this goal, there is a real impact on cost effectiveness.

13. The role of the gemba in reducing overall costs

If the gemba cannot make its procedures short, flexible, efficient, free of defective products and machinery downtime, there is no hope of reducing inventory levels for supplies and parts or becoming flexible enough in order to to meet the stringent demands of today's customers for higher quality, lower cost, and fast, reliable delivery.

It should be made clear that improving quality and reducing cost are compatible objectives. Furthermore quality is the foundation upon which cost and delivery can be built. Without creating a robust system for quality assurance, there can be no hope of building effective delivery and cost management systems. Not only is it possible to improve quality and reduce cost, but we must do both in order to meet the requirements of today's customer.

The simultaneous execution of Quality - Costs - Delivery: it is the supreme objective for the manager of these times. At a time when customers are demanding ever better levels of quality, costs and delivery; management must place a strong emphasis on priority to achieve these three elements.

14. Supervision

Supervising or controlling all processes in the event that something goes wrong is a waste of time and effort. Any automatic cycle process or machine must be reliable enough so that the operator does not have to control them during the cycle. Simple and reliable automation of processes will give staff the opportunity to perform other tasks, be they maintenance or preparation, or other productive tasks or problem analysis, and at the same time, also improve the balance of workload. Supervisors who cannot leave their work area for fear that staff will not work effectively during their absence are wasting time that could be more usefully spent on improving processes, planning and analyzing.Quality inspectors are controllers who monitor something that can negatively impact product quality. If responsibility for quality is given to the people who “own” and run the processes, and those people accept it, then no inspectors will be needed.

15. Poor design

Ignoring the consequences of design decisions is a common feature of many conventional product designers. There is an absence of practical wisdom in the design of the final product, the consequences of which are a series of problems for the production staff. Components are given a tolerance without reference to the capabilities of the available processes. Too many components are intended for a single assembly, and these components are not designed to take advantage of the forces generated by the process; For this reason they fail under the efforts of mechanization, assembly or any type of subjection. Drawings and specifications are made without any checking or verification.

Design features that the customer does not need or want are accepted. A simple design detail can significantly alter the level of investment required to manufacture a product. All this and more is a consequence of designing in isolation, without any sensitivity to the needs of internal and external customers.

After-sales service is essential, especially for capital goods or durable consumer goods, where the consumer appreciates, values and requires these services.

Although today sales can be made online, the concept of salesperson currently transcends the mere taking of orders to be a problem solver for the customer, as well as contact between the company and the market.

While among the activities with added value for the company (called support activities or support without added value for the client) we must mention those of tool design, programming, quality control, work study, planning, organization, direction, production scheduling among others.

Immediately below the level of non-value-added support are the activities that do not generate added value, but that exist because they are the result of all the deficiencies and errors that have been perpetuated in the company. Raw materials for activities that do not produce added value are failures. Waste, repetition of work, repairs, substitutions, destruction, manipulations, overproduction, inspections, administrative bureaucracy, which, although valuable for the operation of the company, do not generate direct value for the client, nor they transform inputs, nor are they generators of an “economic plus”. Also within this qualification are internal transportation activities (the external one brings the product to the consumer and supplies to the company), storage,supervision, and any other activity that consuming resources does not generate added value for the customer.

20. Conservation of energy

Reducing wasteful effort conserves energy. Energy is the power to do work and should only be used to do useful work: if it is not useful, it has no added value. The less energy required to complete a given task, the higher the productivity of this task. A number of common categories of waste can be recognized in a factory, all of which are essentially independent of the types of products and / or services, or the processes used.

Overproduction

It is the practice of doing more of what is needed and more of what can be used immediately. Many world-class companies consider this to be the worst of all categories of waste. Causes of overproduction include: careless forecasting, allowing wastage and repetition of the same job, inexpensive batch quantities (partly due to lack of use of the SMED), use of machines, accumulation of stocks, keeping staff busy and poor production scheduling. Overproduction, planned or not, is the result of a lack of effective control of manufacturing processes. Overproduction uses resources that do not immediately become an outlet generating income for the company.

Stocks

All materials, components and finished products stored as stock lose value. The causes of excessive stocks can be, among others: overproduction, poor sales forecast, long delivery time by suppliers, poor production planning, maximum and safety stocks, tolerance of remnants and repeated parts, times planning too long, production bottlenecks, late delivery of materials, poor control of stored materials, quality problems, poor documentation control, and obsolescence of products. Excess stocks are a catalog of managerial incompetence and one of the biggest losses of resources.

Excessive handling of materials

It is the result of an overstock. The larger the stock, the more material handling will be required to maintain it. A poor plant layout represents a significant increase in material handling. This should not be solved by automating the handling processes, but by overcoming the causes of excess handling by drastically reducing stocks.

You wait

Materials waiting to be used are stocks. If the staff awaits instructions, it means that the management is deficient. Causes include: poor job planning, uneven workloads between processes, equipment failure, poor quality rejections, late delivery, lost materials, and poor supervision.

Wasting time

If the components are not designed and made with the correction that requires easy assembly, there will be excessive losses of time. If the processes are not adequate, the personnel will lose time in the assembly of the components. Continual errors in setting up a machine is an indicator that the process is not under control (importance in the SMED application). A lack of understanding of process variation is the main cause of wasted time due to reaction to unexpected variation that cannot be changed without first changing the process.

Excessive movement

A poorly designed workstation causes staff to waste energy on unnecessary movements. If the canteen and toilets are located too far from the normal workplace, staff will have to walk hundreds of unnecessary miles throughout the year. The tools, equipment, materials and instructions needed to get the job done should be placed in the most convenient place for the operator to save energy.

Defective pieces

The time and resources wasted in redoing defective parts are never recovered. The defects of these parts are the cause of the main interruptions in the progress of the processes. The cost of defects is even higher when it is the external customer who discovers them.

Defective equipment

Poorly designed or poorly maintained equipment contributes a lot to manufacturing defects, work interruptions and accidents. Companies must establish Total Productive Maintenance whose purpose is zero breakdowns (see point 12.5). Increasingly, self-diagnostic devices are being incorporated into production equipment to monitor process conditions and provide warning when preventive maintenance is required.

Balancing workload

Very few mainstream companies are able to achieve an equitable distribution of the workload among all the people in their organization. There are always people or departments that normally have more work than others. The end result is that more people have to be employed and more efforts are needed to evenly distribute the workload. Doing this means increasing the inflow of resources without the corresponding increase in outflows. Productivity fails. This has as its fundamental cause the rigidity of the formal structure of the company (or a labor legislation that prevents the polyfunctionality of employees or workers).Rather than encouraging staff to move freely within departments or across functional barriers to get to where work is to be done, employees are confined to limited areas of performance.

Rotation of workers

To carry out the rotation of workers, supervisors, foremen or section leaders must develop a training plan such that at the end all workers in the section master all processes. The control of the effectiveness of the rotations is carried out by calculating the Polyvalence Rate (TP) which is defined as the quotient between the sum of the number of processes that each worker dominates (Pi) for all the workers in the section (n) divided by the total number of processes by the total number of workers.

S (from i = 1 to n) Pi

nx P

The goal to be pursued is that the polyvalence rate is as close as possible to 100%.

This is of fundamental importance in the development of work cells or U-shaped distribution. In what way: assuming the existence of a process with four activities such as cutting, milling, machining and bending, in case of a full activity such as could If we were 4,000 parts per day, we would have one worker per machine, but if production were reduced to 25% (1,000 units), a single worker could take over the entire operation, passing the remaining workers to other activities. This in a productive organization organized not by product, but by functions is made impossible by the specialization and the arrangement of the machines.

Inconsistent use of resources

In conventional companies, the use of resources exceeding what is necessary is one of the most common causes of waste. This defect falls into company management blinded by technology, such as those that install complex control systems to meet simple needs. This use of excessive space is also one of the great causes of energy waste. This often means that companies have to invest in additional buildings to accommodate the shortcomings of the organization. Excessively large stocks, poor plant layout, overstaffing, and sometimes the desire to improve the image of the institutional building can lead to expansion that does nothing to improve productivity.Special attention must be paid to energy losses such as electricity, steam, and hydraulic oils, coal and diesel, among others.

As energy costs grow and as energy supply and use require a medium-term planning effort, the need to establish energy management mechanisms is understood. In other words, it is necessary to know the consumption and uses of the different energy sources, not only at the level of global values, but also in a particular way applied to the different internal processes and consumption. From here it is possible to predict the increases in energy used that will occur when increasing industrial production capacity, or it is possible to set cost containment measures through an intelligent savings program. It is interesting to know that immediate corrective measures can be applied without investment costs that allow energy savings.

Poor design

Given that this aspect was already a reason for consideration in point 15, we will only show the relationship between each component with the cost of the product and its effect on the cost of production.

Supervision

Although this aspect was developed in the previous point 14, it is worth noting the difference between the traditional supervision with a greater focus on Leadership and the current one with a clear focus on Leadership.

A leader is system oriented, interdependencies, and working together A boss uses command and control from the top down, with little concern for how this affects people.

The vision of the goal is a vital attraction point for the elimination of regressive behaviors. This vision drives activities so that the elements of the system are under positive stress and that regression in one area meets the resistance of all others.

Teamwork

The intelligence of the company is vector. If we had four vectors pushing to one side and one vector pushing to the other, the sum total of those vectors would be three and not five.

Regarding teamwork, in a sum of 1 + 1 we can obtain three different results:

1 + 1 <2

This first result (“one plus one less than two”) means that the whole is less than the sum of the parts and that one element is harming the other in a process of self-destruction.

1 + 1 = 2

The result ("one plus one equals two") means that each person works as if they were alone. The group's decision is in no way different from the individual decisions made by each of its members.

1 + 1> 2

When the result obtained is "one plus one greater than two"), the whole is revealed greater than the sum of the parts, which implies an interaction between the two components (two people, two brains) that allow the phenomenon to manifest of synergy.

There is no commitment without participation

Individual decisions rarely outperform group decisions, both in quality and acceptance.

The effectiveness of a decision can be expressed by means of a mathematical equation in which one of the factors is the quality of thought (PC) that the decision implies, and the other is the acceptance (A) of the idea by the members of the team in charge of carrying it. finished.

Efficiency = CP x A

You may be working in your company with a specialist who has a Ph.D. and has been trained in the best school of Business Administration in the world. Your ideas can be brilliant. Your quality of thinking can be great, worthy of a 10. But imagine, as a hypothesis, what can happen in the event that this specialist is not accepted by the team that must put his ideas into practice. The result could be expressed like this:

Efficiency = 10 x 0

That is:

Efficiency = Zero

It is important that you care about the quality of thought in the company. However, this is not enough, because no matter how brilliant a decision is, if it is not accepted it will not be effective.

As expressed at the beginning, productivity, quality, costs and customer satisfaction do not depend only on processes, machines, raw materials, plans and calculations, it depends on the richest and most vital thing that a company has, which are people, but not that of these as a simple sum of individuals, but as collective (or group) intelligence that, working as a team, sets goals to achieve and overcome.

The functioning of work teams is a growing concern of senior management and leaders in general. The true team has all the potential to improve the performance of small groups at all levels of the business, and its versatility is in tune with the speed, intense competition, and accelerated change that more and more high-performing organizations face.

25. ACTION PLAN

Make managers and employees aware, with the participation of the unions, of the need to adapt to the changes and evolutions of the globalized market, continuously and consistently improving the levels of quality, productivity, costs, delivery times and flexibility.. It is necessary to become aware that if these changes are not operated, everyone may lose their job or the few who will be able to keep it will have subsistence income. Form a planning, implementation and monitoring team in the application of continuous Kaizen improvement. The total commitment of the highest executives of the company is required, which is why the team must have the General Director of the Company or CEO as authority. Plan the implementation of Kaizen.Bear in mind that Kaizen aims not only to reduce costs, but also quality, productivity, delivery, among others. But even more it emphasizes the need to improve quality in order to improve levels of productivity and costs. Train personnel for teamwork in the company as a whole and in the sectors or processes. It should include group dynamics work. Train staff in: kaizen, its principles, philosophy, and management instruments and tools. Training in problem-solving and decision-making methods. Training in management and statistical tools, including CEP & G. Survey and evaluation of operations and activities. Questionnaires and fluxograms. Development of diagnosis and evaluation of the current system and processes,identifying changes (waste and / or waste), and unproductive processes and / or activities. Implement the 5 S. Evaluate the information system. Its speed and precision Establish Statistical Control of Processes and Management Establish a statistical data recording system corresponding to different factors, such as deadlines, quantities, amounts, failures, claims, etc. Establish Quality Circles and Improvement Teams. Establish the Quality Cost system Establish suggestion systems Establish a Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a process of reducing suppliers) Establish a Balanced Scorecard by using CEP & G (Control Points and Review Points). Evaluate the operation of the Kaizen system and improve it.and unproductive processes and / or activities. Implement the 5 S. Evaluate the information system. Its speed and precision Establish Statistical Control of Processes and Management Establish a statistical data recording system corresponding to different factors, such as deadlines, quantities, amounts, failures, claims, etc. Establish Quality Circles and Improvement Teams. Establish the Quality Cost system Establish suggestion systems Establish a Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a process of reducing suppliers) Establish a Balanced Scorecard by using CEP & G (Control Points and Review Points). Evaluate the operation of the Kaizen system and improve it.and unproductive processes and / or activities. Implement the 5 S. Evaluate the information system. Its speed and precision Establish Statistical Control of Processes and Management Establish a statistical data recording system corresponding to different factors, such as deadlines, quantities, amounts, failures, claims, etc. Establish Quality Circles and Improvement Teams. Establish the Quality Cost system Establish suggestion systems Establish a Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a process of reducing suppliers) Establish a Balanced Scorecard by using CEP & G (Control Points and Review Points). Evaluate the operation of the Kaizen system and improve it.Establish Statistical Control of Processes and Management Establish a statistical data registration system corresponding to different factors, such as deadlines, quantities, amounts, failures, complaints, etc. Establish Quality Circles and Improvement Teams Establish the Cost system of Quality Establish suggestion systems Establish a Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a supplier reduction process) Establish Balanced Scorecard by using CEP & G (Control Points and Review Points) Evaluate the operation of the Kaizen system and improve it.Establish Statistical Control of Processes and Management Establish a statistical data registration system corresponding to different factors, such as deadlines, quantities, amounts, failures, complaints, etc. Establish Quality Circles and Improvement Teams Establish the Cost system of Quality Establish suggestion systems Establish a Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a supplier reduction process) Establish Balanced Scorecard by using CEP & G (Control Points and Review Points) Evaluate the operation of the Kaizen system and improve it.Establish Quality Circles and Improvement Teams Establish the Quality Cost system Establish suggestion systems Establish Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a supplier reduction process) Establish Balanced Scorecard through the use of CEP & G (Control Points and Review Points). Evaluate the operation of the Kaizen system and improve it.Establish Quality Circles and Improvement Teams Establish the Quality Cost system Establish suggestion systems Establish Kaizen Budget system Establish: TQM, TPM, JIT / Kanban (start a supplier reduction process) Establish Balanced Scorecard through the use of CEP & G (Control Points and Review Points). Evaluate the operation of the Kaizen system and improve it.

26. Diagnosis of molts

By external consultants: through a guide list of waste or waste, and by surveying processes and activities, they detect changes. Reporting the concept, importance, value in time or quantities, value in monetary units, corrective actions to be taken (recommended).

As suggestions from the staff (individually): by means of a form, each employee will periodically deliver a list of wastes detected.

As suggestions from Quality Circles: using the same methodology as the previous one.

An Improvement Team made up of Technicians and employees will analyze, through management tools, the suggestions raised regarding changes, and will designate a special group or quality circle for its analysis and correction proposals.

The Quality Circles will also be able to detect molts on site and analyze correction proposals, submitting them for consideration to the Improvement Team.

Re-examining unproductive mistakes

The Kaizen system is a method to conscientiously eliminate unproductive costs and increase performance. In production, "unproductiveness" refers to all production situations that only increase costs without adding value (for example, surplus personnel, stock and equipment). When there are too many workers, equipment and products, only the increased cost and secondary loss are achieved. For example, if there are too many workers, unnecessary work is used which, in turn, increases the consumption of power and materials. This is a secondary loss.

The biggest of the unproductive is the excess of stock. If there is too much stock to store at the plant, we must build a warehouse, hire workers to transport the goods to this warehouse, and probably buy a transport trolley for each worker. In the warehouse, staff will be needed to control the stock and prevent its deterioration. Still some of the stored goods will suffer damage. Therefore additional workers will be needed to repair the damaged goods. Once stored in the warehouse, a regular inventory of the goods should be made. This requires more workers. At a certain level, the help of computers will be required. If stock quantities are not sufficiently controlled, it can lead to shortages. So,Despite daily production planning, some will think that shortages are a reflection of production capacity. Consequently, a plan is devised to increase production capacity, which is included in the equipment investment proposal for the following year. With the purchase of these equipment, the stock will increase even more. This vicious cycle of unproductive costs that generate more unproductive costs is hidden in all stages of production and in all kinds of activities. To avoid this, managers and supervisors of production and administration must be fully aware of the unproductivities and their causes.A plan is devised to increase production capacity, which is included in the equipment investment proposal for the following year. With the purchase of these equipment, the stock will increase even more. This vicious cycle of unproductive costs that generate more unproductive costs is hidden in all stages of production and in all kinds of activities. To avoid this, managers and supervisors of production and administration must be fully aware of the unproductivities and their causes.A plan is devised to increase production capacity, which is included in the equipment investment proposal for the following year. With the purchase of these equipment, the stock will increase even more. This vicious cycle of unproductive costs that generate more unproductive costs is hidden in all stages of production and in all kinds of activities. To avoid this, managers and supervisors of production and administration must be fully aware of the unproductivities and their causes.This vicious cycle of unproductive costs that generate more unproductive costs is hidden in all stages of production and in all kinds of activities. To avoid this, managers and supervisors of production and administration must be fully aware of the unproductivities and their causes.This vicious cycle of unproductive costs that generate more unproductive costs is hidden in all stages of production and in all kinds of activities. To avoid this, managers and supervisors of production and administration must be fully aware of the unproductivities and their causes.

All the primary and secondary non-performing activities described ultimately become part of the direct and indirect labor cost, depreciation cost, and overhead. They will therefore contribute to cost increases.

Considering these facts, we can never ignore the elements that increase costs. Unproductiveness caused by a single mistake will wipe out the profit that normally amounts to only a small percentage of sales and thus jeopardize the business itself.

Eliminating unproductiveness is essentially intended to reduce costs by reducing labor and stock, exposing excess tooling and equipment availability, and gradually reducing secondary unproductiveness.

The big question is: what to do with the excess staff?

If we do not ensure continuity of work to employees and workers, not only will they not contribute to improving the company day by day, but they will be afraid to do so due to the possibility that when productivity increases, or indicate the existence of unproductive activities, they will lose their jobs.

There are two solutions:

The first consists of generating new production units within the same company to use both the labor force and the spaces left over from the improvements introduced.

The second consists of creating separate economic units but owned by the main one, which are perfected in certain tasks that they can provide both to the mother company and to others in such a way as to use the surplus resources more fully. Even when the number of personnel is not enough to operate and productively manage a unit of these characteristics, the parent company tends to associate itself with another company with excesses to form a common unit which, apart from providing service to both companies, will produce services to other third parties.

Paretian Analysis

Using the Pareto Chart, proceed to detect the few vital and many trivial, thereby achieving strong leverage effects on the results.

We will proceed to select the factors that have the greatest impact on failures, costs, claims, reprocessing, non-production and waiting times. The correct way is to apply successive Pareto analysis that is observed in the following graph.

Mute Detection

Activities or Processes

Deep analysis by Areas or Sectors

Product or Service

Kaizen Budget

Based on the expenses or costs of the previous year, create a budget based on activities with their respective amounts, classifying them according to whether they add value for the client, if they are support activities or if they lack added value, depending on This classification establishes objectives of elimination, reduction or cost control.

ACTIVITIES	COST	CLASSIFICATION	REDUCTION	COST
	YEAR 2002		PROPOSAL	OBJECTIVE
BANK RECONCILIATIONS	$ 800.00	SVA	25%	$ 600.00
PROCESS PROGRAMMING	$ 3,900.00	bird	10%	$ 3,510.00
SUPPLY MOVEMENTS	$ 82,700.00	ASVA	80%	$ 16,540.00
WAREHOUSES	$ 650,800.00	ASVA	60%	$ 260,320.00
SUPPLY ORDER	$ 7,960.00	ASVA	Four. Five%	$ 4,378.00
OIL PROCESSING	$ 10,960,000.00	AVA	twenty%	$ 8,768,000.00
ISSUE OF CHECKS	$ 1,500.00	ASVA	70%	$ 450.00

Activity Matrix - Objectives

Through this matrix, we proceed to analyze, on the one hand, that the activities meet the objectives of the company, on the other hand, how well they are doing, and lastly, detect objectives not covered by any activity or process.

	OBJECTIVES
ACTIVITIES	Objective «X»	Target "Y"	Objective «Z»	Objective «Q»
Activity A	10	8	7
Activity B	7	9	10
Activity C	5	4
Activity D	8		9
Activity E	7	6	9
Activity F

Thus, we have that Objective “Q” is not being covered by any of the current activities of the company, while Activity F does not cover any established objective.

On the other hand, there are objectives covered to a better or worse extent by each of the activities that support them.

From this analysis we have: on the one hand, the need to eliminate an activity that does not cover any established objective, on the other, to effectively and efficiently develop activities that allow the achievement of Objective “Q”, and lastly to improve the performance of current activities, as for example in the case of Activity C which provides a low level performance.

Permanent benchmarking

We proceed to compare the levels of the company in various aspects such as product costs, costs of activities, tasks or processes, productivity, failures, delivery times, financial and economic indexes, customer satisfaction levels, etc., with the levels of the best companies in each item.

	LEVELS OF	LEVELS OF	BUSINESS	DIFFERENCE OR
	BUSINESS	TOP		GAP

CUTTING PROCESS COST PER TON. HOUR	$ 800.00	$ 650.00	GENERAL RIGHT	$ -150.00

ADM COSTS. GRAL. FOR EACH $ 10,000 OF VTA.	$ 720.00	$ 450.00	NPK Corp.	$ -270.00

DELIVERY TIME	THREE DAYS	1 DAY	ROULF SA	-2 DAYS

Parts per million failures for double converging rings	78 ppm	15 ppm		-63 ppm

Objective pursued with this tool, to monitor closely and continuously how other companies are behaving, whether or not they are competitors, in order to establish objectives for improvements in processes or activities.

Total Productive Maintenance - Improvement Proposals

As in the case of the move, deliver forms to workers and employees with the intention that they inform as a suggestion "Proposals for Improvement" for the maintenance of machines, equipment and tools.

Check list about TPM

It will be analyzed by this means:

Accessibility Maintenance / Cleaning Lubrication Management

It will be in charge of an internal or external operational auditor (consultant)

In the case of Accessibility, a series of questions will be answered, among which will be among many others:

Are areas of difficult or dangerous accessibility identified?

Have areas inaccessible for cleaning been removed?

In terms of Maintenance and Cleaning, the questions would be like the following:

Have the causes of dirt been eliminated?

Is the cleanliness of the machine being maintained?

Regarding Lubrication, are the moving parts lubricated?

And for Management, do the team meetings take place regularly? Are operational programs exposed?

The hunt for the ghost company

The shell company is all that "added value" from the activities of the company that is not present in the product that the consumer purchases, and that will end up negatively increasing the company's bottom line. This is, for example, the cost of waste products in the process of manufacture or intermediate storage, etc. Currently they are called the "Olympic Zeroes": zero waste, zero inventory, zero delay, zero defects, zero breakdown, zero papers, zero accidents.

Within the classic Taylor company, the organization of production and control procedures make it possible to achieve a certain level of product quality at the end of the manufacturing process, which, in the long run, leads to "admitting standards." One is satisfied if they are reached, one reacts if one is below them.

Within kaizen management, there are no definitive standards: one tends to always do better and if necessary "otherwise" and ideally reach all the "Olympic Zeroes".

Making it possible requires:

Final thoughts

Businesses can and should do better every day. They can and should raise your expectations, and broaden your horizons.

The clients

They must give due consideration to customers again. Customers are extremely important. If we eliminate them, the need for businesses and services disappears. Industries and utilities have begun to realize that “the customer” must be the focus of their attention and that ignoring this means the inevitable decline in the case of private industry.

Entrepreneurs, managers, and workers must understand and understand that the sole purpose and reason for their work is to provide a service or product to others. All the components of the organization have “clients” and these clients are, in each case “the one next in line”, that is, the department or person to whom they supply the product or service they carry out. Of course, these same people who are "the customer" in an activity are "suppliers" to the "customers" that follow. And in this way the "supplier-customer" chain continues until it reaches the final customer, the one who buys the product or uses the service and pays the salaries of everyone in the organization. This "supplier-customer" relationship is essential to any total quality program,and provides the path that connects the real wishes of our end customer with the deep functions and activities of the organization.

Continuous improvement

It is necessary to see the wealth represented by the experience accumulated over the years by those who are actually closer to work. Through kaizen improvements can come through a host of small improvements that, taken together, can contribute more to business efficiency than the largest of "macro changes."

The improvement of any process will encompass the identification and solution of "problems"; and therefore, to make sure that everyone can contribute to the improvement process, we must teach that helps people understand problem-solving techniques.

Each department or group should review:

what they are currently doing what the departments and people who are their “clients” need what needs to be done to get closer to the “client” requirements

By making the improvements we are reinforcing each link. By reexamining the objective of each department we make sure that the links are correctly linked together.

Reduce bureaucracy

Bureaucracy is a defensive mechanism to restrict variations; it is based on fixed procedures with which predictable results are assured. Unfortunately it also prevents changes. A little bureaucracy is essential. An overly bureaucratic organization where it is outlined exactly who can do what, without specifying simple means of change, that says exactly how things are going to be done, will have to be seen as an obstacle in any kaizen (continuous improvement) program.

ANNEXES

Bibliography

IMAI, Masaaki

How to Implement Kaizen in the Workplace - Mc Graw Hill - 1998

IMAI, Masaaki

Kaizen. The Key to Japanese Competitive Advantage - CECSA - 1999

TANAKA, Masayasu - YOSHIKAWA, Takeo - INNES, John and MITCHELL, Falconer

Modern Cost Management - Díaz de Santos - 1997

MURATA, Kazuo - HARRISON, Alan

How to Implement Japanese Management Methods in the West - Legis - 1991

ISHIKAWA, Kaoru

What is total quality control? - Standard - 1994