Beyond Strategic Kaizen Performing Synchronous Profitable Operations
Currently, the challenge for manufacturing organizations is how to achieve their expected profit by continuously improving productivity or reducing costs. Manufacturing organizations have been using different improvement approaches to achieving cost reduction and productivity improvement for years by eliminating various losses and waste structures, such as excess inventory, excessive workforce, excessive capacity, excessive utility consumption, and so on. But is the problem solved? Unfortunately, no! Often manufacturing companies focus on maximizing the flow and meeting customer needs but forget their real aim – to make a profit for their stakeholders. Too many organizations meet customer expectations by seeking to continuously synchronize the flow to market demand but forget to check that they are doing it profitably enough to ensure business continuity and prosperity. When the financial results show that they are not so profitable, it is already too late. Moreover, the strategic direction of systematic improvements according to the sales trend – depending on the current degree of production capacity utilization and its dynamic effects on cost structures – is deficient in many manufacturing companies. So, would the failure of strategic and profitable systematic improvements be an option? Of course not!
If the ultimate goal of the organization is to create target profit for stakeholders, then the behavior and strategic systematic improvements must be directed to those scenarios, strategies, tasks, problems, and “production levers” that are best based on creating the target profit. That’s what Strategic Kaizen thinking does – the simultaneous and consistent achievement of systematic operational and financial improvements in a strategic and operational manner. It achieves both synchronous operations at market demand by fulfilling takt time and profitable operations in accordance with profit demand by fulfilling takt profit. In short, the Strategic Kaizen mission is striving for the fulfillment of the ideal state of operations called synchronous profitable operations. In this book, the author, while presenting in detail the seven processes of Strategic Kaizen methodology, exposes the answer to historically incomplete thinking of productivity improvements for target profitability. The uniqueness of the book is reinforced by the detailed presentation of the successful application of the Strategic Kaizen thinking over the years in two multinational manufacturing organizations operating in highly competitive markets, addressing the synchronous profitable operations for both the sales increase scenario and the sales decrease scenario. Moreover, it presents examples of the practical application of the “white-collar” Strategic Kaizen.
Essentially, by adopting the Strategic Kaizen methodology presented in detail in this book to consistently achieve the ideal state of a manufacturing organization, organizations will enter a new paradigm of thinking of strategic improvements – Strategic Kaizen thinking – to meet annual and multiannual target profits in a unique and effective way that operates according to its own strategic and operational management system.
Part I: Strategic Improvement for Profitability and Productivity
Chapter 1: Changing the Strategic Approach of Systematic Improvements
- Strategic Productivity Improvement Dilemma
- Is Conventional Strategic Kaizen Really Effective Enough in World Competition?
- The Continuous Strategic High Productivity Improvement
- Estrangement Results Between Company Health and Just Synchronous Operations
- Changing from Synchronous Operations to Synchronous Profitable Operations
- Synchronous Profitable Operations Should be Continuously Enhanced
- The Crucial Role of Strategic Productivity Improvement
- The Potential for Profitability Increases Based on Productivity
- Targeting the Strategic High Productivity Improvement
- The New Approach to Strategic Systematic Improvements
- The Strategic Kaizen for Synchronous Profitable Operations
- The Concept
- The Basic Image
- The Seven Basic Processes
- Five Problems Targeted to Be Solved
Chapter 2: Current Condition, Basic Policy and Strategy
- Studying the Impact of Current Strategies on Operations and Lowering Costs
- Deep Understanding of the Company's Key External Factors
- Internal Strategic Capabilities
- Current Business Performance Against Expectations
- Operational and Financial Performance
- Current Level of Synchronous Profitable Operations
- The Basic Policy Framework for Strategic Kaizen
- At the Cutting Edge: Identifying Strategic Drivers
- Two Productivity Improvement Scenarios
- The Strategic Intent of Each Strategic Drivers
- Winning Key Strategies
- Systematic Productivity Improvement Strategies for the Sales Increase Scenario
- Systematic Productivity Improvement Strategies for the Sales Decrease Scenario
- Tracking Strategy through Strategic Key Performance Indicators
- Key Performance Indicators at the Strategic Level
- Stratifying Strategic Key Performance Indicators
Part II: Strategic Kaizen Methodology
Chapter 3: Continuous Measurement and Interpretation
- The Stake: Kaizenshiro Setting
- The Main Purpose: From Strategic Intent and Kaizenshiro to Identifying Must Win Strategic Kaizen
- First Process: Studying the Potential for Strategic Systematic Improvement Points
- Flow Structuring and Standardization
- Target Products
- Areas, Modules, Processes and Operations
- Costs: Structuring and Extreme Standardization for Extreme Improvement
- Deep Understanding of the Flow Synchronization and Standardization
- Lead Time
- Takt Time Synchronization: Bottleneck
- Buffer Size
- One Piece Flow
- Standardization and Rolling Losses and Waste
- Deep Understanding of the Work Method, Performance and Standardization
- Current Standard Time Analysis and Takt Time
- Innovative Work Method Design
- Performances: Equipment and Worker
- Deep Understanding of the Utilization and Standardization
- The Main Losses and Waste Structures
- Current Losses and Waste: Cause and Effect Analysis and Standardization
- Current Cost of Losses and Waste
- Critical Cost of Losses and Waste
- Probable Cost of Losses and Waste Behavior: The Impact on Strategic KPIs Targets
- Classification of Strategic Systematic Improvement Points
- Deliverables and Completion Criteria
- Second Process: Calculating Theoretically Takt Profit and Setting Stratified Expectations for KAIZENshiro
- The Synchronous Profitable Operations
- Takt Profit for Speed-Based Target Profit: Actual, Target and Theoretically
- The Ideal State of Synchronous Profitable Operations
- Capacity Bottleneck and Profit Bottleneck
- Setting Stratified KAIZENshiro
- KAIZENshiro for Manufacturing Cost
- KAIZENshiro Stratification: at the Performance Level
- KAIZENshiro Stratification: at the Module Utilization Level
- KAIZENshiro Stratification: at the Module Materials Level
- KAIZENshiro Stratification: at the Products and Factory Level
- From Kaizenshiro to Must Win Strategic Kaizen
- Deliverables and Completion Criteria
Chapter 4: Annual Development of Strategic Kaizen
- The Stake: Establishing the Mechanism for Identifying the Feasible Strategic Kaizen
- The Main Purpose: Embody the Annual Strategic Kaizen Way
- Third Process: Annual Financial Reconciliation
- Summary of The Annual Financial Expectations
- From Annual Strategic KPIs Targets and KAIZENshiro to Annual Takt Profit
- The Seven Steps of the Strategic Kaizen Feasibility Study
- Financial Catchball
- The Basic Approach
- Diagnosis of Strategic Kaizen: Scientific Basis
- Quantitative Analysis of KAIZENshiro
- Appraisal of Strategic Kaizen Feasibility and Setting Final Targets
- Under Certainty: One Target and Static Appraisal
- Under Uncertainty: Several Targets and Dynamic Appraisal
- The Turning Point from Strategic Kaizen to Kaikaku
- KAIZENshiro Budgets to Support Annual Takt Profit
- Planning, Resourcing, Budgeting and Execution
- KAIZENshiro Budgets Integrated Into Master Budget
- Practice of Strategic Kaizen Target Setting
- Deliverables and Completion Criteria: Feasible Strategic Kaizen Alternatives and KAIZENshiro Budget
- Fourth Process: Annual Strategic Kaizen Reconciliation
- Summary of The Annual Operational Expectations
- Target Production Time in Practice: From Annual Takt Profit to Module Synchronization
- Operational Catchball
- Top-Down and Bottom-Up
- Inside-Out and Outside-In
- Products and Modules with Deficiencies
- Developing Balanced Scorecard and KPIs
- Deliverables and Completion Criteria: Balanced Scorecards and Annual Operational Strategic Kaizen
- Fifth Process: Organizing, Planning and Learning for Strategic Kaizen
- Annual Strategic Kaizen Organization
- The 7 Strategic Kaizen Organization Principles
- Establishing Holistic and Synergistic Effects of Strategic Kaizen Organization
- Allocated Ownership for all Strategic Kaizen KPIs at All Levels
- Allocate Ownership for all Strategic Kaizen Projects
- Feedforward Control
- Visual Management for Strategic Kaizen
- Strategic Kaizen Meeting
- Review Mechanism: Risks and Uncertainties
- The Process of Personal Reviews and of Recognition Systems
- Planning for Strategic Kaizen
- The Five Steps to Strategic Kaizen Action Plan and Monitoring
- Definition and Preparation of Individual Plans
- Learning for Strategic Kaizen
- Continuous Learning for Continuous Strategic Change
- Strategic Kaizen as a Continuous Source of Training Needs
- Put Learning Into the Synchronous Profitable Operations
- Deliverables and Completion Criteria: Chronological Targets and Annual Master Plan
Chapter 5: Implementation and Management of Strategic Kaizen
- The Stake: Annual Strategic Kaizen Execution, Control and Reinforcement
- The Main Purposes
- Put the Annual Strategic Kaizen Plans Into Action
- Maintaining Momentum
- Sixth Process: Implementing Feasible Strategic Kaizen Projects
- Applying Structured Meetings
- Organizing Strategic Kaizen Meetings
- The Mechanism for Early Warning of Problems
- The Main Activities for Each Strategic Kaizen Project
- Concurrent Control for Each Strategic Kaizen
- Deliverables and Completion Criteria: The Intermediate and Final Status of Each Strategic Kaizen
- Seventh Process: Follow-up Management of Strategic Kaizen
- Formal Assessment Process
- Follow-up of Each Strategic Kaizen Implementation
- Standardization: A New Standard vs. New Practice
- Manage the Target Values of Each Strategic Kaizen
- Feedback Control: Evaluation of Gains from All Annual Strategic Kaizen
- Evaluation of the Right Things Measurements and Carefully Recordings
- Take Action Against Backsliding of Takt Profit and KAIZENshiro
- Return to the KPIs at Strategic Level and to the First Process of Strategic Kaizen
- The Main Strategic Kaizen Result: The Supremacy of Long-Term Competitiveness
- Tangible and Intangible Strategic Kaizen Results
- Deliverables and Completion Criteria: Operational and Financial Results, Lessons Learned and Recommendations
Part III: Strategic Kaizen Sustain and Case Studies
Chapter 6: Strategic Kaizen Sustain
- Overview of Strategic Kaizen Sustain
- The Stake: Robust Long-term Execution of KAIZENshiro Budgets
- The Main Purposes of Strategic Kaizen Sustain
- The 7 Strategic Kaizen Principles
- Strategic Kaizen Design Considerations in Your Organization
- Incorporate Strategic Needs Into the KAIZENshiro Budget System
- Simulating Several Scenarios for Annual Speed-Based Target Profit (SBTP)
- Setting Strategic Kaizen Targets Linked to KAIZENshiro and to Strategic Target Results
- Specific and Customized Thinking for Each Company
- White-collar Strategic Kaizen
- Operational Challenges of White-collar Strategic Kaizen
- The Accuracy of Ideal and Target Takt Profit and KAIZENshiro Budget
- The Strategic Kaizen: Keys to Success
- Conclusion: Strategic Kaizen for Consistent Operational Excellence
Chapter 7: Case Studies on Strategic Kaizen for Performing Synchronous Profitable Operations
Internationally economies have struggled to understand the productivity puzzle - why has the new technology provided in big data and the internet of things not resulted in higher GDP? At operational level businesses have asked a similar question? – why has the productivity gains being achieved using advances in technology in the business not been converted to the bottom line? The author has produced a detailed view of how a kaizen strategy should be organised and practically implemented to improve profit. The book provides practical guidance in a step-by-step process to how a new "strategic kaizen" system can be implemented. Specific chapters guide the reader through the "7 steps" process.
The author’s detailed knowledge and innovative approach to losses and waste categorisation is a significant improvement of earlier treatments of this area. The early chapters outline why the readers with his basis for continuous measurement and gain an understanding of his approach to strategic productivity improvement. The second part of the book reviews in detail the three stages of his approach and seven processes in the strategic kaizen methodology.
As a user of the existing Kaizen methodology, I believe the information in this book will provides significant opportunities for actual kaizen project leaders to improve their current project approach. This author has a practical insight into how existing manufacturing plant operate and where the gains may be found in identifying and optimising "synchronous profitable operations".
Further the unique approach to "takt profit" for me is worthy of recognition as an advancement in the field of productivity as well as the book. The "KAIZENshiro budget" process depicted in figure 4.5 with an explanation of how the 4 phases of the budget process operates linking to the master budget and the cash flow statements gives real visibility to any strategic kaizen team of the profit impact of their selected strategic kaizen projects.
I recommend this book to be placed in the many national productivity organisations, productivity centres and University libraries and departments covering manufacturing and production engineering. Further I hope the author can contribute a paper on the book to the productivity journal led by our World Academy of Productivity Science.
-- Mike Dillon, Professor, Chairman World Confederation of Productivity Science
For many years, Kaizen has been used in the operations management field to offer solutions to companies to refine processes and operations. However, the Kaizen concept has largely focused on the operational level optimizations and performance improvement, so was mainly discussed in the operations management forums or modules. Indeed, process improvement is not (and should not be) isolated from strategic goals of any companies. Hence, there is a great potential for Kaizen to be reinterpreted in a hybrid way to inform not only operations level but also strategic level decisions.
This book written by Dr. Posteucă offers a unique approach to bridge the application gaps of Kaizen at strategic and operational levels for target profitability. This book offers the novel concept of Synchronous Profitable Operations (intrinsically including the new concepts of Takt Profit, KAIZENshiro Budgets and Speed-Based Target Profit) which bring up the Kaizen thinking to a strategic level. Hence, profitability, strategic objectives, strategic productivity improvement and operational performance of manufacturing companies are aligned to achieve a continuous and complete transformation of operations. The book also offers a complete roadmap to implement this new approach by managers, supported by real Strategic Kaizen case studies of companies.
Therefore, it will be beneficial to all readers who are interested in bringing their companies’ strategic and operational performance to a new level.
-- Professor Qile He, PhD, MSc Res, MSc, BA, SFHEA, CMILT, Council Member, British Academy of Management; Professor of Strategy and Performance Management; Chair of College Research Committee; College of Business, Law and Social Sciences; University of Derby, United Kingdom
This book is focused on the dynamic strategic growth of the effectiveness and efficiency of organizations according to their vision, by planning and implementing feasible strategic systematic changes without investment, in Strategic Kaizen projects, by influencing long-term behaviors to achieve the target profit through a leadership focused on the target value to improve or ”KAIZENshiro stratified budgets” to reach the successive targets of ”Takt Profit”. The book itself creates a flow through the methodology that creates momentum which makes the author's original Strategic Kaizen methodology easier to follow, to understand, and to replicate in organizations.
This book is a must-read for those looking to improve their operations and achieve greater productivity and profitability. The author's innovative approach to losses and waste categorization is explained in detail, offering a detailed understanding of the process. One of the strengths of this book is its practical approach to implementation, including its emphasis on the role of culture and leadership in driving change and its focus on long-term profitability.
I believe this book to be a valuable resource for managers, practitioners, and university professors, and would highly recommend it to anyone looking to improve their operations. The insights and new way of thinking about productivity and profitability improvement offered in this book are truly actionable and a must-read for anyone in the productivity for target profitability field.
-- Mukesh Kumar, Ph.D., Associate Professor in Operations Management, Head of Industrial Resilience Research Group, University of Cambridge, UK
As he does in all his books, Alin provides examples of organizations that are striving to follow his ideas, to place KAIZEN at the heart of their strategic planning, and to target, and achieve, increased profits.
Those with experience with KAIZEN and similar productivity improvement approaches will recognize many of the issues raised, the tools and techniques referenced, and the overall guiding methodology but may be surprised by the sheer level of detail that Alin includes and the way that the various components of the approach are stitched together into a seamless whole that, as the book title suggests, goes beyond earlier approaches that attempted to make KAIZEN a feature of manufacturing strategy.
This is not a book that promotes a simple panacea. Alin is not claiming he has found a 'silver bullet'. The approach takes hard work, detailed analysis, consistent and comprehensive application of a range of tools and techniques and deep immersion in the concepts and practices of KAIZEN. It is these factors that have enabled Alin to have constructed his unique approach. This approach also stresses the need to maintain the application of the methodology over the long term to achieve continuous and constant improvement. The inclusion of the example companies is very useful in helping understand the key messages of Strategic KAIZEN thinking for performing synchronous profitable operations.
By reading and applying the Strategic KAIZEN thinking from this book, you have the opportunity to realize the rewards of the most comprehensive and complete approach to KAIZEN adoption yet seen
-- John Heap, Managing Director of The Institute of Productivity (UK); Past-president of the World Confederation of Productivity Science; President of the European Association of National Productivity Centres; Member of the Advisory Board of the Institute for Consultancy and Productivity Research (India); Director of Juice e-Learning; Visiting professor at Srinivas Institute of Management Studies in Mangalore, India.
Alin Posteucă, Ph.D., researched and studied to develop and implement his unique management technologies for various companies over time. He has studied unique methodologies of world renown in terms of productivity and profitability so far. One of his powerful methodologies is Strategic KAIZEN. In the book "Beyond Strategic Kaizen" he created a totally new way, both theoretical and practical, that is effective and supported to apply a real way of thinking about KAIZEN to simultaneously and consistently achieve the expected financial and operational results strategically. I recommend this book honestly in order to benefit from what is useful and effective in KAIZEN thinking as strategic practices.
-- Shigeyasu Sakamoto, Ph.D, Fellow of the World Academy of Productivity Science (WAPS), CEO, Productivity Partner Inc, Japan
The goal of every organization is to generate profit for all stakeholders. Achieving this, however, requires the continuous challenge of balancing the need to meet customer demand while maintaining productivity and profitability, juggling cost versus quality and delivery. Organizations need a strategic and systematic productivity improvement plan that guides them to create a new culture to achieve both financial and operational target results. The book Beyond Strategic Kaizen is an authoritative guide offering exactly that.
This book is a must-read for all executives and managers who need a strategic system for creating profitable organizations while improving productivity and reducing costs. It is exceptionally well organized and well written, offering invaluable and detailed guidance to executives and managers at all levels. Unlike many books on the market, this book builds on a theoretical foundation to offer practical and specific recommendations on implementation that goes beyond Strategic Kaizen. These include detailing the process, and methodology, setting operational and financial targets, establishing timelines, and offering specific implementational details. Two excellent cases are then provided that demonstrate the practical application and reinforce lessons learned. As such, the book offers an eye-opening and practical guide to business leaders to move their organizations to the next level, as a new way of thinking and acting.
-- Nada R. Sanders, Ph.D., Distinguished Professor of Supply Chain Management, D'Amore-McKim School of Business, Northeastern University
This offers a new way of thinking and action for managers who aim to improve the productivity and profitability by applying the new Strategic KAIZEN principles presented in this book at length. In this book, Alin Posteucă continues his series of books that focus on his concept of Strategic KAIZEN and its application in the manufacturing sector and takes Strategic KAIZEN thinking to a new level. This time, the author presents to us the Strategic KAIZEN concept and methodology, highlighting the importance of synchronizing all aspects of an organization to achieve maximum profitability through continuous productivity growth guided by the need to successively reach TAKT PROFIT targets. The book provides concrete examples and case studies to demonstrate how these principles of Strategic KAIZEN can be applied in real-world scenarios, making it a valuable resource for managers, practitioners and professors in universities. One of the strengths of this book is its emphasis on the practical aspects of implementation. The author offers clear and actionable insights into how managers can create a supportive environment for strategic improvement, including the role of culture and leadership in driving change. The book is an essential new way of thinking for those who are looking to take their operations to the next level. Whether you are an experienced professional or just starting out, this book offers practical, actionable insights that can help you achieve greater productivity and profitability.
-- George Onofrei, Ph.D., Senior Lecturer in Supply Chain Management, Atlantic Technological University, Ireland; Executive Board Member of European Operations Management Association (EurOMA); Area Editor for Operations Management Research Journal; Board Member of the West/North West Lean Network
Alin Posteucă continues to develop his concept of Strategic KAIZEN for the manufacturing sector from his previous books. This time, my first curiosity was the title. How can an organization be beyond Strategic KAIZEN? Then I understood that the seven processes of Strategic KAIZEN through the continuous application of the seven own principles to achieve the successive targets of TAKT PROFIT at all levels of an organization seek to ensure profitability by increasing productivity in the short term, but especially in the medium and long term in a scientific and consistent way. I found in Alin's new book the only practical material for Strategic Kaizen thinking for simultaneously obtaining the expected financial and operational results by increasing productivity, by reducing losses and waste, based on leadership with a focus on long periods of time and on the basis of a more scientific, data-rich approach. I found a new way to measure and strategically and systematically improve the efficiency and effectiveness of people and processes throughout the organization without involving large amount of money.The book kept me motivated and curious to pursue the understanding of Strategic KAIZEN methodology by making it easy to understand the sequence of steps and understanding how to replicate Strategic KAIZEN methodology to achieve annual and multi-annual target profit for stakeholders and also to meet customer needs.
-- Monica Vușcan, Technical-Production Director at Farmec (Gerovital), România
Alin Posteucă, Ph.D., did a great job taking us from the Kaizen culture to the profit dimension by improving productivity. In as much as he did not condemn Kaizen, he only did a deep analysis of the concept of Kaizen and how profit-making is a good way to measure performance for many organizations. Yes, the company is reducing waste, and increasing efficiency but can we see the result on our balance sheet? You need to read the book to find out how he provides answers to the profit-measurement dynamics and achieving target profit regardless of the sales trend (increasing or decreasing).
I recommend the book for top leaders, managers, supervisors, HODs, team leads, and productivity practitioners to help them find a new and effective, and economical way to evaluate and increase productivity beyond the data but also in considerable and measurable profit margin for the organization. This book will revolutionize the productivity industry from the core angle of profit measurement and growth, beyond just the efficiency or effectiveness of people, processes, and products.
-- Remi Dairo, President, Institute of Productivity and Business Innovation Management (IPBIM)
Any manufacturing organization, no matter how big or small, is constantly looking for optimization, looking to increase productivity and reduce costs. After the last two years of pandemic where industries have been taken dramatic decisions to reduce costs by furlough or redundancy, now is more necessary than ever to look for profitability by productivity and stakeholders profit increase. Alin continues the presentation of his concept of Strategic Kaizen from his previous books. This time, his book Beyond Strategic Kaizen comes to the market at a perfect time, introducing revolutionary concepts and courses of action such as Takt Profit, stratified KAIZENshiro, KAIZENshiro budgets, mapping manufacturing organizations so that operational and financial targets and results are perfectly aligned, strategic productivity improvement, etc.As I am starting soon my work towards professional goal of mine in becoming Black Belt and subsequently a Master Black Belt practician, I see a huge opportunity in using Alin’s Strategic Kaizen approach in making sound improvements in within organisation I am working for.
-- Adriana Smoleanu, Quality Manger at Rolls-Royce Bristol Turbines Facility, UK