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Kaizan Costing

Kai Change

Zen Better

Change for Better


Indian Connection

Small Drops of Water together


Ultimately result in a lake
Implementing Kaizen- few rules

List your own Problems


Grade problems as to minor, difficult and major
Start with the smallest minor problem
Move on to next graded problem and so on
Remember improvement is part of daily routine
Never accept status quo
Never reject any idea before trying
Eliminate tried but failed experiments
Highlight problems rather than hiding
Kaizen Philosophy

Approach to Traditional Organisation Kaizen Environment

• Attitude Let it go Continuous


Improvement

• Employees Cost Assets

• Information Restricted Shared

• Interpersonal Commercial Human


Relationship

5 Managerial Belief Routine Change

6 Management Culture Bureacratic Participative

7 Management Function Control Supportive


Form small groups from 6-10 persons
Give them numbers-Kaizen 1,Kaizen-2…
Appoint an evaluator of the group
Arrange weekly meetings of group (6-12 months)
Submit progress of improvement in writing
Allow each member to express
No disturbance when others are speaking
However Clarifications can be sought instantantly

Procedure
For
Implementation
0 Marks for no improvement made

0 to 30 Marks depends upon improvement tried but failed

30 to 50 Marks for small to moderate improvement

50 to 75 Marks for good improvement

> 75 Marks for extraordinary improvement

Evaluation
A Attitude

S Safety

T Productivity

E Energy Saving

M Money Saving

Evaluation
Other factors
Change in Attitude
Tangible Benefits

Reduction in Production Time

Reduction in Rejection

Energy Saving
Intangible Benefits
Improved Quality

Motivation
Team Building
Sense of belongingness
Environment conservation
Change in attitude

Benefits of
Kaizen
Lack of interest and support
from management

Lack of training of
Listening skills, Presentation Skill,
Communication Skill

Criticism of failure from fellow


members

Ignoring Basic Concept


( Improvement is part of daily routine)

Work Pressure -sidelining


the Kaizen

Lessons
for
Failure
Kaizen Costing
Kaizen Costing

Cost Reduction in

 Design of the Product


 Development of the Product
 Production Of the Product
Kaizen Costing-definition

Kaizen costing is the maintenance of present levels for


products Currently being manufactured via systematic
efforts to achieve the desired cost level

KC is applied to product that is already under Production

Time prior to KC is Target Costing


Product Specification
Product
Price Targets
Planning
Phase Profit Targets

Cost Targets

Major Product/Process Changes


Life
Cycle Does Design
Costing Meet Target
Costs?

Estimated Life Cycle Cost

Are Life Cycle Costs


Acceptable ?

Start Production Production


Phase
Minor Product/Process Changes
Scrapping
Product Scrapping Phase
Cost Reduction by 5%
Kaizen Costing Calls

Establishment of cost reduction target


amount and its accomplishment through
Kaizen activities---continuous improvement
Kaizen Costing
Product Development,
Design &
Manufacturing Training,
Learning
Before goal of Target
Target Costing Costing
or Kaizen Costing
is imposed on the
Kaizen Organisation
Costing

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