11th ICQ

- Total Quality Management - Advanced and Intelligent Approaches -

3. June 2014, Belgrade

Kaizen in Serbia:
EnergoPET case study

Prof. Dr. Tatjana Šibalija 1

Filip Jevtović 2
1 Metropolitan University, Belgrade
Faculty of Information Technology, Faculty of Management
2 European University, Belgrade
Faculty of Engineering International Management
Outline

Introduction
• Kaizen background
• The key elements of Kaizen

Application of Kaizen principles in Japanese companies in Serbia

• The example of Japan Tobacco International

Application of Kaizen principles in Serbian company EnergoPET

• Basic data
• Production process
• ISO standards in EnergoPET
• Elements of Kaizen already applied in EnergoPET
• Suggestions for improving Kaizen system in EnergoPET

Concluding remarks
 Introduction
Kaizen background
• Kaizen is a way of thinking: “kai” - change, and “zen” – good
 change for good – continuous improvement

• Kaizen is an improvement of all employees: managers, engineers - not just on the

level of the workshop or factory

• Implementation of Kaizen - two directions:

– from top to down, and
– from bottom to up

• Half of management duties are extended toward maintaining existing resources and
production and other half are focused on improvement.

”We do not have a lot of money to give you, but you still have to be better, and when
you do not have money use brain, and if you do not have brain, sweat.”
Saying of Japanese managers

”Whatever job you do today, think that is the worst way.”

Owner of a Suzuki
 Introduction

The key elements of Kaizen

• Orientation towards the customer
• Total Quality Control (TQC)
• Suggestion system
• Quality circles
• Implementation of robotics
• Implementation of the automation
• Discipline in workplace
• Total Preventive / Productive Maintenance (TPM)
• ‘Just in Time’ concept
• ‘Zero defects‘ – production with no defects
• Work of small groups
• Cooperative relations between manager and employees
• Development of new products
• Continuous improvement of quality
 Application of Kaizen principles in Japanese companies in Serbia
About Japan Tobacco International ltd. Senta
• factory ”Tobacco Industry Senta”; 370 employees in Belgrade and Senta, 150 seasonal work.
• in 2007. production of cigarettes increased to 5 billion; in first two years:
o 46% reduction of defects
o 40% productivity improvement

• Kaizen principles implementation

o in the beginning – basic principles: continuous learning and „5S“
o followed by: visual management and suggestion system (encourage employees to give
suggestions to improve business -presented on the factory blackboards)

• Other specific acivities, e.g.

o The workshop window placed into office of general manager to oversee the Gemba
(the place where most important part of business is happening – workshop, factory).
o Kaizen says that managerial layer must be a part of factory!

“Application of Kaizen in the factory in Senta has given remarkable results.

... That is why we want to transfer our own experience about implementation of Kaizen on
other companies that do business here, and to contribute to whole development of Serbia.“
Tamera Tercilioglu, general director of JTI ltd, Senta factory
 Application of Kaizen principles in Serbian company EnergoPET

EnergoPET: Basic data

• founded in 1997; specialized for production of PET preforms that are

needed as a main row material for production of bottles:
– for water, refreshing beverages, beer, milk, chemical preparation , etc.

• EnergoPET is one of the leaders

in PET preform production in Balkan

• wide assortment of preforms for

different shapes, colours and volume
of bottles

• factory initially had a capacity of about 70 000 000 units per year, and now it
has about 600 000 000 units per year
 Application of Kaizen principles in Serbian company EnergoPET

Production process: from

granulates

to
preforms

Qualitative
Storing in Transferring
and Distributing
Import of front of the granulates to
quantitative granulates to
granulates factory the sucking
inspection of the silos
building point
granulates

Transport of Colouring Heating semi Spritzing or

gralates to Placing
preforms (If product to filling of the
production granulates
customer the melting preform
lines into dryer
demands) point shape

Transport
Marking the Transport to the
Cooling down preforms to Putting a lit
box of filled defined place in
formed shape the filling on the box
preforms warehouse
machines
 Application of Kaizen principles in Serbian company EnergoPET
QM standards in EnergoPET
• ISO 9001

- Procedural approach for developing and implementing ISO standard 9001 in EnergoPET -
 Application of Kaizen principles in Serbian company EnergoPET
QM standards in EnergoPET process -oriented
approach!
• Integrated Management System: IS 9001 & ISO 14001 & HACCP according to APQC model

- The overall Quality Management System and management responsibilities in EnergoPET -

 Application of Kaizen principles in Serbian company EnergoPET
Elements of Kaizen already applied in EnergoPET
• Orientation to the customer - a wide variety of products to offer (different size,
shape or colour of the preforms)

• Quality circles – usage of software ‘Navision‘ to improve communication, exchange

opinions, viewing and keeping history of problems, etc. - ‘electronic quality circle‘

• Automation - production and supporting processes are highly automated, from

numerous alarms to computerised bar-code printing

• Organization of activities through work of small groups - several teams in

production area built for easier communication and problem solving, including
people from different sectors (team leaders, deputies, ...)

• Cooperative relations between employees and managers - friendly and open

communications, managers willing to listen to every employee, etc.

• Development of new products - a certain level of customisation is established, as

well as a cost reduction, while improving the product quality
 Application of Kaizen principles in Serbian company EnergoPET
Suggestions for improving Kaizen system in EnergoPET that could be applied
using existing resources:
• Cleanliness of a working zone - eliminate dust in production facility by introducing a
special ‘carpet‘ that collects dust from the forklifts as they enter and exit the warehouse
• Improvement of process automation - e.g. advanced printing of notices on boxes: to place
a printer by the production line and hence reduce unnecessary motions - connect all lines
to the command centre
• Communication in supply - improvement through good production planning (faster
determination of a daily plan) and introducing a ‘Quick-response‘ program
• Communication regarding quality between the company and customer - facilitate faster
identification of customer needs –due to frequent variations in customer requirements
• Logistics – improve order of the arrival of trucks via communication between warehouse
and truck drivers, according to a plan that will minimize wait-time for trucks and improve
loading and unloading efficiency
• Improving relations between employees and manager - to encourage compromise on
both sides – workers/managers; involvement of a worker in the process of managing the
situation related to their work place
• Hire interns - temporarily employed staff for some side jobs - to allow current employees
to foucs on their job, and improve recruitment & training process for new employees
 Application of Kaizen principles in Serbian company EnergoPET
Suggestions for improving Kaizen system in EnergoPET that require
significant financial support and / or re-organisation:

• Hire an outsource company for keeping up quality standards in company - to allow

quality manager to have more time to deal with reduction of defects and the
integration of HACCP
• Preventive upkeep of machines - a lot of money is wasted due to improper up-keep
because there is no time to maintain machines - TPM (total preventive / productive
manitenance) should be implemented to facilitate preventive machine maintenance
• Infrastructural changes / investments
o there is a need for silos outside of the factory, and that would create less dust inside the
factory - to improve the quality of the product and created free space due to elimination
of the existing granulate vacuum (a small silo inside the factory walls)
o raising up a roof between a factory and a storing place which is cut out for protecting
granulates from outside factors (weather) - that space would be used as a warehouse
o new floor space would also come into consideration, because there are holes on the
factory outer grounds, which is damaged and often causing malfunctions on forklifts
• Development of a new „green“ product (e.g. PET bricks) - the companies in sector
recently started to experiment with ‘greener construction‘ - to be energy efficient
and lighter - ecological PET brick will be recycled and shaped into small bottles
 Concluding remarks
Kaizen in Serbia
 Masaaki Imai promoted Kaizen in Serbia / Balkan in 2008, but the trend has not lived on
• The reason of poor usage of Kaizen may lay in
o a low level of strong dedication to quality,
o not seeking creative initiatives for improvement,
o no interest of public sector (and others), etc.

 Kaizen has been widely used to improve processes, while in Serbia this practice is very poor
o Does the management in Serbia want to create profit, use their resources properly and
achieve high-quality processes and products?
o The potential of Kaizen approach in this sense is evident!

 The company culture should be changed - Japanese way of management where all employees
suggest improvements (in their range of work) and perceive company as a ‘second house‘
o this further leverages the generation of innovative solutions

 Japanese management gives employees conditions for development, and employees give in
return maximum of their knowledge & skills to company
o ‘ magical circle‘ (& knowledge) that raised up Japanese economy after WWII

 To spread this kind of thinking, a lot of effort and faith are needed, as well as the right people –
‘the carriers of this idea ‘
 11th ICQ
- Total Quality Management - Advanced and Intelligent Approaches –

3. June 2014, Belgrade

Thank you for your attention!

Questions / Comments?!

- Kaizen in Serbia: EnergoPET case study -

Prof. Dr. Tatjana ŠIBALIJA

tsibalija@gmail.com
tatjana.sibalija@metropolitan.ac.rs