Perekayasaan Semula (Reengineering) dan Kaizen

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Unit 11

• Perekayasaan Semula (Reengineering) dan Kaizen

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Bahagian 1. Kaizen
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KAIZEN

• Assoc. Prof. Dr. Jegak Uli

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Unit Objectives

• To understand the basic concept of kaizen
• To compare Western and Japanese approach to
  management
• To compare the innovation and kaizen-based
  strategy
• To describe the elements and umbrella of Kaizen

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KAIZEN THE CONCEPT

• KAIZEN as originally defined in the book of
  "KAIZEN, the Key to Japan's Competitive Success",
  by Mr. Masaaki Imai, is
• KAIZEN means improvement.
• Moreover, KAIZEN means continuing improvement in
  personal life, home life, social life, and
  working life.
• When applied to the workplace KAIZEN means
  continuing improvement involving everyone -
  managers and workers alike.

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KAIZEN THE CONCEPT

• Kaizen means improvement
• Kaizen means ongoing improvement involving
  everyone, including both managers and workers
• Kaizen philosophy assumes that our way of life
  be it our working life, our social life, or our
  home life deserves to be constantly improved

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KAIZEN THE CONCEPT

• The message is not a day should go by without
  some kind of improvement being made somewhere in
  the company
• Simply staying in business required unending
  progress, and Kaizen has become a way of life

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KAIZEN THE CONCEPT

• 1. Means improvement
• 2. Ongoing improvement involving everyone top
  management, managers, and workers
• 3. There will be no progress if you keep on
  doing things exactly the same way all the time
• 4. It is everybodys business

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WESTERN VS JAPANESE APPROACH TO MANAGEMENT

• Japanese
• Japanese kaizen and its process-oriented way of
  thinking
• Its messages is one of improvement and trying to
  do better
• It does not mean that innovation can or should be
  forgotten.
• Both innovation Kaizen are needed

• Western
• Wests innovation-and results-oriented thinking
• Innovation strategy is technology driven and
  thrives on fast growth and high profit margins
• Practice of reviewing peoples performance
  strictly on the basis of results and not
  rewarding effort made

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JAPANESE MANAGEMENT

• Has two major components
• 1. Maintenance activities directed toward
  maintaining current technological, managerial and
  operating standards
• 2. Improvement those directed toward improving
  current operating standards
• 3. Improvement can be broken down into KAIZEN and
  INNOVATION

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JAPANESE MANAGEMENT

• In Japanese management, three (3) functions
  should happen simultaneously within any
  organizations
• Maintenance,
• Innovation, and
• KAIZEN.

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1. Maintenance

• By maintenance, we refer to maintaining the
  current status, the procedures are set and the
  standards are implemented.
• People in the lower level of organization mostly
  do that, they maintain their standards.

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2. Innovation

• By Innovation, we refer to breakthrough
  activities initiated by top management, buying
  new machines, new equipment, developing new
  markets, directing RD, change of strategy etc.

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3. KAIZEN

• In the middle there is KAIZEN, small steps but
  continuing improvement.
• KAIZEN should be implemented by the lower/middle
  management and the workers, with the
  encouragement and direction of the top.
• The top management responsibility is to cultivate
  a KAIZEN working climates and cultures in the
  organization.

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JAPANESE MANAGEMENT

• Innovation involves a drastic improvement in the
  status quo as a result of large investment in new
  technology and/or equipment

• Kaizen signifies small improvements made in the
  status quo as a result of on going efforts

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WESTERN MANAGEMENT

• Western perception of management is given in
  Figure 3
• There is little room for KAIZEN concept
• The worst companies are those which do nothing
  but maintenance no internal drive for kaizen or
  innovation

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Comparison of Innovation and Kaizen-based Strategy

• Innovation
• Creativity
• Individualism
• Specialist-oriented
• Attention to great leaps
• Technology-oriented
• Information closed, proprietary
• Functional (specialist) orientation
• Seek new technology
• Line staff
• Limited feedback

• Kaizen
• Adaptability
• Teamwork (systems approach)
• Generalist-oriented
• Attention to details
• People-oriented
• Information open, shared
• Cross-functional orientation
• Build on existing technology
• Cross-functional organization
• Comprehensive feedback

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Important Elements of Kaizen

• 1. A systematic and collaborative approach to
  cross-functional problem-solving
• 2. A custom-driven strategy for improvement
  seek to satisfy the customer and serve customer
  needs
• 3. A system approach and problem-solving tools

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Important Elements of Kaizen

• 4. A process-oriented way of thinking and
  peoples process-oriented efforts for improvement
• 5. A gradual rather than abrupt change
• 6. Everybodys business

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The Kaizen Umbrella

• Customer orientation
• TQC (total quality control) or CWQC (Company-wide
  Quality Control)
• Robotics
• QC (Quality Control) Circles
• Suggestion system
• Automation
• Discipline in the workplace
• TPM (Total Productive Maintenance)

• Kamban (signboards, cards or chits)
• Quality improvement
• Just-in-time (JIT)
• Zero defects (ZD)
• Small-group activities
• Cooperative labor-management relations
• Productivity improvement
• New-product development

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Problem-solving is the Starting Point of KAIZEN

• The starting point of kaizen is to recognize the
  need
• This comes from recognition of a problem
• If no problem is recognized, there is no
  recognition of the need for improvement
• Complacency is the arch enemy of KAIZEN

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Problem-solving is the Starting Point of KAIZEN

• It emphasizes problem-awareness and provides
  clues for identifying problems
• Once identified, problems must be solved
• Thus Kaizen is a problem-solving process
• Kaizen requires the use of various
  problem-solving tools
• Improvement reaches new heights with every
  problem is solved the improvement must be
  standardized

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Kaizen and QC Circles, TQC , CWQC

• A QC circle is defined as a small group that
  voluntarily performs quality-control (QC)
  activities within the shop
• The small group carries out its work continuously
  as part of a company-wide program of quality
  control or TQC (total quality control) or CWQC
  (company-wide quality control) and improvement
  within the workshop

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Kaizen and QC Circles, TQC , CWQC

• Over the years, QC has been elevated to SQC
  (statistical quality control), and then TQC or
  CWQC
• TQC and CWQC mean company-wide Kaizen activities
  involving everyone in the company, managers and
  workers alike
• QC circles have played an important part in
  improving product quality and productivity

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Insemination of KAIZEN into the Organization

•  Not a day should go without some kind of
  improvement being made somewhere in the company.
• When KAIZEN is adapted in organizations and
  management perspectives, however, it is easier to
  talk about it than to implement it.
• It is very natural that people will propose some
  kind of change in their own work place, when they
  become unsatisfied with their present conditions.
  
• Some of the improvements could be carried out
  right away.

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Insemination of KAIZEN into the Organization

• Perhaps, the boss won't even notice them.
• However, when approval is required, several kinds
  of responses from the boss could have taken
  place.
• The ideal situation is that the boss encourages
  their subordinates to carry out their ideas.
• The boss then appreciates the efforts or gives
  recognition.

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Insemination of KAIZEN into the Organization

• That's what people expect when they propose
  something.
• The positive response given by the boss will then
  develop trust with the subordinates and stimulate
  other improvements.
• Cumulatively, this will create momentum for
  continuing improvement.

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BASIC TIPS FOR KAIZEN ACTIVITIES

• Discard conventional fixed ideas.
• Think of how to do it, not why it cannot be done.
  
• Do not make excuses. Start by questioning current
  practices.

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BASIC TIPS FOR KAIZEN ACTIVITIES

• Do not seek perfection. Do it right away even if
  for only 50 of target.
• Correct it right away, if you make mistake.
• Do not spend money for KAIZEN, use your wisdom.

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BASIC TIPS FOR KAIZEN ACTIVITIES

• Wisdom is brought out when faced with hardship.
• Ask 'WHY?" five times and seek root causes.
• Seek the wisdom of ten people rather than the
  knowledge of one.
• KAIZEN ideas are infinite

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Bahagian II Perekayasaan Semula (Reengineering)
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Reengineering some basic concepts

• Assoc. Prof. Jegak Uli

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The Official Definition

• The fundamental rethinking and radical redesign
  of business processes to bring about dramatic
  improvements in performance.

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The Key Words

• dramatic -- improvements not marginal, not 5 or
  10 but quantum leaps.
• radical -- going to the roots of things. Starting
  over, reinventing.
• process -- a group of related tasks that together
  create value for customers e.g.. order
  fulfillment.
• redesign -- the design of processes, how work is
  done

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What Reengineering is Not

• it is not downsizing
• it is not restructuring
• it is not a fad -- it works, brings about huge
  improvements
• it is not more of the same -- it is
  revolutionary. Focus on end to end processes and
  not specialization of labor

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The Three Cs

• CUSTOMERS -- more sophisticated, demanding, more
  alternatives, more knowledgeable
• COMPETITION -- no longer local and gentle, but
  more global and cutthroat.
• CHANGE -- change from trad.focus on planning,
  control, and managed growth to emphasis on speed,
  innovation, flexibility, quality, service, and
  cost.

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Top Ten Ways to Fail

• 1. Giving only lip service to reengineer
• 2. Dont focus on processes
• 3. Spend a lot of time analyzing the current
  situation
• 4. Proceed without strong executive leadership
• 5. Be timid in redesign

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Top Ten (contd.)

• 6. Go directly from conceptual design to
  implementation
• 7. Reengineer slowly
• 8. Place some aspects of the business off-limits
• 9. Adopt a conventional implementation style.
• 10. Ignore concerns of your people

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The Primary Ingredients

• Leadership
• The Reengineering Team

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The Tools of Reengineering Leadership

• SIGNALS -- Explicit Communications
• SYMBOLS -- Personal Behavior
• SYSTEMS -- Measurements and Rewards

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The Profile of a Reengineer

• Process oriented
• Holistic perspective
• Creativity
• Restlessness
• Enthusiasm

• Optimism
• Persistence
• Tact
• Team player
• Communication skills

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The Content of Reengineering Work

• Understanding the old processes and customer
  requirements
• Inventing a new process design that shatters old
  assumptions
• Constructing the new process-- details of
  operations, taking care of implications, training
• Selling the new way

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The Context of Re-e Efforts

• Uncertainty -- uncertainty eliminated gradually
• Experimentation -- iterative. Designing on paper
  must be followed by trying in reality
• Pressure -- must proceed at fast pace. Always
  operate under conditions of great urgency and
  intensity

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Focus of Team Members

• Must share dedication to three things
• The process being reeingineered
• The needs of the customer of that process
• The team itself

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Example of team characteristics

• CARING
• DARING
• SHARING

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Problem, Rule, and Assumption

• PROBLEM -- a specific performance shortcoming of
  the process e.g.. slow cycle time.
• RULE -- a specific aspect of the process design
  that causes the problem e.g.. must have
  specialist for each task.
• ASSUMPTION -- a belief that gives rise to the
  rule e.g.. the work is complex

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Principles for Overcoming Resistance to Change

• Resistance is natural and inevitable --Expect it.
• Resistance is not always apparent -- Find it.
• Resistance has many motivations -- Understand it
• Deal with peoples concerns not their arguments
  -- Confront it
• Theres no one way to deal with resistance --
  Manage it

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The Key Mechanisms for Overcoming Resistance

• INCENTIVES -- positive and negative
• INFORMATION -- dispel uncertainty and fear
• INTERVENTION -- one-on-one connection
• INDOCTRINATION -- make change seem inevitable
• INVOLVEMENT -- make people part of the effort

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Selling the Change

• Impediments to communications
• Ten Principles of Reengineering communications

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Impediments to Communications

• Disbelief
• False familiarity
• Fear of layoffs
• The rumor mill
• Sloppy execution -- incomprehensibility,
  abstractions, complexity, and clichés

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Ten Principles of Re-eng Communications

• 1. Segment the audience
• 2. Use multiple channels
• 3. Use multiple sources
• 4. Be clear
• 5. Communicate, communicate, communicate

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Ten Principles (contd.)

• 6. Honesty is the only policy
• 7. Use emotions, not just logic
• 8. Heal, console, encourage
• 9. Make the message tangible
• 10. Listen, listen, listen

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References

• Hammer, M. and Champy, J. Reengineering the
  Corporation A Manifesto for Business
  Revloution.HarperCollins, New York, 1993
• Hammer, M. and Stanton, S.A. The Reengineering
  Revolution A Handbook. HarperCollins, New York,
  1995.

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The End