Kaizen Philosophy and Supply Chain Management

The supply chain is an ever growing, ever changing system within your company. No matter if your company handles millions of individual components each year or tens of millions, the ultimate goal is to get a product from one destination to the next in the most efficient, productive manner that also saves money, meets customer expectations, and maintains other company-focused goals such as environmental efficiency. A variety of philosophies or styles exist in supply chain management. Which one is right for you depends on dozens of factors. Consider Kaizen philosophy, for example. Here’s what David Kiger wants you to know.

Shipping Port, Supply Chain
Image via Pixabay

What Is the Kaizen Philosophy?

Before comparing it to others, consider what this method involves. The term “Kaizen” has a literal meaning of “improvement.” The philosophy stems from Japan where companies such as Toyota used it to make improvements. The premise is very simple: Continuous improvements are made to keep the company at the top of its game. However, these changes are small in nature. Here are the key principles of Kaizen:

  • The goal is to rely on teamwork. In this philosophy, everyone’s opinion is considered.
  • Company morale must be high because each person working in the company must have a strong level of personal discipline.
  • Employees need to feel confident that their opinion matters even if the current methods employed are working properly.
  • In this system, workers groups, called quality circles, come together to solve problems. They are tasked with developing innovation improvements.

If your supply chain is using Kaizen, it is continuously making small improvements to achieve a better level of function. How can you implement it into your company? Kaizen is a way of thinking. One of the key focuses is on eliminating waste within the supply chain. This may include (as defined by Toyota when creating this philosophy,):

  • Producing too much
  • Processing
  • Waiting
  • Motion
  • Inventory
  • Defects
  • Transportation

Every person within the company from the top down is tasked with looking for ways to reduce waste. Within a single business or manufacturing plant, it is easy to see how this can work well. Everyone is in the same location, focused on the same tasks. In a supply chain, though, things are a bit more complex.

On the supply chain scale, the goal remains the same. In this case, companies must ensure every organization or component of the supply chain is employing the same philosophy with the goal of reducing waste. However, it is not possible to identify all risks unless:

  • The entire supply chain – every component and organization is working in the philosophy by addressing all supply chain members
  • Every organization has implemented waste reduction opportunities within their four walls as well

Both the supply chain as a whole and the individual organizations must be working towards Kaizen. To accomplish this, companies must employ Value Stream Mapping which gives us a whole clear picture for the changes that could improve the supply chain. Supplier associations need to communicate changes at various points within the system. And, other tools need to be used.

What About Six Sigma and Just in Time Production?

David Kiger provides a more in-depth explanation of additional management styles. You may be one of the many organizations with a Six Sigma focus or a “Just in Time” or Lean production process. How do these compare to Kaizen?

It’s impossible to say one method is better than others within supply chain management. Whether or not it is, depends on how well it fits the system. Here’s how to compare and consider the options.

Kaizen

As noted, some of the key components of this system include:

  • Continuous improvement rather than the implementation of a single tool
  • Focused on personal creativity and ingenuity
  • Everything can be improved to make it efficient

A Kaizen event is an occurrence in which resources are brought together to collectively build this mindset and to target specific problems.

Lean or Just in Time

Lean is another type of management philosophy. Here’s what you need to know:

  • Focus is on improving process speed and improving quality through reduction of process wastes
  • Reduce activities that drive up cycle times or add to costs is necessary to become more efficient
  • It is a series of tools that help to reduce process waste

The ultimate goal here is to reduce energy wasted that doesn’t improve or add value to the consumer.

Six Sigma

Now, consider how Six Sigma fits into the picture:

  • The goal is consistent stability, accuracy, and output
  • It’s a tool that optimizes the consistency of key characteristics customers require
  • It is statistic and measurement focused

This complicated method is effective in many cases but requires much more implication of tools than other methods.

What Does David Kiger Recommend? What’s Right for Your Supply Chain Management Style?

To determine which method is best within any supply chain management style, businesses need to focus on what the problem is, who the best person is to solve the problem, and what the desired outcome is. Ultimately, Kaizen can work very well in supply chain management, but so can other methods. Apply the problem to any of these descriptions to determine the effectiveness of its management style.

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