The Importance of Kaizen in Production-Oriented Businesses


Kaizen means "change for the better" in Japanese. This concept is an important tool to ensure the development and efficiency of our businesses. However, before starting improvements, it is necessary to identify losses. There are three basic types of losses: Downtime Losses, Performance Losses and Quality Losses. It is important to measure these losses before starting improvements. MES (Production Management Systems), which is part of Digital Transformation, will be useful in this process. Once the losses in our business are identified, improvements can be made with Kaizen. When identifying losses, Pareto analysis can be useful for Posture Losses. Histogram Charts can be used for performance analysis and Pareto analysis can be used again for quality assessment. Pareto is based on the 80/20 rule. Most problems occur in 20% of cases.

For example, let's take the cost of a minute as 1 TL. According to Pareto analysis, stoppages have the highest rate. Let's say we have a daily capacity of 1440 minutes for each machine and we have 20 machines. Our daily capacity can be calculated as follows: 20 x 1440 = 28,800 minutes. If we take the month as 30 days (different months may have different numbers of days), our monthly capacity would be 28,800 x 30 = 864,000 minutes. Let's say there were about 100,000 minutes of downtime during this time (a very optimistic estimate), which equates to a loss of about 100,000 TL. This figure does not include the revenue from products that could have been produced during this time.

After identifying the problem, it is necessary to form a Kaizen Team. If the loss is due to a lack of orders, the Sales Team should also be included in the Kaizen Team. The Kaizen Team will address the issues using various problem solving techniques such as Brainstorming, 5N1K, Fishbone. Steps will be determined, relevant personnel will be assigned and follow-up dates will be set. In case of a lack of orders, the root causes should be thoroughly investigated - the problem may be market related, or the products produced may be obsolete and no longer in demand. If necessary, a new Kaizen initiative for innovation can be started. Thereafter, periodic review meetings will be organized to assess overdue work and current status. The revenue generated by Kaizen is calculated as annual savings. After Kaizen is completed, monitoring and dissemination processes are initiated.

In summary, measurement is necessary to achieve improvement and this requires digitalization. Therefore, manufacturing businesses need MES (Production Management Systems) and MOM (Manufacturing Operations Management) capabilities.

Ümit Değirmenci
Mert Software & Electronics
Board Member