Kaizan CostingKaizan Costing

Presented By:-Presented By:-

Ankit Mathur (09-F1-103)Ankit Mathur (09-F1-103)

Hemant Sharma(09-F1-106)Hemant Sharma(09-F1-106)

Maninder Singh (09-F1-110)Maninder Singh (09-F1-110)

Yatin Goel (09-F1-135)Yatin Goel (09-F1-135)

Kai Change

Zen Better

Change for Better

Indian Connection

Small Drops of Water togetherUltimately 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 problemMove 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

1 Attitude Let it go Continuous Improvement

2 Employees Cost Assets

3 Information Restricted Shared

4 Interpersonal Commercial Human Relationship

5 Managerial Belief Routine Change

6 Management Culture Bureacratic Participative

7 Management Function Control Supportive

8 Management Stress Functional Cross Functional

ProcedureForImplementation

Form small groups from 6-10 personsGive them numbers-Kaizen 1,Kaizen-2…Appoint an evaluator of the groupArrange weekly meetings of group (6-12 months)Submit progress of improvement in writingAllow each member to expressNo disturbance when others are speakingHowever Clarifications can be sought instantantly

Evaluation

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

EvaluationOther factors

A Attitude

S Safety

T Productivity

E Energy Saving

M Money Saving

Change in Attitude

Benefits of Kaizen

Tangible Benefits

Reduction in Production Time

Reduction in Rejection

Energy Saving

Improved QualityIntangible Benefits

MotivationTeam BuildingSense of belongingnessEnvironment conservationChange in attitude

LessonsforFailure

Lack of interest and support from management

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

Criticism of failure from fellowmembers

Ignoring Basic Concept ( Improvement is part of daily routine)

Work Pressure -sideliningthe Kaizen

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

Price Targets

Profit Targets

Cost Targets

Major Product/Process Changes

Does DesignMeet Target

Costs?

Estimated Life Cycle Cost

Are Life Cycle CostsAcceptable ?

Start Production

Minor Product/Process Changes

Product Scrapping

ProductPlanningPhase

LifeCycleCosting

ProductionPhase

ScrappingPhase

Cost Reduction by 5%

Kaizen Costing Calls

Establishment of cost reduction target amount and its accomplishment throughKaizen activities---continuous improvement

Kaizen Costing

Product Development,Design &Manufacturing

Target Costing

KaizenCosting

Training, Learning Before goal of Target Costingor Kaizen Costingis imposed on the Organisation

5 “S”5 “S”

SEIRI – SORTING SEIRI – SORTING

   SEITON – STRAIGHTENING / SETTING IN ORDERSEITON – STRAIGHTENING / SETTING IN ORDER

   SEISO – SWEEPING / SHINING / CLEANLINESSSEISO – SWEEPING / SHINING / CLEANLINESS

   SEIKETSU – SUSTAINING THE DESCIPLINESEIKETSU – SUSTAINING THE DESCIPLINE

   OPTION – SAFETYOPTION – SAFETY

TWO ELEMENTS OF KAIZENTWO ELEMENTS OF KAIZEN

IMPROVEMENT / CHANGE FOR BETTER IMPROVEMENT / CHANGE FOR BETTER

   ONGOING / CONTINUITY ONGOING / CONTINUITY

KAIZEN BENEFITSKAIZEN BENEFITS

Problems are identified at source and resolved. Problems are identified at source and resolved.

Small improvements can add major benefits.Small improvements can add major benefits.

   Improvements lead to changes in quality, cost and delivery of Improvements lead to changes in quality, cost and delivery of

product.product.

   Greater level of customer satisfaction and business growthGreater level of customer satisfaction and business growth

   Improved morale of employees.Improved morale of employees.

METHODOLOGY OF KAIZENMETHODOLOGY OF KAIZEN

Finding Pain areaFinding Pain area Analyzing pain areaAnalyzing pain area

   Finding solutions Finding solutions  ImplementationImplementation

   Comparing old situation and new situation Comparing old situation and new situation  Writing and displaying the same Writing and displaying the same

   Explaining KaizenExplaining Kaizen Reward givenReward given

FINDING THE PAIN AREA – 3 MFINDING THE PAIN AREA – 3 M

MURA = Inconsistencies in the system “ One side is MURA = Inconsistencies in the system “ One side is OK ; the other side is not OK”OK ; the other side is not OK”

MURI = Physical StrainMURI = Physical Strain

   MUDA = Wasteful activity or obstruction to smooth MUDA = Wasteful activity or obstruction to smooth

flow of an activityflow of an activity

Activity = work + MudaActivity = work + Muda

Expenditure = Cost + WasteExpenditure = Cost + Waste

IMPROVE WHAT YOU MAINTAIN……..IMPROVE WHAT YOU MAINTAIN……..

  

MAINTAIN WHAT YOU MAINTAIN WHAT YOU IMPROVE !!!!!IMPROVE !!!!!

KAIZEN PRINCIPLESKAIZEN PRINCIPLES

Get rid of all old assumptions Get rid of all old assumptions Don’t look for excusesDon’t look for excuses

   Say “NO” to the status quoSay “NO” to the status quo Don’t worry – Start NOWDon’t worry – Start NOW

KAIZEN does not cost money KAIZEN does not cost money  Ask “WHY” 5 timesAsk “WHY” 5 times

Look for wisdom from ten people, not 1 Look for wisdom from ten people, not 1  Never STOP doing KAIZENNever STOP doing KAIZEN

WHY TO DO KAIZEN???WHY TO DO KAIZEN???

To remain competitive, we need to change for better.To remain competitive, we need to change for better. If we do not move forward, we will move backward.If we do not move forward, we will move backward.

To make our jobs easier and safer. To make our jobs easier and safer.  To improve customer service and keep them happy.To improve customer service and keep them happy.

To work smarter, not harder To work smarter, not harder  To improve productivity and qualityTo improve productivity and quality

To achieve organizational growth To achieve organizational growth  To become world classTo become world class

WHEN TO DO KAIZEN???WHEN TO DO KAIZEN???

When there is – When there is –

Pain area for individualPain area for individual

Pain area for organizationPain area for organization

   Dissatisfaction over working methodDissatisfaction over working method

  

  

WHERE TO DO KAIZEN ???WHERE TO DO KAIZEN ???

One’s own working area- RoutineOne’s own working area- Routine

Common relevant area – DepartmentsCommon relevant area – Departments

   Other’s work area – Canteen, ReceptionOther’s work area – Canteen, Reception

   One’s own personal area – HomeOne’s own personal area – Home

HOW TO DO KAIZEN???HOW TO DO KAIZEN???

Use who, what, where, when, why and how for every Use who, what, where, when, why and how for every pain areapain area

Ask “why” question 5 timesAsk “why” question 5 times

   Use CARES- combine, add, rearrange, eliminate, Use CARES- combine, add, rearrange, eliminate,

simplifysimplify

   Use PDCA – Plan, Do, Check, ActUse PDCA – Plan, Do, Check, Act

  

TTHANHANK YOK YOUU