Unit 11 Perekayasaan Semula (Reengineering) dan Kaizen.

Unit 11Unit 11

Perekayasaan Semula Perekayasaan Semula (Reengineering) dan Kaizen(Reengineering) dan Kaizen

Bahagian 1. KaizenBahagian 1. Kaizen

KAIZENKAIZENAssoc. Prof. Dr. Jegak UliAssoc. Prof. Dr. Jegak Uli

Unit ObjectivesUnit Objectives

•To understand the basic concept of To understand the basic concept of kaizenkaizen

•To compare Western and Japanese To compare Western and Japanese approach to managementapproach to management

•To compare the innovation and To compare the innovation and kaizen-based strategykaizen-based strategy

•To describe the elements and To describe the elements and umbrella of Kaizenumbrella of Kaizen

KAIZEN – THE CONCEPTKAIZEN – THE CONCEPT• KAIZEN as originally defined in the KAIZEN as originally defined in the

book of: "KAIZEN, the Key to Japan's book of: "KAIZEN, the Key to Japan's Competitive Success", by Mr. Masaaki Competitive Success", by Mr. Masaaki Imai, is: Imai, is:

• KAIZEN means improvement. KAIZEN means improvement.

• Moreover, KAIZEN means continuing Moreover, KAIZEN means continuing improvement in personal life, home improvement in personal life, home life, social life, and working life. life, social life, and working life.

• When applied to the workplace When applied to the workplace KAIZEN means continuing KAIZEN means continuing improvement involving everyone - improvement involving everyone - managers and workers alike.managers and workers alike.

KAIZEN – THE CONCEPTKAIZEN – THE CONCEPT

•Kaizen means improvementKaizen means improvement•Kaizen means ongoing Kaizen means ongoing

improvement involving improvement involving everyone, including both everyone, including both managers and workersmanagers and workers

•Kaizen philosophy assumes that Kaizen philosophy assumes that our way of life – be it our our way of life – be it our working life, our social life, or working life, our social life, or our home life – deserves to be our home life – deserves to be constantly improvedconstantly improved

KAIZEN – THE CONCEPTKAIZEN – THE CONCEPT

•The message is “not a day The message is “not a day should go by without some kind should go by without some kind of improvement being made of improvement being made somewhere in the company”somewhere in the company”

•Simply staying in business Simply staying in business required unending progress, and required unending progress, and Kaizen has become a way of lifeKaizen has become a way of life

KAIZEN – THE CONCEPTKAIZEN – THE CONCEPT

•1. Means improvement1. Means improvement•2. Ongoing improvement 2. Ongoing improvement

involving everyone – top involving everyone – top management, managers, and management, managers, and workersworkers

•3. “There will be no progress 3. “There will be no progress if you keep on doing things if you keep on doing things exactly the same way all the exactly the same way all the time”time”

•4. It is everybody’s business4. It is everybody’s business

WESTERN VS JAPANESE APPROACH TO WESTERN VS JAPANESE APPROACH TO MANAGEMENTMANAGEMENT

WesternWestern• West’s innovation-West’s innovation-

and results-oriented and results-oriented thinkingthinking

• Innovation strategy Innovation strategy is technology driven is technology driven and thrives on fast and thrives on fast growth and high growth and high profit marginsprofit margins

• Practice of Practice of reviewing people’s reviewing people’s performance strictly performance strictly on the basis of on the basis of results and not results and not rewarding effort rewarding effort mademade

JapaneseJapanese• Japanese kaizen Japanese kaizen

and its process-and its process-oriented way of oriented way of thinkingthinking

• Its messages is one Its messages is one of improvement of improvement and trying to do and trying to do betterbetter

• It does not mean It does not mean that innovation can that innovation can or should be or should be forgotten.forgotten.

• Both innovation & Both innovation & Kaizen are neededKaizen are needed

JAPANESE MANAGEMENTJAPANESE MANAGEMENTHas two major Has two major

components:components:• 1. 1. MaintenanceMaintenance – –

activities directed activities directed toward maintaining toward maintaining current current technological, technological, managerial and managerial and operating operating standardsstandards

• 2. 2. ImprovementImprovement – – those directed those directed toward improving toward improving current operating current operating standardsstandards

• 3. Improvement 3. Improvement can be broken can be broken down into down into KAIZENKAIZEN and and INNOVATIONINNOVATION

Improvement

Maintenance

Top Management

Middle Management

Supervisors

Workers

Maintenance

Top Management

Middle Management

Supervisors

Workers

Figure 1: Japanese Perceptions of Job Functions (1)

Figure 2: Japanese Perceptions of Job Functions (2)

Innovation

KAIZEN

JAPANESE MANAGEMENTJAPANESE MANAGEMENT

In Japanese management, three (3) In Japanese management, three (3) functions should happen functions should happen simultaneously within any simultaneously within any organizations:organizations:

1.1. Maintenance, Maintenance,

2.2. Innovation, and Innovation, and

3.3. KAIZEN.KAIZEN.

1. 1. MaintenanceMaintenance

•By maintenance, we refer to By maintenance, we refer to maintaining the current status, the maintaining the current status, the procedures are set and the procedures are set and the standards are implemented. standards are implemented.

•People in the lower level of People in the lower level of organization mostly do that, they organization mostly do that, they maintain their standards. maintain their standards.

2. 2. InnovationInnovation

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

3. KAIZEN3. KAIZEN

• In the middle there is KAIZEN, small In the middle there is KAIZEN, small steps but continuing improvement. steps but continuing improvement.

• KAIZEN should be implemented by the KAIZEN should be implemented by the lower/middle management and the lower/middle management and the workers, with the encouragement and workers, with the encouragement and direction of the top. direction of the top.

• The top management responsibility is The top management responsibility is to cultivate a KAIZEN working climates to cultivate a KAIZEN working climates and cultures in the organization. and cultures in the organization.

JAPANESE MANAGEMENTJAPANESE MANAGEMENT

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

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

WESTERN MANAGEMENTWESTERN MANAGEMENT• Western Western

perception of perception of management is management is given in Figure given in Figure 33

• There is little There is little room for room for KAIZEN conceptKAIZEN concept

• The worst The worst companies are companies are those which do those which do nothing but nothing but maintenance – maintenance – no internal no internal drive for kaizen drive for kaizen or innovationor innovation

Maintenance

Top Management

Middle Management

Supervisors

Workers

Figure 3: Western Perceptions of Job Functions

Innovation

Comparison of Innovation and Kaizen-based Comparison of Innovation and Kaizen-based StrategyStrategyInnovation:Innovation:• CreativityCreativity• IndividualismIndividualism• Specialist-orientedSpecialist-oriented• Attention to great Attention to great

leapsleaps• Technology-Technology-

orientedoriented• Information: Information:

closed, proprietaryclosed, proprietary• Functional Functional

(specialist) (specialist) orientationorientation

• Seek new Seek new technologytechnology

• Line + staffLine + staff• Limited feedbackLimited feedback

Kaizen:Kaizen:• AdaptabilityAdaptability

• Teamwork (systems Teamwork (systems approach)approach)

• Generalist-orientedGeneralist-oriented

• Attention to detailsAttention to details

• People-orientedPeople-oriented

• Information: open, sharedInformation: open, shared

• Cross-functional orientationCross-functional orientation

• Build on existing Build on existing technologytechnology

• Cross-functional Cross-functional organizationorganization

• Comprehensive feedbackComprehensive feedback

Important Elements of KaizenImportant Elements of Kaizen

1. A systematic and collaborative 1. A systematic and collaborative approach to cross-functional approach to cross-functional problem-solvingproblem-solving

2. A custom-driven strategy for 2. A custom-driven strategy for improvement – seek to satisfy improvement – seek to satisfy the customer and serve the customer and serve customer needscustomer needs

3. A system approach and 3. A system approach and problem-solving toolsproblem-solving tools

Important Elements of KaizenImportant Elements of Kaizen

4. A process-oriented way of 4. A process-oriented way of thinking and people’s process-thinking and people’s process-oriented efforts for improvementoriented efforts for improvement

5. A gradual rather than abrupt 5. A gradual rather than abrupt changechange

6. Everybody’s business6. Everybody’s business

The Kaizen UmbrellaThe Kaizen Umbrella• Customer orientationCustomer orientation• TQC (total quality TQC (total quality

control) or CWQC control) or CWQC (Company-wide (Company-wide Quality Control)Quality Control)

• Robotics Robotics • QC (Quality Control) QC (Quality Control)

CirclesCircles• Suggestion systemSuggestion system• AutomationAutomation• Discipline in the Discipline in the

workplaceworkplace• TPM (Total Productive TPM (Total Productive

Maintenance)Maintenance)

• Kamban (signboards, Kamban (signboards, cards or chits)cards or chits)

• Quality improvementQuality improvement

• Just-in-time (JIT)Just-in-time (JIT)

• Zero defects (ZD)Zero defects (ZD)

• Small-group activitiesSmall-group activities

• Cooperative labor-Cooperative labor-management relationsmanagement relations

• Productivity Productivity improvementimprovement

• New-product New-product developmentdevelopment

Problem-solving is the Starting Point of Problem-solving is the Starting Point of KAIZENKAIZEN

•The starting point of kaizen is to The starting point of kaizen is to recognize the needrecognize the need

•This comes from recognition of a This comes from recognition of a problemproblem

•If no problem is recognized, If no problem is recognized, there is no recognition of the there is no recognition of the need for improvementneed for improvement

•Complacency is the arch enemy Complacency is the arch enemy of KAIZENof KAIZEN

Problem-solving is the Starting Point of Problem-solving is the Starting Point of KAIZENKAIZEN• It emphasizes problem-awareness and It emphasizes problem-awareness and

provides clues for identifying provides clues for identifying problemsproblems

• Once identified, problems must be Once identified, problems must be solvedsolved

• Thus Kaizen is a problem-solving Thus Kaizen is a problem-solving processprocess

• Kaizen requires the use of various Kaizen requires the use of various problem-solving toolsproblem-solving tools

• Improvement reaches new heights Improvement reaches new heights with every problem is solved – the with every problem is solved – the improvement must be standardizedimprovement must be standardized

Kaizen and QC Circles, TQC , Kaizen and QC Circles, TQC , CWQCCWQC•A QC circle is defined as a small A QC circle is defined as a small

group that voluntarily performs group that voluntarily performs quality-control (QC) activities within quality-control (QC) activities within the shopthe shop

•The small group carries out its work The small group carries out its work continuously as part of a company-continuously as part of a company-wide program of quality control or wide program of quality control or TQC (total quality control) or CWQC TQC (total quality control) or CWQC (company-wide quality control) and (company-wide quality control) and improvement within the workshopimprovement within the workshop

Kaizen and QC Circles, TQC , Kaizen and QC Circles, TQC , CWQCCWQC•Over the years, QC has been Over the years, QC has been

elevated to SQC (statistical quality elevated to SQC (statistical quality control), and then TQC or CWQC control), and then TQC or CWQC

•TQC and CWQC mean company-wide TQC and CWQC mean company-wide Kaizen activities involving everyone Kaizen activities involving everyone in the company, managers and in the company, managers and workers alikeworkers alike

•QC circles have played an important QC circles have played an important part in improving product quality and part in improving product quality and productivityproductivity

Insemination of KAIZEN into the Insemination of KAIZEN into the OrganizationOrganization•   Not a day should go without some kind of Not a day should go without some kind of

improvement being made somewhere in improvement being made somewhere in the company. the company.

• When KAIZEN is adapted in organizations When KAIZEN is adapted in organizations and management perspectives, however, and management perspectives, however, it is easier to talk about it than to it is easier to talk about it than to implement it. implement it.

• It is very natural that people will propose It is very natural that people will propose some kind of change in their own work some kind of change in their own work place, when they become unsatisfied with place, when they become unsatisfied with their present conditions. their present conditions.

• Some of the improvements could be Some of the improvements could be carried out right away. carried out right away.

Insemination of KAIZEN into the Insemination of KAIZEN into the OrganizationOrganization

•Perhaps, the boss won't even notice Perhaps, the boss won't even notice them. them.

•However, when approval is required, However, when approval is required, several kinds of responses from the several kinds of responses from the boss could have taken place. boss could have taken place.

•The ideal situation is that the boss The ideal situation is that the boss encourages their subordinates to encourages their subordinates to carry out their ideas. carry out their ideas.

•The boss then appreciates the efforts The boss then appreciates the efforts or gives recognition. or gives recognition.

Insemination of KAIZEN into the Insemination of KAIZEN into the OrganizationOrganization

•That's what people expect when they That's what people expect when they propose something. propose something.

•The positive response given by the The positive response given by the boss will then develop trust with the boss will then develop trust with the subordinates and stimulate other subordinates and stimulate other improvements. improvements.

•Cumulatively, this will create Cumulatively, this will create momentum for continuing momentum for continuing improvement. improvement.

BASIC TIPS FOR KAIZEN ACTIVITIESBASIC TIPS FOR KAIZEN ACTIVITIES

• Discard conventional fixed Discard conventional fixed ideas. ideas.

• Think of how to do it, not why it Think of how to do it, not why it cannot be done. cannot be done.

• Do not make excuses. Start by Do not make excuses. Start by questioning current practices. questioning current practices.

BASIC TIPS FOR KAIZEN ACTIVITIESBASIC TIPS FOR KAIZEN ACTIVITIES

• Do not seek perfection. Do it Do not seek perfection. Do it right away even if for only 50% right away even if for only 50% of target. of target.

• Correct it right away, if you Correct it right away, if you make mistake. make mistake.

• Do not spend money for KAIZEN, Do not spend money for KAIZEN, use your wisdom. use your wisdom.

BASIC TIPS FOR KAIZEN ACTIVITIESBASIC TIPS FOR KAIZEN ACTIVITIES

• Wisdom is brought out when Wisdom is brought out when faced with hardship. faced with hardship.

• Ask 'WHY?" five times and seek Ask 'WHY?" five times and seek root causes. root causes.

• Seek the wisdom of ten people Seek the wisdom of ten people rather than the knowledge of rather than the knowledge of one. one.

• KAIZEN ideas are infinite KAIZEN ideas are infinite

Bahagian II: Perekayasaan Bahagian II: Perekayasaan Semula (Reengineering)Semula (Reengineering)

Reengineering: some basic Reengineering: some basic conceptsconcepts

Assoc. Prof. Jegak UliAssoc. Prof. Jegak Uli

The Official DefinitionThe Official Definition

• The fundamental rethinking and The fundamental rethinking and radical redesignradical redesign of business of business processesprocesses to bring about to bring about dramaticdramatic improvements in performance.improvements in performance.

The Key WordsThe Key Words

• dramatic -- improvements not marginal, dramatic -- improvements not marginal, not 5 or 10 % but quantum leaps.not 5 or 10 % but quantum leaps.

• radical -- going to the roots of things. radical -- going to the roots of things. Starting over, reinventing.Starting over, reinventing.

• process -- a group of related tasks that process -- a group of related tasks that together create value for customers e.g.. together create value for customers e.g.. order fulfillment.order fulfillment.

• redesign -- the design of processes, how redesign -- the design of processes, how work is donework is done

What Reengineering is NotWhat Reengineering is Not

• it is not downsizingit is not downsizing

• it is not restructuringit is not restructuring

• it is not a fad -- it works, brings about it is not a fad -- it works, brings about huge improvementshuge improvements

• it is not more of the same -- it is it is not more of the same -- it is revolutionary. Focus on end to end revolutionary. Focus on end to end processes and not specialization of processes and not specialization of laborlabor

The Three Cs The Three Cs

• CUSTOMERS -- more sophisticated, CUSTOMERS -- more sophisticated, demanding, more alternatives, more demanding, more alternatives, more knowledgeableknowledgeable

• COMPETITION -- no longer local and gentle, COMPETITION -- no longer local and gentle, but more global and cutthroat.but more global and cutthroat.

• CHANGE -- change from trad.focus on CHANGE -- change from trad.focus on planning, control, and managed growth to planning, control, and managed growth to emphasis on speed, innovation, flexibility, emphasis on speed, innovation, flexibility, quality, service, and cost.quality, service, and cost.

Top Ten Ways to FailTop Ten Ways to Fail

• 1. Giving only lip service to reengineer1. Giving only lip service to reengineer

• 2. Don’t focus on processes2. Don’t focus on processes

• 3. Spend a lot of time analyzing the 3. Spend a lot of time analyzing the current situationcurrent situation

• 4. Proceed without strong executive 4. Proceed without strong executive leadershipleadership

• 5. Be timid in redesign5. Be timid in redesign

Top Ten (contd.)Top Ten (contd.)

• 6. Go directly from conceptual design 6. Go directly from conceptual design to implementationto implementation

• 7. Reengineer slowly7. Reengineer slowly

• 8. Place some aspects of the business 8. Place some aspects of the business off-limitsoff-limits

• 9. Adopt a conventional 9. Adopt a conventional implementation style.implementation style.

• 10. Ignore concerns of your people10. Ignore concerns of your people

The Primary IngredientsThe Primary Ingredients

• LeadershipLeadership

• The Reengineering TeamThe Reengineering Team

The Tools of Reengineering The Tools of Reengineering LeadershipLeadership

• SIGNALS -- Explicit CommunicationsSIGNALS -- Explicit Communications

• SYMBOLS -- Personal BehaviorSYMBOLS -- Personal Behavior

• SYSTEMS -- Measurements and SYSTEMS -- Measurements and Rewards Rewards

The Profile of a ReengineerThe Profile of a Reengineer

• Process orientedProcess oriented

• Holistic perspectiveHolistic perspective

• CreativityCreativity

• RestlessnessRestlessness

• EnthusiasmEnthusiasm

• OptimismOptimism

• PersistencePersistence

• TactTact

• Team playerTeam player

• Communication Communication skillsskills

The Content of The Content of Reengineering WorkReengineering Work• UnderstandingUnderstanding the old processes the old processes

and customer requirementsand customer requirements

• InventingInventing a new process design that a new process design that shatters old assumptionsshatters old assumptions

• ConstructingConstructing the new process-- the new process-- details of operations, taking care of details of operations, taking care of implications, trainingimplications, training

• SellingSelling the new way the new way

The Context of Re-e EffortsThe Context of Re-e Efforts

• Uncertainty -- uncertainty eliminated Uncertainty -- uncertainty eliminated gradually gradually

• Experimentation -- iterative. Experimentation -- iterative. Designing on paper must be followed Designing on paper must be followed by trying in realityby trying in reality

• Pressure -- must proceed at fast pace. Pressure -- must proceed at fast pace. Always operate under conditions of Always operate under conditions of great urgency and intensitygreat urgency and intensity

Focus of Team MembersFocus of Team Members

• Must share dedication to three Must share dedication to three things:things:– The process being reeingineeredThe process being reeingineered– The needs of the customer of that The needs of the customer of that

processprocess– The team itselfThe team itself

Example of team Example of team characteristicscharacteristics

• CARINGCARING

• DARINGDARING

• SHARINGSHARING

Problem, Rule, and Problem, Rule, and AssumptionAssumption• PROBLEM -- a specific performance PROBLEM -- a specific performance

shortcoming of the process e.g.. slow shortcoming of the process e.g.. slow cycle time.cycle time.

• RULE -- a specific aspect of the process RULE -- a specific aspect of the process design that causes the problem e.g.. design that causes the problem e.g.. must have specialist for each task.must have specialist for each task.

• ASSUMPTION -- a belief that gives rise ASSUMPTION -- a belief that gives rise to the rule e.g.. the work is complexto the rule e.g.. the work is complex

Principles for Overcoming Principles for Overcoming Resistance to ChangeResistance to Change• Resistance is natural and inevitable --Resistance is natural and inevitable --Expect Expect

it.it.

• Resistance is not always apparent -- Resistance is not always apparent -- Find itFind it..

• Resistance has many motivations -- Resistance has many motivations -- Understand itUnderstand it

• Deal with people’s concerns not their Deal with people’s concerns not their arguments -- arguments -- Confront itConfront it

• There’s no one way to deal with resistance -There’s no one way to deal with resistance -- - Manage itManage it

The Key Mechanisms for The Key Mechanisms for Overcoming ResistanceOvercoming Resistance• INCENTIVES -- positive and negativeINCENTIVES -- positive and negative

• INFORMATION -- dispel uncertainty and INFORMATION -- dispel uncertainty and fearfear

• INTERVENTION -- one-on-one connectionINTERVENTION -- one-on-one connection

• INDOCTRINATION -- make change seem INDOCTRINATION -- make change seem inevitableinevitable

• INVOLVEMENT -- make people part of INVOLVEMENT -- make people part of the effortthe effort

Selling the ChangeSelling the Change

• Impediments to communicationsImpediments to communications

• Ten Principles of Reengineering Ten Principles of Reengineering communicationscommunications

Impediments to Impediments to CommunicationsCommunications

• DisbeliefDisbelief

• False familiarityFalse familiarity

• Fear of layoffsFear of layoffs

• The rumor millThe rumor mill

• Sloppy execution -- Sloppy execution -- incomprehensibility, abstractions, incomprehensibility, abstractions, complexity, and clichéscomplexity, and clichés

Ten Principles of Re-eng Ten Principles of Re-eng CommunicationsCommunications

• 1. Segment the audience1. Segment the audience

• 2. Use multiple channels2. Use multiple channels

• 3. Use multiple sources3. Use multiple sources

• 4. Be clear4. Be clear

• 5. Communicate, communicate, 5. Communicate, communicate, communicatecommunicate

Ten Principles (contd.)Ten Principles (contd.)

• 6. Honesty is the only policy6. Honesty is the only policy

• 7. Use emotions, not just logic7. Use emotions, not just logic

• 8. Heal, console, encourage8. Heal, console, encourage

• 9. Make the message tangible9. Make the message tangible

• 10. Listen, listen, listen10. Listen, listen, listen

ReferencesReferences

• Hammer, M. and Champy, J. Hammer, M. and Champy, J. Reengineering the Corporation: A Reengineering the Corporation: A Manifesto for Business Manifesto for Business Revloution.HarperCollins, New York, Revloution.HarperCollins, New York, 19931993

• Hammer, M. and Stanton, S.A. Hammer, M. and Stanton, S.A. The The Reengineering Revolution: A Reengineering Revolution: A HandbookHandbook. HarperCollins, New York, . HarperCollins, New York, 1995.1995.

The EndThe End