Kaizen, in Japanese, means "continuous improvement," that is
"changing for the better." The word Kaizen denotes a principle. It
shouldn't be confused with any specific guidelines or standards. The
underlying principle behind the term is that even small and
insignificant looking decisions, when effectively taken in business, can
bring relatively larger output in terms of efficiency, productivity and
thus profitability. The Kaizen principle is basically a systematic
approach to business decision making guided by practical and logical
metrics. Those companies which wish to adopt Kaizen decision making in
business should effectively understand Kaizen budgeting.
In
business, there is always pressure from a variety of sources. Consumers
demand improvements in the quality of products. The producers of goods
and services also compete among each other in order to gain a larger
market for their products. They are under constant pressure to improve
the quality of the product as well as after sales service so that they
can control larger share in that particular product market providing
them a leadership role. Even the small business decisions, effectively
taken, can provide much-needed continuous improvement. This effective
business decision making for continuous improvement is nothing but the
Kaizen principle in action.
After the works of Frederick Taylor
and Frank Bunker Gilbreth, it's now very well-known that, not only in
production process, but in every aspect of business there is always room
for improvement. As termed by Taylor's 'mental revolution', this
improvement can be brought about by a harmonious cooperation between
management and workers on the one part and between various divisions of
management like finance, personnel, and even high management on the
other. The approach of Kaizen budgeting stress cost reduction as a basis
of any such improvement.
A businessman needs to be very creative
in order to succeed. Habits have no place in effective decision making.
Sometimes, we keep working in a similar manner due to customary
practices and routine, habitual nature of the work, even though there is
no scientific requirement for that established routine. This needs to
be done away with. Creativity requires that businessmen search and
develop a true science of work by finding best possible methods of doing
a work with the same or better output.
The search for a true
science of work will force you to be analytical and innovative. The
search for one best way to do a job will go a long way to turn you into a
performance-oriented leader instead of task oriented one. The urge to
improve performance will constantly force you to innovate and experiment
with new ideas. You may feel the need to use machines, computers, and
better equipment to simplify tasks and increase output. A true science
of work will certainly eliminate all irrelevant activities to increase
productivity.
This true science of work can be implemented not
only at the shop floor level, but at the planning and managerial level
as well. You can analyze and remove unnecessary process from all
management activities, including budgeting making it an efficient
financial system. Subordinates can be encouraged to adopt a 'true
science of management' not only by effective economic motivation, but by
infusing democratic decision-making as a policy as well.
The
pedagogy and system of Kaizen is not new. It has long been effectively
practiced by management thinkers like Frederick Taylor and Henri Fayol.
Japan's economic strength today stands in testimony of this strategy of
continuous improvement. The decreasingly allocated budgets of Japans'
managers force creative thinking for cost reductions much like Wal-Mart
which usually expects ten percent cost reduction from its suppliers.
This is the essence of Kaizen budgeting that developing a true science
of work will require less resources.
Posts
0 comments:
Post a Comment