- Kaizen (or ‘continuous improvement’) is an approach ofconstantly introducing small incremental changes in a business in order to improve quality and/or efficiency.
- This approach assumes that employees are the best people to identify improvements in the way things are done since they see the processes in action all the time.
- A firm that uses this approach therefore has to have a culturethat encourages and rewards employees for their
The key features of Kaizen include:- Improvements are based on many, small changes rather than the radical changes that might arise from Research and Development
- As the ideas come from the workers themselves, they are less likely to be radically different, and therefore easier to implement
- Small improvements are less likely to require major capital investment than major process changes
- It helps encourage workers to take ownership for their work, and can help reinforce team working, thereby improving worker motivation
- Whilst staff suggestions can help to enrich the work for many employees, Kaizen can be seen as an unrelenting process.
- Some firms set targets for individuals or for teams to come up with a minimum number of ideas in a period of time. Employees can find this to be an unwelcome pressure, as it becomes increasingly difficult to find further scope for improvement.
- Some firms, especially Japanese-owned, conduct quality improvement sessions in the workers’ own time, which can lead to resentment unless there is appropriate recognition and reward for suggestions.
- The complete task is handled by a single worker /group of workers. Jobs can be small-scale/low technology/ high technology
- Low technology jobs: The organisation of production is very simple, with the required skills and equipment easily obtainable. Enables the customer's specific requirements to be included, often as the job progresses. E.g. hairdressers, tailoring, painting, decorating, plumbing
- High technology jobs: Involve much greater complexity - and therefore present greater management challenge. Project management/ project control is essential. The essential features of good project control for a job are:
- - Clear definitions of objectives ( how should the job progress e.g dates)
- - Decision-making process (how are decisions taking about the needs of each process in the job, labour and other resources)
- E.g, film production; large construction projects (e.g. the Millennium Dome)
ADVANTAGES
- Product usually high quality
- Producer meets individual customer needs
- Greater job satisfaction – involved in all stages of production
DISADVANTAGES
- Cost of producing one unit or job is higher
- Labour is intensive
- Requires investment in skills and training
Strengths
Weaknesses
Opportunities
Threats
- An approach to management that focuses on cutting out waste, whilst ensuring quality.
- Lean production aims to cut costs by making the business more efficient and responsive to market needs.
The lean approach to managing operations is really about:
- Doing the simple things well
- Doing things better
- Involving employees in the continuous process of improvement
- …and as a result, avoiding waste
- The concept of lean production is an incredibly powerful one for any business that wants to become and/or remain competitive.
- Why? Because waste = cost
- Less waste therefore means lower costs, which is an essential part of any business being competitive.
Length- More than Year
Example- Expand market share
Aim to grow in long-term could invest in training staff, build up their brands, expand into new market, put money into developing new product so these activities prove effective in long run but in short term profits may fall.
Length-Month to Year
Examples-maximise profit
For firm to maimise it rewards it could stop repairs of building/ facility, stop research in new products, stop training people, end most advertising. So as short term profits raise means in long run firm in weaker position.
- Target client
- Customer Satisfaction
- Market gap
- Funding- sponsorship, government funding
- Amount of competition
- How much product/service will charge?
- Who is the target market?
- How to advertise
- Overall costing
- Running costing
- place --> location --> the way of distribution
- cost to achieve break-even
- Trends
- Possible Tax implications
- Copyright
- Moral/ethics
- interests of stakeholders
- wages for staff- training, min wage
- health and safety implications
- government laws
