Engineering management lecture slides

1. Engineering Management
Dr. Abu Bakr Siddique

2. Lecture Outline
• Introduction to Gemba Kaizen
• An Introduction to Kaizen
• Major Kaizen Concepts

3. Introduction to
Gemba Kaizen

4. Gemba & Kaizen
• You will hear a lot of Japanese terms in this
course. To begin with, we have to look at the
meaning of the words Gemba and Kaizen.
• Gemba literally translates into “workplace”.
• Kaizen literally means “improvement,” but
today most people use it to mean “continuous
improvement.”

5. Common Sense – not that common
• The ultimate message of Gemba Kaizen is
that no matter how much knowledge the
reader may gain from reading Management
books, it is of no use if it is not put into
practice daily.
• Gemba Kaizen explains how to use a
commonsense, low-cost approach to
managing the workplace—the place where
value is added—whatever that place be.

6. Innovation vs Kaizen
• Today’s managers often try to apply
sophisticated tools and technologies to deal
with problems that can be solved with a
commonsense, low-cost approach.
• There are two approaches to problem solving.
• The first involves innovation—applying the
latest high-cost technology, such as state-of-
the-art computers and other tools, and
investing a great deal of money.

7. Kaizen – the building block to success
• The second uses commonsense tools, checklists, and
techniques that do not cost much money. This
approach is called kaizen.
• This course will show how kaizen can achieve
significant improvement as an essential building block
that prepares the company for truly rewarding
accomplishments.
• Kaizen involves everybody—starting with the CEO in
the organization and going all the way to workers—
planning and working together for success.

8. Kaizen in the Gemba
• The key is that everyone in the company must work
together to follow three ground rules for practicing
kaizen in the gemba:
– Housekeeping
– Muda elimination
– Standardization
• In other words the organization should always be doing
these three things: keep its house in order by practicing
the 5 rules of good housekeeping, eliminate waste, and
maintain and improve standards.

9. Kaizen in the Gemba
• Through good housekeeping, employees
acquire and practice self-discipline.
• Employees without self-discipline make it
impossible to provide products or services of
good quality to the customer.
• In Japanese, the word muda means waste. Any
activity that does not add value is muda.

10. Kaizen in the Gemba
• People in the gemba either add value or do not
add value. This is also true for other resources,
such as machines and materials.
• Suppose a company’s employees are adding
nine parts muda for every one part value.
• Their productivity can be doubled by reducing
muda to eight parts and increasing the added
value to two parts.

11. Kaizen in the Gemba
• Muda elimination can be the most cost-
effective way to improve productivity and
reduce operating costs.
• Kaizen emphasizes the elimination of muda in
the gemba rather than the increase of
investment in the hope of adding value.
• The third ground rule of kaizen practices in the
gemba is standardization.

12. Kaizen in the Gemba
• Standards may be defined as the best way to
do the job.
• For products or services created as a result of a
series of processes, a certain standard must be
maintained at each process in order to assure
quality.
• Maintaining standards is a way of assuring
quality at each process and preventing the
recurrence of errors.

13. Introduction to
Kaizen

14. Born in Times of Trouble
• Despite being a Japanese word, the concept of
Kaizen actually originated in America during
World War II when the government enlisted
business process experts to make various
industries more productive in support of the
war effort.
• Not only did American industry need to get
better quickly in order to keep up with the
demands of the war effort, it needed to do so
on a shoestring budget.

15. Born in Times of Trouble
• This combination of dire need and extreme
constraint led to the concept of “small steps.”
• America had neither the time nor the money to
radically revolutionize its industries from the
ground up.
• Instead, proponents of Kaizen implored floor
managers and line workers alike to make small
changes, wherever they could, whenever they
could, for as long as they could.

16. Kaizen – a concept brought home
• After the war was over, the US brought these
same experts to Japan to help rebuild their
economy.
• The kaizen philosophy assumes that our way
of life (be it our working life, our social life, or
our home life) should focus on constant
improvement efforts.
• This concept was so natural and obvious to
many Japanese that they didn’t even realize
they possessed it.

17. Toyota’s Lean Manufacturing
• Japanese industry, led by Toyota, embraced
Kaizen as part of what would become known
as Lean Manufacturing, which was
instrumental to propelling the Japanese auto
industry to prominence by the 1980s.
• Toyota’s success increased awareness of the
term kaizen and has spread the notion of
“lean” from manufacturing to software and
eventually to a whole host of other industries.

18. Results with Kaizen worldwide
• Organizations worldwide from manufacturers,
to hospitals, to banks, to software developers,
to governments have made a difference by
adopting kaizen philosophies, mind-sets, and
methodologies.
• Although improvements under kaizen are
small and incremental, the kaizen process
brings about dramatic results over time.

19. Subtle vs Dramatic
• Western management, meanwhile, worships
innovation: major changes in the wake of
technological breakthroughs and the latest
management concepts or production
techniques.
• Innovation is dramatic, a real attention-getter.
Kaizen, on the other hand, is often undramatic
and subtle.

20. Low risk and low cost
• But innovation is one-shot, and its results are
often problematic, whereas the kaizen process,
based on commonsense and low-cost
approaches, ensures incremental progress that
pays off in the long run.
• Kaizen is a low-risk approach. Managers can
always go back to the old way without
incurring large costs.

21. Major Kaizen
Concepts

22. Major Kaizen Concepts
• In order to successfully achieve kaizen strategy,
management must first learn to adopt certain kaizen
concepts. The basic kaizen concepts required are:
– Kaizen and management
– Process versus result
– Following the plan-do-check-act (PDCA) and
standardize-do-check-act (SDCA) cycles
– Putting quality first
– Speak with data.
– The next process is the customer.

23. Kaizen and Management
• In the context of kaizen, management has two
major functions: maintenance and
improvement.
• Maintenance refers to activities directed
towards maintaining current technological,
managerial, and operating standards and
upholding such standards through training and
discipline.

24. Kaizen and Management
• Under its maintenance function, management
performs its assigned tasks so that everybody
can follow standard operating procedures
(SOPs).
• Improvement, meanwhile, refers to activities
directed toward elevating current standards.

25. Kaizen and Management
• The Japanese view of management thus boils
down to maintaining and improving standards.

26. Kaizen and Management
• Improvement can be classified as either kaizen
or innovation.
• Kaizen signifies small improvements as a
result of ongoing efforts.
• Innovation involves a drastic improvement as a
result of a large investment of resources in new
technology or equipment.

27. Kaizen and Management
• Gembah Kaizen emphasizes two management
roles (kaizen and maintenance) with little
emphasis on innovation.
• However, innovation is one of the main
driving force in today’s technological markets.
• Today, we may say that most good companies
around the world would employ a Gemba-
Kaizen approach across almost all levels of
management.

28. Kaizen and Management
• However, Top Management must also spend a
significant amount of their time towards R&D.
This is illustrated in Figure on the following
slide.
• At the very top of the organization lies the
most important role of leadership.
• Top management must be able to predict how
the technology would evolve and direct the
company towards it through policy
deployment.

29. Kaizen and Management

30. Kaizen and Management
• Modern global businesses are largely
innovation driven. The Figure on the following
slide shows the Top 20 companies in terms of
amount of spending in R&D in 2018.
• As can be seen all the Tech Giants are also the
biggest investors in R&D.
• Not emphasizing on innovation is perhaps the
only major limitation of the Gemba Kaizen
approach.

31. Kaizen and Management

32. Kaizen and Management
• As technology progresses, organizations need
to step up efforts in innovation.
• However, lower and middle managements still
have to primarily abide by the rules of Gemba
Kaizen.
• In low income countries (LICs) like Pakistan,
there is no substantial innovation and
organizations can at best acquire the Gemba
Kaizen management style.

33. Process versus Result
• Kaizen fosters process-oriented thinking because
processes must be improved for results to improve.
• The Kaizen approach requires a process based
approach which is in sharp contrast with the
results-based thinking in the West.
• According to the Kaizen approach, failure to
achieve planned results indicates a failure in the
process. The Management’s role is to identify and
correct these process-based errors.

34. Process versus Result
• One might ask, what’s the point of simply doing
kaizen if it does not yield results.
• Policy deployment (one of management’s key
systems) helps direct these processes towards
achieving results.
• The primary reason for the failure of many
kaizen strategies in some companies is the fact
that kaizen strategy is applied without regard to
implementing the process based approach.

35. Following the PDCA/SDCA cycles
• Successful management on a day to day basis
boils down to one precept: maintain and
improve standards.
• The kaizen processes that maintain and
improve standards are the PDCA and SDCA
cycles.
• The PDCA cycle refers to the plan-do-check-
act (PDCA) cycle while SDCA stands for the
standardize-do-check-act cycle.

36. Following the PDCA/SDCA cycles
• The PDCA (plan-do-check-act) cycle deals with
standardizing a new process, i.e. it deals with the
improvement of standards.
• The SDCA cycle deals with stabilizing an
existing process, i.e. it deals with the
maintenance of standards.
• In the Gemba Kaizen approach to Management,
Maintenance and Improvement become the two
major responsibilities of management.

37. Following the PDCA/SDCA cycles
Plan refers to
establishing a target
for improvement
and then devising
action plans to
achieve that target.
Do refers to
implementing the
plan.

38. Following the PDCA/SDCA cycles
Check refers to
determining
whether the
implementation
remains on track
and if it has brought
about the planned
improvement.

39. Following the PDCA/SDCA cycles
Act refers to set
goals for new
improvements or to
standardizing new
procedures in order
to prevent
recurrence of the
original problem.

40. Following the PDCA/SDCA cycles
• In the beginning, any new work process is
unstable.
• Before one starts working on PDCA, any
current process must be stabilized in a prior
process.
• This stabilization process is referred to as, the
standardize-do-check-act (SDCA) cycle and is
shown in Figure on next slide.

41. Following the PDCA/SDCA cycles

42. Following the PDCA/SDCA cycles
• Only after the current process has been
stabilized should one move on to the PDCA
cycle.
• This is depicted in the Figure on next slide.
• If for a certain process standards have been
established and followed with little or no
abnormalities, we say that the process has been
stabilized.

43. Following the PDCA/SDCA cycles

44. Following the PDCA/SDCA cycles
• During the SDCA cycle we expect to face
abnormalities. Every time an abnormality
occurs in the current process, the following
questions must be asked:
– Did it happen because we did not have a standard?
– Did it happen because the standard was not
followed?
– Or did it happen because the standard was not
adequate?

45. Following the PDCA/SDCA cycles
• The PDCA cycle revolves continuously.
• As soon as the improvement is made the resulting
status quo becomes the target for further
improvement. PDCA means never being satisfied
with the status quo.
• Because employees prefer the status quo and
frequently do not have initiative to improve
conditions, management must initiate PDCA by
establishing continuously challenging goals.

46. Putting Quality First
• Of the primary goals of quality, cost, and delivery
(QCD), quality should always have the highest
priority.
• No matter how attractive the price and delivery
terms offered to a customer, the company will not
be able to compete if the product or service lacks
quality.
• Further, as we shall see later that improving quality
will eventually lead to cost reduction.

47. Putting Quality First
• Practicing a quality-first strategy requires
management’s commitment because managers
often face the temptation to make
compromises in cutting costs or in meeting
delivery requirements.
• In so doing, they risk sacrificing not only
quality but also the long term life of the
business.

48. Speak with Data
• In order for a problem to be correctly understood
and solved, the problem must be recognized and the
relevant data gathered and analyzed.
• Collecting data on the current status helps you to
understand where you are now focusing; this serves
as a starting point for improvement.
• Trying to solve a problem without hard data is a
feeling’s based approach and not a very scientific
or objective approach.

49. The next process is the customer
• All work is a series of processes, and each
process has its supplier as well as its customer.
• A material or a piece of information provided
by process A is worked on and improved in
process B and then sent on to process C.
• The next process always should be regarded as
a customer.

50. The next process is the customer
• The axiom “the next process is the customer”
refers to two types of customers: internal
(within the company) and external (out in the
market).
• Most people working in an organization deal
with internal customers.
• This realization should lead to a commitment
never to pass on defective parts or inaccurate
pieces of information to those in the next
process.

51. The next process is the customer
• When everybody in the organization practices
this axiom, the external customer in the market
receives a high-quality product or service as a
result.
• A real quality-assurance system means that
everybody in the organization subscribes to
and practices this axiom.