Dynamic changes in technology require continual improvements to products, costs, and processes. Cultivating a culture of Lean Kaizen has proven effective for enabling improvements. Top leadership can identify focus areas by benchmarking performance against best-in-class competitors to drill down on core process inefficiencies. When crafting a Kaizen charter, the fishbone diagram tool can help identify root causes of defects by examining how specific factors impact cycle time and productivity. The charter should include a problem statement with current data, goals for a minimum 50% reduction in cycle time or costs, and benefits and risks of the improvements.

1. Rick Ross
16 December,2016
Lean Kaizen as a critical business need and crafting an effective Kaizen charter
Dynamic shifts in technology in recent years and in the foreseeable future require any technology
business to continually improve product offering and remain intently focused on costs as a percent of
revenue plus any core time to market process requirements in order to ensure needed Cash
flow. Competitive pricing, change management needs and investors further require that the machinery
keep up and that profitability measurements demonstrate an agile business maturity cost averse focus
evident by an appreciable return on investment. Cultivating a culture of Lean Kaizen successes has
proven to be highly effective in enabling all-hands to participate in continually improving the required
core business process machinery and in turn remain competitive and even grow the business.
Top executive leadership can enable the needed Kaizen focus areas by first comparing and contrasting
business unit revenue plus operating margins against available marketing data for best in class like
products and services. By benchmarking your existing business unit performance, it is now possible to
further drill down and isolate the areas within each of the core processes of the business impeding a best
in class model and then task business unit leadership with Kaizen improvement targets either annually or
as needed.
Targeting the right improvements to any single core business process in creating a Kaizen charter is an art
form however and should take into account how a given cycle time and associated productivity are
currently impacting both the customer and the business in the form of cycle time, productivity
measurements and Cash flow to the business. Although the Lean tool bag offers many different tools to
choose from, I will share that in my experience I have found the Fishbone Diagram tool to be my personal
tool of choice in that in an open forum it is possible to agree across supporting functions what the high
level symptoms are and then with the same team drill down to specific root causes. I appreciate how this
approach also sets the team off on the right mindset in terms of Kaizen support buy-in and common goal
camaraderie. By examining the specific core process requirements (tools, materials, people, process and
process inputs – as examples of the large fish-bones) an identified reason or reasons for the presence of a
defect,problem or source of batch processing / excess inventory can nearly always be uncovered in 3-5
‘Why’s’ such that if this area for the most basic reason were streamlined or even eliminated, it would
prevent a recurrence of an excessive cycle time or even re-work.
The next step then becomes crafting and executing the appropriate Kaizen charter,take apart the current
state value stream,remove the non-value-add activities and put the process back together with the needed
efficiencies. I will preface my description below with my own approach being, a ½ day workshop long
before the actualKaizen event in order to capture the end to end current state value stream and install a
data collection plan which provides the baseline clock and costing data plus current state process
reference wellbefore the actual Kaizen event.
The key elements of a rock solid Kaizen charter then include but are not limited to:
A Problem Statement: A description of how the current cycle time –and- productivity issues are
impacting both the customer and the business (data points required - Cycle Time, Productivity,
Cash) Note that Cash can be determined in measuring the targeted improvements with weighted average
cost of capital or WACC (as an example) which is essentially banking Cash flow far sooner than is
normal into the business.

2. Kaizen Goals: Define starting baseline if calculated otherwise TBD, Goal minimum 50% reduction and
stretch objective. *Include Current Data Confidence Level % to account for process variance.
Note: Early Kaizen Benefits should be realized in < 90 days or you may have scoped your Kaizen too
large. This is key in that Kaizen improvements that will take too long to implement can unravel with
changes in management and natural employee attrition. Experience has taught me personally to plan and
completely close the end to end Kaizen improvements list within 6 months of the date of the Kaizen date
or I will risk implementing the final stages by myself.
Benefits: Describe how the above goals will deliver tangible improvements to the business and business
segments. Identify the budgets and/or other financial measurements that should demonstrate the end
result.
Risks: Identify risks to approval, event preparation, the event, projected improvements, and/or associated
mitigation plans.
By taking the time to think through the associated risks to the success of your Kaizen charter,Business
Unit Champions and Stakeholders that are tasked from the top with ensuring their business within a
business achieves success,can then be instrumental in clearing your way for success at the process
improvement level.