Kaizen Event Assessment through Performance and Economic Investment Analysis

Abstract

Kaizen event is about the implementation of structured continuous improvement projects, using a dedicated cross-functional team to improve a targeted work area, process or product. Usually, it is executed within an accelerated timeframe by applying proven process tools and human creativity with a goal of improving the overall performance. Thus, this paper is to show the enhancement a company has experienced with the implementation of kaizen events in one of its production areas. The main aim is to share how assessment methodologies were systematically conducted on the areas that should be empirically measured and evaluated in order to maximize the impact of kaizen events on the overall performance. All the measurements, techniques, and methods were described clearly, thus underlining its potential benefits and pitfalls. The case proposed refers to a manufacturing components company for the automotive industry in Malaysia. This case study evaluates one particular event of many events done by the company every day. Through performance analysis, results were measured and analysed by comparing the lean metrics such as productivity, quality, and space, cycle time and setup time reduction between the existing against the improved area. Findings show that the company managed to reduce its operational cost and production lead time significantly. As for the assessment of the cost saving analysis, a total of RM 31,661.22 per year of saving is targeted to be achieved through the long-term commitment from the kaizen team and also top management. On the other hand, the economic analysis shows that the investment made for this event is viable and less risk to be implemented in other production areas or other manufacturing disciplines.