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Kaizen Costing
PREPARED BY : GURSHARAN SINGH
SAINI
KHALSA COLLEGE PATIALA , 147001
Introduction
Kaizen is known as " Genkakaizen " in Japanese
companies. It is used in manufacturing stage of
the existing p...
Concept of Kaizen
Costing
KAI
CHANGE
ZEN GOOD
Change for Good
DEFINITION
Yashihuro Moden defines kaizen
costing as "the maintenance of present
cost levels for products currently being
...
KC is applied to product that is already under
Production For Cost Reduction
Cost Can be reduced through estimation of sev...
NOTIONS OF KAIZEN COSTING
o KAIZEN is Continuous
o KAIZEN is incremental in
Nature
o KAIZEN is participative
Implementing Kaizen-
few rules
o List your own Problems
o Grade problems as to minor, difficult and
major
o Start with the...
o Remember improvement is part of daily
routine
o Never accept status quo
o Never reject any idea before trying
o Eliminat...
Procedure
For Implementation
1.Form small groups from 6-10 persons
2.Give them numbers-Kaizen 1,Kaizen-2…
3.Appoint an eva...
Evaluation
0 - Marks for no improvement made
0 to 30 - Marks depends upon improvement tried but
failed
30 to 50 - Marks fo...
Kaizen Philosophy
Approach to Traditional Organisation Kaizen Environment
1 Attitude Let it go Continuous
Improvement
2 Em...
Advantages of Kaizen Costing
•Customer Satisfaction
•Process Centered
•Create Work Teams
•Cross-functional
•Increasing Emp...
Disadvantages
•Requires Permanent change of Management System
•Does not Produce Required Results
•Difficult to Convince Pe...
Lessons
for
Failure
Lack of interest and support
from management
Lack of training of
Listening skills, Presentation Skill,...
Difference Between Target & Kaizen
Costing
Kaizen Costing is typically based on the following :
- Employees are the source...
Strategic Based Cost Challenges
1.DETERMINANTS OF ENVIRONMENTAL
UNCERTAINTY
2. VOLATILITY
3. COMPLEXITY
4.INCREASING GLOBA...
Kaizen costing
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Kaizen costing

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The presentation is about Kaizen costing that has been used by japan from number of years to control costs.

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Kaizen costing

  1. 1. Kaizen Costing PREPARED BY : GURSHARAN SINGH SAINI KHALSA COLLEGE PATIALA , 147001
  2. 2. Introduction Kaizen is known as " Genkakaizen " in Japanese companies. It is used in manufacturing stage of the existing products as cost reduction process. Kaizen is derived by Japanese automobile companies
  3. 3. Concept of Kaizen Costing KAI CHANGE ZEN GOOD Change for Good
  4. 4. DEFINITION Yashihuro Moden defines kaizen costing as "the maintenance of present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level."
  5. 5. KC is applied to product that is already under Production For Cost Reduction Cost Can be reduced through estimation of seven types of waste :- oover production oInventory oWaiting oDefective oMotion oTransportation oOver Processing
  6. 6. NOTIONS OF KAIZEN COSTING o KAIZEN is Continuous o KAIZEN is incremental in Nature o KAIZEN is participative
  7. 7. Implementing Kaizen- few rules o List your own Problems o Grade problems as to minor, difficult and major o Start with the smallest minor problem o Move on to next graded problem and so on
  8. 8. o Remember improvement is part of daily routine o Never accept status quo o Never reject any idea before trying o Eliminate tried but failed experiments o Highlight problems rather than hiding
  9. 9. Procedure For Implementation 1.Form small groups from 6-10 persons 2.Give them numbers-Kaizen 1,Kaizen-2… 3.Appoint an evaluator of the group 4,Arrange weekly meetings of group (6-12 months) 5.Submit progress of improvement in writing 6.Allow each member to express 7.No disturbance when others are speaking 8.However Clarifications can be sought instantantly
  10. 10. Evaluation 0 - Marks for no improvement made 0 to 30 - Marks depends upon improvement tried but failed 30 to 50 - Marks for small to moderate improvement 50 to 75 - Marks for good improvement > 75 - Marks for extraordinary improvement
  11. 11. Kaizen Philosophy Approach to Traditional Organisation Kaizen Environment 1 Attitude Let it go Continuous Improvement 2 Employees Cost Assets 3 Information Restricted Shared 4 Interpersonal Commercial Human Relationship 5 Managerial Belief Routine Change 6 Management Culture Bureaucratic Participative 7 Management Function Control Supportive 8 Management Stress Functional Cross Functional
  12. 12. Advantages of Kaizen Costing •Customer Satisfaction •Process Centered •Create Work Teams •Cross-functional •Increasing Employees Moral •Reduced Errors •Promote openness •Acknowledge Problems openly
  13. 13. Disadvantages •Requires Permanent change of Management System •Does not Produce Required Results •Difficult to Convince People
  14. 14. Lessons for Failure Lack of interest and support from management Lack of training of Listening skills, Presentation Skill, Communication Skill Criticism of failure from fellow members Ignoring Basic Concept ( Improvement is part of daily routine) Work Pressure -sidelining the Kaizen
  15. 15. Difference Between Target & Kaizen Costing Kaizen Costing is typically based on the following : - Employees are the source of solutions - Cost reduction is achieved by continuous improvement - Cost reduction targets are set every month But Target Costing is estimated selling price - TARGET COST = desired level of profit. It is an integral part of a strategic profit management system.
  16. 16. Strategic Based Cost Challenges 1.DETERMINANTS OF ENVIRONMENTAL UNCERTAINTY 2. VOLATILITY 3. COMPLEXITY 4.INCREASING GLOBAL PRESENCE 5.INFORMATION OVERLOAD 6. AMBIGUITY

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