THE METEORIC RISE of Japan during the 1970s and 80s was amazing and miraculous, and equally surprising was its downfall in the 1990s. Sliding equity and real estate market marked the transitional period of the last decade of the 20th century. Much has been written and heard about this sudden transition from being the centre of adulation to worldwide dismissal. Japan was written-off as an economy devastated beyond recovery and marred by scores of corruption scandals and mountains of dud debt. However, what was, and is still, undermined are the sound manufacturing and business techniques pioneered by leading Japanese manufacturers and the secret of their leading highly competitive automotive and electronic industries. Let me introduce some of these concepts, which can help in managing any business set-up in a better way.
Kaizen is one such technique, which in Japanese means ‘change for the better’ or ‘to take it apart and put back together in a better way’. Kaizen helps in improving productivity by focusing on the incremental improvements achieved through small changes in day-to-day activities, instead of big-bang improvements usually characterised by significant investments in new technologies and systems. The key elements of Kaizen are quality, effort, and empowerment of employees at every organisational level, willingness to change and communication. Importantly, Kaizen must operate with three principles in place: process and results (not results-only); systemic thinking (i.e. the big picture, not solely the narrow view); and non-judgmental, non-blaming (because blaming is wasteful).
Another proven management philosophy practised in Japan and followed by some Western organisations is the Five S’s. It is a technique used to establish and maintain quality environment in an organisation. ‘Five S’ has five elements: Seiri (sorting out useful and frequently used materials and tools from unwanted and rarely used things); Seiton (keeping things in the right place systematically so that searching or movement time is minimised); Seiso (keeping everything around you clean and in a neat manner); Seiketsu (standardising the above principles in everyday life) and Shitsuke (inculcating good habits and practising them continuously). The 5-S practice is useful because it helps everyone in the organisation to live a better life. In 2004, Cyberabad police, embarking on a mission to achieve excellence, declared adopting these two methods. The Hong Kong government is fully committed to promoting the 5-S practice in order to help industries improve their competitiveness.
Kanban and ‘Just in Time’ are two of the best practices in inventory management systems that were pioneered by the Japanese automobile manufacturers, such as Toyota, and have revolutionised the manufacturing industry across the world. These systems have broken the old paradigm of choice between cost and product quality and have enabled companies to offer lower costs as well as better quality to customers. Reduction in manufacturing costs is achieved through reduction in the inventory stocks and supply of inventories by suppliers as and when required. Quality improvement, on the other hand, is the result of lower proportion of component scrap since the components spend less time in the supply chain.
Many corporations have realised that these concepts, if applied appropriately, can humanise the workplace, eliminate hard work, teach people how to do rapid experiments using scientific methods and help in learning, seeing and eliminating the waste in business processes. Some of the leading Indian organisations, such as TATA Motors, India’s largest automobile manufacturer, TISCO, India’s largest steel manufacturer, Larsen & Toubro etc have benefited immensely by the appropriate implementation of Kaizen over the last few years.
