kaizen costing
DESCRIPTION
explains the methodology and importance in strategic cost managementTRANSCRIPT
Kaizan CostingKaizan Costing
Kai Change
Zen Better
Change for Better
Indian Connection
Small Drops of Water togetherUltimately result in a lake
Implementing Kaizen- few rules
List your own ProblemsGrade problems as to minor, difficult and majorStart with the smallest minor problemMove on to next graded problem and so onRemember improvement is part of daily routineNever accept status quoNever reject any idea before tryingEliminate tried but failed experimentsHighlight problems rather than hiding
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 Bureacratic Participative
7 Management Function Control Supportive
8 Management Stress Functional Cross Functional
ProcedureForImplementation
Form small groups from 6-10 personsGive them numbers-Kaizen 1,Kaizen-2…Appoint an evaluator of the groupArrange weekly meetings of group (6-12 months)Submit progress of improvement in writingAllow each member to expressNo disturbance when others are speakingHowever Clarifications can be sought instantantly
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
EvaluationOther factors
A Attitude
S Safety
T Productivity
E Energy Saving
M Money Saving
Change in Attitude
Benefits of Kaizen
Tangible Benefits
Reduction in Production Time
Reduction in Rejection
Energy Saving
Improved QualityIntangible Benefits
MotivationTeam BuildingSense of belongingnessEnvironment conservationChange in attitude
LessonsforFailure
Lack of interest and support from management
Lack of training of Listening skills, Presentation Skill, Communication Skill
Criticism of failure from fellowmembers
Ignoring Basic Concept ( Improvement is part of daily routine)
Work Pressure -sideliningthe Kaizen
Kaizen Costing
Kaizen Costing
Cost Reduction in
Design of the Product Development of the Product Production Of the Product
Kaizen Costing-definition
Kaizen costing is the maintenance of present levels for products Currently being manufactured via systematic efforts to achieve the desired cost level
KC is applied to product that is already under Production
Time prior to KC is Target Costing
Product Specification
Price Targets
Profit Targets
Cost Targets
Major Product/Process Changes
Does DesignMeet Target
Costs?
Estimated Life Cycle Cost
Are Life Cycle CostsAcceptable ?
Start Production
Minor Product/Process Changes
Product Scrapping
ProductPlanningPhase
LifeCycleCosting
ProductionPhase
ScrappingPhase
Cost Reduction by 5%
Kaizen Costing Calls
Establishment of cost reduction target amount and its accomplishment throughKaizen activities---continuous improvement
Kaizen Costing
Product Development,Design &Manufacturing
Target Costing
KaizenCosting
Training, Learning Before goal of Target Costingor Kaizen Costingis imposed on the Organisation