KAIZEN- what the Japs didn't tell you.

KAIZEN - as what most of you may know, is the Japanese management system of Continuous Improvement.

As contrast to the American system where there is quantum leap in improvement & the Chinese where the improvement is reformative (kai ge), the Japanese continuous improvement is a series of slow, slow improvement over a long period of time. That's why if you work in a Japanese company, you must improve (it is compulsory; in fact you need to churn out a Kaizen report every month without fail)but as long as you have a small result reported, it suffices. It keep you on your toes....that's where creativity comes in.

However, having worked in Japanese factories all my live until I retired, Kaizen results are very misleading indeed.That's why in world productivity reports by manufacturing companies over the world, Japanese companies,like Toyota, Nissan, Honda, Suzuki, etc always lead in the productivity figures & subsequently by countries, Japanese always lead the pack whenever the data are released by the Americans or by the Japanese productivity centre.

I could not get the latest figures published (something is wrong..anybody have the data?) but the 2002 figures may suffice as a guideline:
The Jap Productivity Centre reported that Japan ranked 18th among 30 OECD countries in productivity in terms of GDP(using dollars & PPP) over the Labour Force Employed.. Japan at USD54,264 was LAST among 7 major industries by countries. Among the non-OECD countries,Hong Kong & Israel were ranked high at USD50,000. China was ranked 51 out of 58 countries...which is a lot for everyone to ponder,seeing that for the last 10 years, China has consistently raked up more than 8.5 productivity growth rate,e.g. between 1990-2002, China was ranked 1st out of 81 countries in terms of growth rate at average of 8.5% while Japan was ranked at 37th at average of 3.7%.
However, in terms of Physical Labour Productivity, Japan was ranked 3rd out of 37 countries!With Ireland at No.1. In terms of productivity in Manufacturing Industries, Japan ranked 3rd out of 22 countries. This Physical Labour Productivity is measured by using Output over Amt of Invested Labour Hrs,i.e. man-hrs, NOT over Headcount.

Now for my scepticsm at the labour productivity data reported by the Japs:
owing to the immense pressure from top mgmt to churn out an impressive Kaizen results, and hence a high productivity figure,local mgmt have no choice but with the close-one-eye explicit approval from the Jap mgmt, the input man-hrs are mostly manipulated to denote a lower number. So,instead of man-hrs, headcounts are used! Of course, using Headcounts as input is allowed in productivity calculation but the unit of measurement differed & have to be specified instead of misleading the overall figures as XXX/man-hrs. What actually happened was that Japanese companies almost invariably depend on overtimes for their daily output. This is also the pressure on local mgmt to reduce labour intake & hence, a lower headcount reported in Japanese countries.In fact, when I was in Japan on numerous occasions since 1975 up to 1991, I have personally experienced the daily 3 hrs overtime which the supervisor will go around taking names 10 minutes before time-out. Most workers have to comply or else....That's another reasons why most Japanese never return home to their wives & families before 8pm. Either they are at work, or they are at other outlets (Pachinko,entertainment outlets,etc)or they will feel ashamed if neigbours see them home early.

Coming back to my experience,sometime overtime working hours are not computed into the overall productivity calculations but nevertheless, the units employed are still "per man-hr" (which should have been "per person"!)

The one other factor which the Jap mgmt would like to mislead the world at large is out-sourced labour,which directly affected the productivity calaculation:
Almost all Jap factories whether in Japan or overseas out-sourced their labour by about 40%. These out-sourced labour (in Malaysia,we called them 'contract labour')usually worked in the manufacturing factories concerned;they sometime wear the same uniforms as the factories employees but some out-sourced labour have their own separate uniforms. There are reasons to the choices.
These out-sourced labour are paid a flat rate (to their bosses).Their bosses in return may pay their employees overtime rate as necessary. However,note that the Jap manufacturing factories compute their labour productivity based on the flat rate which are normally lower than the standard rate paid to their own employees (less the compulsory employees fund, insurance, etc).
One important factor to note is that invariably, not all the out-sourced labour work time are taken into consideration when computing the labour productivity results;in fact, they are not reported at all...they are reported as overhead expenses! Of course, these out-sourced labour work tome calculation are selective & may vary each month; e.g.the main assembly line workers may be considered as direct labour & their work time taken into consideraion but the sub-assembly work labour may be discarded completely.
Out-sourced labour may also be equal to out-sourced work, whereby most of the components purchased are supplied in sub-assembled forms, thus reducing the number of direct labours required in the plant. Ingenious!

So now you know what I meant. In the past, the Americans & the World have been throwing accolades at the Japanese for their strict work ethics & high productivity figures..but I say, don't be misled; what you see is not what you get.

This is not to say that the Japanese Kaizen mgmt system is no good..in fact I love the system because it makes everybody on their toes & really comes out with monthly improvements, no matter how small they are. There are no chances for lazy bones if their intentions are just to come to the factories & just perform their daily chores.

Anyone....Japanese factories? You may also use these methods to improve your company's productivity rate too.