Kaizen was created in Japan following World War II. The word Kaizen means "continuous improvement".

It
comes from the Japanese words 改 ("kai") which means "change" or "to correct" and 善 ("zen") which means
"good".

Kaizen is a system that involves every employee - from upper management to the cleaning crew. Everyone is
encouraged to come up with small improvement suggestions on a regular basis. This is not a once a month or
once a year activity. It is continuous. Japanese companies, such as Toyota and Canon, a total of 60 to 70
suggestions per employee per year are written down, shared and implemented.

In most cases these are not ideas for major changes. Kaizen is based on making little changes on a regular
basis: always improving productivity, safety and effectiveness while reducing waste.

Suggestions are not limited to a specific area such as production or marketing. Kaizen is based on making
changes anywhere that improvements can be made. Western philosophy may be summarized as, "if it ain't
broke, don't fix it." The Kaizen philosophy is to "do it better, make it better, improve it even if it isn't broken,
because if we don't, we can't compete with those who do."

Kaizen in Japan is a system of improvement that includes both home and business life. Kaizen even includes
social activities. It is a concept that is applied in every aspect of a person's life.

In business Kaizen encompasses many of the components of Japanese businesses that have been seen as a
part of their success. Quality circles, automation, suggestion systems, just-in-time delivery, Kanban and 5S are
all included within the Kaizen system of running a business.

Kaizen involves setting standards and then continually improving those standards. To support the higher
standards Kaizen also involves providing the training, materials and supervision that is needed for employees to
achieve the higher standards and maintain their ability to meet those standards on an on-going basis.

Cut costs. Reduce waste. Reduce maintenance costs. Improve customer satisfaction. Kaizen
accomplishes all of this and more by focusing on creating new ideas to achieve continual improvement through
small changes. It's a method that helps you to get a little bit better at what you do every day.

Kaizen involves every employee in making change—in most cases small, incremental changes. It focuses on
identifying problems at their source, solving them at their source, and changing standards to ensure the problem
stays solved. It's not unusual for Kaizen to result in 25 to 30 suggestions per employee, per year, and to have
over 90% of those implemented.

For example, Toyota is well-known as one of the leaders in using Kaizen. In 1999 at one U.S. plant, 7,000 Toyota
employees submitted over 75,000 suggestions, of which 99% were implemented.

These continual small improvements add up to major benefits. They result in improved productivity, improved
quality, better safety, faster delivery, lower costs, and greater customer satisfaction. On top of these benefits to
the company, employees working in Kaizen-based companies generally find work to be easier and more
enjoyable—resulting in higher employee moral and job satisfaction, and lower turn-over.

With every employee looking for ways to make improvements, you can expect results such as:

Kaizen Reduces Waste in areas such as inventory, waiting times, transportation, worker motion, employee
skills, over production, excess quality and in processes.

Kaizen Improves space utilization, product quality, use of capital, communications, production capacity and
employee retention.

Kaizen Provides immediate results. Instead of focusing on large, capital intensive improvements, Kaizen
focuses on creative investments that continually solve large numbers of small problems. Large, capital projects
and major changes will still be needed, and Kaizen will also improve the capital projects process, but the real
power of Kaizen is in the on-going process of continually making small improvements that improve processes
and reduce waste.

Fleetwood RV's plant 77 in Chico, California, was having growing pains. Despite a slow start—the oil
embargo kept the plant from opening until 1984, five years after it was built—by 1997 its annual gross sales had
reached $110 million a year. Nevertheless, the plant had hit a manufacturing plateau and production had leveled
off. Plant 77 had introduced a quality improvement process in 1992 that involved a five-step problem-resolution
process, corrective action teams and process model work sheets, but progress was slow. To grow, the plant
needed more room and higher production numbers, but it needed to attain them without the expense of added
labor or new construction.

The recreational vehicle (RV) market can be a difficult one in which to succeed. Primarily products for the
affluent, RVs have a more limited market than do other vehicles. Recording $1.73 billion in sales in 1999,
Fleetwood's RV division flourishes because it offers a wide variety of RVs and is known for quality—according to
its customer satisfaction surveys, more than 90 percent of Fleetwood buyers would recommend Fleetwood RVs
to a friend.

Plant 77 found a way to re-energize production when Operations Director Steve Hulft discovered Kaizen—the
Japanese methodology for promoting continuous improvement by reducing waste. Anand Sharma, president and
CEO of TBM Consulting Group, notes that Kaizen originally implied slow, step-by-step improvement, but due to
Toyota's influential implementation has since come to mean rapid evolutionary change. The Toyota Production
System was developed to allow the Japanese company to compete with Ford while expending less money and
time and fewer resources, in part by maintaining a lower inventory, assuring customers of on-time delivery and
producing higher-quality product.

Plant 77 ultimately adopted TBM's Global Production System (GPS), essentially a tailored amalgam of the
Toyota Production System and lean manufacturing principles driven by Kaizen methodology. In contrast to the
Toyota Production System, which was tailored for the automotive industry, the GPS was designed to apply to
virtually any industry. It also helps companies establish the change culture necessary for successful application
of Kaizen--Toyota already had such a culture in place, so its system didn't address problems other companies
would likely face when attempting to effect change. A GPS's primary purpose is to help the company produce
more with less while adding value constantly.

What made plant 77 an ideal candidate for implementing a GPS was its potential for growth and its
management's support of the process and determination to improve, explains Sharma. "Change affects every
part of an organization," he says. "If management isn't ready, it will kill the enthusiasm required for
success."

Once its consultants determined that the company was a good candidate, it was time for the two-day launch
process. During the launch, plant 77's management team learned where they were to begin work and how to
prepare and also selected a team leader. Additionally, the team and the consultants scheduled monthly
interventions, which average four days per month but present an opportunity for progress reviews and on-the-
spot advances. During interventions, visiting consultants actually work in the plant to identify problem areas, such
as having to leave the work station to obtain tools or materials, and improve them.

"We strive for improvements of 30 percent, 40 percent, even 50 percent, and we achieve them, because
the potential is there," Sharma says. "Kaizen isn't magic. There is simply so much waste in most
production systems that Kaizen principles create quick and obvious results."

Near the end of the launch, senior management set new policy and worked to align their objectives with their
newly developed skills. Among the objectives they identified were reducing work-in-progress, increasing workers'
daily piece production, solving specific safety and ergonomics issues, and fixing specific quality problems.

The next big step was the in-house Kaizen "event," which had to involve at least one manager who would
demonstrate by his or her presence on the shop floor that management supported the process. A week-long
Kaizen event can be either public or private (in-house). Both types are designed to involve and empower
everyone, helping to break down inertia and the resistance to change. During each event, the Kaizen team is
assigned an improvement project with specific goals. Following four to eight hours of classroom training, the team
and consultants examine the existing manufacturing process, identify areas of waste and non value-added
operations, and begin generating improvement ideas. The team then applies the ideas directly to the factory floor,
keeping those that eliminate waste and contribute to building a one-piece-flow manufacturing process.

Plant 77 held its first in-house Kaizen event in July 1998, which proved so effective—reducing cycle times by 28
percent, work-in-progress by 73 percent, labor hours by 19 percent and floor space waste by 59 percent--that all
of Fleetwood's other motor-home plants began working with TBM. Eventually, managers at plant 77 decided to
stage a public Kaizen event.

During public kaizens, representatives from other companies—and other industries—visit the host company both
to learn and to contribute by offering suggestions for process improvements. To understand the process more
thoroughly, plant 77's production manager, John Fedele, and general manager, Al LaBelle, had attended public
events at Maytag and Black & Decker before setting out to build Fleetwood's own GPS.

In December 1999, plant 77 became the first Fleetwood plant to hold a public Kaizen event, hosting 48
participants in five teams and working in five areas. Among the visitors were consultants from Japanese and
Brazilian firms and representatives from Safari Motor Coach, Kaiser Aluminum and Perkins Diesel Engine.
Notably, plant 77's was the first public Kaizen ever held on the west coast of the United States and the first in the
RV industry.

The public Kaizen is basically a five-day workshop. During the first day and a half, participants attend basic
training, where they learn about Kaizen methodology and develop new tools and skills they'll be using in the
following week and beyond. After training, team members watch and assess one-piece-flow production as it
takes place. They time and record current work practices, making note of areas in which waste occurs. On the
third day, the participants implement their suggestions for change, and maintenance crews work through the
night moving equipment and materials. After the shop floor has been reorganized, teams spend the fourth day
refining changes, generating more ideas and re-timing production cycles to provide evidence of improvement. On
the last day, participants gather to discuss the changes they've made, which usually include productivity gains
and significant reductions in work-in-progress inventories, defects, lead time and wasted floor space.

Plant 77 is now holding two private five-day Kaizen events a month, making its way through every
department on the line. "For one of those events, we have a consultant here," notes Ron Rabo, plant 77's Kaizen
Promotion Office team manager. "The other we'll do on an in-house basis because we have very capable
group leaders who have been sent to other plants to learn what has to be taught to the people who are
involved in the event. In between those, we'll do three-day point kaizens. We'll put a team of people
together and look at one specific process or procedure."

Less is more

Kaizen events are designed to be a learning process for everyone involved. One skill particularly important for
Fleetwood employees is being able to identify waste.

"You're learning to recognize non value-added activities like waiting," Rabo explains. "[Waiting] is the
worst sin of all because you're not doing anything. You never want someone standing around waiting for
a part or waiting for other people to finish their work. You learn to recognize jobs that are being done
inefficiently for a host of reasons."

Among the first waste issues the teams addressed was lumber. At the time of the public Kaizen, the plant used
eight-foot lengths of lumber, which the supplier cut from 16-foot lengths. However, the teams discovered that, in
most cases, seven-foot lengths were all that were necessary. The supplier now cuts from 14-foot lengths, which
are more easily available and less wasteful—and save Fleetwood money.

Lumber also played a role in one of the primary problems that team members wanted to solve: a lack of floor
space. "We used to have whole bunks of lumber stacked at each cut station," Rabo elaborates."But we
took out most of the lumber, and now we bring it into the shop in much smaller quantities, which frees up
quite a bit of floor space. That way, we don't have to build a bigger building if we want to produce more
coaches. And that's a key concept: building more with less." It's a concept that the plant is learning well:
eliminating excess lumber storage, reorganizing tools and raw materials, and removing elevated work surfaces
increased Fleetwood's available floor space by 29 percent.

Rabo admits that even for him, seeing was believing. The plant used to use large, heavy jigs to construct pine
RV frames. "They were heavy metal jigs that you'd have to pick out of a big rack that took up floor
space," he recalls. "We changed our way of thinking and made new jigs out of light material, 0.07-inch
fiberglass skin. The new light jigs can be stored in little slots under each work station table. Workers can
pull the appropriate jig readily without leaving their work areas. Just creating those new lightweight jigs
saved floor space and time formerly spent looking for the right jig and improved safety by not making
people move those heavy, cumbersome things around anymore."

Resistance to these kinds of changes can be one of the biggest initial obstacles for such an ambitious
project, but the teams' attitudes toward change evolved during Fleetwood's first public Kaizen."Once the group
started to see the positive results from making changes, they began to understand," Rabo explains. "It
wasn't easy, because it's culture, not just behavior. You learn that in the first few days of a Kaizen event.
You learn that culture and behavior are hard to change because they're learned over a period of time of
doing things a certain way day after day. It's hard to go in and turn a department on its head. But once
you do that and have some success, it spreads throughout the plant."

Grow ahead

As Fleetwood has worked to increase production efficiency by building more with less, plant 77 has been able to
reduce labor usage by about 14 percent. This might have led to layoffs in many companies, but it didn't at the
Chico site. For employees to truly cooperate in making the GPS implementation successful, they need to feel that
they're not going to improve themselves right out of jobs.

A successful change culture requires a commitment from management that improvements won't result in
layoffs. "Everyone must be encouraged to take part in creatively coming up with ideas to make
improvement," says Sharma. "But if they do that and at the end of the day the company lays off two
people who helped engineer the change, how would those two people feel? More important, how would
the eight people feel who are left over? Do you think they're going to participate next time to help you do
the same thing?"

The solution is a proactive growth strategy: As the company grows, present workers whose jobs have been
eliminated due to efficiency increases are assigned new duties. This accomplishes two objectives: current
employees have the job security they need so they'll continue to contribute to improvement efforts, and the
necessity to hire and train new employees vanishes. Fleetwood had already begun a growth strategy, so it can
also use attrition to its advantage: as workers leave, the plant won't replace them. Moreover, the company is
starting to place an emphasis on in-sourcing. As the people, machines and materials are already paid for, there's
no need to send materials out to cut costs.

Envisioning the future

So far, 19 of plant 77's departments have been "kaizened," resulting in a 65-percent overall reduction in
work-in-progress and a 22-percent overall reduction in cycle times. The Chico site has also jumped from
last to first in customer satisfaction among Fleetwood's five RV plants. Despite these tremendous advances, the
plant has no plans to slow down — Kaizen is, after all, about continuous improvement. Without adding any
additional buildings to the plant, the present goal is to increase production from the current average rate of 55
units per week to 150 units per week, eventually working up to 200 units per week. The plant currently produces
two classes of RVs on one line, but managers would like to be able to produce each class on its own line to
increase efficiency and boost production numbers. To do so, space within the plant would be reassigned for new
activities, and two parallel production lines, one for each class, would replace the single U-shaped line now in
use. The market would certainly allow Fleetwood room to grow--the plant currently has a 1,300-unit backlog.

Rabo envisions ultimately producing the RVs on a pace-line system, in which each coach (along with its
customized work order) is slowly pulled through all production stages on a chain and doesn't stop moving until it's
finished. Realizing this goal would make plant 77 the first in Fleetwood's RV division and one of the first in the RV
industry to implement a pace-line system. Regardless of whether it attains these improvements, however,
Fleetwood's plant 77 is a clear example of an organization that has embraced the spirit of Kaizen and is enjoying
its rewards.

Vanessa R. Franco is Quality Digest's managing editor.

There is more to implementing Kaizen than we can include on a single web page. However, the following serves
as an overview of introducing Kaizen into an American workplace.

For most American companies Kaizen involves a significant change in the corporate culture. This is key. The
attitudes of employees - from top management down to new hires will need to change. Kaizen needs to become
something all employees do because they want to, and because they know it is good for them and the company.
It can not be something employees do because management dictates that it be done.

That means that if management isn't ready to lead by example, Kaizen will not get off the ground.

Employee training and communication is important. Combined with that, direct involvement by the management
is critical. For example, a manager spending a week on the shop floor working with employees to help and
encourage them to develop suggestions will help. That manager should also ensure employees see their
suggestions acted on immediately. Suggestions should not be implemented next month or next week, but today.
In some cases, a suggestion submitted in the morning can be implemented that afternoon, or sooner.
Keep employees informed about what happens with their suggestions. Don't have suggestions disappear into a
management "black hole."

To get Kaizen started it can be helpful to bring in outside experts. They can work in your facility identifying
problems that those close to the work may not see. This serves as a "seed" allowing employees to see how
Kaizen works and to experience the benefits of Kaizen.

A significant obstacle to Kaizen in many corporations is that problems are seen as negatives. We don't like
problems. Someone who is associated with a problem is likely to be negatively impacted (a lower raise, missed
promotion, or even fired). In Kaizen, problems are opportunities to improve. With Kaizen we want to find, report,
and fix problems. Kaizen encourages and rewards the identification of problems by all employees.

To encourage the submission of suggestions, a part of each supervisor's evaluation should be based on the
number of suggestions submitted by those they supervise. Don't evaluate employees on the number of
suggestions they submit, evaluate your supervisors and managers and how well they are doing at getting those
who work for them to actively participate in Kaizen.

Managers should develop methods to help create suggestions and increase the number of suggestions. For
example, set up teams of five to 12 people to evaluate work areas, processes, quality, productivity, and
equipment availability/reliability. The team then makes suggestions for improvements, and they may even
implement those improvements.

Train employees in using Kaizen tools such as 5S, Kanban, and Line Balancing.

Keep in mind that Kaizen is about action. Taking action to generate suggestions, and taking action to implement
those suggestions immediately.

A Five S program is usually a part of, and the key component of establishing a Visual Workplace and are both a
part of Kaizen — a system of continual improvement — which is a component of lean manufacturing.

The Five S program focuses on having visual order, organization, cleanliness and standardization. The results
you can expect from a Five S program are: improved profitability, efficiency, service and safety.

The principles underlying a Five S program at first appear to be simple, obvious common sense. And they are.
But until the advent of Five S programs many businesses ignored these basic principles.

FREE 5S Quick Start Guide

"Introduction To The 5S Philosophy"

What types of businesses benefit from a Five S program?

Everyone and all types of business benefit from having a Five S program. Manufacturing and industrial plants
come to mind first, as those are the business that can realize the greatest benefits. However, any type of
business, from a retail store to a power plant — from hospitals to television stations — all types of businesses,
and all areas within a business, will realize benefits from implementing a Five S program.

What are the Five S's?

Use the following links to learn more about 5S

 Sort - the first step in making things cleaned up and organized

 Set In Order - organize, identify and arrange everything in a work area
 Shine - regular cleaning and maintenance
 Standardize - make it easy to maintain - simplify and standardize
 Sustain -maintaining what has been accomplished

What will it cost me?

The shipyard industry is spending nearly a million dollars to develop a Five S program the industry can use, and
to implement that program at two shipyards. On the other hand you can implement a Five S program without
adding an extra dollar to your budget.

Realistically you probably will need to spend some extra money to get your Five S program going. There will be
training time; man-hours spent to get your facility cleaned up and organized; equipment purchases, such as
buying a quality labeling system; and time spent on sustaining your Five S program once it is in place.

Your actual costs will depend on where you are now - for example what is the condition of your facility? The
further you are from meeting the goals of a Five S program, the more it will cost to implement one and the greater
the benefits you'll see as a result of your Five S program.

By NIST - Manufacturing Extension Partnership

Client Profile:

Mathers Controls, Inc., a private corporation founded in 1951, manufactures electronic and pneumatic propulsion
controls and propeller shaft brakes for the marine industry. The company primarily focuses on supplying
components throughout the world to OEMs in the boat building industry that construct vessels larger than 40 feet.
A smaller, yet significant portion of business, comes from sales to distributors and individual customers in the
fishing, transportation, and pleasure craft industries. Mathers Controls' offices and manufacturing facility are
located in Burlington, Washington, and the company employs 52 people.

Situation:

Mathers Controls' desire for growth and increased market share and revenue led the company to develop a new
product line aimed at the fully electronic engine and gear control market. Aware that there were restrictions in its
existing operations that could prevent it from meeting increased demand for its products, Mathers Control was on
the verge of approving a more than $1 million plant expansion project. Prior to approving the project, Mathers
Controls contacted Washington Manufacturing Services (WMS), a NIST MEP network affiliate, for assistance.

Solution:

After touring the plant and conducting a fact-finding meeting with top management, WMS recommended that the
company implement lean manufacturing as a means of increasing the capacity of the plant without costly plant
expansion. The Center coordinated a lean manufacturing assessment of the plant and arranged for Mathers
Controls' senior management to visit another company that had been implementing lean manufacturing over the
past year.

Discussing the actual improvements and performance enhancements gained by lean manufacturing with another
company's president provided Mathers Controls' management team with the assurance they needed to approve
WMS' proposal to provide lean manufacturing training and implementation assistance.

By adopting lean manufacturing, Mathers Control wanted to increase the facility's overall capacity by at least
25 percent to avoid the need to expand. WMS contracted a preferred resource provider to thoroughly educate all
of Mathers Controls' employees on lean manufacturing concepts, principles, guidelines, and analysis tools, and
to provide the basis and framework for change. Then, identification and analysis of the company's processes
followed. The employees' experience and lean manufacturing knowledge were applied to the layout design of the
new facility.

The new layout design:

 moved the entire production area next to the shipping and receiving area
 introduced manufacturing cells that significantly reduced space requirements
 promoted one piece flow to minimize assembly costs
 reduced product lead-time and work-in-process (WIP)
 lowered inventory levels, which minimized carrying costs
 stored tools, information, raw materials, and supplies at their point of use to eliminate wasteful steps and
associated costs.

With the elimination of most departmental barriers, communication was enhanced.

WMS successfully implemented the majority of the lean manufacturing processes within a six-month period and
did so without the company losing more than eight hours of production while the plant equipment was relocated.

As a result of WMS' assistance, Mathers Controls reduced its production space requirements by 36
percent, which decreased capital expansion/modification costs by 78 percent since the company no longer
needed to enlarge the facility. Production capacity increased by 100 percent, which allowed employees to take
advantage of cross-training opportunities, while overall capacity increased by 30 percent, with future
improvements anticipated. There was a 32 percent decrease in WIP and finished goods inventory, which freed up
enough cash to pay for the new plant layout. And, with most of its processes simplified, Mathers Controls
decreased production lead times by 50 percent and reduced internal rework by 75 percent.

Results:

 Reduced capital expansion/modification costs by 79 percent.

 Avoided a costly expansion project.
 Increased production capacity by 100 percent.
 Increased overall capacity by 30 percent.
 Decreased WIP & finished good inventory 32 percent.
 Decreased production lead times by 50 percent.
 Reduced production space by 36 percent.
 Reduced production travel distance by 88 percent.
 Reduced internal production rework by 75 percent.
 Enhanced company-wide communications.

Testimonial:

"Washington Manufacturing Services (WMS) provided the insight, drive, and resources that helped us
learn about and implement lean manufacturing to increase our plant's capacity and avoid our costly
expansion plans. Without their persistence and experience, this lean voyage would have been drawn out
and rendered ineffective. Our organization truly appreciates WMS for their guidance and resources. We
will utilize this great service again!"
- Chris Larson, Vice President of Operations