Can You Plan and Execute Strategic Productivity Improvements Without Incurring Large Expenditures?

In February, Alin Posteucă published a book entitled Beyond Strategic Kaizen: Performing Synchronous Profitable Operations, which presents a methodology that achieves simultaneous and consistent systematic operational and financial improvements in a strategic and operational manner. It achieves both synchronous operations at market demand by fulfilling takt time and profitable operations in accordance with profit demand by fulfilling takt profit. In short, the Strategic Kaizen mission is striving for the fulfillment of the ideal state of operations called synchronous profitable operations.

When I spoke with Alin this past week, I asked him: "How do you plan and execute strategic productivity improvements to meet financial and operational expectations simultaneously without further expenditure?"

Here is his full response:

This is a difficult time for manufacturers. To survive, manufacturing organizations must activate their entire potential for planning and executing strategic systematic productivity improvements, they need Strategic Kaizen -- they must go beyond traditional Kaizen activities and beyond the daily activities of continuous improvement based on the reduction or elimination of waste empirically at the shop floor level.

Naturally, a question arises: How is the new concept of Strategic Kaizen for performing synchronous profitable operations defined? "…it is a participatory, systematic, and scientific planning and control process used to align financial and operational business strategy with strategic systematic improvement activities to meet the goals of Takt Profit and takt time at the same time regardless of sales trend (increasing or decreasing)."

Therefore, in this book, I did not limit the Strategic Kaizen to a mere strategic improvement approach. It goes beyond since its main purpose is to direct a complete and continuous strategic transformation to the ideal state of operations, to the state of synchronous profitable operations by meeting successive targets of Takt Profit, or ”the target profit per minute in the bottleneck operation”, and implicitly by meeting the successive targets of takt time. 

As is known, the concept of "synchronization", or JIT and its practice are very important, but it is very difficult for all manufacturing companies to achieve a complete and especially profitable "synchronization". For final manufacturers, "synchronization" seems to be still an extremely effective method, but for their suppliers, "synchronization" is not always adequate, and it is not always profitable enough.

But let's return to your question more specifically. By applying the unique methodology in seven basic processes of Strategic Kaizen presented in detail and with real case studies only in this book, executives have a new way of thinking and acting to move the business to the next level.

In the first five processes, strategic productivity improvements are planned, as follows:

1) measuring and studying the full potential for strategic productivity improvement;

2) calculating ideal Takt Profit and setting strategic expectations for stratified KAIZENshiro;

3) annual financial reconciliation by establishing annual KAIZENshiro budgets and the annual Takt Profit target (financial catchball);

4) annual operational reconciliation by establishing the production target time and by developing the Balanced Scorecard and KPIs (operational catchball);

5) organizing, planning, and learning for Strategic Kaizen.

Then the last two processes focus on the implementation and management, as follows:

6) implementing annual feasible Strategic Kaizen projects in six steps;

7) results, standardization, horizontal extensions, and future plans. 

In conclusion, I recommend both final manufacturers and their suppliers use Strategic Kaizen to simultaneously satisfy the urgent need for "synchronization", or operational need and "profitability" to achieve complete and continuous strategic transformation and to achieve continuous strategic improvement in manufacturing costs of at least 6% per year and with a total of 30-45% for five consecutive years, based on the reduction/elimination of costs of excess inputs and the associated cost of failing to utilize those optimally, costs that exist in their organization anyway, without significant investments, with financial visibility of improvements at the level of KAIZENshiro budgets.

So, the main job of managers is to improve productivity systemically, without investment, and especially strategically, through the now available new Strategic Kaizen thinking and methodology.

What do you think of Alin Posteucă's idea of Strategic Kaizen? Do you think this methodology can achieve synchronous profitable operations?