Is your ERP implementation a big bang project or a long-term one? The answer is probably yes to both. Getting your ERP system live is a big bang, but after that it becomes an ongoing project that you will need to keep working on. To ensure the go-live is successful, you would use an implementation methodology like SYSPRO’s IDEAL methodology. For long-term projects you need a different approach, one that helps in maintaining a constant stream of gradual improvements. That is where the Kaizen method comes in.
What is Kaizen
The Kaizen method is a Japanese management concept of continuous incremental improvement. When used properly, it is part philosophy and part action plan. As a philosophy, it helps to create a culture within an organization where all employees are actively engaged in suggesting and implementing improvements. As an action plan, it is about organizing activities focused on identifying specific areas where improvements can be made. Kaizen was developed in the manufacturing sector and can be an important catalyst in a lean manufacturing strategy as it helps to to reduce defects, eliminate waste, improve productivity and promote innovation, as well as encourage worker involvement.
There are five foundation elements of Kaizen:
- Teamwork
- Personal discipline
- Improved morale
- Quality circles
- Suggestions for improvement
From this, a culture can develop that encourages quality, effort, involvement of all employees, willingness to change, and communication.
Kaizen and ERP projects
The reasons you decide to implement an ERP system are so you can improve existing operations or launch new business initiatives, such as digital transformation. To ensure the implementation processes are managed, and the project achieves its goals in terms of scope, time, resources and cost, organizations use an implementation methodology such as SYSPRO IDEAL (Initiate, Design, Engineer, Actualize, Leverage). Unfortunately, it’s not uncommon for people to think once the ERP system has gone live that the project is finished. This is definitely not the right attitude. Almost on a continuous basis, people need to reflect on processes, identify areas to improve, so the business can take constant small steps forward rather than making occasional big jumps.
Anyone who has worked on an ERP project knows that a major factor in the ultimate success or failure of the project is how people at various levels of the enterprise are actively involved. By adopting a Kaizen approach, and using the elements of teamwork, quality circles and suggestions for improvement, the chances of the project being successful can be significantly increased.
Implementing a Kaizen philosophy is important, but you also need action steps that will drive the execution of continuous improvement. A Kaizen event is a sequence of actions that enable this:
- Set goals.
- Review the current state and develop plans for improvement
- Implement the improvements
- Review and fix what isn’t working
- Report results
- Determine next steps
The principles that the founder of Kaizen, Masaaki Imai, introduced in 1986 fit well into the concepts that involve an ERP project. The principles are:
- process oriented: improve processes to get better results;
- maintain and improve standards: without standards you cannot make improvements;
- people oriented: involve everyone from the shop floor to the top floor.
How Kaizen differs from other methodologies
Over the years, other methodologies have been advocated in ERP projects. These include BPR (business process re-engineering), Six Sigma, and Lean. I have summarized the differences between these and Kaizen here.
| BPR | Used in major structural and process changes More technology oriented Requires major change management effort Decisions made by executives and management |
| Six Sigma | Provides tools and strategies to reduce defects and variability Uses statistical techniques to develop quantified targets |
| Lean | Focuses on removal of waste (i.e. anything that does not add value to the customer) by looking at aspects like inventory, waiting, defects, excess production Aims to increase process speed and quality |
| Kaizen | Improve business as a whole by establishing a standard way of work that encourages thinking creatively throughout the enterprise, improving efficiency, and reducing waste Look anywhere for changes that can be made to improve the business |
Kaizen can be stated as “do or make it better, look how to improve it even if it isn’t broken, because if we don’t, sooner or later someone else will do it better.”
How ERP can support Kaizen
ERP system can support continuous improvement by establishing process and quality standards, include how you manage orders, how the shop floor operates, how goods are stored and finally shipped. Reports and analytics in your ERP system will help you to identify areas where improvements can be made, and then show if the improvements have had a beneficial impact. It can’t be only senior management who can see and use this information. A Kaizen approach must allow all employees access to the information so they can propose their own changes, after all, they have far more detailed knowledge of how the business operates.
Implementing an ERP project is not trivial, but neither is it short-term; once your ERP system is up and running you are in it for the long-term. If you want to ensure that long-term effort is continuously engaged, you should consider building a culture and set of actions that encourage and promote continuous and gradual improvement, not just in a few areas of the business but anywhere that improvements can be made. Using the Kaizen approach is the way you will keep reaping rewards from your ERP system, and avoid that scenario when you discover that your business has changed but your ERP system is no longer supporting it.
(This first appeared on https://www.syspro.com/blog/)
Simon Griffiths - Writer 