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Applying Gemba-Kaizen in a multinational food company: a process innovation framework

rez-Barraza Manuel F. Sua
gico de Monterrey, Monterrey, Mexico EGADE Business School, Tecnolo

Gemba-Kaizen in a multinational company 27

Juan Ramis-Pujol
Department of Operations Management and Innovation, ESADE Ramon Llull University, Barcelona, Spain, and

Mariana Estrada-Robles
gico de Monterrey, Toluca, Mexico Graduate School of Administration, Tecnolo
Abstract
Purpose The Gemba-Kaizen approach is a key business process strategy employed by companies (multinationals also) to enhance their manufacturing performance. However, whilst there is signicant research information available on implementing management systems in a sequential manner, there is little information available relating to the application of this approach to provide a single and highly effective methodology for process innovation in the context of the Gemba-Kaizen approach in multinational companies. Therefore, the purpose of this paper is to develop and apply a process innovation framework in terms of methodology for multinational companies. The research question that governs the study is: How is the Gemba-Kaizen approach applied in an organisational context such as that of a multinational food company in Mexico? Design/methodology/approach An exploratory case study was conducted. One multinational food company (chocolate) which has been established in Mexico for at least 19 years was selected. The paper chronicles the design and application of a process innovation framework in the context of the Gemba-Kaizen approach. In total, four methods were used to gather data: direct observation; participative observation; documentary analysis; and semi-structured interviews. Findings This paper proposes a process innovation framework using the Gemba-Kaizen approach. The development, renement and implementation of a process innovation framework in the context of the Gemba-Kaizen approach has been achieved, working closely with a multinational food company. Consequently, as a result of the application, a conceptual framework was established, based on the results of comparing theory and eldwork: this provides a glimpse into the relationship of the Gemba-Kaizen approach with other improvement methodologies, known as Process Redesign, in the organisation analysed. Practical implications Derived to describe the case study on how to apply the Gemba-Kaizen approach through process innovation methodology, the paper may prove to be of value to practitioners and managers involved in the eld. Similarly, a section on managerial implications has also been included. Originality/value The paper contributes to the limited existing literature on the Gemba-Kaizen system and subsequently disseminates this information in order to provide impetus, guidance and support towards increasing the development of companies, in an attempt to move the Mexico manufacturing (food) sector towards world-class manufacturing performance. Keywords Mexico, Multinational companies, Food industry, Process management, Continuous improvement, Gemba-Kaizen, Framework Paper type Research paper

International Journal of Quality and Service Sciences Vol. 4 No. 1, 2012 pp. 27-50 q Emerald Group Publishing Limited 1756-669X DOI 10.1108/17566691211219715

IJQSS 4,1

28

1. Introduction The Japanese management philosophy known as Kaizen ( ) was introduced as a new, creative operating strategy to improve the competitiveness of twenty-rst century companies (Imai, 2006). When Masaaki Imai published his rst book in 1986, The Key to Japans Competitive Success, the term Kaizen began to receive attention from management experts and scholars around the world. A decade after publication of his rst book, Imai expanded the scope of Kaizen in another book in 1997 a contribution which laid further stress on The Japanese way in Kaizen strategy and in particular the importance of the workplace (where real action occurs) in continuous improvement. Even total quality management and lean thinking, which has received focused attention in the literature in recent years, was deeply rooted in the Japanese management and thus viewed as an integral element in the Gemba-Kaizen approach (Klefsjo, 1997; Al Smadi, 2009). Over the decade from 2000 to 2010, several authors focused on the importance of innovating through Gemba-Kaizen processes to reap substantial quantitative and qualitative benets in terms of time and money, cutting stock costs and what the Japanese term muda (waste) (Ohno, 2007). Neese (2007) indicates that keeping up effort in Gemba-Kaizen may help in achieving signicant improvements to work processes, including better supply chain ows. In Strategic Direction (2004), the most important study of the decade was that by Brunet and New (2003), who concluded that Kaizen can be adapted to each companys special circumstances and create a virtuous rez-Barraza and Ramis-Pujol (2010) circle in its processes and management. Lastly, Sua highlighted the importance of using Gemba-Kaizen for process innovation and for saving time in the work processes found in public company services. Villarreal et al. (2011) made similar ndings in connection with a Mexican multinational company. The foregoing studies provide a sample of the literature that tries to explain Gemba-Kaizen from the process innovation angle. Some of these studies, however, describe Gemba-Kaizen only from the standpoint of rapid shop oor activity similar to the Kaizen Blitz[1] approach (Laraia et al., 1999). Accordingly, there is little empirical evidence for understanding Gemba-Kaizens philosophy or core proposal when it comes to fostering implementation of process innovation methods. This also applies to short-term improvements (Kaizen Blitz) and Kaizen as a new way of looking at the workplace. More specically, the main question we sought to answer in this study was: RQ1. How was Gemba-Kaizen presented when it came to applying a process innovation approach to a food multinational in Mexico? We formulated two sub-questions in our enquiry: RQ1.1. What differences are there between traditional and Gemba-Kaizen ofce management when it comes to innovating processes? RQ1.2. Is there any relationship between the effort put into implementing Gemba-Kaizen and process innovation methods in a multinational food company? To answer the main research question and the two sub-questions, we rst carried out a literature review of the Gemba-Kaizen approach and related themes. In that review, we also looked at the application of the Gemba-Kaizen approach to a food multinational in Mexico. The next step was to carry out an exploratory qualitative study based

on a food multinational that had set up in Valle de Toluca, Mexico in 1998. The paper was structured as follows:
. . . .

An introduction. Literature review of the Gemba-Kaizen approach and process innovation. A description of the research methodology. The research results and the process innovation methodology employed in a food multinational, including qualitative empirical evidence. Conclusions, management implications and the benets of applying Gemba-Kaizen.

Gemba-Kaizen in a multinational company 29

2. Literature review 2.1 Gemba-Kaizen denition and implications Imai (1997) observes that gemba ( ) means where things happen and in a business context might be translated as the shop oor[2]. In fact, Imai (1997) provides an example in his book, indicating that the reporters covering the Kobe earthquake in 1995 did so from the gemba[3]. For Ohno (2007), gemba means the place where a company adds value. This is why Ohno (2007) translates gemba as shop oor or workplace, using the term to embrace the shop oor at Toyota and also the staff who work there. The shop oor is where the value-adding processes take place (Imai, 1997; rez-Barraza et al., 2009b). For Ohno (2007, p. 120) it is the only place where costs can be Sua cut, given work processes may involve non-value adding activities (Ohno, 1978; Imai, 1986). That is why applying the Gemba approach (Ohno, 2007, p. 125) requires a basic idea of the Japanese management system and the Kaizen or continuous improvement concept; because Kaizen activities are implemented through the identication and elimination of waste at every moment and for everyone in all workplace processes (Imai, 1986, 1997). Therefore, Imai (1997) considers that the application of Kaizen in the workplace can best be indicated using the term Gemba-Kaizen. In reviewing Imais book, some writers such as Klefsjo (1997) indicate that Gemba-Kaizen invites company managers to leave their ofces and desks and work closer to the shop oor so that they can grasp what coal-face staff have to contend with, quality issues and/or waste in work processes. The lessons learnt by managers can then be applied to improving and enhancing work processes cheaply and through the application of common sense. Other authors use the term Genchi-Genbutsu which incorporates the gembu or workplace element and adds the idea of going to the workplace and understanding the situation through direct observation (Liker, 2004). Put simply, Gemba-Kaizen is based on watching staff every moment of the day with a view to making improvements to rez-Barraza et al., 2009a). work processes (Imai, 1997; Al Smadi, 2009; Sua Lastly, other authors have related Gemba-Kaizen with the Jishuken process (Toyotas plan improvement activity) (Imai, 1997; Hallum, 2007; Osono et al., 2008). In fact, Jishuken has two main purposes: (1) to solve problems in the workplace that need management attention; and (2) to correct, enrich and deepen understanding of Gemba-Kaizen by management through rst-hand, on-the-job application of the problem-solving principles using hands-on activity and coaching.

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It differs from problem-solving activity conducted by production workers (Team Members in Toyotas language) because Jishuken involves only management teams to identify the problems and implement counter-measures (Marskberry et al., 2010). 2.2 Background to process innovation methodologies Innovation is becoming a crucial issue for organizational learning in this new century (Dahlgaard-Park and Dahlgaard, 2010). Operational or process innovation is the starting point for more complex efforts of innovation inside organizations (Harrington, 1995). In this sense, process innovation appears in the literature in many varieties, schemes and modes concerning changes to company processes. Various authors have described different approaches and perspectives, whose core idea might be simply stated as the systematic analysis of ows and processes with a view to improving them. Notwithstanding this variety, some authors have tried to group these approaches by their common features in order to facilitate independent analysis. These groupings help identify the techniques, methodologies and tools involved. They also allow one to make comparisons of the application of each approach and the level of improvement sought. Each of these approaches can be identied and analysed as a function of various factors and elements (Childe et al., 1994; MacDonald, 1995), such as: . the degree of change or type of improvement; . resources; . the potential risk; . the scope of improvement; . the expectation of results and benets; and . time and cost requirements of making improvements. Process innovation thus seeks improvement to or redesign of business processes with a view to boosting customer satisfaction and organisational efciency and efcacy (Harrington, 1991). This is all carried out through review and continuous learning of the best practices, which lead to radial redesign of a companys obsolete and inefcient processes and thus to better performance (Harrington, 1995). Other contemporary authors such as Davenport and Short (1990, p. 24) dened it as: the analysis and design of workows and processes within and between organizations. Years later, Davenport (1993, p. 14), re-christened his methodology business process redesign, dening it as: the critical analysis and radical redesign of existing business processes to achieve breakthrough improvements in performance measures. In the literature, these authors are considered to be the rst to contribute theoretical concepts such as process innovation (Dumay, 1998, p. 4). Scholarly and practitioners literature on the subject reveals a wide range of innovation methods and resources for companies (Tinnila, 1995). Table I provides a summary. Nevertheless, such process innovation methodologies are hardly applied in Latin American countries. In reviewing the literature on Latin America, only a handful of references were found on the subject (Andreu et al., 1996; Araujo et al., 1998; Salgueiro, n et al., 2004; Sua rez-Barraza, 2010). The rst was Salgueiro (1999) of the 1999; Simo ola de Normalizacio n Espan n y Certicacio n (AENC) (Spanish Standards Asociacio Authority), which contains a methodology for documenting processes and creating standardised manuals on them. Much of the AENCs work is based on that of Harrington (1991), who set out process mapping and documentation procedures. However, this

30

Authors Business process improvement (BPI)

Methodology name

Steps

Harrington (1991, 1995)

Lee and Chuah (2001)

SUPER methodology for BPI

Gardner (2001) rez-Barraza et al. (2009b) Sua Business process innovation

Continuous process improvement

Davenport (1993)

Davenport and Short (1990) Short and Venkatraman (1992)

Business process redesign

Stage 1. Organising for quality. Dene critical processes, select process owners, train staff and establish measures Stage 2. Understand the process. Produce ow diagrams, measure and analyse efciency and cycle times Stage 3. Rationalise processes. Find improvements and draw up a plan Stage 4. Implement, measure and monitor Stage 5. Continuous Improvement. Implement BPI 1. Choose the process 2. Understand the process 3. Measure the process 4. Execute the process 5. Assess improvements Stage 1. Gather data and information on process performance Stage 2. Set process target Stage 3. Assign responsibility and align strategic objectives Stage 4. Monitor performance and manage the operation 1. Develop business vision 2. Identify the features of key processes 3. Understand and measure the performance of existing processes 4. Discover success factors and implementation barriers 1. Develop the business vision and process objectives 2. Identify the processes to be redesigned 3. Understand and measure the performance of existing processes 4. Design and build a process prototype and implement improvements (continued )

31

Gemba-Kaizen in a multinational company

Table I. Process innovation methodologies found in the literature

32

IJQSS 4,1

Authors Business process management

Elzinga et al. (1995) Zairi (1997)

Guha et al. (1997) nge and Steiber (2009) Ala

Source: Design by the authors

Table I. Methodology name Steps Business process change 1. Preparation. Dene key implementation factors 2. Select the process 3. Describe and document the process 4. Process quantication 5. Selection of improvement opportunities 6. Improvement implementation Phase 1. Changing the environment. Find the relationship between strategic initiatives, learning ability, information technology and organizational culture Phase 2. Management of PCBs. Managing processes and managing change Phase 3. Impact of PCBs in organizational performance. Improve processes, quality of life for employees and customer satisfaction

approach bears little on innovation and process redesign. These authors indicate that the application of process innovation yields in less radical changes than that posited by the orthodox process re-engineering model (Hammer and Champy, 1993) given that it allows incremental innovation and process redesign to co-exist. rez-Barraza (2010) provides a practical, global vision of On the same lines, Sua process innovation. Following Demings (1986) premise, the author notes that what cannot be measured cannot be improved. One of the ndings in his work on Latin America is that it is vital to understand processes before measuring them and, later innovating them, employing direct observation in the workplace to these ends. He denes his methodology in the following terms: A Gemba-Kaizen methodology which: continually seeks to discover, redesign, innovate and improve processes in a holistic, integrated fashion; boosts process performance; adds value; gives staff pride in their rez-Barraza, 2010, p. 54). Table II summarises his methodology. achievements (Sua 2.3 Gemba-Kaizen applied in multinational companies Recently, Aoki (2008) studied certain multinationals and how they had successfully transferred the parent companys Kaizen techniques in the workplace to their subsidiaries abroad. The authors studied China and noted how Kaizen application required: the elimination of waste; operational discipline; standardisation of processes; formal and informal communication channels. Basu and Miroshnik (1999) studied the human resources strategy in multinationals such as Nissan and Toyota in their UK operations and concluded that although they did not achieve implementation of all the basic elements of Japanese management systems (Kaizen and Lean Manufacturing) in Britain, they successfully internally implemented many Kaizen elements in their respective car plants there. Finally, Elsey and Fujiwara (2000) conrmed that successful Kaizen transfer depended largely on exchanging instructors on the subject and focusing on workplace learning. Literature on the subject is sparse in Latin America. In this respect, Forrester et al. (2010) concluded in their quantitative study that Lean-Kaizen techniques were becoming widely adopted in Brazils farm machinery industry and that early-adopters had improved their performance and competitiveness. Ablanedo-Rosas et al. (2010) quantitatively studied 20 companies in an industrial cluster in Estado de Hidalgo (Hidalgo State) and the implementation of 5S as an element of Gemba-Kaizen but did not specify how many of the rms were multinationals. Lastly, Landa-Aceves (2009) studied the implementation of Kaizen Blitz in free-port companies along Mexicos border with the USA but also failed to note how many of the ve plants studied were multinationals. Although the literature is silent on the number of multinationals in the two studies on Gemba-Kaizen application in Mexico, one can identify some elements that either foster or hinder successful implementation of this Japanese management philosophy. rez-Barraza and Ramis-Pujol (2010) focused on the application Two studies by Sua of Gemba-Kaizen to Mexican multinational rms (one public, the rest privately-owned). rez-Barraza and Ramis-Pujol (2010), explained the importance of The rst, by Sua applying a Gemba-Kaizen process innovation approach to a service provided by a public company and demonstrated shorter, better-performing processes. The second, by Villarreal et al. (2011), was a case study of a British multinational textile company with a factory in Cadereita, Mexico. It showed how the application of Gemba-Kaizen and process innovation improved plant performance, raised quality by 66.28 per cent, and cut raw material use from 3,000 WIP to 480.

Gemba-Kaizen in a multinational company 33

34

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No. Stage Systemic organisation (system thinking) Process and client Process Process and maintenance

Table II. Summary of rez-Barrazas process Sua innovation methodology (2010) Steps Orientation Tools Systems diagram Process selection table Block diagram ow diagram with participants Table of indicators Process and maintenance Daily improvement Daily improvement Analysis of activities that do not add value Innovation plan Evaluation sheet of a welldened process Operating standards 1. Systematically schematise a companys work to understand processes and their interrelationships 2. Determine the best level of analysis for attaining the optimum level of process innovation (macro- or micro-processes) 1. Determine the clients needs and key requirements for process selection 2. Select and decide the priority process for innovation in the light of the chosen variables 1. Document the existing process 2. Identify the process ows, its limits, initial indicators of activities that do not add value, and internal client-supplier relations 1. Gather and measure process innovation indicators (number of activities, time cycle, operational efciency) for things as they stand 2. Establish process performance indicators and measure these after redesign 3. Establish measurement indicators based on client requirements (client satisfaction indicators) 1. Identify and prioritise opportunities for measuring wasteful elements in the process 1. Draw up and implement an innovation plan 2. Redesign the process, streamlining it as far as possible 1. Evaluate the results of innovations and their impact on process performance, ascertaining at what redesign stage a well-dened process is at 2. Standardise critical process activities 3. Disseminate the lessons learnt and the new standards

Understanding

Selection

Documentation/ mapping

Measurement

Analysis

Innovation/ redesign Evaluation and standardisation

rez-Barraza (2010) Source: Sua

Although studies are beginning to emerge in the literature on the application of Gemba-Kaizen in multinationals in Mexico and Latin America, there is a dearth of empirical literature on the subject. Much of the scholarly literature centres on research studies in Japan, China and the USA (Basu and Miroshnik, 1999; Brunet and New, 2003; Aoki, 2008). There is also a great deal of academic and practitioner literature on successful cases of Gemba-Kaizen application (chiey as a technique) mainly in the USA and focusing on Kaizen or Kaizen Blitz events (Laraia et al., 1999). Gemba-Kaizen has thus been little-studied from the academic angle and there is still a great deal to understand in the highly specic context of multinational companies operating in Mexico and the rest of Latin America. 3. Methodology Bearing the foregoing comments and this papers explanatory nature in mind, there is a clear need to: . delve into Gemba-Kaizen drivers; and . establish the relationship between the approach and the context of a multinational company. Accordingly, the case study methodology was adopted (Eisenhardt, 1989; Yin, 1994). This approach is particularly useful when the research needs to answer how and why questions (Yin, 1994). The methodology is also considered suitable for research on operational management (Voss et al., 2002). In this study, given the nature of the methodology and the research questions posed, the case of a multinational food rm was chosen. The rm had been operating in the industrial cluster of Toluca, Mexico for 19 years and it was selected following the theoretical sample criteria (Ritchie and Lewis, 2003). The case chosen thus had great scope for contributing to theoretical understanding and development. Pettigrew (1997) notes that the importance of this kind of sample selection lies not in the number of cases but in an in-depth study in each case (Pettigrew, 1997, p. 342). Accordingly, such a case should lead one to create robust theories given that the emerging propositions are linked to a wide range of the empirical evidence gathered (Eisenhardt and Graebner, 2007). To ensure data consistency, three data-gathering methods were used: (1) direct observation; (2) document analysis; and (3) semi-structured interviews (Yin, 1994). For the direct observation, at least ve visits were made to each company chosen. The aim was observe workplaces where the Gemba-Kaizen approach was being or had been applied. During this stage, snapshots were taken to record Gemba-Kaizen events before and after. This is of great importance in providing study evidence and drawing up the report. During these visits, documentation was gathered on the application of the Gemba-Kaizen process innovation methodology for subsequent analysis. This documentation included; training manuals; web sites; formats; registry sheets; systems diagrams; ow charts; added value tables. Lastly, an interview protocol and a database on the case study were drawn up to make the study more reliable (Pettigrew, 1997). The main contact was the production manager, he focused on a process to which the innovation methodology was applied. The

Gemba-Kaizen in a multinational company 35

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36

plant manager and six production line workers directly involved in the process innovation were interviewed separately. A total of eight interviews were held in August and December 2010. These interviews strictly followed the research protocol but some exibility was adopted regarding certain responses that bore particularly on the subject. Each interview was transcribed within 48 h of being held and was exhaustive in terms of clarity and data saturation. Everything that arose during the analysis was claried with the contact person through mail and by telephone. Our data analysis sought to both ensure the validity of the construct through the use of multiple sources of evidence and carefully-planned data-gathering. We also sought to increase the external validity of the research by making multiple comparisons with other case studies (Yin, 1994). 4. Introduction to the multinational food company This food and nutrition company is a world-renowned multinational and is present in six continents. It has over 8,500 products, which are made in 480 factories sited in 70 countries. The company has over 253,000 workers worldwide. In Mexico, the company has 13 factories in eight states, employing 5,600 staff and providing some 8,500 indirect jobs. Given the companys wide range of diverse products and to focus sales strategy in consonance with specic market needs, the rm is split into strategic business units (SBUs), namely: lactic products; coffees; water; chocolates; sweets; frozen products; ice cream; nutrition; cereals; culinary products; pet snacks. This study focused on the chocolates and sweets SBU. The factory for this SBU is sited in Toluca, some 40 min by car from Mexico City. It began operations in 1992 with some 11 stock-keeping units (SKUs) and in 1995 expanded operations with the purchase of a competitor factory, which then had three plants. Production of the acquired rms chocolates began then, making the multinational parent company into one of the leading rms in the chocolate market. In 1998, the original competitor factorys plants stopped operating and manufacture of all the products was transferred to the Toluca factory. The multinationals chocolates and sweets division is currently one of the three leaders in its market, together with Hersheys and Mars. It sells around 75 SKUs, some made in Mexico and others imported. It also makes some 20 SKUs for export to the USA and Central America. Some years ago, the multinational went through a rough patch given that its operations management was top-heavy and complex. Its bureaucratic nature made decision-making slow, which pushed up its costs and hurt its market share. That is why the multinational decided to certify its factory processes to the ISO 9000 norm. In theory, this meant introducing a quality management system dening all manufacturing processes, including those at the Toluca plant. However, despite the effort put into improving work processes, the adoption of the ISO norm looked good on paper (documental issue) but meant nothing on the ground. A small coterie of specialists had documented the plants processes from their desktops, far-removed from the realities of the workplace (the gemba). This proved a fatal aw when it came to understanding processes because the ow diagrams reected a departmental bias. The plant manager commented:
When the ISO norm came in, we believed our operating efciency would improve. Nevertheless, I think our strategy and approach failed. We underestimated the work involved and thought it would be a piece of cake. What we forgot is that the action is on the shop oor where people work. I believe that is why we failed (E-003-N-2010).

Given these problems, the company decided to change tack, investing in special training in the principles of Gemba-Kaizen. Once the training programme had ended, the engineer

supervisor of SBU set up a Kaizen improvement team with a group of production line workers. The production line manufactured chocolate and covered 45 SKUs. The Kaizen improvement team comprised the line supervisor and eight multi-tasking workers. They rez-Barraza (2010) methodology, began innovating chocolate manufacture using the Sua which is based on workplace realities. The following section discusses the application of the methodology to the process in question. 5. Applying Gemba-Kaizen in a multinational food company rez-Barraza (2010) methodology comprises seven As noted in the literature section, the Sua steps whose purpose is to thoroughly innovate and/or redesign a given process adopting an approach that is wholly workplace-oriented. The following section shows how the food multinational in general and the chocolate production line applied the methodology. 5.1 Understanding the process Stage 1 in understanding the process innovation methodology revealed all the interdependencies in the rms existing process system. This enabled the company to grasp how its key aim, clients, outputs (products), inputs (raw materials), suppliers, business-critical and business-support processes were linked. The Kaizen improvement teams application of this stage is shown in Figure 1. The systems diagram gives a holistic vision of the companys processes and its core business the chocolates and sweets SBU. The diagram shows: the products chocolates and sweets and their approximately 45 SKUs, and the rms wholesale clients, supermarkets and end consumers, among others. Suppliers and the raw materials needed for the core process are also displayed. Critical processes (that is, those having a direct impact on clients and the product) are shown within the core process. Support processes are those supporting the critical ones. The rst-level diagram or macro-processes diagram selected the fourth critical manufacturing process shown in the rst systems diagram (Figure 1). Figure 2 shows the second-level systems diagram or micro-processes.
First-level Systems Diagram Strategic Unit: Chocolates and Sweets
SUPPLIERS Supplier of first, second, and third tiers

Gemba-Kaizen in a multinational company 37

Critical Processes
Demand Forecasting Research and development Demand Planning Manufacturing Distribution Sales

CLIENTS Retailers Supermarkets Wholesale Government Final Consumer

INPUTS Raw Materials Semielaborates products Assembling Material Promotional Material

Manufacturing, Distribution and Sales of chocolates and sweets Support Processes

Information Technology Human Resource Technical Issues Finance Legal Corporative Communication

OUTPUTS Chocolates and Sweets (aprox. 45 SKUs)

Process of Actors International employees Plants employees Shareholders

Figure 1. First-level systems diagram of the chocolates and sweets SBU

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SUPPLIERS Adquistion Department Forescating Demand External Suppliers

Second-level Systems diagram Critical Processes

Manufacturing Planning Procurement Manufacturing of Chocolates Manufacturing of Sweets INTERNAL CLIENT Distribution

38
INPUTS Raw Materials Semielaborates products Assembling Material

Manufacturing

OUTPUTS Chocolates and Sweets (aprox. 45 SKUs)

Figure 2. Second-level diagram of the chocolates and sweets SBU

Support Processes
Industrial Security Human Resource Quality Assurance Engineering Administrative Process Industrial Engineering

5.2 Process selection Using the Kaizen teams second-level systems diagram of the aforesaid rm, we identied likely processes for innovation in: the manufacture of chocolates and sweets; the supply process, given its complexity; opportunities that line workers had observed in the workplace. The selection criteria proposed by Harrington (1991) were adopted in identifying the process for improvement by the Kaizen team. These criteria were: . susceptibility to change; . process performance; . company impact; and . client impact. Once the Kaizen improvement team had analysed these four criteria, it drew up a selection matrix with a scale of one to ten, with 0 indicating no application of a given criterion and 10 full application of the criterion. Each of the candidate processes for redesign was rated accordingly. Table III shows the results. The process selected the chocolate manufacturing process was the one that scored highest.
Sweets manufacture process 9 9 6 5 10 7 7 7 60

Selection criteria Client dissatisfaction with process result Control over process operation Willingness to change Support for a possible improvement project Benets obtained from the improvement Likelihood of success Relevance for company and staff Consideration of clients demands and needs Total

Supply process 8 9 7 4 9 6 5 4 52

Chocolate manufacture process 7 9 10 8 10 8 9 7 68

Table III. Selection matrix candidate processes for redesign

5.3 Mapping the process Once the Kaizen improvement team had selected the process, it then went on to document it (Step 3) and draw up a process map. The reason for applying Step 3 lay in the need to understand the detailed operations in the workplace. The two criteria that the Kaizen improvement team bore in mind during this step were: (1) Documentation of the present situation. It is important to document the situation as it really is and not as an ideal. For this purpose, the Kaizen improvement team must go to the workplace to document the process through direct observation. The aim here is to quickly and accurately visualise all waste emerging from the process ow. (2) Identify the process ow, its limits, activities that do not add value (indications of waste are graphically shown using the cloud symbol) and internal client-supplier relations. In this respect, the block diagram is the rst step in applying a diagram description tool. Its purpose is to make a general description of the sequence of a given process. The block diagram drawn up by the Kaizen improvement team is shown in Figure 3. Once the Kaizen improvement team had drawn up the block diagram, it used the tool to map the process in detail through ow diagrams. The symbols used to document processes follow American National Standard Institute (ANSI), which is unique to process innovation and redesign. The standards purpose is not to produce a process manual. Accordingly, the ANSI symbols serve to ag potentially wasteful activities. An example is given below (rst page of the diagram), mapping the existing chocolates manufacturing process (Figure 4). 5.4 Process measurement Process measurement is the next step in the methodology. In fact, measuring the existing process gave the Kaizen improvement team a benchmark when implementing innovation and redesign actions. The indicators to be borne in mind in attempting to grasp how the process worked before innovating and redesigning it are: (1) The number of activities making up the process. Each of the process activities mapped are numbered to nd their total number: No: of activities 142 (2) Number of process participants (people or areas). If one follows the ow diagram and participants to map the process, one can establish how many actors there are in the process. The total number of participants was seven people, split between three areas:
.

Gemba-Kaizen in a multinational company 39

Programming area: Programming. Manufacturing area: Manufacturing co-ordinator. Line technicians.

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START

Establish production program

40
Work groups sand shift planning

Make a plan of working process stocks and boot scripts

Request of order of production

Request inputs of warehouse

Produce semi-elaborate products

Manufacturing final products

Distributionts steps

Figure 3. Block diagram showing the manufacturing process

END

Moulding operator. Materials control operator.

.

Packaging operator. Storage area: Goods lift operator.

(3) Process cycle times. The process cycle time spans from process commencement to completion. The Kaizen improvement team measured it, following all the ows in three samples:

12

START
1 Demand planner MUDA 1 Meeting to review production program 13

Review semielaborated stock

32 MUDA 17 23 Are the process orders correct? NO

Inspection of moulding operating conditions

33 Moulding operator

Shift Supervisor MUDA 9 Calculation of stock scope 24 14 MUDA 10 NO Is there enough stock? 25 MUDA 18

YES Quality control document Transfer to production line with operator

Gemba-Kaizen in a multinational company 41

2 MUDA 2

Review production program

MUDA 21

34 Correct moulding operating conditions?

Shift Supervisor Notify the moulding operator and control material operator that the orders are ready

15 4 MUDA 3 Program approval by Production Coordinator NO Request of stock MUDA 11

MUDA 22 35

NO

16

YES Go to Demand Planner MUDA 12

MUDA 19

Moulding operator Fix operating conditions

YES

2 STARTS Working process of chocolate products Subprocess MUDA 13 17

26 Demand Planner and Shift Supervisor MUDA 20 Meeting to request process orders 3 NO ENDS Working process of chocolate products Subprocess 28

Moulding Operator Machine procedures on 36 Moulding operator Quality control document 37 Transfer mass from tempering machine to moulding depositor YES 38 Transfer mass from tank to tempering machine Moulding Operator Vent moulding line

YES 5 MUDA 4 Production coordinator Meeting with Human Resources to evaluate staff capacity

27

Is there enough stock in tank?

MUDA 23

6 MUDA 5 Is there enough personnel? NO

18 MUDA 14

Demand Planner Creation process orders

19 MUDA 15 7 MUDA 6 YES 20 MUDA 16 Elaboration of Schedule document 8 Print document 9 Hand in to HR (support process) MUDA 7 Shift supervisor Data capture in payroll MUDA 8 Human Resources Support process Attention to production line activities 11 22 10 21 Shift supervisor 30 View process orders in IT system MUDA 18 Check process orders NO Shift Supervisor back to office 29

Production coordinator

Moulding Operator Heat the mass

39 Tank filling

40 Mass heating

Moulding Operator Inject chocolate in moulds

31 Chocolate mass in ideal state for process? YES

41

Inspection of injection operating conditions

Continues to activity 142

Limits (starting or ending activities)

Inspection

Delay

Process-activity

Electronic transport

Notation

Flow lines

Transportmovement

Connector

Decision

Document

Storage

Figure 4. Flow diagrams showing the existing chocolates manufacturing process

Average process cycle time 12 days

5.5 Process analysis The next step was to sift through the information to identify parts of the process that posed problems or revealed waste. Table IV shows the analysis of each existing activity revealed by the process map. As Table IV shows, 50 per cent of the activities in the chocolates manufacturing process do not add value (i.e. 71 out of 142) and thus represent waste. Accordingly, the process was full of activities which were unreliably repeated jobs that merely hindered process ow. Table V summarises the chocolates manufacturing process.

IJQSS 4,1

Activity type Transport

Chocolate manufacture process Flowchart symbol

Count 8

42

Decisions

13

Inspection

13

Internal documents Delay

Activities that do not add value

25

Table IV. Analysis of the chocolates manufacturing process

Electronic transport

Total

71

5.6 Process redesign Once the Kaizen team had nished its analysis, it proposed a set of improvements in redesigning the process. The improvement measures included: the creation of operating standards; the scrapping of bureaucratic activities (unnecessary meetings, staff movements, superuous quality control); training staff in new operations standards; identifying waste in the process; balancing work loads based on a new task time. The measures taken are given in the Kaizen report below, which sets out the redesign actions taken. Kaizen report: (1) Chocolates manufacturing process: . Ensure that information systems, mainly SAP/R3, are more reliable and automated throughout the process. . Improve inter-stage communication in the information systems to ensure that the information gathered is available to everyone involved in the process, allowing them to consult such information without having to move from one area to another. . Train staff in the handling and effective use of all information system applications so that they can work at full capacity. . Draw up process standards to make activities clearer, more robust and stable whilst ensuring full visibility of the process. . Train staff in using and monitoring standards to avoid errors and wasteful use of resources.

Number Activity 1 2 4 5 6 7 8 9 13 15 16 17 18 19 20 23 24 25 27 31 34 35 36
. . .

Classication Activity Inspection Decision Activity Decision Document Activity Transport Activity Decision Electronic transfer Transport Activity Activity Transport Decision Transport Activity Decision Decision Decision Activity Document

MUDA type Activity that does not add value Unnecesary inspection Unnecesary decision Activity that does not add value Unnecesary decision Unnecesary document Unnecesary copy Unnecesary worker movement Activity that does not add value Unnecesary decision Unnecesary transfer Activity that does not add value Activity that does not add value Activity that does not add value Unnecesary worker movement Unnecesary decision Unnecesary worker movement Activity that does not add value Unnecesary decision Unnecesary decision Unnecesary decision Activity that does not add value Unnecesary document

Meeting to review production program Review production program Program approval by production coordinator Meeting with human resources to evaluate staff capacity Is there enough personnel? Elaboration of schedule document Print document Hand into HR (support process) Calculation of stock scope Is there enough stock? Send e-mail stock request Go to demand planner Meeting to request process orders Creation process orders Shift supervisor back to ofce Are the process orders correct? Transfer to production line with operator Notify the moulding operator and control material operator that the orders are ready Is there enough stock in tank? Chocolate mass in ideal state for process? Correct moulding operating conditions? Fix operating conditions Quality control document

Gemba-Kaizen in a multinational company 43

Table V. Summary of waste in the chocolates manufacturing process

Implement the 5S programme to order work. Standardise task times for activities and processes. Train co-ordinators in the measurement of task times, work loads and the identication of waste in the process. Foster the use of e-mails and other electronic means to keep staff informed and to avoid unnecessary meetings. After the improvement measures, process activities were slashed from 142 to 71 (50 per cent of activities represented waste). The cycle time was cut from

(2) Tangible impacts after the improvements:

.

IJQSS 4,1

an average of 12 days before the improvements to 7.07 days 41 per cent faster. Once the Kaizen improvement teams actions had all been successfully concluded, the process was redesigned using a block diagram, indicating: the participant who would carry out the activity, the time for each activity in the process; the sequence of the redesigned process. The block diagram is shown in Figure 5. 6. Conclusions and managerial aspects of using a Gemba-Kaizen process innovation framework There are various benets in using methodological approaches such as Gemba-Kaizen for process innovation, as is shown by the experience of the multinational food company in this case. Let us consider the question: what differences are there between traditional ofce management and management based on Gemba-Kaizen when it comes to process innovation? The answer is that the Kaizen improvement team yielded greater benets because it was based in the workplace and could directly observe all the activities representing waste in the manufacturing of chocolates. The spotlight was
START

44

PLANNING OFFICER

15 min 2 STEPS

Electronic delivery of the production program in SAP System. Accompanied by an automatic launch of orders to process according to the capacity and task time standardized line.

COORDINADTOR OF MANUFACTURE

60 min 2 STEPS

Set up templates of production according to an electronic interface that allows you to see the availability of staff.Automatic capture of labour at the time that the Coordinator of manufacture will end fill their production staff

SUPPORT PRODUCTION LINE TECHNICIAN

30 min 3 STEPS

Inspect the stock of semi-manufactured, consultation process orders in the system that were automatically released and releases the order process

MODEL OPERATOR

7 days 28 STEPS.

RAW MATERIAL OPERATOR

3hrs 6STEP.

TRANSPORT OPERATOR

1 hour 8 STEPS

Boot sequence begins and temperate according to production programme and to the standard line. Performs throughout the process of transformation of chocolate until it is delivered in packaging machine.

Check the order of process, verifies and receives packaging material and delivers it in packaging machines.

Receives material need, located in the cellar and pay according to the task time line.

PACKAGING OPERATOR

6.5days 33 STEPS.

Figure 5. Block diagram of the redesigned process for the manufacture of chocolates

Receive material on your machine, installs it and adjust the parameters of the machine to deliver the product involved and stocked distribution.

END

put on waste that had hitherto lain hidden, conrming Imai (1997) and Ohnos (2007) ndings. When the companys plant manager asked why the production process averaged 12 days before the chocolates were ready for delivery, the answer was always an endless stream of complaints and mutual recriminations by the sections involved. In other words, it was impossible to visualise the process from the boardroom and identify the host of activities (50 per cent of the total) that added no value whatsoever. In fact, the Kaizen improvement team showed the rest of the plant, including its manager, the importance of Gemba-Kaizen through detailed process mapping and analysis of the waste found. From this point on, specic improvement objectives could be set using this combination of methodologies to create a virtuous circle of ongoing improvements in plant operation. Managers in other areas of the company also learnt a great deal from the experience and are now focusing on process innovation using Gemba-Kaizen for this purpose. Five management implications emerge from this case: (1) The introduction of a management approach based on Gemba-Kaizen allows identication of what really adds value for the company and end clients. (2) The application of a structured, proven innovation methodology led to rapid, major changes in the rms operating processes. (3) Using staff who work in the gemba (workplace) and know its daily processes and activities like nobody else is vital to achieving active employee participation, continuous improvement and process redesign. This ensures that staff take a more pro-active vision of problem-solving and identify all activities that do not add value. (4) The process-based focus enabled the multinational food company in question to adopt horizontal management centred on the workplace, where the beginning and end of the process were visualised and the needs of both internal and external clients could be established. Process innovation helped the company propose improvements to the way things were done, eliminate waste and understand the sequence of critical plant processes. Based on the evidence found in this and other cases, bureaucracy builds up in companies, strangling processes with red tape. (5) Full support for the improvement effort by top managers of the plant, this nding conrms other studies in the literature (Swartling and Olausson, 2011). It only remains for our second sub-question to be answered, namely: is there any relationship between the effort put into implementing Gemba-Kaizen and process innovation methods in a multinational food company? Answering according to the evidence it is that the application of a Gemba-Kaizen-based innovation methodology allowed the multinational company to develop a single, integrated methodology for innovate their processes. Accordingly, one can conclude that there is a link between both methodological approaches in this particular case study. Nevertheless, this nding conrms what is stated in the literature of the original authors and in recent studies (Imai, 1997; Ohno, 2007; Marskberry et al., 2010). As a result of the eld work, we put forward a theoretical framework (Figure 6) that captures the nature of this link.

Gemba-Kaizen in a multinational company 45

IJQSS 4,1

Gemba-Kaizen Approach

46

Participation (Gemba-Kaizen Teams)

Understanding

Leader (Improvement Agent)

Evaluate/ Standardize

Selection

Process Innovation Redesing Innovation

Mapping

Measure Support with Analysis Clear action of Top Managers

Gemba Management Information Management

Figure 6. Process innovation framework within the Gemba-Kaizen approach

Source: Design own

It is important to note that the data obtained from this case provides a snapshot of the phenomena studied but cannot be used to establish causal relationships. As in all research based on a case study, this paper has its limitations. The most obvious one is that all the ndings are based on a case study. Another difculty is to objectively handle the vast quantity of data produced by the eldwork, making it hard to evaluate the relationships that may exist within the studied phenomenon (Eisenhardt, 1989). Last but not least, there was no direct evaluation of the impact the application of the Gemba-Kaizen approach on the companys performance. These limitations notwithstanding, our research contributes to the existing literature through an empirical study that reveals methodological relationships and their specic application. Clearly, the study may be extended to other industrial sectors or services to corroborate the framework identied.
Notes 1. Blitz being German for lightning. 2. Workplace has been substituted for gemba throughout save in the purely linguistic discussion of the Japanese word and in the term Gemba-Kaizen.

3. For English-speaking readers, this is clearly quite a different context, which one might render as ground zero or the scene of destruction.

Gemba-Kaizen in a multinational company 47

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Further reading Rohleder, T. and Silver, E. (1997), A tutorial on business process improvement, Journal of Operations Management, No. 15, pp. 139-54. Sheridan, J. (1997), Kaizen Blitz, Industry Week, Vol. 246 No. 16, pp. 19-27. Sirkin, H. and Stalk, G. (1990), Fix the process, not the problem, Harvard Business Review, Vol. 68 No. 4, pp. 26-33. Corresponding author rez-Barraza can be contacted at: manuelfrancisco.suarez@itesm.mx Manuel F. Sua

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