Japanese ‘Kaizen’ principle boosts profit margins of SMEs

small-micro-enterprises-smesThe introduction of Japanese ‘Kaizen’ concept and methodology into workplace operations of Small and Medium-sized Enterprises (SMEs), in parts of the country has dramatically cut down inefficiencies and raised output and business profits.

Transportation time is said to have been dropped by around 74 per cent while factory spaces maximised to about 75 per cent with quality of product and profits margins jumping considerably among SME beneficiaries of Kaizen training.

The Japan International Cooperation Agency (JICA) and the National Board for Small Scale Industries (NBSSI) launched the ‘’national Kaizen project,’’ for SMEs in 2012 to help businesses reorganise their operations in simple and efficient way while keeping to their culture of doing things.

A pilot scheme was commenced in Ashanti Region in 2015 after the launch, recording optimised output and then expanded to Northern Region.

JICA Chief Representative to Ghana, Mr Koji Makino told reporters that the Kaizen principle is a Japanese word that means ‘’improvement’’ and is used in industry settings.

“It is an important methodology for production, it is the secret of Japanese carmaker – Toyota.

“It was introduced in early stage of the company history, that is, they applied Kaizen when they were much smaller company.”

The word is interpreted as Kai, meaning ‘change’ and Zen, ‘better’ which means ‘’change for the better.”

It is a philosophy, a key and applied technique, for SMEs, which touch on their cultural and management style, that leads to high benefits and expanded growth of businesses.

When the principle is applied in a continuous manner, Makino said: “it enabled enterprises to cut down production cost drastically and increased productivity and quality as well as pushed up sales and profits margins significantly.

The Chief Executive of Shekinah Glory Bakeries, Mrs Esenam Ofori, who is a beneficiary of Kaizen training in Tamale said: “it is very beneficial and has helped to grow and change my business, it has reduced time and everything now runs smoothly.”

The company has been able to visualise its objectives and operates in a tidier environment while motivation for workers to idle during operational hours eliminated, she said.

Mr Eric Affram, the Northern Regional Manager of NBSSI, in a presentation chronicling successes of beneficiary enterprises of the Kaizen training said a team of Japanese experts observed business during the application process.

The team evaluation of Shekinah Glory Bakeries during operations showed movement time shortened by 74 per cent while cooling space was maximised by 75 per cent, he said.

Movement of workers within factory ambience, he added, was also noted to have been dropped from 35 minutes to nine minutes as workers carried products from one joint to another – implying 26 minutes of wasted time saved.

The methodology does not require big investment and could be applied in public and private spheres of Ghana’s economy to reduce office inefficiencies and raise productivity, Kaizen experts said.

The Executive Director of NBSSI, Mr Lukeman Abdul-Rahim said the organisation is considering establishing a human resource development centre to provide knowledge on Kaizen practice to trainees.

He was of the view that government would provide adequate support to NBSSI to make Kaizen an integral part of all business support services provided to the private sector.

The project has been expanded to Brong Ahafo, Central and Greater Accra regions where recipients would obtain basic training while those in Ashanti and Northern regions would receive advance tutorial.

“I am very confident that this national Kaizen project will certainly contribute to a steady development of SMEs in Ghana,” Japanese Ambassador to Ghana, Kaoru Yoshimura said.

He said the principle has been proven to enhance productivity and decrease defective goods through initiatives and ingenuity of local workers.

Yoshimura expressed hope that “with diligent implementation of the JICA Kaizen project, Ghana would be one of the most successful countries.”

Source: GNA

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