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Study summary

Kaizen training and consulting for small and medium-sized manufacturing firms

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Kaizen training seems to be more useful for firms that can easily experiment with their manufacturing plant layout and workflows, like garment manufacturing firms.

General description

Small and medium-sized enterprises (SMEs) producing either rolled steel construction materials or knitwear garments are offered either a three-week management training programme (including the basic notions of Kaizen) in a classroom setting, one-on-one consulting sessions based on Kaizen principles or both.

Aim

  1. To foster the adoption of Kaizen practices
  2. To increase firms’ value added

Context

This intervention was tested on SMEs in semi-urban industrial clusters in a country where Kaizen production management practices, like keeping the workplace tidy, keeping track of inventory or performing machine maintenance regularly, are common among large firms but not among SMEs.

Participants

Owners (or their adult children) of small and medium-sized manufacturing firms that produce either rolled steel construction materials or knitwear garments. The participants’ average schooling is around seven years, and 57 per cent of them are men. Most participants have never received training before, and only a few are willing to pay for it.

The average steel firm has 19 workers and annual sales of about US$1.6 million. Meanwhile, the knitwear firms have an average of 22 workers and annual sales of around US$270,000.

Activities

  • Classroom training: Three weeks of daily sessions, with each session lasting two and a half hours. During the sessions, participants are taught elementary Kaizen management along with standard business training content such as basic accounting, marketing and business strategy. The instructor uses four participant firms as models for showcasing Kaizen practices: how to streamline the workshop layout, properly maintain the machinery, sort and store materials, etc.
  • On-site training: Begins with a one-day seminar, in which the owners or managers of the model enterprises give presentations on their business changes that have resulted from implementing Kaizen practices, the responses from their workers and their own opinions. The local consultants then make two to three visits to each participating firm to demonstrate how to encourage workers to improve their work environment, productivity and product quality.

Both components are delivered by local consultants previously trained by an experienced Kaizen expert from Japan. The trainer’s training covers essential knowledge of Kaizen and a method of teaching Kaizen principles to business owners and workers.

Tweak

Some of the firms are only offered the in-class training, others the on-site sessions and a third group is offered both. A fourth group is offered none.

Results

  • For firms in the knitwear industry, both the in-class training and on-site visits alone led to higher adoption of Kaizen practices two years later, with those receiving the two components not showing any greater adoption than those receiving only one.
  • For firms in the knitwear industry, the higher adoption of Kaizen practices only led to increases in value added for those that received on-site visits, regardless of whether they also had in-class training or not.
  • The increase in value added seemed to be driven by a reduction in overproduction, as the dead output decreased in firms that had access to the consulting sessions. 
  • The effects on the value added for firms in the knitwear industry didn’t show immediately after the training, but two years later.
  • For firms in the steel industry, only the combination of the two components (in-class training and on-site visits) led to sustained increases in the adoption of Kaizen practices.
  • The larger take-up of Kaizen practices didn’t translate into higher value added for firms in the steel industry.
  • For all firms, access to the programme increased their willingness to pay for a similar one in the future, with this effect being stronger for the knitwear firms (consistent with the programme being more suited to them).

Policy implications

  • A few on-site consulting sessions based on the Kaizen methodology outperforms a three-week in-class Kaizen training programme by triggering similar rates of business practices and allowing for medium-term effects on firms’ value added.
  • Support schemes based on Kaizen seem more suited to firms that can easily implement modifications in their production processes, like light-industrial firms.
  • Offering free training plus a consulting programme to SMEs that wouldn’t participate if they had to pay increases their willingness to pay for similar support in the future.

Full study