Combining training and on-site consulting sessions based on the principles of Kaizen can trigger better business performance in the medium run, with the consulting component being key for that to happen.
Micro and small firms in the garment industry are offered a three-week management training programme (including basic Kaizen concepts) in a classroom setting, one-on-one consulting sessions based on Kaizen principles or both.
- To foster the adoption of good practices, including Kaizen production management practices
- To increase firms’ performance in terms of sales and value added
This intervention was tested in a region where small-scale firms and self-employed businesses producing garment products are numerous and mostly operated by women.
Owners or top managers of garment manufacturing firms. Participants are in their mid-40s, most of them are women and their educational attainment is about 11 years of schooling, which is way above the average schooling in the country. More than 60 per cent had previously received business training, but all were unaware of the concepts of Kaizen before the programme.
Their firms have, on average, a little more than five workers; all are part of a business association and are eager to expand their businesses. They supply their products to the domestic market and occasionally export to neighbouring countries.
- Classroom training: Two and a half hour daily sessions five days a week over three weeks. The training covers typical SIYB (Start and Improve your Business) modules (marketing, accounting and bookkeeping) as well as basic Kaizen concepts on production management and quality control: coordinating the division of labour among workers, reducing wasteful use of materials and time, and preventive maintenance, among others. Two participant firms are chosen to be used as real examples of how to apply the Kaizen concepts being taught.
- On-site consulting: It starts with a half-day seminar to explain the functioning of the on-site consulting and to assign each firm a trainer. The assigned trainer makes an initial visit to the firm to spot inefficiencies and develops a plan with implementable solutions to improve efficiency and safety at work through the implementation of Kaizen principles. The initial visit is followed by at least two more visits from the trainer to follow up on the implementation and provide concrete advice.
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. The in-class training and the on-site sessions have a similar cost of approximately US$2,000 per participating firm. The cost of providing both components is around US$4,000.
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.
- Having access to any of the three versions of the support scheme (only in-class training, only on-site sessions or both) led firms to adopt a higher number of good management practices, including Kaizen practices.
- Firms adopted a number of good practices at first, but during the following years they stopped using those that weren’t found to be useful and adapted the remaining practices to their businesses’ realities. Despite that, the higher rate adoption of good management practices persisted for at least three years.
- The short-run effects in terms of practices adoption were highest for firms receiving both the in-class training and the on-site sessions, while three years later the rate of adoption was highest for those that only received the in-class training.
- Within the first two years, none of the support schemes had led to increased sales or value added.
- However, large positive effects on sales and value added appeared during the next two years for the group of firms receiving both the in-class training and the on-site consulting sessions.
- Four years after the programme, firms that had received both components had average annual sales 90 per cent higher than those that hadn’t received any support, while value added was about 65 per cent higher.
- For those firms that only received the on-site consulting sessions, sales and value added also increased in the medium run by about US$13,000 and US$10,000, respectively, more than for the firms that didn’t receive any support.
- The returns in terms of value added compensated by far for the cost of the programme for the on-site consulting sessions (about US$2,000) only and the in-class training plus on-site sessions scheme (about US$4,000).
- Combining in-class and on-site sessions based on Kaizen principles seems to help manufacturing firms to become more efficient and increase sales.
- The effects on business performance of support schemes aimed at increasing the adoption of good practices are likely to show in the medium term, after an assimilation period during which firms try out different practices to identify and focus on the useful ones.
- On-site consulting sessions seem to help firms to make better decisions about which practices to adopt, given that on average firms that have access to the one-on-one consulting sessions don’t adopt more practices than those that don’t have access to those sessions, but they achieve better business performance in the medium run.