Proceedings of the 2015 International Conference on Industrial Engineering and Operations Management

Dubai, UAE, March 3 5, 2015

The Role of Kaizen

(Continuous Improvement) in Improving
Companies Performance: A Case Study
Hassan Abdulmouti
Department of Mechanical Engineering
College of Engineering, University of Sharjah
PO Box 27272, Sharjah, United Arab Emirates
hmouti@sharjah.ac.ae

AbstractKaizen refers to the philosophy or practices that focus
upon continuous improvement of processes in manufacturing,
engineering and business management. The improvements are
usually accomplished at little or no expense and without
sophisticated techniques. The purpose of this paper is to present the
results of implementing the Kaizen principles at Port Installed
Options Center in Toyota Saudi Arabia. Using relevant Kaizen tools
including Toyota Production System (TPS), 5S and the seven Muda
enabled us to understand the system and identify the most critical
problem areas. The Kaizen target was set after analyzing the
problems and identifying the gap between the existing system and the
TPS. The main results of the study can be summarized as: using the
same facilities it was possible to be more efficient by reducing the
manpower needed by 26.9% (from 349 to 275 installers) and more
effective by increasing the annual output by 13% (from 188000 to
212400 vehicles); improve the Associates Engagement Index (Q12)
by 6.4% (from 2.91 to 3.11); potential for inventory reduction due to
the use of Kanban system with just-in-time production; avoid
investing in new facilities needed to meet the increase in the demand
in the market. All these resulted in improving the production line
productivity which were appreciated and acknowledged by Toyota
Motor Corporation.
KeywordsKaizen, Toyota Production System (TPS),
Productivity, Business Excellence, Management, Muda and 5S.
I. INTRODUCTION
Many people ask the following common questions: 1)
Why Japan is an advanced and developed country? 2) What
are the reasons of success for Japanese companies? In fact,
there are many reasons but Kaizen is one of the most
important reasons in addition to Japanese culture itself.
Kaizen is the Japanese word for "continuous improvement" or
"change for the best. It refers to the philosophy or practices
that focus upon continuous improvement of processes in
manufacturing, engineering, and business management for
various types of organizations. Kaizen is used worldwide and
it became the central pillar for processes improvement in
many big companies starting from Toyota, where it has been
adopted to define the TOYOTA WAY (Toyotas DNA). In a
simple definition, one can say that Kaizen activities aim at
improving all functions of the business, even by small steps,
and through involving all employees. It is a collective effort
that makes the process more efficient, effective, under control,
and adaptable. The improvements are usually accomplished at
little or no expense and without sophisticated techniques or
expensive equipment. Applying Kaizen on complex processes
starts by breaking them down into their basic elements or sub-
processes and then improving them. Kaizen Division in such
companies has role by educating employees on how to
produce efficiently with limited resources (manpower,
material, space and machine), make continuous improvement
for the organization, cost reduction and cost optimization in
order to save manpower, space, equipment, material, etc.,
continues training and education for the employee of the
organization and involve them in Kaizen activities and
increase the productivity of the employee in the organization.
Hence, Kaizen is a system of continuous improvement in
quality, technology, processes, company culture, productivity,
safety and leadership. Kaizen culture which is Kaizen eye
refers to the ability to step back from all activities, observe
current processes and the ability to propose solutions to
problems. The Toyota Way has been successfully applied in
many dealerships and in many companies rather than Toyota
[1 to 11]. Therefore, the purpose of this paper is to present the
results of implementing the Kaizen principles at Port Installed
Options Center in Toyota Saudi Arabia. This paper is
organized as follows: Section 2 presents theoretical
background, section 3 presents and discusses the results of
implementing the Kaizen principles at the case study, and it
ends with conclusions.
II. THEORETICAL BACKGROUND
A. Kaizen and its Important Principles
Kaizen spirit exists since origins of Toyota History. In
1902 Sakichi Toyoda invented an error proof wooden loom.
With this invention, he introduced a new key concept (Jidoka)
that changed production forever. This machine stopped when
a thread broke and the purpose of these stoppages was to
prevent errors and defects. This becomes later the Jidoka the
concept of Toyota Production System (TPS) and has a good

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978-1-4799-6065-1/15/$31.00 2015 IEEE
relation with Muda elimination. Beyond that, Kiichiro Toyoda
(who became the director of Toyoda Automatic Loom Works
in 1921) always encouraged staff and people to make
suggestions and not to be afraid to make mistakes. He said;
Lets give it a try and Dont be afraid to make mistakes.
Also he said Try, if it fails, learn from the failure and try
again, adding small improvements each time. Kaizen is an
important pillar of Toyota way, which is based on two
important pillars as follows [1 to 11]:
Continuous Improvement:
o Challenge: Form a long term vision, meeting
challenges with courage and creativity to realize
the dreams.
o Kaizen: Improve business operations
continuously, always driving for innovation and
evolution.
o Genchi Genbutsu: Go to the source to find the
facts to make correct decisions, build consensus
and achieve goals at best speed.
Respect for People:
o Respect: Respect others (including all
shareholders and colleagues) by making every
effort to understand each other, take
responsibility and do best to build mutual trust
and mutual responsibility, sincere, effective,
communication.
o Teamwork: Stimulate personal and professional
growth, share the opportunities of development
and maximize individual and team performance.
Commitment to education and personal
development, respect for the individual, realizing
consolidated power as a team.
Kaizen improvement is based on the use of the
following important principles [1 to 11]:
Value-added and non-value-added work activities.
Principles of motion study and use of cell technology.
Principles of material handling and use of one-piece flow.
Documentation of Standard Operating Procedures (SOP).
The five Ss for workplace organization which is a
philosophy of good housekeeping.
Visual management by means of visual displays for better
communications.
Genchi Genbutsu: It means go to the source place to find
and see facts, determine what is really going on and make
correct decisions.
Toyota Production System (TPS): This will be explained in
details in a later section with a case study.
Hoshin Kanri: It is the managing and controlling the
organization direction needle. It is the policy deployment of
any organization.
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Do it right way principle: (Fix-it-Right, Fix it Fast and Fix
it Once) do not pass any incomplete or defected job.
When facing a problem or even a mistake, grasp problems
and analyze root causes then follow problem solving process.
Toyota Business Practices (TBP). It is an action to realize
continuous achievements efficiently for all positions or
functions.
Team dynamics, which include problem solving,
communication skills, and conflict resolution. Kaizen relies
heavily on a culture that encourages suggestions by operators
who continually try to incrementally improve their job or
process.
The Kaizen Idea Technique (bank) including (Kaizen
marathon projects). Think out the box can help using new
ideas. Toyota Motor Corporation (TMC) is successfully
involving the field staff in the Kaizen process, and as a result
they give incredible ideas. Such a process also strengthens the
employee commitment and sense of belonging to the
company, which is crucial for increasing their motivation.
Cooperation in company departments and effective
consensus. This could be achieved by sharing of goals and
quantitative objectives, and any variances between goals and
performance should be explained thoroughly to avoid
misunderstandings.
B. Toyota Production System (TPS) [1 to 11]
The main pillars of TPS are Just-In-Time (JIT) and
Irregularity Control (JIDOUK), in addition to elimination of
Muda and using the Standardized Operation Procedures
(SOP).
1) Just-In-Time (JIT): which means collect, produce and
transport only the necessary items (for customer, for work) at
the necessary time in the necessary quantities (from the
previous process.). Do not hold or keep unnecessary items or
inventory. JIT principle depends on continuous flow
processing and lead-time reduction. Where lead-time = cycle
time standard in-process stock (standard in-process stock is
the minimum set-up to proceed operation in repeated sequence
and movement in process, when working according to work
procedure). Reducing the lead-time could be by reducing the
cycle time that can be achieved by shortening manpower,
time/vehicle and reducing standard in-process stock. Figure 1
illustrates a sample of shortening the flow. The upper raw of
the figure shows 6 units of standard in-process stock. When
the workers cycle time takes 20 minutes for example, the
lead-time takes 120 minutes. The mid raw of the figure shows
3 units of standard in-process stock with lead-time of 60
minutes. The third raw shows one unit of standard in-process
stock for 20-minute lead-time. As shown here, when reducing
the standard in-process stock with maintaining the same
workers cycle time, the lead-time drastically will be reduced.
Furthermore, if job improvement should reduce the workers
 cycle time, the lead-time will be further reduced. Continuous
flow processing aims to erase any stagnation between
processes and carrying-out of one-piece at a time production.
The conditions of flow processing are to get one-piece at a
time production and flow for goods, multi-process handling
and multi-skilled for people and arranged in process order and
orderly flow for equipment. The advantages of shortening the
flow is to improve quality, shorten lead time and realize
prompt delivery, reduce inventory and stagnation, use
minimum resources, simply management (less managerial and Fig. 1: A sample of shortening the flow
administrative intervention) and realize minimum cost and
maximum profit.
2) Irregularity Control (JIDOUKA): which is the ability of
production lines to be stopped eventually when problems
appear as equipment malfunctions, quality problems or work
being late, either by machines which have the ability to sense
abnormalities or by employees. This aims to prevent passing
or producing any defective goods or products by stopping the Fig. 2. An example of eliminating Muda from process
line if there is an irregularity case where only non-defected
products are sent to the next process. Hence, a quality must be TABLE 1. PIOC-PLANTS PROFILE
built at each process of the products, and no need to assign
Plant 1 Plant 2 Plant 3 Total
staff only to watch machines (manpower savings). As an and 4
example an ANDON System can be used for this purpose Location NDC South NDC -----
which is an electric bulletin board that makes irregular Compound
location recognized at a glance to encourage involved persons Covered area 2208 m2 1552 m2 3670 m2 7430 m2
to take actions. Start operation 2001 1992 2003
Number of 160 95 122 377
3) Elimination of Muda: The 7 Muda refers to seven classes of employee
waste (overproduction, delay and waiting, transportation, Average 10000 3000 4000 17000
production
processing and over quality, inventory or stock (un-recovered /Month
funds), wasted motion, and defective parts repair/rejects/ Models Avalon, Hilux L/Cruiser
rework). Figure 2 shows an example of eliminating Muda accessorized Aurion, Wagon
from a process. Camry, Corolla, L/Cruiser
Yaris, Rav4, Pickup
Hiace, Dayna, Prado,
III. The Case Study: Implementing the Kaizen Principles at Port Coaster, Fortuner
Installed Options Center in Toyota Saudi Arabia Terios, Sirion, Innova, FJ
Materia, Lexus, Cruiser,
In the following, the results of implementing the KAIZEN Seqouia
principles in a case study are presented. The case used in this
study is the Port Installed Option Center (PIOC) in Toyota
Saudi Arabia. PIOC consists of 4 plants including the
National Distribution Centre (NDC) all of them are located
near the port of the Red Sea of Jeddah. Those centers are
related to Toyota Saudi Arabia which is a part of Abdul Latif
Jameel Co. Ltd. (ALJ). The PIOC mission is to timely
accessorize new vehicles with high quality and optimum cost,
using Toyota Way in production. The PIOC vision is to
become a leading vehicle accessorization production line in Fig. 3. (PIOC) accessorized volume
the Toyota Network, using TPS and Toyota Way, to satisfy
market needs and achieve business excellence. Table 1 shows 1) The Old Stall Type Production:
the PIOC plants profile, and Figure 3 illustrates (PIOC) The accessorized volume was produced in PIOC using the
accessorized volume per year. old stall type production which is a push system used for the
period 1990-2007. The vehicle parked in one stall and one or
more installers install all accessory items. The facilities of

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stall type are not designed to accommodate an annual 3. Improve Associates Engagement Index (Q12) to be
production for more than 180,000 which couldn't meet sale 3.10.
increase for the year 2008 (212400). Figure 4 is a sample of 4. JIT parts supply.
stall type production in plant 1.
Table 2. (PIOC) business plan and required installers and stalls
2006 Business Plan
Yearly 2005 2006 2007 2008 2009 2010
Plan
Vehicle 129,00 159,72 188,00 212,40 233,50 257,70
Sales 0 0 0 0 0 0
(Units)
Require 226 266 311 349 375 401
d
Installer
s
Require 181 212 249 279 300 321
d Stalls
Actual 226 266 312 275
Fig. 4. Sample of stall type production in plant 1
Installer
s
The main disadvantages and problems of the current stall
type can be summarized as follows: 5) TPS Implementation/kaizen:
Low production rate (50 Vehicle./Month/Installer). The implementation of TPS was set by designing a
Poor space utilization (63 Vehicle /Stall/Month). timeline. The Kaizen Division of Toyota Motor Corporation
Low Associates Engagement Index (Q12) results (2.91 (TMC) agreed to support Toyota Saudi Arabia in
in 2007). implementing TPS. TMC Kaizen Team gave theoretical and
Muda's causing time lost for installers, arranging tools, On JOB Training to PIOC. Then PIOC started TPS trial
vehicles and collection of parts from sub warehouse. implementation in plant 2 (Hilux). The result was 25%
Difficult to control manpower movement. improvement in production rate. The success of TPS project in
Big variance in incentive for installers (SR 500 to plant 2 encouraged PIOC to apply it in other plants. TMC
4000). Kaizen team visited PIOC in early Oct. 08 and they
Weak planning. appreciated the progress in TPS implementation. They gave
Difficulties in quality control during the process. recommendation in the areas of parts supply, 5S, production
Production based on individual motivation not team control boards and safety. Figure 5 illustrates the pre
work (man of the month). Poor teamwork, accessorized area while figure 6 shows the TPS line and figure
communication and relationships. 7 clarifies the new trolley design per vehicle. The principle of
High number of vehicles damages due to poor layout Just-in-time (JIT) parts supply is represented in figure 8.
and flow.
2) Problem Description:
The increase in sales volume requires directly increasing the
production capacity, facilities and installers. Table 2 shows
PIOC business plan including required installers and stalls.
3) Gap Analysis:
As per 2007 business plan, A SR 10,000,000 is budgeted to
establish additional facilities and recruit about 37 installers to Fig. 5. Pre Accessorized Area
be able to match 212,400 sales in 2008 using stall type
production.
4) Kaizen Target:
The Kaizen target was to implement TPS in order to avoid
building any additional facility and to avoid recruiting more
manpower besides the following targets:
1. Increase production rate by 25% (63 Vehicle
/Month/Installer).
Fig. 6. TPS line
2. Enhance space utilization (71 Vehicle /Stall/Month).

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 installers which are required to meet the increase in the
demand in the market. Hence the total saving in manpower is
the required installer 349 the actual installers 275 = 74
installers by using the same facilities. This results a total
savings in installers of about SR 3.6 million. Avoid investing
in new facilities needed to meet the increase in the demand in
the market was an important result of implementing Kaizen.
In addition, improve the Associates Engineering Index (Q12)
by 6.4% (from 2.91 to 3.11) was a great result of applying the
Fig. 7. Trolley Design/Vehicle TPS since the worker become one team with higher
engagement, this reduces the variance in incentive for
installers. The total saving is about SR 9 million per year. The
increasing of the annual output is about 13% (from 188000 to
212400 vehicles) for the year 2008. Furthermore a potential
for inventory reduction was clear due to the use of Kanban
system with just-in-time production. Besides, increasing the
quality since a quality was built at each process and step of the
products and reduce the number of vehicle damages due to the
control of the layout and flow. All these resulted in improving
the production line productivity which were appreciated and
acknowledged by Toyota Motor Corporation.
Fig. 8. JIT Parts Supply
CONCLUSIONS
6) Main Results of Implementing the Kaizen Principles:
Using relevant Kaizen tools including Toyota Production The results of implementing the Kaizen principles at Port
System (TPS), 5S and the seven Muda enabled us to Installed Options Center in Toyota Saudi Arabia were
understand the system and identify the most critical problem achieved by using relevant Kaizen tools including Toyota
areas. The Kaizen target was set after analyzing the problems Production System (TPS), 5S and the seven Mudas. The
and identifying the gap between the existing system and the Kaizen target was set after analyzing the problems and
TPS. The main technical results are summarized in table 3. identifying the gap between the existing system and the TPS.
Figure 9 presents a sample comparison of the results in plant 1 The main results of the study can be summarized as follows:
before and after TPS implementation. 1- Savings of about 5.5 million by avoiding investing in
new facilities needed to meet the increase in the
TABLE 3. A SUMMARY OF THE MAIN TECHNICAL RESULTS demand in the market.
Comparison Stall type 2007 TPS 2008 2- Using the same facilities it was possible to be more
Production rate 50 Vehicle 65 Vehicle efficient by reducing the manpower needed by 26.9%
/installer/month /installer/ month (from 349 to 275 installers) instead of increasing the
Space Utilization 63 Vehicle /stall/month 71 Vehicle manpower by 37 to meet the increase in the demand in
/stall/month the market. This results of total savings in installers of
Q12 2.91 3.11 about 3.6 million.
Installers Required installer 349 Actual installers 275 3- Having more effectiveness by increasing the annual
output by about 13% (from 188000 to 212400
vehicles).
4- Improve the quality of the production since the quality
was built at each process and step of the products.
5- Improve the Associates Engagement Index (Q12) by
6.4% (from 2.91 to 3.11). This reduces the variance in
Fig. 9. A sample comparison of the results in plant 1 before and after TPS incentive for installers.
6- Potential for inventory reduction due to the use of
After TPS implementation, the daily planning was
Kanban system with just-in-time production and
improved to meet the TPS. Moreover, the number of installers
was reduced to 275 instead of recruiting about 37 extra

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 reduce the number of vehicle damages due to the [11] Masaaki Imai. Gemba Kaizen. A Commonsense, Low-
control of the layout and flow. Cost Approach to Management. McGraw-Hill ISBN 0-07-
031446-2. 1997.
7- All these result in improving the production line
productivity which were appreciated and
acknowledged by Toyota Motor Corporation.

Acknowledgements
We would like to express our gratitude and thanks to the
Director and staffs of PIOC in ALJ.

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