Integrative Improvement Blog

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Kaizen and kaikaku – the yin and yang of smart manufacturing

Kaizen and kaikaku – the yin and yang of smart manufacturing

The term ‘smart manufacturing’ most likely conjures up images of a shiny new building with modern, end-to-end, connected technology. However, to many pundits observing the trend of digital transformation, a factory doesn’t require the latest or even the most technology to be smart. Even an old factory that integrates modern technology with select old machinery can enable data-driven decisions about processes and capabilities that are at the heart of what is meant by smart.

The concept of smart manufacturing can be traced back to the 1980s when manufacturers started digitising fabrication. And because of Moore’s Law, which states that computer processing speeds will double every two years, it is computing that’s developing and enabling digitisation in manufacturing today.

So smart manufacturing, in simple terms, is connecting a manufacturer’s information technology and operational technology across its total value chain, both inside and outside the company. In practice, this could evolve into cyber-physical systems that are tied together with industrial networks, cloud computing, fixed and mobile terminals, and wireless networks, to a facility.

Kaizen or kaikaku?

In such an environment of constant change and disruption, how can you know when ‘improvement’ is enough or, more importantly, when it’s time to leapfrog your competitors with a radical overhaul of an activity or even an entirely new offering? In other words, how do you balance the difference between incremental improvement (kaizen) and fundamental transformation (kaikaku)?

Do you go for the more conservative option of spending less in order to improve return on investment (ROI)? Or do you boldly leap into the future? The answer is a careful balance of both, coupled with a strong understanding of the interplay between kaizen and kaikaku.

Kaikaku, also known as a kaizen blitz, is necessary to break paradigms, increase people’s awareness and understanding, and eliminate all waste. Kaikaku investments are therefore usually made before kaizen improvements.

For many of the world’s most successful organisations, major leaps forward in performance are approached by developing a high-level strategy for their smart manufacturing vision.

As a first step, one quick win may be in the quality area. Many companies test quality after a part or process is completed. Imagine you could quickly identify which integrated elements of a manufacturing process are non-compliant (while operating) and correct them midway. Could you potentially save, say, 20% to 30% in materials, downtime, and/or rework?

If your answer is ‘yes’, examining how you might apply smart technology may be the first step. This could include linking machines together via automation and software, automating the integration of information from the process into your broader software system, and looking at the data and responding in real time.

But before embarking on a particular path, you should first consider long-term requirements and how technology could be implemented. Perhaps industry-leading performance could be achievable in phases if it is planned from the start. Use of an Industry 4.0 approach and modular systems could also significantly mitigate long-term risks.

Whichever direction is taken, there should be agreement at senior level that any innovative leaps identified are critical to success. These must then be planned and scheduled properly to optimise ROI and avoid plateauing, or future waste.

When developing an optimal plan, you need to include a well-defined gap analysis which outlines the incremental improvements and innovative leaps your organisation needs to take to either catch up with global leaders, or take the global lead. Your organisation should have confidence that it has the capability to close these gaps quickly, or you can engage partners with the required experience to assist you.

As part of that approach, meetings and site tours with industry leaders and solution providers can help develop awareness of current KPIs that are achievable for key processes within the operation.

READ how the executive team at a major Chinese bottling plant fast-tracked a tailor-made smart factory solution.


The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.   


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