13. TS Nguyen Dang Minh

8/14/2019 13. TS Nguyen Dang Minh

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Japanese Continuous Improvement Practices Implementation in

Vietnamese Manufacturing Companies

Phan Chi Anh and Nguyen Dang Minh

This study investigates the implementation of Kaizen practices in Vietnamese manufacturing

companies. Statistical techniques such as ANOVA and regression are applied to analyze the data

are collected from 64 Vietnamese manufacturing companies through a questionnaire survey

during 2011-2012. The results of statistical analysis indicate that Japanese continuous

improvement practices have positive relationship with companies’ performance on quality, cost,

and delivery. We conclude that Vietnamese companies should further emphasis on implementing

Japanese management practices to enhance the performance.

Introduction

Vietnam is facing the challenges of developing the supporting industries that can

supply parts with stable quality, cost, and delivery (QCD) to foreign-affiliated

assembling companies in order to enhance its international competitiveness amid

ongoing globalization. In recent years, Vietnamese Government has gradually paid

attention to develop its supporting industries, however the industries have facing many

difficulties in human resource, skills, techniques, technologies, management

methodologies…etc. In order to increase productivity and quality in supporting industries

in Vietnam, the cooperation of Japanese Government and Japanese private sector is very

important. Since the late of 1990’s, many Vietnamese companies try to learn and

implement different types of Japanese management methods and techniques such as 5S,

QCC, SPC…Recently, the Japanese management methods and techniques is more

promote in Vietnam by supports Japanese Government. Many JICA experts and senior

volunteers are dispatched to Vietnam to transfer Japanese management methods and

techniques in manufacturing companies, especially companies belonging to supporting

industries. However the current literature does not show us much about the current

situation and the effectiveness of Japanese management methods and techniquesimplementation in Vietnamese industries. This study is conducted to address this need.

The main objective of this study is to examine and evaluate the impact of different

Japanese continuous improvement practices (Kaizen) on different business performance

indicators of Vietnamese manufacturing companies.

To study the current situation of the implementation of Japanese management

methods and techniques in Vietnam industries

To study the impact of implementation of Japanese management methods and

techniques in Vietnamese manuafacturing companies





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Quality management is now regarded as the key management issue in Vietnamese companies.

The focus of Vietnamese businessmen and managers over the late thirty years could be

summarized as follows.

1980s-1990s: Companies focused on setting – up the quality control activities along with

standardization.

1990s-2000s: Companies focused on the ISO 9000 and other standard implementation,

and Vietnam Quality Award (since 1996).

Late 2000s: Many companies which ISO 90000 certified considered implementing

several Japanese management methods and techniques such as 5S, QCC, SPC….

By 2010 the situation of quality management and standadization practices of Vietnam

The number of on-effect national standard is about 6700 national and 40% of them are

complies with international standards.

Every year, a number of 200 organization participates Vietnam Quality Award

7000 international certificates in Vietnam including ISO 9000, ISO 14000, ISO 18000,

ISO 22000)

Since 2000s, the transformation of Japanese management methods and techniques in Vietnamese

could be sumarised as the follows

• Though Japanese customers and suppliers network: Japanese consultants, managers, and

engineers. Japanese Government provided a big supports through many projects handed

by JICA , Japan Productity Center,AOTS, etc• Through local government and local consulting and training services. This focus on

training and guiding in some practical topicts such as 5S, QCC, shop-floor improvement.

• Self-study: Vietnamese companies sent their staffs to visit Japan. The lessons learned

though theses study missions then are implemented in Vietnamese companies to solve

their specific problem.

Though the attention of Kaizen and quality managemeny in Vietnamese companies is constanly

increased, there is a lack of Kaizen and quality management studies because of the resources

limitations. There is several questions regarding the performance of Japanese management

teachniques implemented in Vietnamese companies and how do they fit to the culture and

organization structure of Vietnamese companies. Theses issues should be further examined for

better understanding on the tranformation of Japanese management in Vietnam.

Analytical framework and data collection



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This section presents the analytical framework and data collection of this study.

Survey design and data collection and data analysis are summarized in three below

subsections.

The main research questions of this study are:

What is the current situation of the implementation of Japanese improvement

practices in Vietnam manufacturing companies?

What is the impact of implementation of Japanese improvement practices in

Vietnamese manuafacturing companies?

To answer these questions, an empirical study will be conducted through a questionnaire

survey and deep interview in Vietnamese manufacturing companies. The respondents of

the survey are the managers, engineers, and workers of 52 manufacturing companies that

received supports from Japanese consultants in the past.

To get reliable information from companies, the survey targets to the respondents who

are the key decision maker in the companies, i.e. members of Management Board.

Questionnaire items were developed after reviewing the literature of Japanese

management studies, Kaizen transformation studies, quality management and production

management in developing countries studies, etc. The content validity is managed by

reviewing a large set of empirical studies on such issues.

The evaluation of question items was made through Likert 5 points – scale, from

“Strongly agree” to “Strongly disagree”. This way of evaluation has proved strong

effectiveness as indicated in Kaizen literature. Current situation of Japanese improvement

practices in the company is evaluated by 30 question items and business performance is

evaluated by 11 question items.

Data has been collected during December 2011 to January 2012. Number of returned

questionnaire is 52. Questionnaire respondents are Member of Board of Management

(43%) and Middle management level (57%). We find that missing data are kept in

minimum (less than 0.003%) and measurement test was conducted to ensure that data is

valid and reliable.

Data analysis

To answer the research questions, statistical methods such as ANOVA andregression analysis will be used to analyze the collected data. This section summarized



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the results of data analysis processes. We would like to highlight the general observation,

positive points, and rooms for improvement in the following tables





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Table 2: Scores on Japanese improvement practices in companies

5S Min Max Mean STD

1 Training 5S awareness for employees 1.00 5.00 4.28 0.93

2 Formulating 5S committee 1.00 5.00 4.24 0.80

3 Developing and Establishing 5S standard 1.00 5.00 4.10 0.74

4 Maintaining daily 5S at office and showroom 1.00 5.00 4.00 0.94

5 Maintaining daily 5S at shop-floor 1.00 5.00 3.75 1.05

6 Maintaining daily 5S at warehouse 1.00 5.00 3.98 0.99

7 Promoting 5S to suppliers network 1.00 5.00 3.54 1.12

Quality Management

8 Employees are trained to match the skills requirements 1.00 5.00 3.96 0.92

9 Employees are trained on quality awareness 1.00 5.00 4.00 0.89

10 Operations standards are well developed, established, and maintained 1.00 5.00 3.94 0.88

11 Products and service standards are developed, established, and

maintained 1.00 5.00 4.04 0.89

12 Inspection standards are developed, established, and maintained 1.00 5.00 4.06 0.86

13 Acceptance sampling standards are developed, established, and

maintained 1.00 5.00 3.88 0.90

14 Quality records is well documented and maintained 1.00 5.00 4.00 0.82

Kaizen Continuous improvement

15 Kaizen philosophy is trained and introduced to employees 1.00 5.00 3.94 0.92

16 QC 7 tools are trained for employees 1.00 5.00 3.60 0.96

17 QC 7 tools are used for process control and improvement 1.00 5.00 3.51 0.9218 QC 7 tools are used for problem solving 1.00 5.00 3.57 1.00

19 QC 7 tools help to improve product quality 1.00 5.00 3.50 0.98

20 Small group problem solving activities are conducted 1.00 5.00 3.43 1.17

21 Small group problem help to improve quality problems 1.00 5.00 3.46 1.17

22 Scheme for employee suggestion is established and implemented 2.00 5.00 4.09 0.84

23 Improvement suggestions of employee help to improve product quality 2.00 5.00 4.07 0.80

Production Control

24 Production schedule is made and implemented 2.00 5.00 4.18 0.70

25 Production plan is made and maintained 3.00 5.00 4.16 0.62

26 Production plan is incorporate with marketing and sale plan 3.00 5.00 4.14 0.68

27 Production process is under statistical process control 2.00 5.00 3.86 0.84

Human Resource Management

28 Job-based training is provided to employees 2.00 5.00 4.12 0.78

29 Skill-base training is provided to employees 2.00 5.00 4.08 0.79

30 Performance assessment is implemented 3.00 5.00 4.02 0.78



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Table 3: Scores on business performance

Quality Min Max Mean STD

1 Number of defective product is lower than competitors 2.00 5.00 3.71 0.82

2 Number of returned product is lower than competitors 2.00 5.00 3.86 0.76

3 Product performance and function are better than competitors 2.00 5.00 3.90 0.80

4 Customer service is better than competitors 2.00 5.00 3.98 0.75

5 Having higher customer satisfaction than competitors 2.00 5.00 3.96 0.77

Cost

6 The price of product is lower than competitors 2.00 5.00 3.52 0.77

7 The price of product is attractive to customers 2.00 5.00 3.65 0.73

Delivery

8 Frequency of deliver on time more than competitors 2.00 5.00 3.75 0.73

9 Deliver faster than competitors 3.00 5.00 3.90 0.72

Market

10 Increasing of market share is faster than competitors 2.00 5.00 3.77 0.84

11 Having lager market share than competitors 2.00 5.00 3.60 0.88



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Table 4: Correlation between the implementation of Japanese methods and techniques and business performance of the companies

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11

Training 5S awareness for employees + +

Formulating 5S committee +

Developing and Establishing 5S standard + + + + +

Maintaining daily 5S at office and showroom + + + + + + + +

Maintaining daily 5S at shop-floor + + + +

Maintaining daily 5S at warehouse + + + + + + + +

Promoting 5S to suppliers network + + + + + + + +

Employees are trained to match the skills requirements + + + + + +

Employees are trained on quality awareness + + + + + + +

Operations standards are well developed, established, and maintained + + + + + +

Products and service standards are developed, established, and maintained + + + + + + + +

Inspection standards are developed, established, and maintained + + + + + +

Acceptance sampling standards are developed, established, and maintained + + + + + + + + + +

Quality records is well documented and maintained + + + + + + + +

Kaizen philosophy is trained and introduced to employees + + + + + + + + +

QC 7 tools are trained for employees + +

QC 7 tools are used for process control and improvement + + + + + + +

QC 7 tools are used for problem solving + + + +

QC 7 tools help to improve product quality + + +

Small group problem solving activities are conducted + + + + + + +

Small group problem help to improve quality problems + + +

Scheme for employee suggestion is established and implemented + + + + + + + +

Improvement suggestions of employee help to improve product quality + + + + + + +

Production schedule is made and implemented + + + + + + + + +

Production plan is made and maintained + + + + + + + + +

Production plan is incorporate with marketing and sale plan + + + + + + + + + +

Production process is under statistical process control + + + + + + + +

Job-based training is provided to employees + + + + + + + +

Skill-base training is provided to employees + + + + + + + + +

Performance assessment is implemented + + + + + + + + + + +

Note:

“+”: indicates the significant correlation coefficients between methods and techniques and business performance of the companies



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Table 5: Regression Analysis

Dependent variables

Quality

Performance

Cost

performance

Delivery

performance

Market

performance

R 2

0.438 0.297 0.419 0.274

Adjusted R 2 0.370 0.196 0.346 0.184

F 6.396 2.962 5.770 3.024

Significant level 0.000 0.45 0.000 0.021

Beta coefficient 1.031 (0.053) 1.091 (0.059) 1.277 (0.020) 1.297 (0.071)

5S practices 0.382 (0.045) 0.104 (0.674) 0.327 (0.050) 0.142 (0.545)

Quality management

practices0.366 (0.050) 0.389 (0.042) 0.378 (0.108) 0.072 (0.780)

Kaizen practices 0.099 (0.591) 0.478 (0.035) 0.085 (0.656) 0.051 (0.812)

Production control

practices

0.009 (0.957) 0.278 (0.193) 0.200 (0.323) 0.185 (0.384)

Human resource

management practices0.064 (0.755) 0.095 (0.636) 0.460 (0.019) 0.277 (0.089)

Significant level is set at 5% as suggested in literature

The relationship between the implementation and Japanese methods and techniques

and business performance of the companies were analyzed by appying two statistical

methods: simple correlation analysis and multiple regression analysis.

Simple correlation analysis is taken first. We found the strong correlation between the

implementation of Japanese methods and techniques and business performance of the

companies (significant level was set at 5%). Companies having higher degree

implementation of Japanese improvement practices would have higher performance when

compared with their competitors

Further test on the relationship between Japanese improvement practices and business

performance of companies are conducted by developing the multiple regression analysis

models.

The dependent variables are four business performance as quality, cost, delivery, and,

market performances.

The independent variables are five factors as 5S, quality management, continuous

management, production control, and human resource management (HRM) activities.

Significant level is set at 5% as suggested in literature. The regression results indicate

the links between the variables as described in the following figure.



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We find that:

The implementation of 5S and quality management practices significantly impact

quality performance. The high implementation of 5S and quality management

practices will lead to the advantage on quality performance.

The implementation of quality management practices and Kaizen practicessignificantly impact cost performance. The high implementation of Kaizen

practices and quality management practices will lead to the lower cost comparing

with competitors.

Delivery performance depends on the implementation of 5S and HRM practices.

The high implementation on 5S and HRM practices will lead to the fast and on-

time delivery.

As the result, we conclude that the implementation of Japanese methods and techniques

such as 5S, quality management, Kaizen practices significantly improve companies’

performance on quality, cost, and delivery.

Conclusions

The results of our questionaire survey and in dept intervew indicate the evidences

that:

The implementation of Japanese improvement practices matchs the companies’

expectation. The contents and methodology of Japanese management transferred by

Japanese experts are understood and followed by Vietnamese companies.

Companies highly appreciate Japanese experts’ methodology, results, and

performance. Many suggestions from Japanese experts have been noticed and

implemented by the companies.Companies would like to extend the services from Japanese experts in the future

aquired more Japanese expert’s services. Japanese expert’s services are very necessary for

companies in the future.

Japanese expert’s services contents and methodology should be arranged to match

companies’ needs. In the future, future companies need more Japanese experts services

which focus on productivity improvement, continuous improvement, production control,

statistical process control, and 5S.



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Japanese methods and techniques are implemented in different manners in companies.

In general, companies show that 5S activities implementation is currently focused. In the

future, SV services should support companies to implement QCC, QC 7 tools, and

problem solving methods.

Companies having higher degree implementation of Japanese methods and techniques

would have higher performance when compared with their competitors. The

implementation of Japanese methods and techniques such as 5S, quality management, and

Kaizen practices significantly improve companies’ performance on quality, cost, and

delivery perspectives.

Reference

1) Aoki, K., (2008), “Transferring Japanese kaizen activities to overseas plant in China”,

International Journal of Operations& Production Management , Vol. 28, No.6, pp. 518-539.2) Flynn, B. B. and Saladin, B. (2006), "Relevance of Baldrige constructs in an international

context: a study of national culture," Journal of Operations Management, Vol. 24 No. 5, pp.

583-603.

3) Hofstede, G., (2001), Culture's Consequences: Comparing Values, Behaviors, Institutions

and Organizations Across Countries. Thousand Oaks, CA: Sage Publications.

4) Naor, M., Goldstein, S. M., Linderman, K. W., and Schroeder, R. G. (2008), "The role of

culture as driver of quality management and performance: Infrastructure versus core quality

practices," Decision Sciences, Vol. 39 No. 4, pp. 471-702.

5) Recht, R. and Wilderom, C., (1998), “Kaizen and culture: on the transferability of Japanese

suggestion systems”, International Business Review, Vol.7, No.1, pp. 7-22.

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13. TS Nguyen Dang Minh