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KAIZEN CONCEPT

Bagul Niraj Ravindra1, Ahire Mayur Pranay

2

Department Of Mechanical Engg., Sandip Foundation's Sitrc, (India)

Department Of Mechanical Engg., K.B.H Polytechnic, (India)

ABSTRACT

Organization that emphasizes on the essence of stratergy, namely transformative dimensions, is more efficient

than organization that is concerned with program and process. There are two approaches to reach progress.

Gradual improvement or kaizen and development based on Great Leap, which is called innovation. Kaizen is

process-oriented way of thinking that supports and encourages the efforts of process-oriented people for small

but continuous improvements and it has main differences with western management system that assessment

solely takes place based on the results. Kaizen is a system that involves all employees, from top management to

the bottom. Anyone who contribute to improvement by continuous suggestion imrovement, are encouraged and

suggestions are not presented once a month or a year but they are continuous. Kaizen also sets and adjusts

standards and improves standard continually. Kaizen costing is implemented with the objective of determining

cost reduction targets and co-operation of staff in all levels, and it is different from innovation and cost control

techniques of standard costing

I. INTRODUCTION

Kaizen literally means improvement - improvement in your personal life, your spiritual life and your working

life. When a company adopts the Kaizen model, it strives to improve its processes in small but meaningful ways.

And not just a onetime improvement, but a commitment to excellence by constantly testing and improving the

work flow, day in and day out. Kaizen was first introduced in the Toyota manufacturing plant in Japan in the

early 1950s, and it has since become one of the country‟s main reasons for its success. In Japan, kaizen is a way

of life in the workplace, from the office of the CEO all the way down to shop apprentice. They take it very

seriously, and for good reason. Kaizen has led them from a defeated wartime nation to one of the strongest

industrialized countries in the world. But the best thing about kaizen – and the biggest reason that every

company should adopt it – is that it does not rely on expensive innovative solutions. Just the opposite is true.

The core principal of kaizen is to make small, immediate improvements in the processes and standards of the

workplace. But not just one improvement. Looking for ways to make small improvements should be part of

everyone‟s job, every day of the week. And after a period of time, all of these small improvement will add up to

better working conditions, a (Imai, 1997) higher degree of safety, more efficiency and ultimately, greater profit.

Continuous improvement of processes and products as well as the responsibility of all workers for quality are

fundamental guidelines of TQM philosophy – the philosophy conducting to the increase of productivity without

simultaneous decrease of quality and based on the Deming cycle. The cycle, characterizing the repeatability of

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actions, is aimed at the achievement of farther improvements Those ideas had been formulated and published in

United States of America, and then used in practice and improved in Japan; this is the place of origin of one the

most popular methods of the quality improvement. Kaizen (kai – do, change, zen – well) is a kind of thinking

and management, it is a philosophy being used not only in management field but also in the everyday life in

Japan. It means gradual and continuous progress, increase of value, intensification and improvement Kaizen

needs attaching great value to the details and common sense to make work cleverer.

In Japanese management, kaizen means “continuous improvement” involving the entire workforce from the top

management to middle managers and workers. The origin of Japan‟s kaizen movement was the quality control

method imported from the United States (US) in the post WW2 period. Japan assimilated and developed this as

its own management practice method which later even surpassed performance in the US. This adapted method,

which became known as kaizen, spread rapidly among Japanese companies including a large number of small

and medium-sized enterprises. It subsequently spread overseas as Japanese business activities expanded abroad

and Japanese companies began to build production networks with local companies.

Japan offers assistance for kaizen in many developing countries through private channels such as intra-company

technology transfer and support for local suppliers, as well as through public channels such as official

development assistance (ODA) and guidance provided by various public organizations. By now, kaizen

assistance is one of the standard menu items of Japanese industrial support in developing countries. While such

assistance initially focused on East Asia where Japan had active business partnerships, it has now been

implemented widely in other regions including South Asia, Latin America and Eastern Europe. However, as far

as Sub-Saharan Africa is concerned, knowledge sharing and implementation of kaizen has been rather limited

except in a few notable cases. There are a lot of unexploited benefits of selective and well calibrated application

of kaizen from which African countries can draw upon to improve their production and service units.

II. KAIZEN- THE DEFINITION

Kaizen (Kai „Zen) is a Japanese term that means continuous improvement, taken from words 'Kai', which means

continuous and 'zen' which means improvement. Some translate 'Kai' to mean change and 'zen' to mean good, or

for the better.

Kaizen is one of the most commonly used words in Japan. It is in the newspapers, on the radio and TV. Japanese

society is bombarded daily with statements regarding the Kaizen of almost anything. In business, the concept of

Kaizen is so deeply ingrained in the minds of both managers and workers that they often do not even realize that

they are thinking Kaizen. The key difference between how change is understood in Japan and how it is viewed

in the West lies in the Kaizen concept. This concept is so natural and obvious to many Japanese managers that

they often do not even realize that they possess it! This explains why companies are constantly changing in

Japan. The Kaizen concept is very weak in Western companies, where it is often rejected without knowing what

it really entails. This explains why American and European factories may go years without changing. Within the

Kaizen way of thinking, not a day should go by without some kind of improvement being made somewhere in

the company. After WWII most Japanese companies had to start from the ground up. Every day brought new

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challenges to managers and workers alike, and every day meant progress. Simply staying in business required

unending progress, and Kaizen has become a way of life.

In sport, the kaizen cycle leads to continual improvement in performance.

FIG (1): - Kaizen Cycle

III. KAIZEN IS A PROCESS

To understand what kaizen is, it may be helpful to look at the differences between the traditional western

methods of improvement and kaizen in the west, innovation is king. When management wants to get better

results from their workers, they introduce the latest technology, or incorporate the newest management

technique that they saw at the last trade show. Big changes equal big results - that‟s the mantra that is

traditionally chanted in the west. The result is often a big expenditure of money and time and in the end, the

results are not that great. Kaizen is different. Kaizen is the tortoise compared to the western hare. It relies on

long-term, long lasting and no dramatic changes. “Small steps done many times” is the method that they rely on.

It is a group effort – everyone is involved and contributing. It requires a small investment of money, but a large

investment in effort, cooperation and training. If done correctly, the results are often amazing. Kaizen is a

process. It is not a onetime adjustment made to make this quarter‟s numbers look better. It must become a daily

part of every worker‟s routine. It must become part of the company‟s culture so managers and employees are

constantly looking for small ways to improve the work flow. When that happens, you will have an organization

that has become lean, mean and efficient. This is the essence of kaizen. This is its greatest strength.

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FIG (2): - Kaizen Process

IV. CONSTANT IMPROVEMENT

In any business, an employee‟s work is based on existing standards imposed by management. Improvement

refers to improving those standards. The Japanese perception of management boils down to one precept to

maintain and improve standards. Improving standards means establishing higher standards. Once this is done, it

becomes management's maintenance job to see that the new standards are observed. Lasting improvement is

achieved only when people work to higher standards. Maintenance and improvement have thus become

inseparable for most Japanese managers. The higher up the manager is, the more he is concerned with

improvement. At the bottom level, an unskilled worker working at a machine may spend all his time following

instructions. However, as he becomes more proficient at his work, he begins to think about improvement. He

begins to contribute to improvements in the way his work is done, either through individual suggestions or

through group suggestions. Nobody can dispute the value of improvement. Whenever and wherever

improvements are made in business, these improvements are eventually going to lead to improvements in such

areas as quality and productivity. The starting point for improvement is to recognize need, and this comes from

recognition of a problem. Kaizen emphasizes problem-awareness and provides clues for identifying problems.

4.1 PROBLEM SOLVING

Kaizen starts with a problem or, more precisely, with the recognition that a problem exists. Where there are no

problems, there is no potential for improvement. A problem in business is anything that inconveniences people

downstream, either people in the next process or ultimate customers. The issue is that the people who create the

problem are not directly inconvenienced by it, and therefore are not sensitive to problem. In day-to-day

management situations, the first instinct, when confronted with a problem, is to hide it or ignore it rather than to

face it squarely. This happens because a problem is a problem, and because nobody wants to be accused of

having created the problem. By resorting to positive thinking, however, we can turn each problem into a

valuable opportunity for improvement. Where there is a problem, there is potential for improvement. When a

problem that has been identified must be solved. When a problem is solved and standards have been surpassed,

then new standards must be set.

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V. KAIZEN CONCEPT

• Management

In Kaizen, management has two functions: Maintenance and improvement. Setting standards and keeping

them is an important part of kaizen. One of management‟s primary roles is to maintain the technological

and operating standards that have been put into place. They make sure that everyone performs their

assigned tasks according to explicitly outlined standards and performs them on a daily basis. Management‟s

other role is improvement. They must be constantly looking for ways to raise the current operating

standards. This is an ongoing effort and must be a daily part of the manager‟s job.

5.1 PDCA Cycle

The PDCA cycle is a system to ensure the continuation of the kaizen principles. It is a vital part of the

process.

Plan refers to establishing a target and a strategy for improvement. This is a must. Without a target, how do

you know if you have achieved success?

Do refer to the implementation of your plan.

Check is when you determine if your plan actually improved the process.

Act is the process of standardizing the improved procedure so that it can be continued and so that the

problem will not return.

FIG (3): - PDCA Cycle

VI. VISUAL MANAGEMENT

Another major concept of kaizen is visual management. The opportunities for improvement may present

themselves on a daily basis, but if you are not able to see them, they will be missed. One of primary methods

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used in kaizen is to create an environment where tools, supplies and processes that out of place or out of sync

can be seen right away. There are two systems that are used to achieve this: 5S and 5M.

6.1 The 5S

The heart and soul of visual management is 5S. It is systematic approach to workplace organization and

cleaning that will transform a disorganized workplace into an efficient running machine.

The 5Ss are:

Sort (Seiri) – The first step in 5S is to eliminate all the things in the workspace that are not being used and

store them away. If a tool are material is not used on a daily basis, eliminate it from the workstation.

Set in Order (Seiton) – The second step is to arrange the items used on a daily basis so that they can be

easily accessed and quickly stored. Your goal is to make eliminate any unnecessary movements and actions

by the worker to make hie process as efficient as possible.

Shine (Seiso) – Next is to get everything cleaned and functioning properly. The goal is to remove all the dirt

and the grime and to keep it that way on daily basis. You want to get it clean and keep it clean.

Standardize (Seiketsu) – The fourth step is to develop a routine for sorting, setting and shining. Standardize

creates a system of tasks and procedures that will ensure that the principles of 5S are performed on a daily

basis.

Sustain (Shitsuke) – In the last step, you want to create a culture that will follow the steps on a daily basis.

The chief objective of sustain is to give your staff the commitment and motivation to follow each step, day

in and day out.

FIG (4): - 5S structure.

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4.2.2 The 5 Ms

A great tool for management to maintain and improve the workflow is called the 5 M‟s. By always keeping an

eye on the 5 M‟s, the managers will be able to see when something is not working in a process.

1. Manpower – Managers must know their employees jobs intimately. The must know if they are completing

their tasks in the right way, and know what the skill level of each employee is. Is the morale high, or is

there a lot of absenteeism or indifference?

2. Machines – Each manager must also have an excellent working knowledge of each machine and tool in his

department. He must check to see if they are being regularly maintained and if they are in good working

order. Are they producing high quality products? If not, is it the fault of the machine?

3. Materials – The flow of materials is very important in kaizen. The Just-in-Time model dictates how

materials should flow in a process. Only those materials that are needed should be in the work zone. If there

are more materials than are needed, they should be stored away in a separate location. Each work station

should have a minimum and maximum inventory level for each process.

4. Methods – By having standardized methods, the manager will be able to see if the worker is doing their job

correctly. Posted\ worksheets and diagrams that show the sequence and quality control for each process will

help achieve proper adherence to the standardized methods.

5. Measurements – How do you know if a process is running smoothly? Productions schedules and targets

should be prominently displayed for all to see if improvement is being made. Also, gauges should be clearly

marked to show the proper operating ranges of the equipment.

VI. PRINCIPLE OF KAIZEN

The two key features of kaizen are incremental and continuous improvement and involvement of the entire workforce in that

process. The workforce, even workers, need to participate in producing small but frequent changes by making suggestions

for improvement in both process and product. Beyond that, the logical structure of the concept of kaizen, the precise

relationship among its tools, and concrete measures and sequences adopted on the factory floor, are difficult to pin down

since there are many different schools of teaching that emphasize different aspects and tools of kaizen relative to others.

Even among excellent companies, Toyota‟s way is different from Honda‟s way, and the Panasonic philosophy is quite

distinct from Canon‟s.

6.1 Principles

• Continually improve

• No idea is too small.

• Identify, report, and solve individual problems.

• Focus change on common sense, low-cost, and low-risk improvements, not major innovations.

• Collect, verify, and analyze data to enact change.

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• A major source of quality defects is problems in the process.

• Decreasing variability in the process is vital to improving quality.

• Identify and decrease non–value-added steps.

• Every interaction is between a customer and a supplier.

• Empower the worker to enact change.

• All ideas are addressed and responded to in some way.

• Decrease waste.

• Address the work place with good housekeeping discipline.

6.2 Kaizen Tools

1. 5S

5S is a philosophy and checklist for good housekeeping to achieve greater order, efficiency and discipline in the

workplace. It is derived from the Japanese words Seiri (Sort), Seiton (Straighten), Seiso (Shine), Seiketsu

(Systematize), and Shitsuke (Standardize/ Self-Discipline). There are also different English renditions.

2. Suggestion System

A Suggestion System is the method by which the ideas and suggestions of employees are communicated

upwards through the management hierarchy to achieve cost savings or improve product quality, workplace

efficiency, customer service, or working conditions. Examples range from simply placing suggestion boxes in

common areas, to implementing formal programs with committees reviewing ideas and rewards given for

successful adoption of those ideas.

3. Quality Control Circle

QCC is a small group of workers who collectively find a problem, discuss alternative remedies, and propose a

solution. QCCs voluntarily perform improvement activities within the workplace, as part of a company-wide

program of mutual education, quality control, self-development and productivity improvement.

4. Total Quality control

TQC is an organized activity involving everyone (from managers to workers) in a totally integrated effort

towards kaizen at every level. It is equivalent to Company-Wide Quality Control (CWQC).

5. Total Quality Management (TQM)

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TQM represents a number of management practices, philosophies and methods to improve the way an

organization does business, makes its products, and interacts with its employees and customers. QCC activities

function as an integral part of TQM. TQM evolved from TQC in the late 1980s.

6. Toyota Production System (TPS)

TPS is the philosophy which organizes manufacturing and logistics at Toyota, including interaction with

suppliers and customers. It focuses on the elimination of waste and defects at all points of production including

inputs, process and final output (delivery). The term “Lean Production System” can be used interchangeably.

6.3 Kaizen vs Innovation

Kaizen vs. innovation could be referred to as the gradualist-approach vs. the great-leap-forward approach.

Japanese companies generally favor the gradualist approach and Western companies favor the great-leap

approach, which is an approach epitomized by the term innovation. Innovation is characterized by major

changes in the wake of technological breakthroughs, or the introduction of the latest management concepts or

production techniques. Kaizen, on the other hand, is un-dramatic and subtle, and its results are seldom

immediately visible. Kaizen is continuous while innovation is a one-shot phenomenon. Further, innovation is

technology and money-oriented whereas Kaizen is people- oriented. In the West, a middle manager can usually

obtain top management support for innovative projects because they offer return on investment benefits that

managers can hardly resist. However, when a factory manager wishes to make small changes in the way his

workers perform a task, obtaining management support can be difficult.

Kaizen does not call for a large investment to implement it, but it does call for a great deal of continuous effort

and commitment. To implement Kaizen, you need only simple, conventional techniques. Often, common sense

is all that is needed. On the other hand, innovation usually requires highly sophisticated technology, as well as a

huge investment.

FIG (5):- Kaizen vs. Innovation

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If you look at a diagram of Kaizen vs. Innovation, Kaizen is a constant slope, while innovation is a staircase.

Often, innovation does not bring the staircase effect, however, because it lacks the Kaizen strategy to go along

with it. Once a new system has been installed as a result of new innovation, it is subject to steady deterioration

unless continuing efforts are made to first maintain it and then improve on it. There is no such thing as static or

constant. All systems are subject to deteriorate unless a continuing effort is made to maintain or improve, as you

can see in the figure below.

FIG (6):- Actual Pattern for Innovation without maintenance

The worst companies are those that do nothing but maintenance (no internal drive for Kaizen OR innovation).

Improvement by definition is slow, gradual and often invisible with effects that are felt over the long run. In a

slow-growth economy, Kaizen often has a better payoff than innovation does. For example: it's difficult to

increase sales by 10% but it's not so difficult to cut manufacturing costs by 10%. However, because Western

management is so focused on the short term and immediate results, often the Kaizen approach is not given the

opportunity. Western management philosophy might be "I don't care what you do or how you do it. I want the

results- and I want it now!" If profit is the only means to measure performance of top management, then they

will be reluctant to initiate improvements that risk hurting short-term profits, even if the long-term benefits of

such change are obvious low. Kaizen requires virtually everyone's personal efforts and the knowledge that with

that effort and time, improvements will be made. Management must make a conscious and continuous effort to

support it. It requires a substantial management commitment of time and effort. Investing in Kaizen means

investing people, not capital.

VII. MANAGEMENT SUPPORT OF KAIZEN

If the benefits of Kaizen come gradually, and its effects are felt only on a long-term basis, it is obvious that

Kaizen can thrive only under top management that has a genuine concern for the long-term health of the

company. One of the major differences between Japanese and Western management styles is their time frames.

Japanese management has a long-term perspective and Western managers tend to look for shorter-term results.

Unless top management is determined to introduce Kaizen as a top priority, any effort to introduce Kaizen to the

company will be short lived. Kaizen starts with the identification of problems. In the Western hire-and fire

environment, identification of a problem often means a negative performance review and may even carry the

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risk of dismissal. Superiors are busy finding fault with subordinates, and subordinates are busy covering up

problems. Changing the corporate culture to accommodate and foster Kaizen - to encourage everybody to admit

problems and to work out plans for their solution - will require sweeping changes in personnel practices and the

way people work with each other. Kaizen's introduction and direction must be top-down, but the suggestions

for Kaizen should be bottom up, since the best suggestions for improvement usually come from those closest to

the problem. Western Management will be required to introduce process-oriented criteria at every level, which

will necessitate company-wide retraining programs as well as restructuring of the planning and control systems.

The benefits of Kaizen are obvious to those who have introduced it. Kaizen leads to improved quality and

greater productivity. Where Kaizen is introduced for the first time, management may easily see productivity

increase by 30 percent, 50 percent and even 100 percent and more, all without any major capital investments.

Kaizen helps lower the breakeven point. It helps management to become more attentive to customer needs and

build a system that takes customer requirements into account. The Kaizen strategy strives to give undivided

attention to both process and result. It is the effort that counts when we are talking about process-improvement,

and management should develop a system that rewards the efforts of both workers and managers, and not just

the recognition of results. Kaizen does not replace or preclude innovation. Rather, the two are complementary.

Ideally, innovation should take off after Kaizen has been exhausted, and Kaizen should follow as soon as

innovation is initiated. Kaizen and innovation are inseparable ingredients in progress. The Kaizen concept is

valid not only in Japan, but in other countries. All people have an instinctive desire to improve themselves.

Although it is true that cultural factors affect an individual's behavior, it is also true that the individual's

behavior can be measured and affected through a series of factors or processes. Thus, it is always possible

regardless of the culture, to break behavior down into processes and to establish control points and check points.

This is why such management tools and decision-making and problem solving have a universal validity.

After the elimination of waste, the management focus for Kaizen should include:

Achieving maximum efficiency and quality

Eliminating processes that cause human fatigue

Maximizing utilization of facilities, tools etc.

An open management style that allows questioning of the existing systems and processes.

Providing opportunities for employees to learn and encouraging them to do so

Encouraging teamwork and cooperation.

Striving for continuous improvement at all levels.

Improving systems and processes.

Kaizen is a culture initiative. Your organization must have leadership that encourages and incents people to

continuously improve their ability to meet expectations of high quality, low cost, and on-time delivery.

7.1 Steps in Kaizen Implementation

Identify specific point for improvement in one‟s own work area.

Analyze the root cause of the problem using QC tools and develop.

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Implement the kaizen and quantify.

Standardize the improvement through proper documentation.

Deploy horizontally if applicable.

Fill in the improvements in the standard format and submit for evaluation.

Audit after 3 months.

7.2 Kaizen Benefits

Kaizen Reduces Waste- like inventory waste, time waste, workers motion

Kaizen Improves space utilization, product quality

Results in higher employee morale and job satisfaction, and lower turn-over.

Toyota is well-known as one of the leaders in using Kaizen. In 1999 at one U.S. plant, 7,000 Toyota

employees submitted over 75,000 suggestions, of which 99% were implemented.

Eliminating processes that cause human fatigue.

Improvement in individual people capabilities.

Improvements for new products (ideas)

Improving systems and processes

Achieving maximum efficiency and quality

An open management style that allows questioning of the existing systems and processes

Machine capability improvement (minimum down-time)

Striving for continuous improvement at all levels

Quality improvement.

Improvement in customer service and customer relations.

Improvement in production aids (fixtures, tools, etc.).

VIII. NEED AND SCOPE

Kaizen is the means to achieve a corporate strategy, not the strategy. Every corporation needs to make a radical

change, or some change at least, to survive in this very competitive, rapidly changing world. The most important

challenge facing top management today, especially in a manufacturing company, is to establish a target about

where they want to take the company in the next two, five and ten years. In manufacturing, there are only two

systems. One is the batch or queue production system, and the other is what we call just-in-time (JIT) or the

Toyota production system. One of the most urgent tasks for top management is to choose the strategy, and say

that we have decided to change to the just-in-time production system to be able to survive in the new

millennium. Kaizen is misunderstood by most people. They say Kaizen is small step improvement and this is

the age of big jumps, but in my way of thinking, the biggest jump is making the transformation from the batch

mode to JIT.

8.1 Need in The Indian Corporate Sector

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I see that Indian managers are extremely intelligent. They are abreast with latest technologies and developments.

But the problem is that they completely isolate themselves from reality. They are under the impression that real

knowledge can be gained only by reading books and attending lectures. How often do they actually roll up their

sleeves and get into some action? They really need to make more effort [at getting into the thick of action]. They

have immense knowledge, but what they lack is wisdom that comes by doing things yourself.

8.3 Kaizen Success Storis In India

Following Indian organization has implemented kaizen effectively:

Thermax Limited

Tata Motors

TVS Motor Company

Mahindra & Mahindra Limit

Hero Honda Motors Limited

Bajaj Auto

8.4 KAIZEN- Reasons for Failure

Top management may not support it

Workers are not properly motivated

Participants are not properly trained

The efforts of failure by the group members are criticized

Improvements are a part of daily routine --- this basic concepts are ignored

Participants are always found with lot of work pressure

8.5 KAIZEN Activities- Tips

Discard conventional fixed ideas.

Think of how to do it, not why it cannot be done.

Do not make excuses. Start by questioning current practices.

Do not seek perfection. Do it right away even if for only 50% of target.

Correct it right away, if you make a mistake.

Ask 'WHY?" five times and seek root causes.

KAIZEN ideas are infinite

8.6 Kaizen Measurment

Kaizen Result Can Be Measured In Many Ways As Below.

Number of kaizens completed per employee per year.

Percentage participation level of employees.

Economic benefits in Rupees …… …… and as % to net sales

Qualitative benefits measured in terms of:

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Near miss accidents.

Delivery service level improvements, etc.

IX. CASE STUDY

SAMSUNG CASE STUDY

9.1 Introduction

Samsung Electronics France is the French subsidiary of Samsung, one of the world‟s largest manufacturers of

consumer and business electronic products. Its diverse product lines include audio and video,

telecommunications, and information systems products, as well as appliances and semiconductors. Samsung

rapidly and continuously develops and introduces new products to the market, which are sold through both retail

and dealer channels. The quantity, diversity and technical nature of its products requires Samsung to provide

extensive customer service operations.

Samsung consolidated its three outsourced call centers in France onto a single Cosmo Call Universe contact

center platform hosted by Orange Business Services (France Telecom) and fully integrated with Samsung‟s SAP

CRM system. Samsung used the flexibility of the platform to restructure so that customers and dealers now call

a single service number, regardless of the product.

9.2 Flexibility needed for lower cost, better service

To support its many products in the French market, Samsung had three outsourced call centers, each for specific

product groups, and each with a different phone number and its own team of agents and specialists. With 50 new

products each month, the specialists required much training. The teams were located near the French headquarters

for training access, but this location was not cost effective for the team‟s non specialized agents. A more efficient

call center structure was desired.

Also, Samsung was providing and maintaining the equipment used by its outsourcers, managing the phone

service providers, and keeping a specialist on staff to support the phones. The systems had limited CRM

integration capability and were inflexible. Facing these costs and limitations, Samsung decided to replace its call

center systems and improve its customer service.

9.3 Premise-based to Hosted Contact Center

Samsung wanted the scalability and flexibility that a hosted IP based system provided, so that it could easily add

and drop agents, change sites or even outsourcers, and monitor agents from anywhere via the internet. It

preferred a hosted model with a monthly fee for usage, rather than a new premise-based system with a large

capital investment. It wanted a complete package of services from a top provider, and a service level agreement,

things that would let Samsung focus on training specialists and serving customers, rather than on maintaining

call center equipment and managing phone service.

9.4 Samsung Outsources its Call Center Platform as well as its Agents

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contact center built on the Cosmo Call Universe platform, and included all telephone service. Samsung has

achieved better control over its operations. The Tenant Self Administration capabilities of Cosmo Call Universe

provide complete and uniform reporting, administrative visibility and operational control of its outsourced agents.

Supervisors can manage the system from any location that has an internet connection. In addition, Samsung used

the flexibility of the Cosmo Call Universe platform to reorganize its call centers from a product line organization

to a Tier 1 and Tier 2 structure. Tier 2 product specialists stay close to headquarters for cost effective training,

while less-skilled Tier 1 agents can work anywhere, including home and offshore.

Following its call center reorganization, Samsung replaced its original Magic service desk application with a full

SAP CRM integration. With SAP, customer service ticket and account information is now instantly available to

any Tier 2 specialist in any location when a call is transferred, no matter where it was originally answered.

X. LOWER COSTS, BETTER SERVICE, AND GREATER CUSTOMER

10.1 Satisfaction:

Using its new hosted Cosmo Call Universe contact center platform, Samsung has improved the quality of its

customer service and increased customer satisfaction, while simultaneously reducing its costs. One major cost

reduction is the elimination of system maintenance and support burdens.

More important, Samsung‟s Customer Service operations are now simpler and faster for both agents and

customers. With SAP fully integrated into the Cosmo Call Universe platform, customer account information

appears on the Tier 1 agent screen when a call is answered. And by automatically sending account and service

ticket information to the Tier 2 specialist, the time spent looking up the caller account information or having the

caller restate their issue is eliminated. Since 70% of Samsung‟s calls are transferred, average call time has

dropped from 8 minutes to 7.25 minutes, and total outsourcer costs are down 13%. Shorter calls are not only a

cost saving for Samsung, but a support experience enhancement for its customers, and therefore a true

competitive advantage.

The Cosmo Call Universe platform provides Samsung with the ability to easily manage its outsourced agents,

and the flexibility to add or drop agents and sites as needed. It can now set up new test site locations for Tier 1

agents using commercial internet access. Now Samsung can quickly and easily evaluate the feasibility and cost

of a potential new site before deciding to make it permanent. Samsung‟s new hosted contact center in France is

a success by every measure, strengthening Samsung‟s position as a global leader in customer service. It is being

studied by other Samsung European Subsidiaries for their consideration as a model for deployment.

10.2 Enterprise Value and Benefit Provided: -

• Convenient Single phone number for all customer service calls

• Average call time dropped by 45 seconds, reducing outsourcer cost by 13%

• Better first call resolution rate

• Flexibility to locate outsourced agents in the most cost effective places

• Outsourced agents monitored centrally via internet to insure high service quality

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XI. CONCLUSION

Kaizen continuous improvement by the small steps – should be realized due to each employee‟s involvement.

Kaizen improvements should proceed without any additional investment or through small investments.

It means small improvements done consistently over a long period of time. If you integrate the kaizen principles

into your workplace, you will see noticeable improvements right away, and great improvements in the long

term. You will see improvements in at the workstations, in the office and in your employees. And you will get

these results without spending a ton of money on new equipment. Because the results come not from fancy

innovation, but from the creation of a workforce that is actively involved in making small improvements to the

work flow.

REFERENCES

Books

[1] Imai, Masaaki (1986) Kaizen: The Key to Japan’s Competitive Success. McGraw-Hill Publishing

Company.

Gandhi TK, Puopolo AL, Dasse P, et al. Obstacles to collaborative quality improvement: the case of

ambulatory general medical care. Int J Qual Health Care, 2000; 12:115–23.

[2] Industrial organization and management- O.P. khanna.

[3] Industrial Engineering –L.C. Jhamb,

[4] Kaizen example and other concepts taken from Gemba Kaizen – a Commonsense, Low-Cost Approach to

Management. Masaaki Imai, New York: McGraw Hill, 1997, pp 257-262.

Website

1. American Productivity & Quality Center (APQC) <http://www.apqc.org/portal/apqc/site>

2. Association for Overseas Technical Scholarship (AOTS) <http://www.aots.or.jp/eng/indexeng.html>

3. Asian Productivity Organization (APO) <http://www.apo-tokyo.org/index.htm>

4. www.kaizen.com