In a sales increase scenario, volume conceals inefficiency. Margins improve because fixed costs are spread across more units. The flaws in the cost architecture remain invisible. In a sales decrease scenario, there is nowhere to hide. Every structural loss, every unplanned consumption, every minute of desynchronisation in the flow becomes financially visible — immediately. Strategic Kaizen governs in both directions. This is the proof that it governs when the conditions are hardest.
In a sales decrease scenario, cost architecture is not a choice. It is the only strategy available to management. Everything else is a reaction. KAIZENshiro is the architecture.
AS-Company is a food manufacturer operating in a continuous production regime across 6 production modules. Core challenges identified by the Strategic Kaizen team: extending continuous production days, increasing flexibility for small lot orders (the predominant customer requirement), reducing unplanned equipment stops, saving energy, reducing WIP and raw material storage days, and reducing man×hour per product. The company joined the Strategic Kaizen methodology one year before this scenario was deployed.
Management had already established the basic Strategic Kaizen policy, including the 6-module cost of losses and waste (CLW) measurement system. Feasible Critical Cost of Losses and Waste (CCLW) to improve was identified at $27,500,000 for the next fiscal year — the financial foundation from which KAIZENshiro would be selected.
Takt profit for the standard product lot was set at $235/47 seconds, with an OEE target of 71%, a production target of 417 lots per shift, and a Speed-Based Target Profit of $300/minute. Annual target production time: 116,000 minutes per shift. The required annual KAIZENshiro was set at $5,150,000 — representing a 6.5% reduction in manufacturing cost across both production lines.
KAIZENshiro of $5,150,000 governs 12 Strategic Kaizen projects — 3 featured here, including 2 White-Collar projects targeting physical losses and informational flow. Gold bars indicate White-Collar contributions. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, New York, 2019, pp. 238–252.
Following financial and operational reconciliation, 10 Strategic Kaizen projects were selected to fulfil the annual KAIZENshiro, with 2 reserve projects. KPI owners were designated for each project. The decisive principle governing selection: economic relevance over operational preference. In a sales decrease scenario, this principle is not a guideline — it is the only discipline available to sustain profit architecture when volume contracts.
Three projects are presented here — two of which are White-Collar Strategic Kaizen. Together they contributed 33.5% ($1,702,500) of the annual KAIZENshiro, following the four-phase structure of Strategic Kaizen: Theme → Plan → Analysis & Action → Results. The remaining 66.5% came from 9 additional projects focused primarily on increasing OEE from 67% to 71%.
for Grinding Equipment “GG1”
Theme: Reduce average setup cycle time at high-capacity grinding machines from 57 minutes to 28 minutes — enabling 25 setup events per month (up from 10), increasing flexibility to accept small customer orders, and meeting the OEE contribution required by KAIZENshiro. Team: 7 members. Duration: 11 weeks (completed in 10).
Context: AS-Company processes two types of raw materials on the GG1 equipment. Each setup requires replacement of grinding rollers (fast and slow), brushes, and cleaning knives — a 57-minute operation measured from completion of emptying to quality confirmation. The equipment’s previous 6-month average OEE: 68%.
Analysis & Action: The team analysed operating parameters, set-up flow diagrams, and timed the activities of both technicians individually. Of the 57 minutes total, 43 minutes were identified as improvable — through changes in roller fixing method, external pre-setup preparation, and elimination of sequential waiting steps. After implementation, the 43 minutes decreased to 10 minutes of waste. Setup cycle time reached 24 minutes — exceeding the 28-minute target. Solutions were multiplied to 7 similar pieces of equipment. Total investment: $12,500.
From 57 to 24 minutes — 58% reduction, exceeding the 28-minute target. 43 minutes of improvable time were systematically eliminated through ECRS-AD analysis. Investment: $12,500. Solutions multiplied to 7 similar equipment. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, 2019, pp. 238–252.
of Packaging Materials
White-collar Kaizen is not about office efficiency. It is about the hidden cost of processes that no one has standardised yet — packaging used as workaround, information used as substitute for discipline, tools used where standards should be.
Theme: The difference between planned and actual consumption of packaging materials in the previous year: $310,000. Five types of packaging were selected that together exceeded standard consumption by $260,500 — 84% of the total unfavourable deviation. No effective control solutions had been found through conventional budget monitoring. Team: 14 members (managers, team leaders, specialists from across the company). Duration: 11 weeks.
Root causes identified: Operators using packaging materials as non-standardised solutions to prevent quality and technical problems. Packaging used to compensate for process deficiencies rather than solve them. Some operators untrained on packaging standards. No standardised tracking of deviations by type of use.
Solutions implemented: Re-standardisation of packaging layers per use case; substitution of expensive packaging with cheaper alternatives for specific uses; replacement of packaging-as-workaround with purpose-built technical solutions; acceptance of new standard consumption into the system. Zero project investment.
for Loading and Unloading Trucks
Theme: Over the previous 6 months: 4,580 minutes of production stoppage caused by delays in truck unloading of raw materials, and finished product storage days 18% above standard due to loading delays. Average time from gate entry to warehouse: 19 minutes. Standard target: 3 minutes. Team: 5 members (production planning manager, warehouse managers, IT specialists). Duration: 15 weeks.
Root causes: Poor real-time communication between gate, warehouse, and production planning. No prioritisation system for the 260 daily trucks. Drivers relying on phone calls to determine unloading locations. No “truck on the way” tracking. Non-standardised decision processes at every access point.
Solutions implemented: Each supplier assigned a predetermined location per warehouse. Three-level truck prioritisation system (Immediate / High / Normal). Elimination of all phone calls — driver receives an SMS in four languages with loading/unloading data and predetermined warehouse location. Real-time “truck on the way” record. IT re-design performed entirely by internal IT specialists — zero external cost.
Three projects, 33.5% of annual KAIZENshiro, $12,500 total investment. Two White-Collar projects (gold) contributed 22% — proof that the architecture of profit reaches beyond the shop floor into information flow and material standards. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, 2019, pp. 238–252.
After two years of Strategic Kaizen, AS-Company reached sustained sales growth and became measurably more competitive and profitable. The sales decrease scenario that triggered the $5,150,000 KAIZENshiro became the foundation of a new competitive position. The structural disciplines installed — OEE governance, standardised material flows, real-time truck prioritisation, packaging consumption architecture — became the permanent operating system.
Plant managers at AS-Company stated: “Through the Strategic Kaizen methodology we have a clear goal of improvements: KAIZENshiro. Now we will be able to respond better to our customers’ orders and better plan annual and multi-year productivity.” The most expensive decision was the one they chose not to make: waiting for better sales conditions to govern profit.
Source: Alin Posteucă, Manufacturing Cost Policy Deployment (MCPD): Profitability Scenarios — Systematic and Systemic Improvement of Manufacturing Costs, Routledge, New York, 2019, pp. 238–252. Dr. Alin Posteucă is the originator of the Strategic Kaizen Paradigm and the MCPD/SBTP management systems.
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