Strategic Kaizen: KaizenShiro Budgeting

The concept of Strategic KAIZEN plays a decisive role both in approaching the Manufacturing Cost Policy Deployment (MCPD) system and in the new Speed-Based Target Profit (SBTP) thinking paradigm.

The annual and multiannual plans of the departments and the interdepartmental ones for improving the costs are always the big challenge. The production department and the management and cost accounting department seek to involve all departments to look for feasible ways to reduce the current level of costs. Even if the top management establishes the short-term target profit and the long-term, medium and short-term sales / profit ratio and then the production and sales volumes are established for 3-5 years, often the expected level of cost reduction is not in line with profit and competitiveness needs. Even if in particular all opportunities to improve variable costs (especially of variable costs considered controllable) are analyzed, the challenges are stringent and often difficult to meet. Moreover, the results of the improvement projects seem to have good results in terms of cost, but in the financial statements these results are not very visible.

In this context, KAIZENshiro Budgeting represents the new approach of fulfilling the target value of improving manufacturing costs by reducing / eliminating the cost of losses and waste with the help of Strategic KAIZEN and KAIKAKU (by total company, by departments, by product families and especially by products).

Source: Alin Posteuca on LinkedIn