The plant manager from AA-Plant faced a structurally complex demand: increase output from 600 to 800 parts per shift — a 33% volume increase — by May of the fiscal year, without capital expenditure. The assembly line ran at OEE 68% against a required 75%. Takt time needed to decrease from 33 to 27 seconds. Simultaneously, the group demanded a 6% annual reduction in unit cost for 3–5 consecutive years. Raw material and utility costs were rising. Orders arrived in small, fluctuating batches.
This was not a productivity problem. It was a profit architecture problem. The assembly line was both the capacity bottleneck and the profit bottleneck — generating critical cost of losses and waste (CCLW) across the entire flow. Strategic Kaizen was deployed not to respond to financial results, but to design the future profit state before it became visible in the financial statements.
The income statement reveals yesterday. KAIZENshiro governs tomorrow. Strategic Kaizen does not respond to financial results — it architects them before they occur.
AA-Plant manufactures automotive components in a repeated-lot regime across four production modules. One product family. The assembly line is both the capacity and profit bottleneck. The company operated under Manufacturing Cost Policy Deployment (MCPD) and Speed-Based Target Profit (SBTP). Group vision: top 10 globally in five years. Five strategic drivers: synchronised and flexible production, product quality, cost reduction, systematic profitable improvement, and people development.
Transformation cost represented 22% of total manufacturing cost; material cost, 78%. Previous-year manufacturing cost: $93,575,952. Target for the next fiscal year: $122,640,000. Takt profit for the previous year: $37.8/33 seconds at OEE 68%. Target takt profit: $40.25/27 seconds at OEE 75%, satisfying SBTP of $89.4/minute. Available production time increased from 357,408 to 393,200 minutes. The annual KAIZENshiro of $7,500,000 simultaneously satisfies: (1) profit target of $35,259,000; (2) 6% unit cost reduction; and (3) price reduction from $360 to $350 per unit requested by the group.
KAIZENshiro of $7,500,000 simultaneously satisfies profit, cost, and price obligations. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, New York, 2019, pp. 217–238.
The $7,500,000 KAIZENshiro was deployed across 17 Strategic Kaizen projects through financial and operational catchball. Ten projects addressed KAIZENshiro directly. Four addressed operational constraints. Three served as reserve. The cardinal principle: economic relevance precedes operational preference.
Three projects contributed 60.5% of the annual KAIZENshiro. Each followed four phases: Theme → Plan → Analysis & Action → Results. All takt profit and takt time targets were simultaneously met. Zero capital expenditure across all three.
to the Takt Time
Theme: Reduce cycle time across all 12 workstations of the DGF assembly line from 33 to 27 seconds. Five operations exceeded the target. The assembly line was declared the Must Win Strategic Kaizen zone. Team: 7 members. Duration: 10 weeks.
Analysis & Action: Video analysis of five exceeding operations revealed recoverable Auxiliary Function (AF) seconds: line loading (9s), manual assembly positioning (5s), cable fixing redistributable to next station (3s), test equipment reset geometry (3s), conveyor chain speed (4s). ECRS-AD analysis confirmed: no automation, no investment. Work method redesign through MDC was sufficient for all five operations.
Five operations exceeded the 27-second takt time target. Rust zones represent AF seconds recoverable through ECRS-AD without investment. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, 2019, pp. 217–238.
with the Assembly Line
Theme: Eliminate the second most frequent cause of assembly line stoppage: desynchronisation between the “S” painting equipment and the assembly line. Over six months: 74 incidents, 2,830 minutes of line stoppage due to missing painted parts. Investment: $4,350.
Solutions: Real-time tracking of painted parts stock with hourly order control and full scrap/rework traceability. Standardised vertical storage with visual control. Full redesign of production planning and distribution — synchronised to the 27-second takt time from Project 1. The desynchronisation eliminated structurally.
Processing Equipment “M”
Theme: Reach 27-second cycle time across all 7 operations of “M” stamping/bending equipment feeding the assembly line. Two operations exceeded target: Op.1 (34.9s) and Op.6 (34.2s). Total recoverable time: 24.4 seconds. Team: 9 members. 8 weeks (completed in 6).
Analysis & Action: Op.1: two unnecessary movements, unnecessary sheet overturning. Op.6: extended feed times, excess bending durations, inefficient discharge. Solutions: new packaging standard with supplier, increased feeding speed, reduced operator distances, reduced profiler descent. Zero investment. Both operations reached 25 seconds — exceeding target.
Three projects. 60.5% of annual KAIZENshiro. Zero capital expenditure. Source: Alin Posteucă, MCPD: Profitability Scenarios, Routledge, 2019, pp. 217–238.
Visual management was implemented at all levels: panels showing vision and strategic objectives, balanced scorecards by level, CLW and CCLW evolution, KAIZENshiro stratification over three years, takt profit and takt time projections for the next five years. A Strategic Kaizen project is complete when the effects of implemented solutions are visible and repeatable over time. Repeatability is the proof of architecture, not of effort.
Source: Alin Posteucă, Manufacturing Cost Policy Deployment (MCPD): Profitability Scenarios, Routledge, New York, 2019, pp. 217–238. Dr. Alin Posteucă is the originator of the Strategic Kaizen Paradigm and the MCPD/SBTP management systems.