Father Sez

From and to parents - parental advice to our children on personal financial management and life.
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Applying Kaizen, the Japanese science of continual improvement in our daily lives

Monday, May 5th, 2008

                                                

Cameron wrote an excellent article on the American industrial system being “unfriendly” to continuous improvement and hence losing their leadership role. He mentioned Kaizen, the Japanese science of continuous improvement as one of the main keys that allowed the Japanese to take leadership.   

I am no expert at Kaizen, but I absolutely love the concept and the clear and simple process by which continuous improvement can and is being achieved. 

Kaizen is not a system where someone puts an idea in a suggestion in a box and the box is opened after 6 months. It’s more of a continuously ongoing carnival within the organisation. A massive living and breathing machine that comes out of ‘000’s of improvements every year, year in and year out. 

The book, Kaizen: The key to Japan’s Competitive Success gives some of the art and science of Kaizen as it is applied and practiced in the very biggest of Japanese firms.

You have to read the book to appreciate the number, type and quality of the suggestions thrown out by the system. We are talking in millions here! The prize money given is sufficient to help workers fully furnish their homes! It’s incremental improvement, little by little, step by step.

Kaizen is part of Total Quality Management (TQM), a concept, ironically, first mooted by an American, W. Edwards Deming who is also considered the father of modern quality management.  Reading Cameron’s article, something sparked in my mind.

Why can’t we apply the principles of TQM in our lives? And in our personal finances? Or are we already applying it sub consciously? 

The five pillars of TQM are:-

  • Management Commitment

Yep, my wife and I are fully committed to improving our lives. For us, our children and our extended families.

  • Employee Empowerment

If we take the family members, including all our children, as “employees of the family organisation”…..I have to say that we are empowered.

  • Fact Based Decision Making

This can be simplified at the family level. We don’t need statistical stuff. But things like the Pareto Principle and Cause and Effect Diagrams have to understood by all the family members, aka employees.

  • Continuous Improvement
  • Customer Focus

Some of the issues to be improved upon may have to be an adult issue, though children sometimes can shock us with their insight.

 This page from Mind Tools shows how to use Pareto Analysis to select the biggest issue that we should try to solve or the biggest expense that we should try to reduce.

And this page shows how we can use Cause and Effect Diagrams to help us to think through causes of a problem thoroughly. The C & E diagrams guide us to consider all possible causes of the problem.

See how Pinyo demonstrates the use of the Pareto Principle to improve personal finance.

Can we use these methods to try to reduce our commute costs, our grocery costs, our mortgage bills, increase our online income……….….or whatever?

I have not applied these rules in a formal manner at home. I have just used my own analyses and ran them with my wife before implementing some of those “frugalizing” steps that we have taken.

Now with rising costs of food that affects every single family member, maybe TQM Family Style’s time has come.

I humbly thank Shaefer’s Blog for the inspiration for this post. 

Picture Credit: Google Images

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