critical success factors for sustainable kaizen

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION IN MANUFACTURING INDUSTRY: THE CASE OF PEACOCK SHOES MANUFACTURING INDUSTRY

BY: HAFTU HAILU A THESIS SUBMITTED TO EiT - THE SCHOOL OF MECHANICAL AND INDUSTRIAL ENGINEERING IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTERS OF SCIENCE IN KAIZEN (QUALITY AND PRODUCTIVITY IMPROVEMENT) ADVISOR: ABDELKADIR KEDIR (DR.) CO – ADVISOR: MR. GETACHEW BASSA

ETHIOPIA INSTITUTE OF TECHNOLOGY – MEKELLE (EiT – M) DEPARTMENT OF INDUSTRIAL ENGINEERING MEKELLE UNIVERSITY

SEPTEMBER, 2015

MEKELLE UNIVERSITY ETHIOPIA INSTITUTE OF TECHNOLOGY SCHOOL OF MECHANICAL AND INDUSTRIAL ENGINEERING MASTER’S PROGRAM FINAL THESIS ACCEPTANCE APPROVAL FORM 1. STUDENT’S NAME: HAFTU HAILU 2. THESIS TOPIC: CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION

IN

MANUFACTURING

INDUSTRY:

THE

CASE

OF

PEACOCK SHOES MANUFACTURING INDUSTRY. 3. THIS IS TO CERTIFY THAT MR. HAFTU HAILU HAS INCORPORATED ALL THE COMMENT’S FORWARDED TO HIM BY THE EXTERNAL AND INTERNAL EXAMINERS DURING THE THESIS DEFENSE HELD ON SEPTEMBER 5, 2015

APPROVED BY 1. _______________

SIGNITURE _______________

DATE _______________

EXTERNAL EXAMINER 2. _______________

_______________

_______________

INTERNAL EXAMINER 3. ________________

________________

______________

ADVISOR 4. ________________ CHAIRPERSON

______________

________________

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION

2015

Declaration

I, Mr. Haftu Hailu hereby announce that the thesis entitled ―Critical Success factors for sustainable kaizen implementation in manufacturing industry‖ submitted by me for the award of Master Degree in Kaizen (Quality and Productivity Improvement) of Ethiopian institute of technology, Mekelle university at Mekelle is my original work and it has not been presented for the award of any other degree, Diploma, Fellowship or any other similar titles of any other university or institutions.

Place: Ethiopia Institute of Technology, Mekelle University, Tigray, Ethiopia

Signature Student:

_______________

Date _________________

Haftu Hailu Advisor:

________________

________________

ABDELKADIR KEDIR (PhD)

Date: September 08, 2015

i

HAFTU HAILU


2015

Acknowledgements

A research cannot be effectively getting done without the guidance, critics, inspiration and partnership of many individuals who have assisted in different ways with the completion of the research. I would like to thank all those who have heartened, stirred and abetted me in completing this research paper as scheduled. First of all, I would like to thank the Almighty GOD for giving me the inspiration to start and patience to finalize this thesis work. Next, I would like to express my deepest and heartfelt thanks to my advisor Dr. ABDELKADIR KEDIR and Co- advisor GETACHEW BASSA for their unlimited support, creative suggestions, direction, advice, and patience with me during the preparation for this thesis. I would like to thank ASSEFA MISGUN for his friendly approach on instructing the application of SPSS software. My appreciation goes to GETAHUN TADESSE, General Director of Ethiopian Kaizen Institute for his continuous intensive care for the period of studying the research. My thanks also go to CHALEW ALEHEGN Kaizen officer and all the main management teams, kaizen officer, facilitators, team leaders and kaizen promotion team members of Peacock shoe manufacturing industry, who responded to my research questionnaires and provided all data which are used in this research work. Last, but not least, I would like to thank my family; EKI – medium & higher manufacturing industries sector directors; EKI - Chemical & related industry directorate staffs, my friends and colleagues, for their darling, encouragement, patience and support throughout the study.

i

HAFTU HAILU


2015

List of abbreviations CSF……………………..Critical Success Factor CAI……………………..Cronbach’s Alpha Index EKI……………………..Ethiopian Kaizen Institute FDRE…………………..Federal Democratic Republic of Ethiopia GDP…………………….Growth Domestic Product GRIPS………………….National Graduate Institute for Policy Studies IPD……………………..Initiative for Policy Dialogue JICA……………………Japan International Cooperation Agency JUSE……………………Union of Japanese Science and Engineering KMO……………………Kaiser – Meyer - Olkin PCA…………………….Principal component analysis SAM……………………Measure of Sampling Adequacy SPSS……………………Statistical Package for Social Science MOI……………………Ministry of Industry PDCA…………………..Deming cycle stands for Plan – Do – Check – Act

ii

HAFTU HAILU


2015

Table of contents

Acknowledgements.................................................................................................................................... i List of abbreviations .................................................................................................................................. ii Table of contents ..................................................................................................................................... iii List of tables ............................................................................................................................................. vi List of figures ........................................................................................................................................... vii Abstract .................................................................................................................................................. viii CHAPTER ONE: INTRODUCTION ................................................................................................................ 1 1.1.

Background of the study ............................................................................................................... 1

1.2.

Problem statement ....................................................................................................................... 2

1.3.

Research questions ....................................................................................................................... 3

1.4.

Objectives of the study ................................................................................................................. 4

1.4.1.

The general objective ................................................................................................................ 4

1.4.2.

Specific objectives ..................................................................................................................... 4

1.5.

Scope of the study ........................................................................................................................ 4

1.6.

Limitation of the study .................................................................................................................. 4

1.7.

Significance of the study ............................................................................................................... 4

1.8.

Structure of the thesis .................................................................................................................. 5

CHAPTER TWO: LITERATURE REVIEW ....................................................................................................... 6 2.1.

The Kaizen Philosophy in Manufacturing Industries..................................................................... 6

2.2.

Kaizen Philosophy Principles ......................................................................................................... 7

2.3.

The Pillars of Kaizen ...................................................................................................................... 8

2.3.1.

Housekeeping............................................................................................................................ 8

2.3.2.

Waste Elimination ..................................................................................................................... 8

2.3.3.

Standardization ......................................................................................................................... 9

2.4.

Kaizen Implementation Problems ............................................................................................... 10

2.5.

Critical Success Factors for Kaizen Implementation ................................................................... 11

2.6.

Some identified CSF for Kaizen philosophy implementation...................................................... 12

2.7.

The Challenges of Kaizen Implementation ................................................................................. 15

iii

HAFTU HAILU


2015

2.8.

The Benefits of Kaizen Implementation...................................................................................... 15

2.9.

Successful Kaizen Implementation in Ethiopia ........................................................................... 16

2.10.

Idea Generation Techniques ................................................................................................... 16

2.11.

Hierarchy of Kaizen Involvement ............................................................................................ 17

2.12.

Success indicators in Kaizen implementation ......................................................................... 18

2.13.

The Power of Self-discipline in Sustaining Kaizen implementation ........................................ 18

CHAPTER THREE: RESEARCH METHODOLOGY ........................................................................................ 19 3.1.

Study area Description and study period.................................................................................... 19

3.2.

Study Design................................................................................................................................ 19

3.3.

Research Method Type and sources of Data .............................................................................. 19

3.4.

Data collection Instruments ........................................................................................................ 20

3.4.1.

Interviews................................................................................................................................ 20

3.4.2.

Questionnaire Design .............................................................................................................. 20

3.5.

Pretesting the questionnaire ...................................................................................................... 20

3.6.

Target Population........................................................................................................................ 21

3.7.

Sample Size and Sampling Techniques ....................................................................................... 21

3.8.

Data analysis ............................................................................................................................... 22

3.8.1.

Statistical validation for the questionnaire ............................................................................. 22

3.8.2.

Descriptive data analysis ......................................................................................................... 23

3.8.3.

Factor feasibility analysis ........................................................................................................ 23

3.9. Theoretical model that shows the relationship between critical success factors and success indicators ................................................................................................................................................ 23 CHAPTER FOUR: RESULT AND DISCUSSION ............................................................................................ 26 4.1.

Response rate of questionnaire .................................................................................................. 26

4.2.

Descriptive analysis of demographic factors .............................................................................. 27

4.3.

Statistical Analysis of the questionnaire ..................................................................................... 27

4.3.1.

Reliability Test Result .............................................................................................................. 28

4.3.2.

Descriptive statistics analysis - factors affecting Kaizen implementation .............................. 28

4.3.3.

Factor analysis feasibility ........................................................................................................ 28

4.4.

Identification of the critical factors............................................................................................. 31

4.5.

Mentioning of the eight critical factors ...................................................................................... 35

4.6.

Eight Critical Success Factors Interpretation .............................................................................. 38

iv

HAFTU HAILU


2015

4.7.

Multiple regression analysis ....................................................................................................... 42

4.8.

Results of hypothesis testing ...................................................................................................... 47

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION........................................................................ 56 5.1.

Summary of the research............................................................................................................ 56

5.2.

Conclusions from the study ........................................................................................................ 57

5.3.

Recommendations from the research ........................................................................................ 58

5.4.

Opportunities for further research ............................................................................................. 58

References .............................................................................................................................................. 60 Appendices.............................................................................................................................................. 63 Appendix I: Structured questionnaire..................................................................................................... 63 Appendix II: Interview questions ............................................................................................................ 68 Appendix III: Achievements - Part one: Quantitative Results.................................................................. 68 Appendix IV: Peacock Shoes Kaizen Organizational Structure ............................................................... 71

v

HAFTU HAILU


2015

List of tables Table 3.1: Sample size and collected questionnaires…………………………………………….22 Table 4.1: Experience * Qualification * Gender Cross tabulation………………………...…….27 Table 4.2 KMO and Bartlett’s Test Measure of Sampling Adequacy as a whole …….………...29 Table 4.3 Total Variance Explained Initial Eigenvalues………………………………….……..30 Table 4.4 Total variance explained extraction sums of squared loadings……………………….30 Table 4.5Total variance explained – rotation sum of square loadings...................................…...32 Table 4.6 Rotated factor matrix………………………………………………………………….33 Table 4.7 Mentioning of the eight critical success factors….........................................................36 Table 4.8 summary result from regression model - customer satisfaction………………..…..…43 Table 4.9 summary result from regression model - staff performance………………..…...…….44 Table 4.10 summary result from regression model – cost reduction…………………………….46

vi

HAFTU HAILU


2015

List of figures

Figure 2.1: Benefits of 5S-KAIZEN in Ethiopia (MOI: GTP – II, 2015)……………………….16 Figure 3.1: Conceptual model that shows relationship between critical success factors and success indicators…………………………………………………………………...……………24 Figure: 4.1 Respondent type of the company………………………………...………………….26 Figure: 4.2 Surveyed main sections of the company…………………………………………….26 Figure 4.3 Scree plot…………………………………………..…………………………………31 Figure 4.4: The theoretical model for the relation between the CSF and indicators ……………49 Figure 4.5 Preparation …………………...………………………………………………………50 Figure 4.6 Planning …………………...…………………………………………………………51 Figure 4.7 Implementation …………………...………………………………………….………52 Figure 4.8 Evaluation …………………...………………………………………………….……53 Figure 4.9: Deming, problem Solving, idea generation soft techniques matrix……..…………..54

vii

HAFTU HAILU


2015

Abstract KAIZEN means continuous improvement involving everyone from top management to shop floor workers. A Peacock shoe is one of the leather products manufacturing industry which is currently implementing Kaizen. The company attains greater end result by recording monetary result of Birr 33,244,820 in implementation for the past two years. This achievement enables the company to be role model. Consequently, this thesis focuses on identifying critical success factors for sustainable Kaizen implementation. The study design is descriptive research. Both qualitative and quantitative data were used. This thesis presents the results of a survey with final 32 main items which are factors affecting for basic Kaizen implementation, 19 success indicators and the theoretical model that demonstrates the relationship between critical success factors and success indicators. The questionnaire was applied to 153 employees of the company from whole departments. The survey was validated using statistical validation using the Cronbach alpha index; the result is 0.908.This shows that there is an internal consistency among items. The KMO index value was obtained for the 32 items and had a value of 0.642 with Bartlett's Test of Sphericity Approx. Chi-Square 4503.007, degree of freedom 496 and significance value 0.000. This result allows for further factor analysis. A factor analysis by principal components and varimax rotation was applied for finding the critical success factors. Finding designates that 32 items are merged in to eight critical success factors: preparations, process control, planning, implementation, continual evaluation, effective leadership, recognition & reward, employee’s attitude. All the eight factors together explain for 76.941 % of the variance in affecting for successful Kaizen implementation. Multiple regression model analysis was used to know the relationship between critical success factors and success indicators. The result showed preparation, planning, effective leadership, recognition & reward, employee’s attitude have relationship with staff performance, customer satisfaction, cost reduction; process control and continual evaluation have relation with staff performance and cost reduction; whereas implementation has only relation with cost reduction. Finally, the result shows Peacock shoes manufacturing industry should always practice the identified critical success factors for sustaining Kaizen implementation in order to achieve sustainable improvements. Key words: Kaizen, Critical Success Factor, Success Indicator, Factor analysis, Peacock

viii

HAFTU HAILU


2015

CHAPTER ONE: INTRODUCTION 1.1.

Background of the study

Manufacturing industries are facing challenges due to the fastest changes of pace in technology and market demands (Jackson, 2000). In recent years, manufacturing industries have also experienced unprecedented degrees of change in management, process technology, customer expectations, supplier attitudes and competitive behavior (Beach, Muhlemann, and price 2000 p7). The above statements show that industries which have manufacturing systems, with high dependability, have implemented world-class manufacturing strategies such as kaizen philosophy. Change is now a permanent feature of the business environment and organizations, which adapt to this new environment, are more likely to gain a significant competitive advantage according to Mfowabo Ncube (2006) showed on his research. Due to the implementation of Kaizen, Japan’s firms become successful and the 1970 the country’s export was greater than its import (Bisht, 2013, p.167) following the success of Japan’s firms, Japan takes initiative to support Africa under Yokohama action plan. Ethiopia has experienced a fast economic growth in recent years with the annual GDP growth rate average 11%. The industry sector also shows growth at an alarming rate for the past four years in the local share of production quantity ranging from 10.30 % to 14.3 %. The GDP share of the manufacturing sector ranging from 4.4 % to 4.6 % which is less than those of other countries with the similar income level (MOI: GTP - II, 2015). In Ethiopia manufacturing sector, the slow development of the private sector, the poor quality control, and the low productivity have been major obstacles for promoting exports and domestic and foreign investments. For sustainable economic growth and poverty reduction in Ethiopia, it is essential to develop the private sector or to strengthen the competitiveness of its economy through improving the quality control and productivity. Therefore, to tackle the above stated problems, Ethiopian late prime minister Meles Zenawi asked support concerning the transferability of Kaizen to Ethiopia from Japan. Based on this, JICA assisted for the strengthening the private sector for the past three years. Besides to this, JICA will also support the sector for the next five years in order to achieve the stretched goals setting in GTP -II. Therefore, Peacock shoes manufacturing industry is one of the export oriented industry which have implemented the kaizen philosophy.

1

HAFTU HAILU


2015

The company is starting implementing the first level of kaizen since Nov 2013. All the manufacturing industry employees have got the first level of kaizen training which was held from 2013/10/26 to 2013/11/19 in the industry. The company has already established the kaizen organizational structure and registered 40 QC Circles. After the completion of the training, the company implemented the philosophy. At the time of implementation, the company were achieving substantial improvements. The achievements are tangible, intangible and physical effects. In general the gains were like: Reduction of defect products from 49 to 20 pair of shoes per month; capable of in time and on time deliveries of products to the customer; Reduction of inventory like spare parts, semi-finished and finished products results in 1,080,520 birr saving; Improvements in daily production from 700 to 960 pair of shoes and from 2.73 to 3.75 pair of shoes per operator. However this is somewhat small relative to global shoes manufacturing ranges from 5 to 6 (MOI: GTP – II, 2015); Existing high employees morale and capable of generating 20 new improvement ideas. After implementing these ideas the company earns 160,000 Ethiopian birr; the company establishes the safety policy, healthy workplace organization; presence of healthy and attractive workplace organization. These all builds impression on local and foreign customers that provides surplus production orders. The company was also a role model within the country. In general, following successful Kaizen implementation, the company able to earn 33,244,820 birr for the past two years - 2013 to 2015 (Appendix III). This achievement enabled them to get first rank from export oriented industries and got excellence award from Ethiopian kaizen institute since 2014 (Peacock kaizen officereport, May 2015). However, the company is facing challenges on sustaining Kaizen implementation and substantial improvements for the past three months. This thesis addresses on identifying critical success factors that enables the company to sustain the Kaizen implementation to the discrete production sector with the focus on Peacock shoes manufacturing industry. This research will be done by listing factors that affect Kaizen implementation from previous researchers reported from different companies and countries.

1.2.

Problem statement

There have been several studies on the reasons why companies implement Kaizen, the benefits to be derived from Kaizen, as well as the tools and techniques of Kaizen have been well researched and documented. However, little is known about the reasons for failed Kaizen implementation,

2

HAFTU HAILU


2015

how to avoid the pitfalls and what to do to ensure the success of Kaizen in Ethiopia manufacturing context. It is clear that despite the popularity and growth Kaizen philosophy takes in Ethiopia. Most of the manufacturing industries are not successful and even the few successful manufacturing industries like peacock are backfiring and suffering from a lot of challenges on sustaining the Kaizen implementation and substantial improvements (peacock Kaizen office, 2015 report). Most of the problems are internal, but some external problems also exist. In general the problems like: 

High machine breakdowns.



High concentration of wastes.



Lower employee involvement for the Kaizen activities, and



High defects and reworks are few due mentioned.

With this in mind, the researcher has, therefore, focused on Peacock shoes manufacturing with a view to determine the questions: 

What are the critical success factors for sustainable kaizen implementation in Peacock manufacturing industry? and



What are the main critical success factors of Kaizen reported in the previous researchers?

Therefore, the researcher believed that identifying few critical success factors for sustainable Kaizen implementation in this company would lead them on sustaining the Kaizen activities, the company could be competitive globally and leading line of existing companies in the country.

1.3.

Research questions

In order to develop a strategy to conduct this research in a systematic manner, besides to the above questions, a number of research questions are highlighted to enable the researcher to find an appropriate solution to the main problem. The research questions are: 

What have been the biggest obstacles in sustaining Kaizen implementation and results from the implementation?



What have been the biggest contributors in sustaining the Kaizen implementation and results from the implementation?



What relationships are existing between critical success factors and success indicators?

3

HAFTU HAILU


1.4.

2015

Objectives of the study

1.4.1. The general objective The general objective of this research was to determine the critical success factors for sustainable Kaizen philosophy implementations in manufacturing industry, Peacock shoes.

1.4.2. Specific objectives The specific objectives of this study were to:  Identify the challenges and driving forces during the implementation period.  Clearly identify tools and techniques existing in Kaizen implementation.  Understand the performance of the organization in accordance with the achievements.  Propose the theoretical model for the relationship between the success factors and the success indicators.

1.5.

Scope of the study

The range of this research paper is for determining the critical success factors for sustainable kaizen implementation in manufacturing industries: the case of peacock shoes all departments. The study focuses only on kaizen implementation and collecting primary data will be based on the required questionnaire filled by the respondents (i.e. main development team, facilitators, team leaders and members). In addition to that, the research did not analyze other issues and points within the company.

1.6.

Limitation of the study

The research is limited to one company, and the study was undertaken in view of peacock shoes manufacturing industry. The identified critical factors and model developed also works only for the company. Other limitations include the absence of any local studies that shows the critical success factors for sustainable Kaizen implementation at the moment. Due to this fact the factors affecting for sustainable Kaizen implementation for successful completion of the research were taken from out of the country.

1.7.

Significance of the study

Increased globalization is forcing manufacturing organizations to implement world class manufacturing techniques through shorter product life cycles, new product development, more production systems and strategies. This research paper focuses on gaining insights in to the

4

HAFTU HAILU


2015

critical success factors for sustainable kaizen implementation on the manufacturing industries at the potential areas of Peacock shoes. On the basis of this research, it should be useful to: The company main development team who address the critical success factors for sustainable kaizen implementation on productivity and quality development and organizational change; Facilitators and Team leaders who prepare and educate team members who are focused on the four constructs of kaizen such as kaizen preparation, planning, implementation and evaluation; and Kaizen promotion team members who should continuously focus on improving their working processes. From this study, the theoretical model that shows the relationship between critical success factors and success indicators was prepared and recommendations also developed as guidelines to sustain the activities and overcome problems. Besides, it should be useful to the Ethiopian Kaizen Institute as frame work to similar shoes manufacturing industries.

1.8.

Structure of the thesis

The study is structured in to five chapters. Chapter one deals with the importance of the study which consists of background, statement of the problem, research questions, objectives, significance, scope and limitations of the study. Chapter two concerns with review of related literatures. Chapter three deals with methodology of the study which comprises study area description & study period, study design, data types and sources, data collection instruments and data analysis of the study. The fourth chapter consists of result and discussions. Here, after gathering the data, by coding the items the data was encoded to the SPSS software. The results of the study were analyzed and interpreted as per the software output. The last chapter deals with summary, conclusions and recommendations of the study. Besides to these chapters, the study consists of both references and appendices.

5

HAFTU HAILU


2015

CHAPTER TWO: LITERATURE REVIEW 2.1.

The Kaizen Philosophy in Manufacturing Industries

According to Desta (2014) from the debris of the Second World War, Japan through its culturally embedded, innovative management system has succeeded in rebuilding its economy and is now emulated by the community of nations Waheed et al., (2010). Many non-Japanese companies are initiating a kaizen management strategy without adequately taking into consideration its own cultural roots. Thus, they face many barriers while they are racing their visions. According to Desta (2014) as stated by Brunet and New (2003), it has not been clear previously how firms in other cultures can maintain the momentum for kaizen activities, nor how the concepts of target setting, control and incentives for participants fit into their overall management system. In order to stay competitive in an increasingly global market place and with an increase in customer demands, a number of foreign companies are forced to rethink their manufacturing and management approach to lower costs of production, minimize waste, improve productivity, boost quality, and achieve sustainability. In addition, when transferred to other cultures, companies need to use dedicated cross-functional teams to improve a targeted manufacturing work area Heizer & Render et al, (2010). The researcher agreed with this and as per the Ethiopian culture, workers from same discipline should be organized besides to existing one cross functional team. Therefore, since well-established kaizen strategies help companies to control cost, minimize workers motion, focus on zero defects and, more fundamentally, improve workers’ skills by creating a cooperative atmosphere where everyone becomes fully aware of the key goals, each step of the kaizen process needs to be mapped out and measured to ensure economic value to its customers. As stated by Glover et al (2008) since kaizen teams apply structured process tools and human creativity with a goal of substantially improving the performance of the work area, process or product, the team workshop needs to be purposely designed to make jobs easier by taking them apart, studying them, and making improvements, creating a culture of continual improvement with well-designed outreach programs to everyone in the organization Thessaloniki (2006).

6

HAFTU HAILU


2015

The researcher advised for the manufacturing industries team members of 8 to 10 per team in order to finish timely and present his/her opinions freely. According to Desta (2014), the team is chosen from the top management level, middle managers, and frontline workers from the target work area and includes outside experts to give their own objective initiatives. But, the researcher recommends the team should be from same discipline. Meaning, as per the hierarchical level - main management team, facilitators, Kaizen Promotion Team members. These teams are brain storming In short, according to Desta (2011) in a brainstorming session the ground rules need to include: 1) keeping an open mind to change; 2) maintaining a positive attitude; 3) never leaving in silent disagreement; 4) creating a blameless environment; 5) practicing mutual respect every day ; 6) treating others as you want to be treated; 7) one-person – one voice, regardless of position or rank; and 8) understanding that there is no such thing as a dumb question ( EPA, November 2007).

2.2.

Kaizen Philosophy Principles

World - class manufacturing strategies such as kaizen philosophy is holding principles. Kaizen philosophy, however, includes the concept of Kaizen (CI) and Kairyo (Process improvement) Imai (1986). As per the above summary of the Kaizen methodology, the philosophy embraces four main principles: Principle 1: Kaizen is process oriented. Processes need to be improved before results can be improved. Principle 2: Improving and maintaining standards. Combining innovations with the ongoing effort to maintain and improve standard performance levels is the only way to achieve permanent improvements. Principle 3: Kaizen focuses on small improvements of work standards coming from ongoing efforts. There can be no improvement if there are no standards. The PDCA cycle is used to support the desired behaviors. This cycle of continuous improvement has become a common method in Kaizen; it is used to generate improvement’s habits in employees. Principle 4: People Orientation. Kaizen should involve everyone in the organization, from top management to workers. One of the strongest mechanisms aligning with this third principle is Group-oriented Kaizen. Kaizen teams focus primarily on improving work methods, routines and procedures usually identified by management.

7

HAFTU HAILU


2.3.

2015

The Pillars of Kaizen

The following are four pillars of kaizen activities to implement greater operational efficiency (the cost) and effectiveness (the extent to which customers’ requirements are met). These are: a) housekeeping activities, b) waste elimination or elimination of non-value added materials, c) standardization of workplace environment, and d) mapping out Socio-economic and environmental effects of the company, and e) conducting follow-up action plans to evaluate the end results of the kaizen activities (Ministry of Industry, 2011).

2.3.1. Housekeeping The beginning of the kaizen housekeeping journey of management starts by displaying a level of orderliness and clarity of the work area using the following Five Steps (5S). As stated by Imai, 5S is a set of techniques that provide a standard approach to good housekeeping and fosters an increase in quality and productivity Imai (1997) as quoted in Juhari et al (2011). If an organization wants to ensure continued competitiveness and achieve market growth, it needs to start with the following 5S system: a) sorting or gathering the spear materials needed by the company, selling what is not needed to a scrap dealer or putting them into trash; b) setting or straightening, keeping visible the remaining materials or parts to provide a pleasing appearance; c) shining and spreading the clean products; d) standardizing and consistently implementing the new process; and e) sustaining improvement. Therefore, to effectively apply the 5S System, Juhari, et al, (2011) suggest that communication, training, reward and recognition, and top management support are vital factors that influence employees’ motivation in the implementation of the 5S System. Given this, they suggest that management needs to pay attention and invent effective strategies to motivate their employees on a consistent basis. In their study they have ascertained that the four independent variables that influence employees’ motivation for environmental improvement and the implementation of the 5S systems include, knowing the goals of the firm, management support, employee involvement and experiential training, and employees’ reward and recognition.

2.3.2. Waste Elimination According to Desta (2014) Muda or elimination of non-value adding activities includes removing unnecessary wastes caused by people and machine. Muda or waste can accumulate because a company may have more than necessary equipment, materials or people for quantity production.

8

HAFTU HAILU


2015

The way to eliminate waste in any company is therefore to make employees aware in advance which steps add value to the product, and which steps do not. Generally, the seven types of deadly wastes (muda) as identified by the Toyota Production System (TPS) that accumulate in a company’s production system are caused by 1) overproduction, 2) waiting, 3) transportation, 4) inventory, 5) over processing, 6) motion, and 7) production of defective parts. According to Desta (2014) it was suggested by Thawani (2003) that unlike many western approaches such as Business Process Re-engineering, Six Sigma which calls for massive investments, the golden rules of Workplace Management (Gemba kaizen) is group effort for continuous incremental improvement that can be standardized by requiring each worker to: Go to work place first (like a detective) when problems arise; Investigate or check the object carefully (e.g. a customer complaint or defective item produced/pile loads of inventory); Take temporary counter-measures promptly; Find the root cause of the problem (e.g. if excess inventory check the purchasing system or the production management); and develop/amend an existing procedure/system to prevent its recurrence.

2.3.3. Standardization According to Desta (2014) Standards are set by management and engineers. Companies with employee suggestions can bring about improvement as they are called to review the set standards periodically, collecting information and analyzing defects, and encouraging teams to conduct problem-solving activities to optimize performance, comfort, and safety to meet the company’s goals. As stated by Thessaloniki (2006) cited in Desta (2014) the standardization of improvement activities may include the following key features if employees: 1) represent the best, easiest, and safest way to do the job; 2) offer the best way to preserve know-how and expertise; 3) provide a way to measure performance; 4) provide a basis for both maintenance and improvement; 5) provide objectives and a basis for employee training and motivation; 6) create a basis for auditing or diagnosis; and 7) provide a means for preventing recurrence of errors and minimizing variability. Thus, the benefits of standardization could a) help the company optimize operations, save cost and improve profits, b) enhance customer satisfaction and increase sales, c) increase market share, and d) reduce negative impacts on the environment.

9

HAFTU HAILU


2.4.

2015

Kaizen Implementation Problems

The researcher tried to study the global Kaizen implementation problems. The Kaizen philosophy was applied for a large number of industrialists and highly competitive managers that were eager to employ methodologies that strengthen the highly competitive environment where they were involved Tanner C, Roncarti J (1994). However, despite the popularity of this philosophy, Kaizen implementations in companies had little success. For example, reports that in a survey of US manufacturers, 90 % of 3,000 industrial organizations had implemented continuous improvement projects; however, only 10 % felt they were achieving the desired results Rink J (2005). From 360 Spain and Mexico firms, 33 % of the firms adopted the Kaizen methodology Jaca C, et al. (2010) On the other hand; there were few tracks of continuous improvements, due to a poor cooperation of operators and organization, and a lot of resistance to change by employees in systems improvement. The main causes of abandonment of Kaizen philosophy: organizational resistance to change from employees, Lack of proper implementation and monitoring techniques for Kaizen, Lack of commitment and support from senior management, Lack of motivation from employees to participate, Lack of resources (time, money, space etc...), Resistance from unions, Lack of monetary profits for each improvement project Suárez B, et al. (2011) The researcher tried to show the challenges existing in Ethiopian manufacturing industries. The industries are facing challenges during the implementation. 1, local industry products are not competent due to poor quality. 2, not providing result based evaluation and rewarding system. 3, information and support providing services are not information technology based. 4, the societies have low awareness regarding to gender issues. 5, service providing systems are not in way. 6,unavailability of enough skill labor. 7, quality standard of support provided by development stakeholders is not good. 8, confusing about the implementation and knowledge of kaizen. 9, locally, lack of providing transportation services. 10, lack of performance and leader ship capacity. 11, poor and result less working culture. 12, Bad thought of the society towards quality, local service and products. 13, unavailability in number and poor quality of agricultural products which are inputs for manufacturing industries EKI (2014).

10

HAFTU HAILU


2.5.

2015

Critical Success Factors for Kaizen Implementation

According to Jorge L. G, et al. (2013) Critical success factor (CSFs) were proposed by Daniel in 1961, and this idea were popularized by Rock arts in 1979. Study of information systems, over the past two decades demonstrate that the CSFs method has been widely adopted and used in a variety of fields of study to determine the most critical factors influencing enterprise success. However, there is no one particular definition of success, as the definition of success is different from one person to another, depending on the perspective of the person who defines it. CSFs were defined by Rockmart as ―the limited number of arrears in which results, if they are satisfactory, will ensure successful competitive performance for the organization‖, moreover, Bruno and Lei decker (1984) have defined CSFs as ―those characteristics, conditions or variables that, when properly sustained, maintained, or managed, can have a significant impact on the success of a firm competing in particular industry‖. Study of CSFs will permit companies to focus their efforts on some areas to meet the CSFs, or even allow companies to decide if they have the capability necessary to meet CSFs requirements. Boynton and Zmud (1984), regard CSFs as one of the few things that ensure success for an organization. Furthermore, the CSFs concept is the most important for overall organizational objectives, mission and strategies Freund, Y.P. (1988). The researcher wants to ask an important question based on the above CSF concept: what companies are doing in other countries for successful implementation of their continuous improvement activities? And what should peacock manufacturing industry do to sustain the basic Kaizen implementation activities? Regarding to re-act the questions shown above, the researcher found in a literature review that there are adequate components that contribute to the successful implementation of Kaizen. 20 authors and 41 activities or factors sorted according to their numbers of references. Some factors that were cited only once, which are associated with effective internal processes, 5s implementation Bateman N (2005), workplace safety Farris JA (2003), focus on customers Romero R, et al. (2009), application of methodologies to understand customer's voice Dale B, et al. (1997), resistance to change Melnyk S (1998), consistent approach to improvement activities and development of structures to stop the bugs Upton D (1996), make operating practices Landa Am (2009), establishment of long-term goals, and shaping a learning organization and focus on development of critical processes and quality management systems Kaye M, Anderson R (1999).

11

HAFTU HAILU


2015

Other factors that were cited at least two times from literature are: Factor 1: Commitment and motivation of staff Tapias A, et al. (2010); Factor 2: Support from senior management Cooney R, (2004); Factor 3:Allocated resources (time, economic, spaces) Bisgaard S (2007) ; Factor 4: Leadership Bateman N (2005); Factor 5: Developing a culture of continuous improvement Prajogo D, (2004) ; Factor 6: Set goals for improvement programs Jorgensen F, (2004); Factor 7: Using an appropriate methodology Bisgaard S, et al. (2007); Factor 8: Standardization and process measurement Farris JA, et al. (2003); Factor 9: Organization of support teams Upton D, et al. (1996)]; Factor 10: Presence of a facilitator to support the program Prajogo D, et al. (2004)]; Factor 11: Interdepartmental communication Tapias A, et al. (2010); Factor 12: Differences between the focus of improvement and the existing culture Bessant J, (1997); Factor 13: Employee attitude Landa Am et al. (2009); Factor 14: Interdepartmental cooperation Bisgaard S, et al. (2007); Factor 15: Follow the PDCA cycle Bisgaard S, et al. (2007); Factor 16: Training and education Jorge L. G, et al. (2013); Factor 17: Heterogeneity of improvement teams Landa Am (2009); Factor 18: Assessment system Readman J (2007); Factor 19: Skills and experience Bessant J, et al. (1997); Factor 20: Establish policies, objectives and structure Tapias A, et al. (2010); Factor 21: Clarify goals and common ideas Bessant J, et al. (1997)]; Factor 22: Documentation and evaluation, factor 23: Workers integration and award, Factor 24: Customer focus Jorge L. G, et al. (2013). Besides to this, view Kaizen as a long term journey, Kaizen champions, Financial capabilities, Involve and value employees at all levels of the organization, Problem solving by involving people, Realistic timescales for changes, Standardization, Views and understand Kaizen as a philosophy rather than another strategy are factors affecting the successful Kaizen implementation Alaskari. O, et al. (2012).

2.6.

Some identified CSF for Kaizen philosophy implementation

Training and Education Training and education is related with the training given to workers and management commitment with continuous improvement projects to be successful; thus, this factor is associated with people, managers, and operators Jorge L. G, et al. (2013). Increased involvement means more responsibility, which in turn requires a greater level of skill. This must be achieved through training. Training is an important factor that helps in making efforts toward continuous improvement. Kaizen training includes educating and training all employees, help employees to increase knowledge, provide information about the mission, vision, direction and organization

12

HAFTU HAILU


2015

structure to enable them to gain skills in an effort to improve the work quality and thus solve the problem. An organization that demands staff development, policy formulation and planning will determine the allocation sampler for the training and strategic planning is not only focused on training needs now, but also training in the future. Effective Communication Communication could be vertical or horizontal. Vertical communication between the different structural levels of the organization and horizontal communication, between leaders of various projects, where there should be a collaborative and supportive relationship for successful Kaizen implementation Jorge L. G, et al. (2013). Communication inextricably linked in the Kaizen process, yet some executives find it difficult to tell others about the plan in a way that will be understood. An additional difficulty is filtering. As top management’s vision of Kaizen filters down through the ranks, the vision and the plan can lose both clarity and momentum. Thus, top management as well as managers and supervisors at all level serve as translators and executors of top management’s directive. The ability to communicate is valuable skill at all levels from frontline supervisor to senior managements. The factor of communication helps to allow confidence to others as well as provide encouragement and share the risks. Documentation and Evaluation Documentation and evaluation associates with the habits of documentation, record of activities, and commitments acquired by each team member for continuous improvement, targets, and achievements using the adequate formats, preferably standardized among all improvement groups that exist in the company, which would facilitate communication and reports or informs the factor number two in importance. It also refers to the establishment of standards and guidelines that indicate how to measure the performance indices for the groups established. Besides, in this factor, the need to establish systems and regular periodic evaluation for the group is noted, all as a monitoring process Jorge L. G, et al. (2013). Integration and reward This factor is related to the integration that must exist by workers in decision making process of the company, since rarely they know the problems of production systems and may have a better assessment of technical aspects so that their opinions should be heard. However, this process of integration to work in a company requires the recognition of his/her work when the activities entrusted to them have full compliance and when they have an ongoing involvement in solving

13

HAFTU HAILU


2015

problems. Employees shall be given due recognition for their contributions and their ideas. It is a psychological process to develop confidence between the members of the organization and encourage them to make decisions and solve problems with each other Jorge L. G, et al. (2013). Management Commitment and Leadership Direct involvement of top management allows all decisions to be made quickly and facilitate Kaizen journey. Top management support is necessary to prove the availability of concrete actions. The action can be taken to establish the Kaizen policy, establish structure, attract a whole staff, disseminate information on Kaizen, managing the change process and organize the day of continuous improvement activities. Management is committed to be always aware of demand for change. Among the commitments that need to be highlighted is to renew and update key elements of the organization, make structural changes in the organization, prepare for a new job specification, resolving conflicts to be faced, to ensure the involvement of members and create an effective plan to improve the administration of an organization. The skills of the management can make a significant boost to staff. Management style highlighted by the management is able to provide a boost to staff. Management is committed to promoting cooperation rather than competition within the organization Norhayati Z., et al. (2012). Employee Involvement Employee involvement is a process for empowering employees to participate in managerial decision-making and improvement activities appropriate to their levels in the organization. At the end of the day only one thing that differentiates one company from another its people. Not the product, not service establishments, not the process, not secret ingredients; ultimately any of these can be duplicated. The Japanese have always recognized this and it is one of the reasons for their success in world markets, they place tremendous value on the integration of people with organizational objectives, equipment and processes. Norhayati Z., et al. (2012). Teamwork Teamwork can unite the entire staff of the organization in the success of continuous improvement. In this spirit practiced through cooperation, commitment and participation of staff in the overall continuous improvement program initiated by the organization. Therefore, it involves the concerted action of employees, through their role in providing skills, assessment and experience to a particular task Norhayati Z., et al. (2012). Culture for change and improvement

14

HAFTU HAILU


2015

Culture for change and improvement is allied with a culture for change and improvement, which means that the processes are not accepted as is, and always the operators and managers are looking an opportunity for improvement. That culture for change is also demonstrated when some workers are removed from their work areas because they are no more required due to an improvement implemented Jorge L. G, et al. (2013).

2.7.

The Challenges of Kaizen Implementation

The authors Titu, M. A., & Grecu, C. O. (2010) tried to describe the challenges existing in relation with basic kaizen implementation in Africa. Power concentration in the top management but kaizen deals with total people involvement; lack of skilled workforce on applying tools and techniques; companies are not implemented forward and backward integration to control business networks which are out of control. The author also offered solution for weakened the above difficulties by including basic kaizen in academic curriculums like higher education, vocational schools and dissemination the movement of kaizen. I also agree with him. Besides to this, it is also recommended to start the philosophy in the kindergarten as per the level of the education.

2.8.

The Benefits of Kaizen Implementation

It well known that, in Ethiopia both manufacturing and service providing sectors are aggressively implementing the basic Kaizen. According to MOI: GTP-II (2015), results are achieved from role model industries that have been implemented successfully. The following benefits are attained from both organizations: productivity improves accounts 37.20 % that is average relatively the global; reduction of waste accounts 55.26 % that is still good. Defect reduction accounts 31.30%; cost reduction accounts 6 % to 60%; searching time reduction accounts 95%; industrial accidents are reduced from 49.5% to 15%; previously employees are facing problems to solve. But, after implementation, employees are solving 50.3% of the identified problems using soft basic Kaizen tools and techniques see figure 2.1.

15

HAFTU HAILU


2015

Benefits of basic Kaizen I n d i c a

Solved problems

t o r s

Searching time reduction Defect reduction Productivity improvement 0.00%

20.00%

40.00%

60.00%

80.00% 100.00%

Frequency

Figure 2.1: Benefits of 5S-KAIZEN in Ethiopia (Source: MOI: GTP-II, June 2015)

2.9.

Successful Kaizen Implementation in Ethiopia

The introduction of kaizen as a management tool and success in the transfer of technology to improve and enhance productivity and managerial capability in Ethiopia needs to be seen in the establishment of several building blocks: 1) the fit between kaizen culture and the organizational culture of Ethiopia’s manufacturing practices; 2) changes in the mindset of Ethiopian manufacturing workers so they will adhere to the kaizen work ethics; 3) workers’ training and discipline so that workers follow standard operating procedures; 4) the existence of a hungry mentality so Ethiopian factory workers will do work which is above and beyond their responsibility; and 5) the empowerment and involvement of workers in decision-making to cooperatively identify problems, generate solutions, implement them and then follow up to evaluate quality and productivity Desta, A. (2011).

2.10. Idea Generation Techniques According to Ryu F. et al, (2003) Quality control circles use problem-solving and idea generation techniques to aid them in their QCC activities implementation. These techniques include: Brainstorming, 5Why approach, 5W1H, 4M1E. In addition, value analysis and eight components analysis are also soft techniques that are applied by KPT members EKI (2014). 5W1H Analysis: 5W1H signifies six words that begin questions that are needed to be answered in order to describe a fact correctly: what, when, where, who, why, and how. Teams are recommended to follow and ask these questions in order to grasp the facts without any omission. For example they define problems by asking and answering the following questions. 4M 1E

16

HAFTU HAILU


2015

Analysis: 4M1E stands for the five elements needed in production (man, machine, materials, method, and environment).This is often used as a method of stratification in cause and effect diagrams. Sometimes this system is referred to as 5M1E, with the fifth m representing either measurement (since data is obtained through them) or money. 5 Why approach: One variation of the Why-Why approach involves repeating the question why five times to analyze things. This basic procedure is meant to effectively and efficiently utilize time, funds, and human resources to eliminate problems (e.g., problems in terms of quality, price, delivery, safety, or environment protection) in any operation, ensure customer satisfaction, and maintain employee participation. Brain Storming Analysis: brainstorming is used at various stages of problem-solving activities to encourage groups’ creativity. It is a method of getting a group to generate a lot of ideas in a short space of time. Group thinking usually produces more ideas than individual thinking. A QC Circle can use brainstorming to identify problems in the work area, to find causes of a problem, to search for a solution to a specific cause of a problem, to choose a name for the Circle, or to search for a format of project presentation Ryu F. et al, (2003).

2.11. Hierarchy of Kaizen Involvement The hierarchy of Kaizen involvement consisting of four chain of command duties and responsibilities according to Imai M (1986). These are: 1) Top Management: Determine to introduce Kaizen as a corporate strategy, Provide support and direction for Kaizen by allocating resources, Establish policy for Kaizen and cross functional goals, Realize Kaizen goals through policy deployment and audits, Build system, procedures, and structures conducive to Kaizen. 2) Middle Management and Staff: Deploy and implement Kaizen goals as directed by top management through policy deployment and cross functional management, Use Kaizen in functional capabilities, Establish, maintain, and upgrade standard, Make employees Kaizen conscious through intensive training programs, Help employees develop skills and tools for problem solving. 3) Supervisors: Use Kaizen in functional rules, Formulate plans for Kaizen and provide guidance for workers, Improve communication with workers and sustain high morale, Support small group activities (such as quality circles) and the individual suggestion system, Introduce discipline in the workshop, Provide Kaizen suggestions. 4) Workers: Engage in Kaizen through the suggestion system and small group activities, Practice discipline in the workshop, Engage in continuous self-development to become better problem solvers, Enhance skills and job performance expertise with cross education Imai M (1986).

17

HAFTU HAILU


2015

2.12. Success indicators in Kaizen implementation The effect of kaizen implementation consequences on achieving tangible and in tangible results Imai M (1986).: Tangible effects: Increased market share, Increased sales volume, increased production volume, Successful development of new products, Shortening of product development time, Improved quality, Fewer complaints, Reduced defect costs, More employee suggestions, Fewer industrial accidents. Intangible effects: Increased awareness and involvement in management by everybody, Increased quality consciousness and problem consciousness, Better communication both horizontally and vertically, Improved quality of work, Improved human relations, Improved information feedback, Improved managerial skills, Clear delineation between responsibility and authority, More confidence in new product development, Conversion to goal oriented thinking, Improved standardization, More active use of Statistical quality control Imai M (1986).

2.13. The Power of Self-discipline in Sustaining Kaizen implementation The major impediments for many organizations are to sustain or keep constant the achievable results of Kaizen activities after it accomplishes Bateman N (2005). The enablers that were associated with successful and sustainable process improvement programs were: Availability of financial and non-financial (e.g., human) resources, General culture, including having an open minded culture and an enthusiastic workforce, The need to change/improve, Strong event champions, Effective communication, including use of communication to promote/clarify need for change, Manager's approach, including proactive practices to support change and counteract potential barriers to improvement, Strong team leaders. Bateman N (2005).

18

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015

CHAPTER THREE: RESEARCH METHODOLOGY 3.1.

Study area Description and study period

Peacock shoes manufacturing is the potential area where the researcher is focused for study. It is located in Addis Ababa, Peacock shoe manufacturing industry is one of the sister industry of Dire industries which is established in the 1984 E.C. The factory is located at the Nifas silk lafto subcity saris cluster (Debrezeit road) at the back side of kadisco building. The existing capital of the company is round 25,000,000 Birr. The company consists of 256 numbers of employees including top management, middle management and front line workers. The actual daily production quantity is 1500 pair of shoe in eight hours.The type of products manufactured in the company are male, female and baby shoe types. The company is producing for local and export market. The potential foreign customers of the company are G-star and Overland shoe, Golden pacific and brown shoe, Al–kahir, Magokor, Biella and Rumbo from England, china, SaudiArabia, Spain and Italy respectively. The company possesses cutting, closing and lasting machines. The study period was from the time when the company starts implementing the philosophy in November 2013 until the completion of the study as shown in the cover page.

3.2.

Study Design

This research study is descriptive in nature because, this type of study will be conducted to provide detailed description about the existing phenomena and to justify current condition. Descriptive research comprises surveys and fact finding enquiries of different types. The main objective of descriptive research is describing the state of affairs as it prevails at the time of study.

3.3.

Research Method Type and sources of Data

The researcher used both quantitative and qualitative data. To gather the required data, the researcher used two sources of data: primary and secondary. Tools include questionnaires from main development team, facilitators, team leaders and KPT members, interview from two senior managements whom coordinate Kaizen implementation within the company; and also using observation for witnessing the activities. For secondary data the researcher used various documents. Annual reports and data presented for Ethiopian Kaizen institute and photos which shows the physical status of the company after Kaizen implementation.

19

HAFTU HAILU


3.4.

Data collection Instruments

3.4.1. Interviews The researcher is used structured type of interview by constructing 6 questions and made procedures on how the interviews should be conducted and questions reported. All interviews were conducted on the same way, i.e. the variation in the data collection should be as small as possible Ghauri, P. & Gronhaug, and K.(2002). The interview was taken with DGM of production and corporate service.

3.4.2. Questionnaire Design The initial phase was the literature review to determine the research reports related to critical success factor for Kaizen and list them. The search was conducted in databases to give this review a rational validation to the survey. The main items founded in literature review were used to build an initial questionnaire with 32 items, in issues management and employees related to factors affecting kaizen implementation and success indicators. The initial survey was applied to top managements, middle managements, supervisors and operators working in PDC, cutting, closing, lasting & finishing, maintenance and offices; this task was made looking to give a judge validation to the survey. The questionnaire should be answered on: filling the blank space, the level of importance in a five – point Likert scale ( 5 = Extremely important, 4 = Very important, 3 = Important, 2 = Low important

, 1 = Not at all important ) as shown in Appendix I. The

final questionnaire consisted of three parts. Namely, Part - 1: Demographic data three questions; Part – 2: factors affecting Kaizen implementation 32 questions and Part - 3: success indicators contains19 questions.

3.5.

Pretesting the questionnaire

On completion of the questionnaire, seven consultants from the Ethiopian Kaizen Institute were approached to complete and pretest the questionnaire. According to Ferreira, R. (2005) defines a pretest as the cheapest insurance that: The data collected will be as useful as possible to answering the problem, The target respondents will co-operate as fully as possible, The collection and analysis of data will proceed as smoothly as possible. The reason for the pretest was to highlight any unclear questions. On receiving the questionnaire back from the above mentioned employees, the researcher made the necessary adjustments.

20

HAFTU HAILU


3.6.

Target Population

The manufacturing company under review consists of departments like PDC, cutting, closing, lasting & finishing, maintenance and planning with 256 permanent employees. The questionnaires were disseminated to the specified nominated main development team, facilitators, team leaders and members of the KPT from whole departments. This nomination of respondent’s is for the reason that the respondents are participating for the period of implementation and they are organized in a team as per the kaizen organizational structure. In addition to that, the researcher believes that these focus teams are having surplus data regarding to the questionnaire. Any employees who are not organized in a team (seasonal and contract workers) are out of the nomination. In addition to this, the researcher uses non-probability sampling or purposive sampling to select the sample size by some arbitrary method because it is known to be representative of the total population.

3.7.

Sample Size and Sampling Techniques

It is very important that the sample that is selected should faithfully represent the group to be studied Ghauri, P. & Gronhaug, K. (2002). The sampling technique ensured that the sample was representative and could be used to generalize about the population. Leedy, P.D.(1997) Describes: ‟No matter how good the gathering of data is…the survey cannot be accurate if the people in the sample are improperly selected‖. The researcher decided that the full complement of the whole kaizen teams would be approached to complete the questionnaire. Since the population size of the company is known, so to decide the required sample size, the following proven formula was used Robert V. Krejcie (1970). ( Where, s = required sample size;

) (

(

)

(

)

= the table value of chi-square for 1 DOF at the desired

confidence level (3.841); N = the population size (for the case of peacock N = 256); P = the population proportion (assumed to be 0.50 since this would provide the maximum sample size); d = the degree of accuracy expressed as a proportion (0.05).

21

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Using the above formula, considering 5% margin of error, 95% level of precision the sample size taken is the population of 153 respondents. The sample size taken as per the nominated departments is shown in Table 3.1 Table 3.1: Sample size and collected questionnaires PDC

Cutting

Stitching

Lasting &

Maintenance

Office

Total

Finishing No of Samp No

Sampl No of Sam

No

Samp

No

Samp No of Sam

No of Sampl

empl

le

of

e size empl

ple

of

le

of

le

empl

ple

emplo

e size

oyees

size

empl

taken

size

empl

size

empl

size

oyee

size

yees

taken

taken

oyee

take

oyee

taken

oyee

taken

oyee

take

n 6

4

28

17

120

n 72

84

49

11

7

7

4

256

153

153 sample size: 14 = Main development team, 16 = Facilitators, 39 = team leaders and 84 = team members. Source: Peacock Kaizen office (2015)

3.8.

Data analysis

After applying the survey, a database was designed using Statistical Package for Social Sciences, version 20 the statistical analysis included several phases, as it is described below. Principal component analysis was used for factor analysis. PCA can be used to reduce the dimensions of a data set. It reduces the data down into its basic components, remove away any unnecessary items. According to Kaiser’s (1961) cited in Vermaak T.D. (2008)

3.8.1. Statistical validation for the questionnaire Before validation is taking place, the responses are checked and variables are coded. Then, for statistical validation of the questionnaire, the CAI was used, but always looking to have the minimum number of activities but with the highest CAI values. Thus, it was examined if eliminating some of the activities could increase the CAI because the value of these events had slight variability. The minimum value for CAI was a cutoff of 0.6 Cronbach LJ (1951); Nunnally JC, (2005). The CAI value for 32 variables scored 0.908 which is above the cutoff value.

22

HAFTU HAILU


3.8.2. Descriptive data analysis Along with the validated questionnaire, the researcher used statistical package for social science (SPSS) 20 to perform the descriptive analysis for the variables or items. In this process, descriptive statistics such as mean and standard deviation are used to know factors affect the Kaizen implementation.

3.8.3. Factor feasibility analysis In order to determine the feasibility of a factorial analysis, the correlation matrix was obtained, observing that most of the correlations were higher than 0.35. The researcher calculates both the Kaiser-Meyer-Olkin (KMO) index and the Bartlett Sphericity test as a factor analysis feasibility index. Since it is recommended an index higher than 0.6 Kaiser, H. F. (1974).Besides, commonality was analyzed for every task Nunnally JC, (2005). A factorial analysis was applied to determine the factors by principal axis factoring analysis method using the correlation matrix for the extraction of components. The important factors were those with an upper or equal value to one in their eigenvalues, conditioning the search to 25 iterations for the convergence of the result Streiner D, (1995). Besides, Levy JP, (2003) with the objective of a better interpretation of critical factors; then, it was made a factor rotation by the Varimax method. The activities that integrate the factors were identified by the highest value that the factorial charges contained, which is a correlation measure with the factorial axis Nunnally JC, (2005); Vermaak T.D. (2008). The researcher tried to propose a theoretical model by assessing previous empirical findings done like Vermaak T.D, Jorge L.G and Suon Vichea.

3.9.

Theoretical model that shows the relationship between critical success factors and success indicators

The potential influence of critical success factors (independent variables) on the success indicators (dependent variables) are described in Figure 3.1. The following hypotheses were formulated for each linkage. These are theories that will be empirically tested. The researcher tried to propose the theoretical model and the researcher go through Vermaak T.D (2008). H1: Providing comprehensive training and education to all levels of the company starting from shop-floor employees to top managements will result in increased staff performance, customer satisfaction and decreasing manufacturing costs.

23

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 H2: Having ownership towards the philosophy will result in increased staff performance, customer satisfaction and decreased manufacturing cost. H3: when employees working in team results in increased staff performance, customer satisfaction and decreased manufacturing cost. H4: Having effective vertical and horizontal communication in providing frame work of strategic improvement plan will result in increased staff performance, customer satisfaction and decreasing in manufacturing cost. H5: All levels of company employee’s participation in the Kaizen implementation will result in increased staff performance, customer satisfaction and decreasing in manufacturing cost. H6: Using process control and improvement techniques will result in increased staff performance, customer satisfaction and decreasing manufacturing cost. H7: Continual evaluation of the implementation and the performance of all levels of employees will result in increased staff performance, customer satisfaction and decreased manufacturing cost. H8: Establishing recognition and reward system in the company will result in increased staff performance, customer satisfaction and decreased manufacturing cost. H9: Knowledgeable and committed effective Kaizen leadership will result in increased staff performance, customer satisfaction and decreased manufacturing cost. H10: Employee’s attitude will result in increased staff performance, customer satisfaction and decreased manufacturing cost. Figure 3.1: Theoretical model that shows relationship between critical success factors and success indicators

24

HAFTU HAILU


Independent Variables

Comprehensive Education & training

Peo ple

Items (operation s)

R PII24, PII31

Teamwork

PII6, PII13

Effective communication Employee’s participation Effective Leadership

P

PII23, PII27, PII29, PII32

Ownership

Employee’s attitude

Dependent Variable (Success Indicators)

O Increasing Staff Performance

F I T

PII21, PII26, PII28

A PII7, PII11, PII12, PII22 Increasing Customer satisfaction

PII16, PII20 PII10, PII14, PII15, PII18, PII19

B I L I

Process control Pro cess


Continual Evaluation

PII5, PII9, PII30

Recognition & reward

PII1, PII17, PII25

25

Reduction of manufactu ring cost

HAFTU HAILU

T Y


CHAPTER FOUR: RESULT AND DISCUSSION 4.1.

Response rate of questionnaire

A total of 153 questionnaires were distributed (hard and soft) to the hierarchical position of main development team, facilitators, team leaders and KPT members of six departments. Figure 4.1 shows the respondent type and surveyed main sections respectively, and it is clear to notice that KPT members and team leaders are the most surveyed respondents with 54.90 % and 25.49 % respectively.

Figure: 4.1 Respondent type of the company

Figure 4.2 below describes closing and lasting / finishing sections were the most surveyed sections with 72 and 49 respondents respectively. The response rate is 100 percent since all respondents were filled the questionnaire. This is done because of employees dedicated to offer information appropriate to the research and strong support from Peacock shoes Kaizen office Office

S PDC e Maintenance o Cutting c n Lasting t Closing i

4 4 7 17 49 72 0

10

20

30 40 Frequency

50

60

70

80

Figure: 4.2 Surveyed main sections of the company

26

HAFTU HAILU


4.2.

Descriptive analysis of demographic factors

The demographic factors used in this research were qualification, experience and gender. These personnel data are important on the consistency of the research. The researcher wants male and female respondents to be skilled and qualified. Table 4.1: Experience * Qualification * Gender Cross tabulation Gender (Male and female)

Qualification 1 to 6 7 to 8 9 to 10 11 to 12

Total

TVEL1

Degree

/Diploma and above

1 year

0

0

2

1

5

3

11

2 years

0

32

20

10

13

2

77

Experience 3 years

2

8

9

8

21

1

49

4 years

0

0

4

0

8

0

12

5 years

0

2

2

0

0

0

4

2

42

37

19

47

6

153

Total

Table 4.1 illustrates that 92.35 % of the respondents have spent at least 2 to 3 years in Kaizen implementation. Besides to this, 71.24 % of the respondents are above grade 10. These result of socio-economic characteristics of respondent’s shows that, they can obviously understand and respond to the questions provided to collect primary data. Factors affecting for successful Kaizen implementation and success indicators variables are highly associated with training and education.

4.3.

Statistical Analysis of the questionnaire

153 questionnaire forms received by way of primary data collection was loaded to the SPSS software for the Initial analysis. Overall, there were 32 criteria, which were having an impact on the critical success factors for successful Kaizen implementation. However, to come out with a Discriminant Analysis output with all the 32 Criteria would lead to a very lengthy model. To counter the same, the Factor Analysis was used for the data reduction. For the data reduction the feedback was taken from my advisor.

27

HAFTU HAILU


4.3.1. Reliability Test Result Different authors accept different values of this test in order to achieve internal reliability, according to Asedesach A. (2014), the minimum required value is 0.7. The CAI was obtained for the 32 initial items that is 0.908. Different authors agree that removing some items from the questionnaire results on improving the CAI value Bisgaard S (2007). The researcher found that not important eliminating the variables since the existing variables internal consistency was maintained. The cronbach’s coefficient alpha was calculated for each item of the questionnaire with minimum 0.901, maximum 0.913 and the 32 items as a whole scored CAI value 0.908 that is excellent. Therefore, based on the test, the results for the items are reliable and acceptable.

4.3.2. Descriptive statistics analysis - factors affecting Kaizen implementation Descriptive analysis is done first to know the level of importance of the factors. With 5 point likert scales, the interval for breaking the range in measuring each variable is calculated by Suon V. (2005): (

)

where R is the interval for breaking the range; N is the maximum applied likert scale. According to the analysis, the 32 items recorded minimum 3.94 and maximum 4.68 that is 31 items falling on the interval breaking range 4.20 to 5.00 most important items and one item on the interval breaking range 3.40 to 4.19 high important. This result is excellent and shows that all the respondents agree on the importance of all variables for successful Kaizen implementation.

4.3.3. Factor analysis feasibility The following criteria are used to assess and describe the sampling adequacy: 0.90 = Marvelous or excellent; 0.80 = Meritorious or very good ; 0.70 = Middling or good; 0.60 = Mediocre or fair; 0.50 = Miserable or poor and below 0.50 = Unacceptable Kaiser, H. F. (1974). If KMOs < 0.5, it is a good idea not to do factor analysis. The Bartlett's Test of Sphericity is the test for null hypothesis that the correlation matrix has an identity Bartlett, M. S. (1954). Very small values of significance (below 0.05) indicate a high probability that there are significant relationships between the variables, whereas higher values (above 0.05) indicate the data is inappropriate for factor analysis.

28

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Table 4.2 KMO and Bartlett’s Test Measure of Sampling Adequacy as a whole KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

0.642

Approx. Chi-Square

4503.007

df

496

Sig.

0.000

Bartlett's Test of Sphericity

Source: KMO and Bartlett’s output - IBM SPSS Statistics Viewer Table 4.2 illustrates the KMO index value obtained for the 32 items and had a value of 0.642 which is above 0.6 Mediocre or average and acceptable. The Bartlett's sphericity test gave a chi-square value of 4503.007 with 496 degrees of freedom that represents a p – value (significance) of 0.000 which is less than a 95% level of Significance,

= 0.05 Bartlett, M. S.

(1954). The determinant value of the correlation matrix was estimated in 0.000. With this feasibility indexes, the conclusion was that the factor analysis could be applied. Factor analysis is a statistical technique that is used to identify a relatively small number of factors in order to represent the relationship among a set of interrelated variables Terre B. et al, (2006). The researcher applied three steps for factor analysis: 

Computing inter correlations between variables (correlation matrix);



Extracting initial factors, and



Rotating the factors to obtain a clearer picture of the factor content as shown the output.

The researcher tried to know the inter correlation between variables. The result illustrates that after extraction, the 32 items have KMO index value: 1 item score above 0.9 = Marvelous or Excellent, 10 items score above 0.8 = Meritorious or Very good, 15 items score above 0.7 = Middling or Good, 5 items score above 0.6 = Mediocre or Faire, 1 item score above 0.5 = Miserable but acceptable. These items are with allowable SAM value.. The researcher tried to know the extracted initial factors. Table 4.3 below illustrates that the eigenvalues of 32 items. In factor analysis, only those factors with an eigenvalue greater than unity were considered Streiner D, (1995), and only eight factors meet that requirement, which together accounts for 76.941 % of all eigenvalues.

29

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Table 4.3 Total Variance Explained Initial Eigenvalues Total Variance Explained Component

Initial Eigenvalues Total

% of Variance

Cumulative %

1

9.206

28.768

28.768

2

3.472

10.850

39.618

3

3.141

9.817

49.434

4

2.748

8.589

58.023

5

1.940

6.063

64.086

6

1.624

5.075

69.160

7

1.260

3.938

73.098

8

1.230

3.843

76.941

Extraction Method: Principal Component Analysis. Table 4.4 below describes the total variance explained extraction sums of squared loadings. The researcher therefore wants the items to be loading properly on the factors. The greater the loading, the more the variable is a pure measure of the factor. Loadings in excess of: 0 .71 are considered excellent, 0.63 are considered very good, 0.55 are considered good, 0.45 are considered fair, and 0.32 are considered poor Comrey, A. L.(1992).. Choice of the cutoff for size of loading to be interpreted is a matter of researcher preference Tabachnick, B. G. (2007). Eight factors have been extracted based on their eigenvalues greater than one. Besides, each factor is constituted of all those variables that have factor loadings greater than the maximum limit 0.7 as shown in Table 4.4 below which is excellent. 32 variables were clubbed into eight factors. These eight extracted factors explained 76.941 % of the variability factors for successful Kaizen implementation. This explains above three-fourth of the variability. Table 4.4 Total variance explained extraction sums of squared loadings

Component

1

30

Extraction Sums of Squared Loadings Total

% of Variance

Cumulative %

9.206

28.768

28.768 HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 2

3.472

10.850

39.618

3

3.141

9.817

49.434

4

2.748

8.589

58.023

5

1.940

6.063

64.086

6

1.624

5.075

69.160

7

1.260

3.938

73.098

8

1.230

3.843

76.941

The researcher tried to use the scree plot for showing the relationship between eigenvalues and factors:

Figure 4.3 below illustrates the scree plot graphs the eigenvalues against each factor. We can see that from the graph that after factor eight there is a sharp change in the curvature of the scree plot. This shows that after factor eight the total variance accounts for smaller and smaller amounts. Factors are interpreted through their factor loadings.

Figure 4.3 Scree plot

4.4.

Identification of the critical factors

The researcher wants here rotating the factors to obtain a clearer picture of the factor content as shown the output. The factor matrix was than rotated to simple structure by means of Varimax Rotation with Kaiser Normalisation Vermaak T.D. (2008). Table 4.5 below illustrates the total variance explained – rotation sum of square loadings after rotation. Thus, after rotation, Factor 1 accounts for 16.056 % of the variance; Factor 2 accounts for 10.286 % of the variance; Factor 3

31

HAFTU HAILU


accounts for 9.996 % of the variance; Factor 4 accounts for 9.157 % of the variance; Factor 5 accounts for 8.525 % of the variance; Factor 6 accounts for 8.253 % of the variances; Factor 7 accounts for 7.369 % of the variance; Factor 8 accounts for 7.298 %. All the eight factors together explain for 76.941 % of the variance in successful Kaizen implementation. Table 4.5: Total variance explained – rotation sum of square loadings Factors

Rotation Sums of Squared Loadings Total

% of Variance

Cumulative %

1

5.138

16.056

16.056

2

3.291

10.286

26.342

3

3.199

9.996

36.338

4

2.930

9.157

45.496

5

2.728

8.525

54.021

6

2.641

8.253

62.274

7

2.358

7.369

69.643

8

2.335

7.298

76.941

The researcher examines the Rotated Factor Matrix Table 4.6 below. This table illustrates the rotated factor matrix correlation of the variables with each of the extracted factors. Usually, each of the variables is highly loaded in one factor and less loaded towards to the other factors. To identify the variables, included in each factor, the variable with the value maximum in each row is selected to be part of the respective factor. The values greater than and equal to 0.494 have been highlighted in each of the rows to group the 32 variables in to 8 critical factors. Six items loaded on Factor 1, four items on Factor 2, four items on Factor 3, four items on Factor 4, five items on Factor 5, three items on Factor 6, three items on Factor 7, three items on Factor 8. All factors consist of at least three items, which is in line with Thurstone’s recommendation of at least three variables per factor for exploratory analysis Kim, J. & Mueller, C. (1978).

32

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Table 4.6 Rotated factor matrix Code Item

Component 1

PII1

A salary promotion system to encourage employee participation in Kaizen

PII2

Standardization and designing ―foolproof‖ implementation processes to minimize errors

PII3

2

3

4

5

.088

.035

.016 .021 .761 -.087

.256 .740

.227

.060 -.026

.117 .771

.200

.035

.092 .182 .323 -.029

.646

.152

.014

.045 .468 .366 .160

.129

.273

.270 -.167 .794

.033 .018

.108

.885 -.027 .269 .049 .119

.238 .368

.666 -.027

.042 .084 .219 -.028

.549

.488 -.041

.135

.024

.394

.128 .579

.004

.008

6

7

-

8

-

.014 .259

.072

Using idea generation soft techniques by following PDCA cycle extensively for process control and improvement

PII4

Well maintaining production equipment’s according to the maintenance plan.

PII5

Regularly top management and relatives auditing the implementation

PII6

All employees recording Kaizen related data during implementation

PII7

Establish policy for Kaizen and cross functional goals realize through policy deployment and audits

PII8

Discussion of all employees Kaizen - related issues in meetings

PII9

Establishing evaluation systems to measure the performance of all employees

PII10 Focusing on bench marking activities for best practicing PII11 Providing frame work of strategic improvement plan for achieving the objectives broadly defined by managements PII12 Clarifying the organization’s goals and objectives formulated

33

.036 .014

.052 .009 -

-

.310

.023

.925

.083

.854

.018

.034 .118

.076 .163

.751

.310

.248

.079

.024

.059

.023 .511 .068

-

.020 -.080

.064 .040

-

-

.006 .004 .034

-

-

.070 .156

HAFTU HAILU

.478

.158

-.084

.020

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 PII13 Working in team for fixing problems and scale up employee’s capability

.050

-

.100

.901

.000 .219 .126 .155

.422 .411 -.011

.172

.494

.187 .205

.279

.285

.585

.000 .276 -.153

.538

.080 .466 .107 .402

.349 .349 -.227

.072

.186 .064 .636 .284

.426 .007

.183

.164

.624 .075 .291 .031

.250 .419

.018 -.027

.541 .171

.386 .138

.064

.565

.283

.212 .045 -.033

.406

.202

.494 .020

.009 -.040 .023 .151 .354

.067

PII14 Top management’s pledging to the development of the entire workforce and encourage participation, learning, innovation, and creativity throughout the organization to get shop floor commitment and

.037

.314 .172

employee trust PII15 Aligning of short & long term plans with a company’s vision PII16 Applying generated new ideas from employees for process modifications and change layouts PII17 Financially rewarding for excellent suggestions to get shop floor commitment and employee trust PII18 Testing the organization’s mission and vision statements against the principles implicit in Kaizen

-

-

.191 .207

PII19 Top managements participation in formation of realistic time scale for change and Kaizen organizational structure PII20 The company implements various inspections effectively (incoming, process, and final products). PII21 The company employees openness for accepting feedbacks PII22 Organizing KPT from members of same disciplines PII23 Views and understand Kaizen as a philosophy and a corporate strategy rather than another strategy PII24 Provide support and direction for Kaizen by allocating resources PII25 Value employees as long term resources at all levels of the organization

34

.600

.054

-

-

.243 .324 .033

.237

-.237

.038

.102 .648

.628 .553 -.063

.000

.275 .158 .090 -.111

.795 .320

.163

.179 .068 .055 .003

.103

.542 .241 -.027

.068 -.106 .052 .595 .204

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 PII26 Having positive attitude to actively involved employees in problem solving, quality &

.550 .101

.039

.126

.048 .138

.788 .026

.173

.081 -.036

productivity improvement PII27 Change in organizational culture by build systems, procedures, and structures conducive to Kaizen PII28 All employees of the willingness to accept the philosophy requirements PII29 Providing training and education for all personnel in Kaizen - related concepts and skills PII30 Continually providing feedback to employees concerning the implementation PII31 Maximizing ownership with management and employees commitment PII32 Providing specific work-skills training to all employees

4.5.

.372

.099

.715 .279

-.132

.124

.225

.014

.300

.056 .117

.055 .405 .168 .589

.069 -.102 .110 .296 .166

.324 .174 -.197

.109

.102 .799 .097 -.040

.576 .120 -.422

.077

.229 .238

-.036 -.095

.322 .010

.795

.145

.103 .001

Mentioning of the eight critical factors

At this point (after factor loading), the researcher is faced with the task of deciding whether the factor analytical procedure produced any meaningful results, and whether conceptually sound interpretation can be attached to the results. Each factor has to be identified and appropriately labeled or named. The variables that have been included into each critical factor have been named as under:-

35

.577

HAFTU HAILU

.140

.064

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Table 4.7 Mentioning of the eight critical success factors Fact

Code

Variable or item included

or 1.

PII23

Factor

Name of

load

the factor

Views and understand Kaizen as a philosophy and a corporate strategy 0.628 Preparation

rather than another strategy PII24

Provide support and direction for Kaizen by allocating resources

0.795 (Ownership

PII27

Change in organizational culture by build systems, procedures, and structures conducive to Kaizen

PII29

Providing training and education for all personnel in Kaizen - related

Education) 0.715

PII31

Maximizing ownership with management and employees commitment

0.576

PII32

Providing specific work-skills training to all employees

0.795

PII2

Standardization and designing ―foolproof‖ implementation processes to 0.740

PII3

16.056 %

Process

minimize errors

control and

Using idea generation soft techniques by following PDCA cycle extensively

improveme

for process control and improvement

3.

; Training &

concepts and skills

2.

0.788

0.771

nt

PII4


0.646

PII8


0.549

10.286 %

PII7

Establish policy for Kaizen and cross functional goals realize through policy

0.666

Planning

deployment and audits PII11

Providing frame work of strategic improvement plan for achieving the objectives broadly defined by managements

36

(Effective communica 0.854

tion)

HAFTU HAILU


4.

PII12

Clarifying the organization’s goals and objectives formulated

0.751

PII22

Organizing KPT from members of same disciplines

0.600

PII6


0.885

PII13

Working in team for fixing problems and scale up employee’s capability

0.901

PII16

Applying generated new ideas from employees for process modifications and

0.538

The company implements various inspections effectively (incoming, process, and final products).

5.

Implement ation (Employee participatio n)

change layouts PII20

9.996 %

0.565 9.157 %

PII10

Focusing on bench marking activities for best practicing

0.925

PII14

Top management’s pledging to the development of the entire workforce and

0.494

encourage participation, learning, innovation, and creativity throughout the organization to get shop floor commitment and employee trust

Effective

PII15

Aligning of short & long term plans with a company’s vision

0.585

leadership

PII18

Testing the organization’s mission and vision statements against the

0.624

8.525 %

principles implicit in Kaizen PII19

Top managements participation in formation of realistic time scale for

0.541

change and Kaizen organizational structure 6.

PII5


0.794

PII9

Establishing evaluation systems to measure the performance of all

0.579

PII30

Continually providing feedback to employees concerning the implementation

0.799

PII1


0.761

37

evaluation 8.253 %

employees

7.

Continual

Recognitio

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 PII17

Financially rewarding for excellent suggestions to get shop floor

0.636

commitment and employee trust

n

&

rewarding

PII25

7.369 %

0.595 Value employees as long term resources at all levels of the organization

8.

PII21

The company employees openness for accepting feedbacks

0.648 Employee’

PII26

Having positive attitude to actively involved employees in problem solving,

0.577

s attitude

quality & productivity improvement 7.298 % PII28

All employees of the willingness to accept the philosophy

4.6.

0.589

Eight Critical Success Factors Interpretation

Factor 1: Preparation (Ownership; Training and education) It is distinguished that the first factor is related with the preparation like ownership and training & education. This factor is very core for successful Kaizen implementation. Primarily, the owner of the company, main management team, facilitators, team leaders and members are expected to have a sense of ownership to view and understand Kaizen as a philosophy and a corporate strategy in order to bring change in organizational culture. Secondly, extensive management and employees oriented training and education is given (As per Figure 4.5). Thirdly, as per the given training the main development team establish policy for Kaizen, cross functional goals, building systems, procedures, and structures by realizing through policy deployment and audits for successful Kaizen implementation. Different authors from literature also agree on this factor Tapias A, et al, (2010). Here main development team support and commitment is the precondition to consider employees are long term resources at all levels of the company. This factor is associated with people of top and middle managements, supervisors and employees. This factor is combined by six main items and explains the 16.056 % of all the items variance. All employees of the case company have taken both management and shop floor oriented training as per their hierarchical levels.

38

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Factor 2: Process control It is distinguished that the second factor is related with process control and improvement. This factor is part of implementation and associated with processes in which workplaces and operations including maintenance activities are standardized or designed to minimize both human and machine errors, kept neat and clean at all times, implements various inspections effectively (e.g., incoming, process, and final products). Besides, employees of the company are using simple or soft idea generation tools and techniques like brainstorming, 5W1H, why–why analysis, 5M1E (See Figure 4.9). Different authors also agree on this factor Bhuiyan N, (2007). This factor is combined by four main items and explains the 10.286 % of all the items variance. During the company observation and interview to DGM’s, the following activities were observed. The case company Kaizen officer, facilitators, KPT leaders and members are using the above soft tools and techniques: brain storming, why-why analysis, 5W1H, 5M1E for controlling their processes. However there were gap on following PDCA – problem solving methodology. Factor 3: Planning (Effective communication) It is distinguished that the third factor is related with planning or effective communication. This factor is associated with people and all employees of the company. It is key for successful Kaizen implementation. Establishing policy for Kaizen and cross functional goals realize through policy deployment and audits, providing frame work of strategic improvement plan for achieving the objectives broadly defined by managements, clarifying the organization’s goals and objectives formulated and organizing KPT from members of same discipline are basic for successful Kaizen implementation. These activities are performed through effective communication. Where there should be main management team participation with shared and helpful association upright between the different hierarchical structures of the company for successful Kaizen implementation (See Figure 4.6). Different authors also agree on this interpretation Tapias A, et al, (2010). This factor is combined by four main items and explains the 9.996 % of all the 32 items variance. After the company wide training has been taken, the top managements taken the responsibility on engaging Kaizen officer. Kaizen organizational structure is already established (Appendix IV). The Kaizen implementation activities were prepared with the aid of main development team. During Kick-off program, the main management team has elaborated the goals and objectives of the company.

39

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Factor 4: Implementation (Employee participation) It is distinguished that the forth factor is related with implementation or employee participation. This factor is associated with problem solving activities and the heart of Kaizen implementation because there is all employees (front line workers to main development team) involvement: During 5S (Sorting, Set in order, Shine, Standardize and Sustain) implementation methodology, discussing Kaizen issues in meeting, parallel problem solving, working in team, in generating new ideas for success continuous improvement (See Figure 4.7). Different authors also agree on this factor Bateman N, et al. (2005). This factor is combined by four main items and explains the 9.157 % of all the items variance. 5S implementation is done in all departments of the case company by all employees’ involvement. During observation, kaizen related documents like: minutes, weekly KPT plans and reports, annual reports were existing until the end of May 2015. Besides, as per the secondary data and observation, several KPTs are recording Kaizen related data during implementation but this activity does not continued. From interviews, it was clear that poor working in team for fixing problems and scale up employee’s capability, poor applying generated new ideas from employees for process modifications and change layouts. However, the company establishes quality in station for incoming, process, and final products inspection. Factor 5: Effective leadership It is distinguished that the fifth factor is related with leadership. This factor is associated with the philosophy of the 4P’s model. Pledging to the development of the entire workforce throughout the organization is important since Leadership is about getting extraordinary results from ordinary people. Besides, main development team establishes visits to get best practices from another successfully Kaizen implementing company. In the case company, employees commitment and trust is achieved due to top management’s guaranteeing to the development of the entire workforce and encourage participation, learning, innovation, and creativity throughout the organization. The main development team has already aligned short & long term plans with a company’s vision. This was observed during the observation. Top managements have been participated in formation of realistic time scale for change Kaizen implementation program. Different authors also agree on this interpretation Tapias A, (2010) This factor is combined by five main items and explains the 8.525 % of all the items variance.

40

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Factor 6: Continually Evaluation It is distinguished that the sixth factor is related with evaluation and monitoring. This factor is associated with process monitoring and very crucial in sustaining the successful continuous improvement activities. Regularly top management and relative’s audit, establishing evaluation systems to measure the performance of all employees and continually providing feedback to capacitate employees, displaying implementation activities at the shop floor with the ways of recording activities lead to successful Kaizen implementation (see Figure 4.80). Pledges developed by each team member for continuous improvement and achievements using the adequate formats, preferably standardized among all improvement groups that exist in the company, which would simplify communication and reports or informs the factor number two and three in importance for successful Kaizen implementation. It also refers to the establishment of standards and guidelines that indicate how to measure the performance indices for the groups establishes. Different authors also agree with this interpretation Bateman N et.al, (2005). This factor is combined by three main items and explains the 8.253 % of all the items variance. The DGMs interview proves regular main management team meeting per two weeks for evaluating the performance of facilitators and KPT leaders with respect to department’s objective. However, there is no well-established assessment system to evaluate the performance of employees. Factor 7: Recognition and reward It is distinguished that the seventh factor is related with recognition and reward. This factor is associated with people and all employees’ encouragement. Improving working conditions in order to recognize employee Kaizen efforts, establishing salary promotion system to encourage employee participation, Position promotions based on work quality, rewarding excellent suggestions for effectively stimulate employee commitment and trust for successful Kaizen implementation. One author also agree on the interpretation Jorge L. G, et al, (2013). This factor is combined by three main items and explains the 7.369 % of all the items variance. Since the case company has already established evaluation system, monthly best KPT recognition and reward is given by the help of Kaizen office. Financial rewarding was given for the Kaizen officer, facilitators and three best KPT’s ‟Maint united‖ - maintenance, ‟Chulule‖ – lasting, ‟Nib main‖ – store KPT leaders & members. But, there is no salary promotion system in the company.

41

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Factor 8: Employee’s Attitude It is distinguished that the eighth factor is related with company employee’s attitude towards change. Employees developing culture of continuous improvement with openness and willingness to accept feedback and the philosophy are necessity for any initiatives to implement successfully. Employees with positive attitude to accept and implement the philosophy. This condition demands developed culture to continuous improvement. Without having positive attitude, it is not expecting to implement the philosophy. Different authors also agree on this Landa Am et al, (2009) describe successful Kaizen implementation requires positive employees attitude. This factor is combined by three main items and explains the 7.298 % of all the items variance. The secondary data illustrates that employees (not all) were highly motivated and open to discuss with their leaders. Besides, the interview also clarifies that employees are always eager to see improvements. However, all the KPT members do not have open mind to accept feedbacks from the appropriate leaders. Table 4.7 illustrated the critical success factors. The following factors are same as the hypothesis presented: process control, continual evaluation, rewarding & recognition, effective leader ship. The theoretical factors of comprehensive training & education and ownership have emerged as one factor which was labeled preparation. Effective communication was merged as planning. Team work and employee participation have emerged as one factor which was labeled as implementation due to the company working culture.

4.7.

Multiple regression analysis

In order to empirically evaluate the various relationships in success indicators and critical success factors, a multiple regression analyses needed to be applied. As such the influence of each of the eight critical success factors or independent variables on each of the three success indicators or dependent variables needed to be assessed. Multiple regression analysis is one of the most commonly used multivariate procedures and is used to build models for predicting scores on one variable, the dependent variable, from scores on a number of other variables, the independent variables Terre Blanche, et al, (2006). The researcher tried to predict the successful Kaizen implementation in terms of staff performance, customer satisfaction and manufacturing cost reduction (dependent) variable from independent variables such as preparation (ownership, education & training), process control and

42

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 improvement, planning (effective communication), implementation (employee’s participation and teamwork), effective leadership, continual evaluation, recognition and reward, employee’s attitude. Table 4.8 summary result from regression model (Dependent variable - customer satisfaction) Code

Factors affecting successful Kaizen implementation (independent variables)

R

Coeffici

t

Sig

square

ents

.385

3.815

0.000

(Beta) PII29

Providing training and education for all personnel in Kaizen -

0.244

related concepts and skills PII24

Provide support and direction for Kaizen by allocating resources

0.244

.327

2.491

0.014

PII12

Clarifying the organization’s goals and objectives formulated

0.194

0.214

2.031

0.044

PII11

Providing frame work of strategic improvement plan for achieving

0.194

the objectives broadly defined by managements PII22 PII10

PII14


Focusing on bench marking activities for best practicing Top management’s pledging to the development of the entire

0.194 0.304

-0.353

0.282

-0.234

3.274 2.967 2.721

0.001

0.004

0.007

0.304

workforce and encourage participation, learning, innovation, and creativity throughout the organization to get shop floor

0.295

3.294

0.001

0.432

4.545

0.000

commitment and employee trust PII18

Testing the organization’s mission and vision statements against

0.304

the principles implicit in Kaizen PII19

Top managements participation in formation of realistic time scale for change and Kaizen organizational structure

43

0.304

-0.238

3.068

HAFTU HAILU

0.003


Value employees as long term resources at all levels of the

0.106

organization PII28


0.153

0.257

2.367

0.019

.410

4.581

0.000

Note: Significance value of 0.05 or less Table 4.8 describes significant value, t-test and coefficients of independent variables that indicate the relationship between independent and dependent variables. Since the significance value is 0.05 or less, there are several non-significant coefficients, indicating that independent variables (critical success factors) are not related with customer satisfaction-dependent variable. They are: Process control and improvement, Implementation, Continual evaluation. There are 11 variables that are significant. It means that the predictor (critical success factors) have relation with customer satisfaction. They are: preparation; planning; effective leader ship; recognition and reward; employee’s attitude. Table 4.9 summary result from regression model (Dependent variable – staff performance) Code


PII23

Views and understand Kaizen as a philosophy and a corporate strategy

R

Coeffici

square

ent


0.404

0.404

concepts and skills PII8

PII2

Discussion of all employees Kaizen - related issues in meetings Standardization and designing ―foolproof‖ implementation processes to minimize errors

44

Sig

.232

2.347

0.020

.409

4.565

0.000

(Beta)

rather than another strategy PII29

t

0.205

0.205

-.223

.324

2.462

3.472

HAFTU HAILU

0.015

0.001


Establish policy for Kaizen and cross functional goals realize through

0.264

.551

5.688

0.000

policy deployment and audits PII11

Providing frame work of strategic improvement plan for achieving the

0.264

objectives broadly defined by managements PII10

PII14

Focusing on bench marking activities for best practicing Top management’s pledging to the development of the entire

0.275

-.331

-.334

3.212 3.810

0.002

0.000

0.275

workforce and encourage participation, learning, innovation, and creativity throughout the organization to get shop floor commitment

.407

4.444

0.000

.243

2.500

0.014

and employee trust PII18


0.275


PII30


Continually providing feedback to employees concerning the

0.271

0.271

implementation PII17


0.403

commitment and employee trust PII25

Value employees as long term resources at all levels of the

0.403

organization PII28


0.162

-.441

4.357

.599

7.185

0.000

.329

3.688

0.000

.335

3.775

0.000

.400

4.493

0.000

Note: Significance value of 0.05 or less Table 4.9 describes significant value, t-test and coefficients of independent variables that indicate the relationship between independent and dependent variables. Since the significance value is

45

0.000

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 0.05 or less, there are non-significant coefficients, indicating that critical success factors are not related with staff performance like implementation (employee’s participation). There are 14 variables that are significant. It means that the predictor (critical success factors) have relation with staff performance. They are: preparation, process control & improvement, planning, effective leadership, continual evaluation, recognition & reward, employee’s attitude. Table 4.10 summary result from regression model (Dependent variable – cost reduction) Code


PII29


R

Coeffi

t

Sig

square

cients

.249

2.412

0.017

(Beta) 0.207

concepts and skills PII32

Providing specific work-skills training to all employees

0.207

.311

2.814

0.006

PII8


0.040

.203

2.044

0.043

PII7

Establish policy for Kaizen and cross functional goals realize through

0.155

.206

1.983

0.049

policy deployment and audits PII11

Providing frame work of strategic improvement plan for achieving the

0.155

objectives broadly defined by managements PII22


0.155

PII20

The company implements various inspections effectively (incoming,

0.057

process, and final products). PII18


0.260



46

0.037

-.304

2.753

0.007

.310

3.183

0.002

.224

2.583

0.011

.358

3.649

0.000

-.247

2.128

HAFTU HAILU

0.035



0.179

commitment and employee trust

.219

2.097

0.038

PII25

Value employees as long term resources at all levels of the organization

0.179

.270

2.597

0.010

PII28


0.097

.246

2.668

0.008

Note: Significance value of 0.05 or less Table 4.10 describes significant value, t-test and coefficients of independent variables that indicate the relationship between independent and dependent variables. Since the significance value is 0.05 or less, there are significant coefficients, indicating that critical success factors are related with manufacturing cost reduction: They are: preparation, process control & improvement, planning, implementation, effective leadership, continual evaluation, recognition & reward, employee’s attitude.

4.8.

Results of hypothesis testing

The potential influence of critical success factors (independent variables) on the success indicators (dependent variables) are described chapter 3 (Figure 3.1) with 10 formulated hypothesis for each linkage. These theoretical hypotheses are empirically tested. Independent variables or critical success factors with significant values less than 0.05 are accepted. The result is providing as shown below. H1: Providing comprehensive training and education to all levels of the company starting from shop-floor employees to top managements will result in increased staff performance, customer satisfaction and decreasing manufacturing costs. This result is accepted. Since the significance value of the predictor training and education in comparison with staff performance, customer satisfaction and cost reduction are 0.00, 0.00 and 0.017 respectively. These results are less than the upper limit significant value of 0.05. H2: Having ownership towards the philosophy will result in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is rejected. Since the significance value of the predictor ownership with staff performance, customer satisfaction and

47

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 cost reduction are 0.647, 0.504 and 0.130 respectively. These results are greater than the upper limit significant value of 0.05. H3: when employees working in team results in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is rejected. Since the significance value of the predictor teamwork with staff performance, customer satisfaction and cost reduction are 0.972, 0.296, and 0.191 respectively. These results are greater than the upper limit significant value of 0.05. H4: Having effective vertical and horizontal communication in providing frame work of strategic improvement plan will result in increased staff performance, customer satisfaction and decreasing in manufacturing cost. This result is accepted. Since the significance value of the predictor planning or effective communication in comparison with staff performance, customer satisfaction and cost reduction are 0.02, 0.01 and 0.007 respectively. These results are less than the upper limit significant value of 0.05. H5: All levels of company employee’s participation in the Kaizen implementation will result in increased staff performance, customer satisfaction and decreasing in manufacturing cost. This result is accepted only for comparison with cost reduction. Since the significance value of the predictor employee’s participation in comparison with cost reduction is 0.011. But in comparison with staff performance and customer satisfaction, the significant value is 0.162 and 0.481 respectively. These results are greater than the upper limit significant value of 0.05. H6: Using process control and improvement techniques will result in increased staff performance, customer satisfaction and decreasing manufacturing cost. This result is accepted only for comparison with staff performance and cost reduction. Since the significance value of the predictor process control and improvement in comparison with staff performance and cost reduction is 0.01and 0.043 respectively. But in comparison with customer satisfaction, the significant value is 0.812. This result is greater than the upper limit significant value of 0.05. H7: Continual evaluation of the implementation and the performance of all levels of employees will result in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is accepted only for comparison with staff performance and cost reduction.

48

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Since the significance value of the predictor continual evaluation in comparison with staff performance and cost reduction is 0.00and 0.035 respectively. But in comparison with customer satisfaction, the significant value is 0.665. This result is greater than the upper limit significant value of 0.05. H8: Establishing recognition and reward system in the company will result in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is accepted. Since the significance value of the predictor recognition and reward in comparison with staff performance, customer satisfaction and cost reduction are 0.00, 0.019 and 0.01 respectively. These results are less than the upper limit significant value of 0.05. H9: Knowledgeable and committed effective Kaizen leadership will result in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is accepted. Since the significance value of the predictor effective leadership in comparison with staff performance, customer satisfaction and cost reduction are 0.014, 0.00 and 0.00 respectively. These results are less than the upper limit significant value of 0.05. H10: Employee’s attitude will result in increased staff performance, customer satisfaction and decreased manufacturing cost. This result is accepted. Since the significance value of the predictor employee’s attitude in comparison with staff performance, customer satisfaction and cost reduction is 0.00, 0.019 and 0.008 respectively. These results are less than the upper limit significant value of 0.00. These results are less than the upper limit significant value of 0.05. Figure 4.4: The theoretical model after empirically tested: the relationship between the CSFs and success indicators

49

HAFTU HAILU


4P’ S

Independent Variables (Critical Success Factors)

Preparation (Education & training)

Peo ple

Recognition & reward Planning (Effective communication)

Operation, Analysis & Knowledge Management

Dependent Variable (Success Indicators) P


R

PII17, PII25

O Increasing Staff Performance


F I T

Employee’s attitude Philo sophy

Effective Leadership

Continual evaluation Pro cess

A PII10, PII14, PII18, PII19

Increasing Customer satisfaction

PII5, PII30

B I L I

Process control

Problem solving

PII28

Implementation (Employee’s participation)

50

PII8, PII2

Reduction of manufactu ring cost

PII20,

HAFTU HAILU

T Y

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Figure 4.5 Preparation Preparation

Providing assessment

Selecting trainees

Preparing Curriculum

Providing Management oriented Training

Overview of Kaizen

    

History of Kaizen What is Kaizen? Kaizen Philosophy Kaizen Principles Systems, tools and techniques

51

Muda, Mura and Muri

   

Concept of cost Types of operations 7 types of wastes Waste identification and elimination

Providing Training

Preparation of Training Document

Providing Shop Floor employees oriented Training

Facilitators and leaders oriented training

Kaizen promotion team

5S

    

Preparation Planning Implementation Sustaining 5S AUDIT HAFTU HAILU

 

The kaizen promotion team activities The problem solving procedures (PDCA cycle)

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Figure 4.6 Planning Planning

Organizational structure

Preparing Kaizen structure in line with organizational structure

Formation of main development team, facilitators, KPT leaders and members

Preparation of streamffffff duties and responsibility of teams

Recognition of current condition

Using checklist

Taking Photo

Recordin g video

Preparation layout and value stream mapping

52

Deciding Activity Range

Selected KPT

Selection of Model Area

Goal setting

Recognizing 5S Sections result Evaluating Existing Condition

Setting Target Companywide

Selected Sections

Declaration

Other alternatives

Preparing activity plan Preparing Gantt chart

Preparation of sorting action plan

Allocating budget

Departments applying requisition formats

Preparation of Set in order action plan Preparation of Shine action plan Preparation of Standardize action plan

Preparation of Sustain action plan

HAFTU HAILU

Declaration of implementatio n Announcing to employees

Holding meeting with employees

Introduction Kaizen Policies

Kick-off

Preparation of Safety action plan

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Implementation

Figure 4.7: Implementation

Set in order activities

Sorting activities

Preparation list of needed materials

Using red tag strategy Preparation for selecting unneeded items

Preparation for selecting needed items Deciding items that are used near to the working place

Performing set in order activities

Listing of unused materials Disposal activities Performing Shining Activities proceed to set in order

53

Shining activities

Preparation for set in order

Sharing responsibility Preparation equipment’s for set in order

Providing space

Visual managements

Directing the shining activity to appropriate personnel Selecting shining areas

Selecting shining methods Selecting shining materials

Standardizing activities

Standardized sorting

Standardize red tags

Set in order standardize

Sustain activities Main management team patrol

Using personnel protective equipment

Using posters

Establishing rewarding system

Leveling visual controls

Standardize shining activities

Safety activities

Performing 5S audit activities

Starting shining activities Performing set in order

HAFTU HAILU

Leveling hazard areas

Displaying openly safety policy

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Figure 4.8: Evaluation Evaluation Phase

Support from Ethiopian Kaizen Institute

Main management team patrol

Check Up the activities Comprehensively

Comprehensive Evaluation manual and Check

Give emphasis on sustaining of the activity

Registration Check-List Award Policy

Kaizen office and cross functional team patrol

KPT’s each other cooperation

Evaluate ―5S Check List‖

Evaluate Kaizen Promotion Team Record problems on‖5S check findings‖

Consider committees feedback

Award Procedure

Tack picture of 5S problems

Sectorial Evaluation Check-List

54

HAFTU HAILU

KPT leaders and members confirming achieved results them selves

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Figure 4.9: Deming, problem Solving, idea generation soft techniques matrix Deming Cycle

Simple Kaizen Tools & techniques

Definition of problem

Brainstorming, 5M1E

Analysis of problem

Why – why analysis, Value analysis, Affinity Diagram

Why

Identification of Causes

Why – why analysis

How

Planning Countermeasures

5W 1H

Process Analysis (Implementation)

3Mu elimination, 5S concept, 5W1H

What

Plan

Problem Solving Procedures

Do

5W 1H, QPCDSME - analysis Check

Evaluation & Confirmation of result

Action

Standardization & Solution

55

5W 1H

HAFTU HAILU


CHAPTER FIVE: CONCLUSION AND RECOMMENDATION 5.1.

Summary of the research

At the present time, there are numerous initiatives functional in manufacturing industries, which pursue to increase the effectiveness and performance, and Kaizen is one of the most implemented systems. In a literature review of 20 authors, it was found that there are 41 key success factors that have been cited.. This variety of factors reported in different companies and countries led to the need to seek and identify specific factors that have to use Ethiopian companies, with their own culture. The general objective of this research was to identify critical success factors for sustainable Kaizen implementation in Peacock shoes manufacturing industry. The study design was Descriptive research. In this research, both quantitative and qualitative data were used.. The target populations of the research were main management teams, facilitators, KPT leaders and members. In this research both primary and secondary data were used as source of information. Based on the research objective, English version questionnaires were prepared. 153 employees were steered using purposive sampling technique. All 153 respondents were filled the survey questionnaires. The response rate was 100 percent. Regarding the reliability of the questionnaire all the questionnaires were reliable and acceptable with Cronbach's Alpha average result 0.908. Frequency of mean was used to know the importance of the factors affecting successful Kaizen implementation and the result was excellent. The factor analysis feasibility was done using measure of sample adequacy - KMO index value for the 32 items and had a value of 0.642 and the Bartlett's sphericity test gave a chisquare value of 4503.007 with 496 degrees of freedom that represents a significance of 0.000 and determinant value of the correlation matrix was estimated in 0.000. With this feasibility indexes, factor analysis could be applied. Factor analysis was done in three steps. Eight critical success factors were identifies that explained 76.941 % of the variability. Multiple regression analyze was applied to empirically evaluate the relationships between success indicators and critical success factors; to know the variation in variable explained by the model.

56

HAFTU HAILU


5.2.

Conclusions from the study

The following specific conclusions have been compiled from the surveys administered during the research process. The critical success factors for sustainable Kaizen implementation in Peacock shoes manufacturing industry are: Preparation - 16.056 %, Process control - 10.286%, Planning 9.996%, Implementation – 9.157%, Effective leadership-8.525%, Continual evaluation - 8.253%, Recognition & reward - 7.369%, 8) Employee’s attitude- 7.298%. Preparation associated with education and training is key for sustainable Kaizen implementation. This CSF is linked to people and related with staff performance, customer satisfaction and manufacturing cost. Process control is key factor for sustainable Kaizen implementation. This factor is linked to process and related with staff performance and manufacturing cost. Planning associated with effective communication is key factor for sustainable Kaizen implementation. This factor is linked to people and related with staff performance, customer satisfaction and manufacturing cost. Implementation associated with employee’s participation is key for sustainable Kaizen implementation. This factor is linked to problem solving and related with only manufacturing cost. Effective leadership on kaizen philosophy is key factor for sustainable Kaizen implementation. This factor is linked to philosophy and people and related with staff performance, customer satisfaction and manufacturing cost. Continual evaluation is key factor for sustainable Kaizen implementation. This factor is linked to process and related with staff performance and manufacturing cost. Recognition and reward is key factor for sustainable Kaizen implementation. This factor is linked to people and related with staff performance, customer satisfaction and manufacturing cost. Employee’s attitude is key factor for sustainable Kaizen implementation.. This factor is linked to people and related with staff performance, customer satisfaction and manufacturing cost. HAFTU HAILU 57


5.3.

Recommendations from the research

The peacock shoes manufacturing industry have, to an extent, made varying degrees of improvement with critical success factors. The researcher tried to show the hypothesis that is empirically tested. It indicates areas where there is room for improvement. From interview, it was clear that currently the company is challenging on sustaining the Kaizen activities. There should be maximizing ownership with management and employees commitment in the company. In addition to this, specific work-skills training should be given to all employees The company should establish salary promotion system to encourage employee participation in Kaizen implementation. The company employees should open to accept feedbacks provided from their leaders and need to have positive attitude to actively involved employees in problem solving, quality & productivity improvement The main development team of the company should establish evaluation systems to measure the performance of the employees. This enables them to mitigate the risks existing in the company. Both facilitators and leaders of the company should follow the problem solving approach PDCA cycle extensively for process control and improvement. The maintenance section staffs should be alert in order to maintaining production equipment’s according to the maintenance plan. Besides to this, there should be good culture of recording data concerning production, quality and maintenance. The company employees should work in teams in order to fix problems and scale up employee’s capability by generating new ideas. These ideas should be used for process modifications and change layouts.

5.4.

Opportunities for further research

This research paper has provided insight into the critical success factors for sustainable kaizen implementation in manufacturing industries. However, this research paper has created a lot of opportunities for further research. The following further research is recommended:

58

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 The researcher wants future study on critical success factors for sustainable Kaizen implementation in both manufacturing and service sector industries in Ethiopia. Due to shortage of time the researcher focuses only on peacock shoes manufacturing industry. The researcher also wants surveying on analyzing the failures of Ethiopian manufacturing industries. Despite the popularity of Kaizen philosophy, there is no research focusing on the root cause analysis for failures of the organizations. Currently manufacturing industries including the case company are implementing the benchmarking. Therefore, it is better to study on aligning basic Kaizen and Benchmarking for sustainable improvements:

59

HAFTU HAILU


References Ahmed, S. Hassan, M. and Fen, Y. (2005). Performance Measurement and Evaluation in an Innovative Modern Manufacturing System. Journal of Applied Science 5 (2), 385-401. Alaskari. O, Ahmad M.M, N. Dhafr, Pinedo-Cuenca. R (2012): Critical Successful Factors (CSFs) for Successful Implementation of Lean Tools and ERP Systems, Vol III, London, U.K Asedesach A. (2014) A Thesis on Effects of kaizen Implementation: p. 41 Bateman N (2005) Sustainability: the elusive element of process improvement. Int J of Oper and Prod Manage 25(3):261–276 Bhuiyan N, Baghel A, Wilson J (2007) A sustainable continuous improvement methodology at an aerospace company. Int J Product Perform Manag 55(8):671–687 Bisgaard S (2007) Quality management and Juran's legacy. Qual Reliab Eng Int 23:665–677 Bisht, D. S. (2013). The Japanese Wow: Kaizen. VSRD international journal of Business and management Research , 167-172. Bwemelo, G.(2014) KAIZEN as a Strategy for Improving SSMEs’ Performance: Assessing its Acceptability and Feasibility in Tanzania, Vol.6, No.35 Desta, A. (2011). A Conceptual frame work for assessing the transferability of the Japanese Kaizen Management Techniques to manufacturing plants in Ethiopia. Asian Journal of Business and Management Sciences, 09-19. Ethiopian KAIZEN Institute (2014)፡ KAIZEN Movement, Strategic Directions and Action Plan 2015-2025 GRIPS. (2009). Introducing Kaizen in Africa. GRIPS, 18-20. Jorge L. G, Denisse G. R., Alejandro A.I. (2013) Critical success factors for Kaizen implementation in manufacturing industries in Mexico, Juhari, N. Abidin, N. and Omar, M. (2011). Factors Influencing Employees’ Motivation in Implementing 5S System. Human Resources Management. Vol. 39. Pg. 4836-4847.

60

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Khan, I. A. (2011). Kaizen: Tha japanese Strategy for continuous Improvement. VSRD international Jornal of Business & management Research , 177-184. Landa Am (2009) CSFs and permanence for Kaizen events. Sinnco, 1–20 (In Spanish) Mezgebe, T.T , Asgedom, B. H and Desta, A. (2013) ‟Economic analysis of lean wastes: Case Studies of Textile and garment industries in Ethiopia. ‖(Unpublished paper). Mfowabo N. (2006). The impact of Total productive maintenance on manufacturing performance. Ministry of Industry, The Federal Democratic Republic of Ethiopia (June 2011). The Study on Quality and Productivity Improvement (Kaizen) in the Federal Democratic Republic of Ethiopia. Norhayati Z., Shalini M., Muhamad Z., Mohd S. (2012) Critical Success Factors of Total Quality Management Implementation In Higher Education Institution: A Review. Vol. 2, No. 12 Nunnally JC, Bernstein H (2005) Psychometric theory, 2nd edn, McGraw-Hill, Interamericana, México, D.F. (In Spanish) Readman J (2007) What challenges lie ahead for improvement programmes in the UK? Lessons from the CINet Continuous Improvement Survey 2003. Int J Technol Manag 37(3):290 Rink J (2005) Lean can save American manufacturing. Reliable plant. Accessed 15 Sept 2011 Romero R, Noriega S, Escobar C, Ávila D (2009) Critical success factors: a competitiveness strategy. CULCYT 6(31):5–14 (In Spanish) Slobodan prosic, M. (2011). Kaizen Management Philosophy. I International Symposium Engineering Management And Competitiveness , 173-178. Suon Vichea (2005): Key factors affecting the performance of foreign direct investment in cambodia, p.80. Tabachnick, B. G., & Fidell, L. S. (2007). Using multivariate statistics (5th ed.). Boston: Allyn and Bacon.

61

HAFTU HAILU

CRITICAL SUCCESS FACTORS FOR SUSTAINABLE KAIZEN IMPLEMENTATION 2015 Tapias A, Yeison A, Correa R, Hernan J (2010) Kaizen: a case study. Redalyc 16(45):59–64 (In Spanish) Terre Blanche, M.Durrheim, K., & Painter, D.Ed.2006. Research in practice. Applied methods for the social sciences. 2nd Ed. Cape town: University of Cape town press. Thessaloniki (2006). Kaizen Definition and principles in Brief: A concept &Tool for Employees Involvement. http://www.etsugar.gov.et/en/news/item/59-kaizen -helped-sugar-facto.Retrieved May14, 2013. Titu, M. A., & Grecu, C. O. (2010). Applying the Kaizen Method and the 5S Technique in the Activity of Post-Sale Services in the Knowledge-Based Organization (pp. 5-8). Hong Kong: ISSN. Vermaak T.D. (2008) Critical success factors for the implementation of lean thinking in south Africa manufacturing organizations. Lawrence Erlbaum Associates. Waheed, A. Zulfigar M. and Rafi, W. (2010). Diffusion of Japanese Management Practices in the developing Countries: A case of Pakistan. Interdisciplinary Journal of Contemporary Research in Business. Vol. 2, Iss.7; 315—337.

62

HAFTU HAILU


2015

Appendices Appendix I: Structured questionnaire

Questionnaire on: Critical success factors for sustainable Kaizen implementation in manufacturing industries in Ethiopia: The case of peacock shoes manufacturing in Addis Ababa – Ethiopia. Introduction 1.1. Background The following questionnaire is adopted; industrial engineering student in Ethiopian Institute of Technology, Mekelle University in order to collect data for research entitled on" Critical success factors for sustainable Kaizen implementation in manufacturing industries in Ethiopia: The case of peacock peacock Shoes manufacturing in Addis Ababa - Ethiopia‖. The questionnaire includes the following points: Factors affecting Kaizen implementation, success indicators and demographic data. 1.2. Objective This management’s oriented questionnaire is prepared for academic research use. The purpose of this questionnaire is to collect data for a research entitled ‟ Critical success factors for sustainable Kaizen implementation in manufacturing industries in Ethiopia: The case of Peacock Shoes manufacturing in Addis Ababa - Ethiopia‖. 1.3. Confidentiality The researchers promise respondents of this questionnaire that your information will be kept confidential and will be used for academic purpose only. We kindly request your cordial support in responding to the questions incorporated in this questionnaire genuinely. 1.4. Instruction Please read each statement carefully and put a tick mark under the number that most describes each respondent’s opinion. In the first section questionnaire the blank space is provided to fill the

63

HAFTU HAILU


2015

respondent’s personal data. The typical scale that is used in the second section questionnaire is a five - point level of importance Likert scale: 1 = Not at all important (NI); 2 = low important (LI); 3 = Important (I); 4 = Very important (VI); 5 = extremely important (EI). In the third section questionnaire is a five - point level of agreement: 1 = strongly disagree (SDA); 2 = Disagree (DA); 3 = Neutral (N); 4 = Agree (A); 5 = Strongly agree (SA) Part - I: Demographic data 1. What is your highest qualification? 1.Primary (Grade 1-6)___,2.Junior(7-8)___ , 3. Secondary (9-10) ____, 4. Preparatory (11-12)____, 5. Diploma____,6. Degree and above ____, 2. What is your position in this organization?

1. Top management ____ 2. Middle

management ____ 3. Supervisor ____ 4. Employee or Operator 3. How long have you been involved in kaizen implementation? 1. 1 year ____ 2. 2 year ____ 3. 3 years ____ 4. 4 years ____5. 5 years ____ Part – II: Factors affecting for sustainable kaizen implementation Code

Likert Scale

Items 1

PII1


PII2

Standardization and designing ―foolproof‖ implementation processes to minimize errors

PII3

Using idea generation soft techniques by following PDCA cycle extensively for process

2

3

control and improvement PII4


PII5


PII6


PII7

Establish policy for Kaizen and cross functional goals realize through policy deployment

64

HAFTU HAILU

4

5


2015

and audits PII8


PII9

Establishing evaluation systems to measure the performance of all employees

PII10 Focusing on bench marking activities for best practicing PII11 Providing frame work of strategic improvement plan for achieving the objectives broadly defined by managements PII12 Clarifying the organization’s goals and objectives formulated PII13 Working in team for fixing problems and scale up employee’s capability PII14 Top management’s pledging to the development of the entire workforce and encourage participation, learning, innovation, and creativity throughout the organization to get shop floor commitment and employee trust PII15 Aligning of short & long term plans with a company’s vision PII16 Applying generated new ideas from employees for process modifications and change layouts PII17 Financially rewarding for excellent suggestions to get shop floor commitment and employee trust PII18 Testing the organization’s mission and vision statements against the principles implicit in Kaizen PII19

Top managements participation in formation of realistic time scale for change and Kaizen organizational structure

PII20 The company implements various inspections effectively (incoming, process, and final products). PII21 The company employees openness for accepting feedbacks

65

HAFTU HAILU


2015

PII22 Organizing KPT from members of same disciplines PII23 Views and understand Kaizen as a philosophy and a corporate strategy rather than another strategy PII24 Provide support and direction for Kaizen by allocating resources PII25 Value employees as long term resources at all levels of the organization PII26 Having positive attitude to actively involved employees in problem solving, quality & productivity improvement PII27 Change in organizational culture by build systems, procedures, and structures conducive to Kaizen PII28 All employees of the willingness to accept the philosophy PII29 Providing training and education for all personnel in Kaizen - related concepts and skills PII30 Continually providing feedback to employees concerning the implementation PII31 Maximizing ownership with management and employees commitment PII32 Providing specific work-skills training to all employees

Part – III: Indicators of Sustainable Kaizen Implementation Code

Items expecting from the overall implementation

Likert Scale 1

2

A. Staff Performance PIII1

Successful kaizen implementation will result in improved in managerial skills and more active use of tools & techniques.

PIIIA2 Successful kaizen implementation will result in employees building more confidence in

66

HAFTU HAILU

3

4

5


2015

new product development PIIIA3 Successful kaizen implementation will result in employees converting to goal oriented thinking PIIIA4 Successful kaizen implementation will result in employees created more suggestions

PIIIA5 Successful kaizen implementation will result in employee’s quality and problem conscious B. Customer satisfaction PIIIB1 Successful kaizen implementation will result in the company providing value, as defined by the customer , to the customer PIIIB2 Successful kaizen implementation will applied methodologies to understand the customer voices PIIIB3 Successful kaizen implementation will result in customers to get the right products at the right time, place and price with right quality. PIIIB4 Successful kaizen implementation will result in the company delivering on time-in-full to its customers. PIIIB5 Successful kaizen implementation will result in customer satisfaction PIIIB6 Successful kaizen implementation will reduced customer complaints C. Achievements – Manufacturing cost PIIIC1 Successful kaizen implementation will result in increased sales volume PIIIC2 Successful kaizen implementation will result in increased production volume PIIIC3 Successful kaizen implementation will result in development of new products PIIIC4 Successful kaizen implementation will reduced product development time

67

HAFTU HAILU


2015

PIIIC5 Successful kaizen implementation will increased market share PIIIC6 Successful kaizen implementation will improved product and service quality PIIIC7 Successful kaizen implementation will reduced defect costs PIIIC8 Successful kaizen implementation will reduced industrial accidents

Appendix II: Interview questions The interview is held with two deputy general manager of production & technique, and corporate service of the peacock shoe manufacturing industry. 1. What is the progress on current level of implementation? 2. What is your response on the overall impact of the implementation on your workplace during or after the implementation? 3. Have there been any other MAJOR CHANGES in the company since the implementation? Market share, production volume, product development, product quality, safety awareness, employee’s morale and workplace organization. 4. Were there any follow-up action items that still needed to be completed immediately after the implementation? 5. What have been the biggest obstacles in sustaining the results from the implementation? 6. What have been the biggest contributors in sustaining the results from the implementation?

Appendix III: Achievements - Part one: Quantitative Results S.n

Indicators

Before

After

Change in %

Monetary value

o. 1. 5S Indicators 1.1

5S evaluation format (%)

18%

95%

77%

2,369,230.7

1.2

Income selling of inventory

0

10,669

0

1,080,520

1.3

Reused items

0

10

100%

109,315.04

1.4

Maintained equipment’s

0

20

100%

150,000

1.5

Free space

0

300

100%

540,000

68

HAFTU HAILU


1.6

Accidents in workplace

2015

10 per month

0

100%

>100,000

2. Elimination of waste indicators 2.1

Searching time per month

192 hrs

55 hrs

71.3%

297,916

2.2

Machine breakdown per month

92.7%

98.96%

6.3%

169,881

2.5

Transportation waste

30 m

0m

100%

8,336

2.7

Wastage of time

24hrs

6hrs

2.8

Discarding inventories

0

28

100

250,000

2.9

Damaged materials

5

0

100%

5,000

5.20mints

4.50 mints 6.7 %

3,571

20,000

3. Productivity indicators 3.1

Lead time

3.2

Duration of breakdown per month 10 hrs

5.4 hrs

85.2%

220,800

3.3

Frequency of breakdown

30 per month

10

67%

66,400

3.4

Production volume per day

771

960

19.7%

75,600

3.5

Labor productivity

92.7%

93.9%

1.2%

647.34

3.6

Machine productivity

94%

97%

3%

SAME Q 2.2

3.7

Raw material productivity

90%

95%

3.8

Delivery Time

Achievable

Achievabl e

Achievable

50,000

4. Quality Indicators 4.1

Defect products per month (pairs)

49

20

57.2%

11,600

4.2

Raw material waste

10%

5%

50%

SAME Q 3.7

4.3

Customer complaints per month

4

2

50%

5. Other Indicators 5.1

Generated new ideas

0

20

160,000

5.2

Cost reduction

-

5%

101,496

Total birr

0

5,685,729.74

Due to the above improvements the following market opportunities were attained in Peacock: Alkahir, Over land, Magokor፣ Bella, Rumbo, Golden pasfic - 906388.5 dollar and RICO, Magokor, Brown shoe, Sseko Design, Overland shoe - 471,566 dollar. Grand Total Birr = 18,127,770 + 9,431,320 + 5,685,729.74 = 33,244,819.74

69

HAFTU HAILU


2015

Part – two: Physical effect (achieving facts on the company)

Preparation

Planning

Implementation

Company’s reward

70

National Award

HAFTU HAILU


2015

Appendix IV: Peacock Shoes Kaizen Organizational Structure

Factory Manager

KPT Chair Person

Main Development team

Production Manager

Planning Manager

Main development team

Product development center

HRM Manager

Cut ting Sup ervi sors

Hand Stitc hing Supe rviso rs

Stitc hing Supe rviso rs

Last ing Sup ervi sors

Plan ning Seni or Exp ert

HRM Senior Expert

Cutt ing Ope rato rs (5)

Han d Stit chi ng Ope rato rs

Stitc hing Ope rato rs (17)

Lastin g Operat ors (12)

Plan ning Exp erts (1)

Person nel & Guard Expert s (2)

71

Maintenance Manager

PDC Super visor

PDC Oper ators (1)

Mainte nance Supervi sor

Maintena nce Operators (1)

KPT office

KPT Facilitators

KPT Leaders & Members

HAFTU HAILU