Presentation on theme: "National Movement for Quality and Productivity Improvement (Kaizen)"— Presentation transcript:
1 National Movement for Quality and Productivity Improvement (Kaizen) Policy Formulation in Developing Countries GRIPS Development Forum
2 Policy Learning and Private Sector Dynamism Dynamic Capacity Development requires efforts by both the public and private sectors.Policy learning by the governmentLearning policy formulation and implementation, through international comparison of best practicesFostering private sector dynamism through national movementSome countries have made policy efforts to orchestrate a national movement for mindset change.
3 Ethiopia-Japan Industrial Policy Dialogue (phase 1: 2009-2011, phase 2: 2012- ) Request from late Prime Minister Meles: July 2008Advice on Ethiopia’s industrial development strategy, from East Asian perspectivesFrank exchange of views, through regular policy dialoguesJICA-GRIPS team has responded to his request: 2009-By sharing concrete, hands-on information on EA experiences and by discussing implications for Ethiopia’s industrial development strategyQuestion from Prime Minister: Sept. 2009How to stimulate private sector dynamism? How to enhance the policy response capacity of the private sector? Our tentative answerNational Movement for Mindset Change !
4 National Movement for Mindset Change Many developing countries suffer from weak private sector response:Firms are too passive, waiting for customers or official supportWorkers do not learn skills; job hopping is rampantShort-term speculation is preferred over long-term investment in manufacturing technologyIf mindset does not change spontaneously, state may have to force it from the top until it becomes part of national culture.Forced movement is a double-edged sword. Some countries succeed brilliantly, but others fail. It must be designed with knowledge and care.
5 Outline Factors for successful Quality and Productivity Improvement (Kaizen) Movement2. Examples:Japan’s quality and productivity improvement (kaizen) movement (1950s- ): private-sector ledSingapore’s productivity movement (1980s- ), with Japanese assistance: government-led3. Lessons and implications for Ethiopia’s kaizeninstitutionalization and scaling-up
6 What is Quality and Productivity Improvement (Kaizen)?
7 KaizenA Japanese philosophy that focuses on continuous improvement through all aspects of life.In business: incremental & continuous improvement with the involvement of the entire workforce“If no money, use your brain”: An effort to improve productivity, quality and cost without additional investment (= no new machines) firstParticipatory: Top/senior management, middle management, supervisors, and workers – all need to participate to continuously improve.Bottom-up: specific ideas of improvement come from the front-line (e.g. factory floors).Emphasis on process as well as results.Source: Masaaki Imai, “Kaizen: The Key to Japan’s Competitive Success”, McGraw-Hill/Irwin, 1986.
9 Quality and Productivity Movement: Europe(post-WW 2)USJapan (1950s)Ethiopia(2009- )BurkinaFaso(1990s)Singapore(1980s)Botswana(1990s)Quality and Productivity Movement:Experiences of Selected Countries in Asia and Africa
10 National Movement: Factors for Success (esp National Movement: Factors for Success (esp. Quality and Productivity Improvement)National movement is not just a few projects; it is a comprehensive drive with strong passion and deep commitment, involving everyone from top to bottom and taking a decade or more to accomplish.Strong personal commitment of top leaderEstablishment of core organization(s) responsible for quality and productivity improvementMassive campaign (for mindset change)Supporting institutions and mechanisms at central and local levelsAuthorized and standardized training programs and materials for those concernedDeveloping private sector capability, esp. fostering private, productivity management consultants
11 National Movement: Country-Specific Factors Drivers of Quality and Productivity MovementPolitical drive is absolutely necessary, but economic incentives are crucial to sustain the movementExamples: domestically-driven (e.g., export drive of resource-poor countries), externally-driven (e.g., FDI demanding local companies for high-quality production capability)Degree of private sector dynamismPrivate sector capability in initiating, scaling-up, and sustaining the movementAbsorptive capacity of new technologies, incl. educational and training levels of general workforceLevel of technologies (depend on stages of development)Basics (5S, QC Circles, etc.)R&D, technological innovation
12 Overview of Productivity Movement (1): Factors for Success Overview of Quality and Productivity Movement (1): Factors for SuccessJapanSingaporeBurkina FasoBotswanaEthiopiaLeadership○△Core organization(s)(private)(public)△/×(publicprivate)ongoingSupporting institutions (central and local levels)(fragmented)Massive campaign(strong, private-led national movement)(strong, govt.-led national movement)(govt.-initiated movement, but partial)(govt.-initiated movement)Training programs and materials(not updated)Fostering private sector capability(productivity mgt. consultant)×?
13 Overview of Quality and Productivity Movement (2): Country-Specific Factors JapanSingaporeBurkina FasoBotswanaEthiopiaDrivers of productivity movementStrongDomesticNeed for export drive (resource- poor countryDomestic + ExternalPerceived poor work ethicsNeed for FDI attraction (resource- poor country)ModerateNeed to enhance supply-side response during SAPPerceived poor work ethicsNeed for economic diversification (resource- rich country)Need for economic transformation (resource- poor country)Degree of private sector dynamismPrivate sector-led national movementGovt.-led national movementWeakGovt.- initiated movementGovt.-initiated movementExternal supportUS & EuropeWB/JapanSAP: Structural Adjustment Program
14 Japan: Main PointsSense of urgency for industrial catch-up (after WW 2 devastation), by exporting manufacturing productsPrivate sector took initiative to create core organizations for quality and productivity improvementStrong leadership of top management of private organizationsCentral and local-level networks for mass participationCollaborative relationships among govt., industry, and academia / within factories (btw. managers and workers)Absorptive capacity of companies to adopt and develop new technologies (incl. managers, engineers, and workers)Various national systems established to support quality and productivity improvement
15 Role of Private Sector Organizations in Introduction, Development and Diffusion of Foreign TechnologiesPrivate SectorOrganizations(JPC, JUSE, JMA, etc.)US & EuropeanCountriesPrivate Companies(Technology Transfer)(Technology Transfer)Dispatch of study missions to US & EuropeInvitation of foreign advisorsTranslation of foreign literature into Japanese<To Learn>Study on adaptability of new technology (by committees and working groups: industry-govt.- academia joint research)Trial application and modification of techno- logy (pilot projects)<To Test & Modify>Guidance and advicesEducation and trainingQualification and certification systemAward systemEnlightenment and movement<To Diffuse>Source: Adapted from Tsuyoshi Kikuchi “The Roles of Private Organizations in the Introduction, Development and Diffusion of Production Management Technology in Japan” (original paper published in the Bulletin ofthe Graduate School of International Cooperation Studies No. 4, 2011, Takushoku University).
16 Japan: Core Organizations for Quality and Productivity Improvement Japan Productivity Center (JPC)Established in 1955 as a public-interest foundation; received US support duringTripartite collaboration: govt., business, and labor unionsMain role: productivity improvement (leading Productivity Movement) (supporting Singapore’s Productivity Movement under JICA project)Union of Japanese Scientists and Engineers (JUSE)Established in 1946, as an incorporated foundationMain role: quality improvement (“Deming Prize”, QC Circles)(supporting Burkina Faso (QCC) under WB/Japan PHRD fund project)Japan Management Association (JMA)Established in 1942, as an incorporated associationMain role: noritsu (efficiency) improvement, management innovation
17 Japan Productivity Center (JPC): 1955- In 1951, Mr. Goshi (who later became the first chairman of JPC) visited Europe as a member of Keizai Doyukai mission and learned Productivity Movement.Mr. Goshi was convinced of the need for Productivity Movement in Japan, and invited other major business organizations to jointly establish JPC.Govt. also recognized the need for JPC. In 1954, the Cabinet adopted a policy for productivity improvement.MITI Enterprise Bureau planned to set up a productivity organization. But, business leaders insisted that JPC be a private organization.In 1955, JPC was established, funded by both public and private sectors. Govt. will not interfere into JPC financial and personnel matters.Govt.-business coordination committee was established, chaired by a private sector representative and attended by vice ministers and JPC-selected private sector members.
18 Union of Japanese Scientists and Engineers (JUSE): 1946- Promoting the concept and techniques of quality control (QC) and statistical quality control in Japan.Invited Drs. Deming and Juran (prominent American experts) for lecturers and seminars on statistical quality control methods and quality management, in 1950 and 1954 respectively.Established “the Deming Prize” in 1951: award ceremony broadcasted on TV every year.Established the Quality Control Research Group, composed of academic institutions, industry and govt.The QC movement introduced at the workshop level in the 1950s was developed into QC Circles by the 1960s.QC Circle Center and grass-root activities (Regions, Chapters)Promoted QC activities by broadcasting training programs on radio/TV and publishing journals.
19 Trend of Study Missions Abroad by JPC (1955-60) A number of study missions were sent abroad and their findings were disseminated widely (organized by top management, industry-specific, specialization, labor unions, SMEs, etc.)Fiscal yearMissionsNo.Participants No.Mission briefingsParticipants(Mission briefings)19551956195719581959196015274362758417430743065274982154121358461411371543313018098741110,02033,96027,42012,1777,8941,740Total3063,1334953652693,211o/w SMEsSource: History of Trade and Industry, Vol. 6, Edited by the Ministry of Trade and Industry(original data come from various reports of the Japan Productivity Center)
20 Regional Branches and Chapters Central and Local Level Networks of Japanese QC Circle Activities (JUSE)CenterRegional Branches and ChaptersQC CircleGrand PrizeFQCMagazineQC CircleMutual VisitQC CircleConferenceAll-Japan QC CircleCompetitionConferenceQC CircleCenterRegionsandChaptersConference forChairman ofthe RegionsConference forSecretary ofthe RegionsQC CircleDiscussionMeetingQC CircleLectureMeetingTraining ConferenceforLeadersPromotersSection HeadsChapter SecretariesQC CircleSymposiumQC CircleConferenceQC CircleStudy MeetingSource: Robert E. Cole (1989) Strategies for Learning
21 Establishment of Various National Systems Mutually reinforcing, comprehensive approachVarious national systems were established, to support the efforts for quality and productivity improvementStandards system (JIS: Japan Industrial Standards)Public research organizations (local-level testing and research centers to meet the industrial needs of local communities)Export inspection systemShindan system (SME management consultant system), etc.
22 Singapore: Main Points Singapore is a successful example of govt.-led Productivity Movement. It now offers consultancy to developing countries.In the early 80s, the govt. launched Productivity Movement, aiming at mindset change at all levels. Unlike Japan, the core organization was established by the govt.Productivity Movement was introduced not only to the business, but also to the public sector.JICA assistance from 1983 to 1990 (JPC experts)Key factors for success:Strong personal commitment by Prime MinisterMassive campaign for awareness raising; later combined with company-based consultancyTripartite cooperation among the govt., industry, & labor unionsProducing private consultants from JICA trainees by installing proper system and incentives
23 History of Productivity-related, Core Organizations PeriodOrganizationRemarks1964Productivity Unit, within Economic Development Board (EDB)65:Charter for Industrial Progress, Productivity Code of PracticeNational Productivity Center- Autonomously-run division under EDB71:Tripartite Interim Committee (to prepare NPB)National Productivity Board (NPB)- Statutory body, initially affiliated with Ministry of Labor and later with Ministry of Trade and Industry (MTI)73:Singapore ProductivityAssociation (SPA) formed81:ProductivityMovement Launched; National Productivity Council (NPC) createdProductivity Standard Board (PSB)- Statutory body, affiliated with MTI2002-presentStandards, Productivity and Innovation Board (SPRING)
24 Singapore’s Productivity Movement 1979: PM Lee Kuan Yew states “Workers here are not as proud of or as skilled in their jobs compared to Japanese or Germans.”1981: LKY studies Japanese practices; LKY met Mr. Goshi, then Chairman of the Japan Productivity Center (JPC) and asked for cooperation. Productivity Movement launched1981: National Productivity Council (NPC) established, with high-level representation from govt., employers, unions and academia: November is designated as Productivity Month; LKY delivers his annual speech on productivity for seven consecutive years
25 Framework for Productivity Movement (Around the 1980s)National ProductivityCouncil (NPC)National ProductivityBoard (NPB)EmployerGroupsCivil ServiceProductivity MovementEducationalInstitutionsUnionsProfessionalInstitutionsInt’l BusinessCommunitiesProductivity AwarenessSkills UpgradingHarmonious Labor Management RelationsSource: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.
26 Channels of Scaling-up and Institutionalization Public sectorProductivity campaign by the Central Productivity Committee; also linked with civil service reform programsInvolving MINDEF and the Singapore Armed ForcesLabor unionsProductivity campaign by the NTUC Productivity Promotion CouncilEmployer groupInvolvement of business associationsTraining at educational institutions (polytechnic, etc.)Development of private, management consultantsIncentives for companiesWorkforce training (via Skills Development Fund)Singapore Quality Award (for both public and private sectors)
27 Core Organization: National Productivity Board (NPB) 1981-95 Serving as the secretariat of National Productivity Council (NPC)Training and developing a cadre of management consultantsPromoting Work Excellence Committee and Quality Control (QC) CirclesPromoting productivity campaignAdministering Skills Development Fund (incentives for companies to train workforce)Cf. Skill Development Fund: an employer-based funding that provides financial incentives for staff training. Established in All employers must pay Skills Development Levy for all workers.
28 Core Organization: Singapore Productivity Association (SPA) Established in 1973 as an affiliated body of NPB (now, SPRING)Promote the active involvement of organizations and individuals in Productivity Movement and expedite the spread of productivity and its techniquesOrganize courses and seminars, company visits, study tours to promote knowledge/skills acquisitionMembers (institutional or individual) have access to information, training and seminars, networking opportunities, etc.International cooperation: in collaboration with MFA, MTI, SPRING, APO, AOTS, etc.
29 Evolution of Productivity Movement in Singapore Awareness stageAction stageOwnership stages90s-Create widespreadawareness of productivityamong companies andthe workforceTranslate “Awareness”into specific programsTo improve productivityat the workplaceEncourage ownership ofProductivity Movementby private firmsStart internationalcooperationJICA-supported Productivity Development Project (PDP: )Training of NPB staff NPB staff (with JICA experts) Private managementMassive campaign conduct company visits, consultantsmodel company project, etc.
30 Awareness Stage: 1981-85 Focus Measures taken Positive work attitude TeamworkRecognition for companies and individualsMeasures takenEducation of the publicInformation dissemination and trainingStrengthening company loyaltyPromotion of labor-management joint consultationPromotion of productivity in the public sectorSource: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.
31 Key Message “Together We Work Better” Teamy Bees“Together We Work Better”Productivity campaign slogans and postersVirtuous cycle (political message) Increased productivity Growth of business/economy More consumer demand for products Welfare improvement of individuals
32 Action Stage: 1986-88 Focus Measures taken Skills upgrading of management and workersUpgrading of companies’ operational efficiencyMeasures takenModel company project – implemented jointly by NPB staff & JICA expertsAssociate consultant scheme (NPB Associates), management consultancy referral schemes – mobilizing private consultants trained under JICA-supported PDPIndustry-based consultancy assistance schemeTraining of workforce (via. Skills Development Fund)Collaboration with other National Training ProgramsSource: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.
33 Ownership Stage: 1989-90s Focus Measures taken Self-sustaining Productivity MovementMeasures takenPrivate sector leading the annual productivity campaignSingapore Quality Award (1994- )Launch of Productivity Activists Scheme (1996- )Cf. Productivity Activists Scheme (introduced by PSB): network to enable member companies to benchmark their productivity against partners and improve their skills and techniques. Resources are pooled for an effective exchange of information in support of productivity movement.Source: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.
34 JICA Kaizen Project in Ethiopia Phase 1: Pilot project ( )Select and teach 30 companies (5S+QCC; good results obtained)Set up Kaizen Unit under MOI; upgrade to Ethiopia KAIZEN Institute (EKI)Phase 2: Training Ethiopian kaizen trainers ( )Teach kaizen to more firms (large, SMEs, SOEs…)Ethiopian experts (central & local level) to gain experience through teaching, to replace JICA expertsStrengthen EKIFutureKaizen as a key productivity tool for light manufacturing industrialization & five-year planScaling up domestically & internationally
35 Driven by strong initiative of PM with JICA’s support Kaizen in EthiopiaDriven by strong initiative of PM with JICA’s supportTire factoryPVC pipe factory
36 Quantitatively Measured Results from the Kaizen Pilot Project Per-headSource: JICA
37 Implications for Ethiopia’s Kaizen Institutionalization and Scaling-up The Ethiopian government is strongly committed and already established the core organization (EKI), building on achievements of kaizen pilots.To diffuse and sustain kaizen on the ground, the following issues may worth consideration.National Movement requires long-term efforts; be mindful of three stagesImportant role of the core organization throughout the stagesMassive campaign for mindset changeTraining programs and materials (by using and adapting kaizen manuals being developed now)Mechanism for nationwide outreach, including MSEsMechanism for inter-agency coordinationAwareness Action stages Ownership stage (self-sustaining)
38 Current Assessment and Challenges Ethiopia is working hard for kaizen institutionalization and scaling-up, by combining the Action with Awareness Stages.The country is making impressive progress, and even established the National Kaizen Council (led by MOI minister). Ethiopia has a potential of becoming the first success model of govt.-led national movement in Africa.However, sometimes EKI moves too fast for “quick-win”, and there remain challenges to realize Kaizen National Movement in a true sense, such as:Awareness stage:Ethiopia’s kaizen awareness has risen considerably, thanks to enormous efforts by EKIBut, this is mainly directed to “usefulness” of kaizen as a productivity tool and not to spiritual awakeningNeed to shift the balance of Ethiopia’s awareness campaign, with greater emphasis on the spiritual (philosophical) aspects.
39 Current Assessment and Challenges Ownership stage (-- in the future, this becomes critical)Collaborative relationship among govt., business, academia Adapting and internalizing kaizen into the Ethiopian contextSustainability of the core organization Technical sustainability: Need to constantly update knowledge (e.g., linking with FDI strategy?) Retain national experts and gradually foster private mgt consultants (e.g., qualification system?) Financial sustainability (public, or private?)Important role of TVET and education to raise the absorptive capacity of the future workforceDevelop comprehensive policy framework and supporting institutions for quality and productivity improvement