Analysis of Key Factors Affecting Kaizen and Development of a Framework for its Effective Implementation in Automobile Sector of Pakistan

Abstract

There are a number of philosophies, tools and techniques available for continuous improvement of performance of the organizations. Kaizen is one of the Japanese management philosophies, which can be effectively implemented for continuous improvement of performance, work area, product quality, organizational internal processes and development of human resource. Primarily, Kaizen was developed and implemented by automobile sector organizations of Japan. Most of the automobile organizations of Pakistan are Japan based and have tremendous contribution in economic development of the country. Therefore this sector was selected for measuring perceptions of respondents regarding different factors affecting Kaizen and its outcomes. The theoretical framework for effective implementation of Kaizen was developed through identification of key factors from literature review and survey of automobile organizations and discussion with proponents of Kaizen in Pakistan. In this research, Top Management Commitment, Organization Kaizen Culture, Personal Initiative of Employees, Rewards & Recognition, Training of Workers and Kaizen Event & Team Design were selected as independent variables of Kaizen. Variables such as Human Resource Development, Work Area Improvement, Product Quality Improvement, Organization Internal Process Improvement and Overall Success of Kaizen in an organization were incorporated as outcome variables of Kaizen in theoretical framework. In this research, survey technique was adopted for the collection of data for empirical analysis. The existing questionnaire found in the literature was amended, and this modified questionnaire consisting of two parts was used in this research. Construct validity and reliability of survey scale items were checked through Factor Analysis. Survey was conducted in two phases. In first phase, Part I of survey questionnaire was forwarded to 455 automobile sector organization including member organizations of Pakistan Automobile Manufacturing Association (PAMA), Pakistan Association of Automotive Parts & Accessories Manufacturers (PAPAM) and Association of Pakistan’s Motorcycle Assembler (APMA). Out of those 455 organizations only 216 organizations responded back showing response rate of 47.5%. Kaizen tools and techniques implementation status was found good / satisfactory in 97 organizations. In second phase of survey, perception of individual respondents regarding statement of survey scale xxxiii items related to independent, process and dependent variables of Kaizen was measured from selected organizations of Phase-1 of the survey. A total of 200 respondents from 61 different organizations including respondents from top management, middle management and shop floor workers working as Kaizen team members and team leaders responded back to survey questionnaire. During face validation and data screening through descriptive statistics, 27 survey responses from 7 different organizations were rejected due to incompleteness or biasness. Finally 173 survey responses from 54 organizations, implementing Kaizen tools and techniques for continuous improvement were empirically analyzed. The relationship among independent and dependent variables was determined through statistical analysis of data collected through measure of perceptions of the respondents. Pearson Correlation Test, ANOVA and Multiple Linear Regression Analysis were applied to confirm the proposed theoretical research framework. Results of statistical analysis indicate that critical factors such as Top Management Commitment, Organization Kaizen Culture, Personal Initiative, Reward & Recognition, Training of workers and Kaizen Event & Team Design have medium to strong positive correlation having Pearson Correlation Coefficient values ranging from 0.413 to 0.791 with outcome variables of Kaizen. After confirmation of all pre-requisites of Multiple Linear Regression Analysis from the data, regression model for each outcome variable of Kaizen was developed. The results indicate that model developed for outcome variable Human Resource Development account for 76.7% variation in it due to change in independent variables such as Top Management Commitment, Organization Kaizen Culture, Rewards & Recognition and Training of Workers having standardized beta coefficient values 0.432, 0.206, 0.242 and 0.269 respectively. The regression model developed for Work Area Improvement account for 72% variation in outcome variable of Kaizen “Work Area Improvement” due to independent variables such as Organization Kaizen Culture, Rewards & Recognition and Training of Workers having beta coefficient values, 0.251, 0.315 and 0.549 respectively. Similarly the third regression model developed for Product Quality Improvement accounts for 72.3% variation in it, contributed by three independent variables such as Top Management Commitment, Organization Kaizen Culture, and Training of Workers having beta coefficient values, 0.428, 0.338 and 0.350 respectively. Fourth model accounts for 75.5% variations in Organizational Internal Process Improvement, contributed by five independent variables such as Organization Kaizen Culture, Rewards & Recognition, Training of xxxiv Workers, Personal Initiative of employees and Kaizen Event & Team Design having beta coefficient values, 0.220, 0.255, 0.221, 0.455 and 0.210 respectively. Finally, 69.2% variations in Overall Success of Kaizen were explained by four independent variables of Kaizen such as Top Management Commitment, Personal Initiative of employees, Rewards & Recognitions and Training of Workers having beta coefficient values, 0.281, 0.228, 0.219, and 0.361 respectively. The results of mediation analysis indicate that process factors of Kaizen partially mediate the relationship between independent variables and overall success of Kaizen in an organization. The results of this study are in line with the research carried out on Kaizen event effectiveness in the UK. The framework for effective implementation of Kaizen was developed by incorporating all independent variables (input factors) having medium to strong correlation with outcome factors and has significant contribution in regression model developed for different outcome variables of Kaizen. This research study is limited to automobile sector organizations of Pakistan, however, in future the scope of this research can be widened to other sectors as well. Secondly, in this study the relationship among 15 different variables (independent, process and dependent variables) of Kaizen has been analyzed. The relationship among other organizational factors, internal as well as external affecting Kaizen may be identified through empirical analysis in future research work.