Friday, July 10, 2009

Implementing Kaizen and Hansei in Retail Business

I am reading a book entitled The Toyota Way these days. This book is written by Jeffrey K. Liker, Ph.D. The book is about how to understand fourteen management principles which has been used by Toyota, the best automaker in the world, and how to implement them in our own business.

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Toyota Prius
Actually, I used to read some short articles about Gemba Kaizen management system but it was a long time ago.
Kaizen is a Japanese word for incremental or continuous improvement whereas Hansei means reflection. In the US, the concept of Kaizen is similar to the principles of Lean Management. When I run my bookstore, I feel that I need to make many improvements in the business. But I think that this small retail shop is totally different from the giant manufacturing industry - Toyota.
We all know that Toyota produces the best selling cars in the world but thinking or applying their management system to my small bookshop might be an incompatible approach.
In fact, after reading the book, I am surprised that Kaizen and Hansei can also be applied to any kinds of business including small, medium and large companies. There are always rooms for improvements. For instance, when I stand in the middle of my bookstore watching the display of the books, how the shelves are arranged and how the books are sold, I know that there are still many things that I need to do to improve my service to customers.
One of the most important things the Toyota Way teaches to its readers is the elimination of wastes in all segments of the production or servicing processes. These wastes include unnecessary movement of workers, defects in products, overstock, unnecessary transport, that do not directly contribute to adding values to the products or services we are about to deliver to our customers or consumers.

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How these wastes are eliminated. The answer is through the implementation of hansei and kaizen. Hansei means that we have to identify the wastes first. To be able to identify the wastes, we have to monitor the manufacturing process, or the servicing process at the place where it happens. After identifying the wastes, the next step is implementing Kaizen. Improvements after being implemented have to be maintained. This means that we will not create or let the wastes to happen again.
In retail business, we sometimes order things that are really not requested by our customers. To minimize the occurrence of excess inventory, we need to provide order forms or wish list where customers can place their orders. Retail manager must use this list to order merchandise from manufacturer. If we can apply this process into our retail process then we can minimize or prevent the occurrence of excess inventory and at the same time increase profit to a maximum value.
I have applied this method for more than year now and the result is amazing. I am able to triple the monthly profit of the bookstore by just providing order form of wish list near the cashier table. Collecting wish list from customers can be a tedious job but it will streamline the whole performance of the business. Customers cannot find the books that they are looking for, they can write the titles; authors, and if possible the publishers of the books. We then order the books from our partner discount bookstore. When they have arrived in our bookstore, we will call or send sms to our customers. We only need one to three days to sell all the books which have just arrived in our inventory. Improvements must be done at the place of the process (gemba).
Buy some books about Kaizen from the following Amazon.com online store if you are interested in learning more about it.



I have seen that Hansei and Kaizen really work when I apply them in my bookstore. I recommend this book to all of you, business owners around the world to read the book and adopt the management principles of the Toyota Way and the Toyota Production System, of course with some adjustments, into our business. by Charles Roring in Manokwari of West Papua of Indonesia

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