There is a consensus among economists that for economic growth to be sustainable in the long run, it must be driven by productivity gains. While it is true that productivity can be improved using new machinery, technology does not improve productivity unless operators use and maintain it properly. Good management is a prerequisite for substantial improvements in productivity. The good news for Africa is that there is a human-friendly, inexpensive, common-sense approach to productivity gain that has proved effective in other regions of the world. Its name is kaizen.
Senior Assistant Director, Private Sector Development Group, Industrial Development and Public Policy Department - Japan International Cooperation Agency
Professor Emeritus - National Graduate Institute for Policy Studies
Vice President - National Graduate Institute for Policy Studies
Kaizen is the management philosophy and expertise that brings about continuous, participatory, incremental, and low-budget improvements in quality, productivity, cost, delivery, safety, morale, and environment. Kaizen offers a solution for many entrepreneurs who cannot afford to employ highly-educated and skilled workers. A basic function of the methodology is to serve as a set of effective job-training tools for entrepreneurs who have to train unskilled workers and instill in them a positive mindset. The advanced part of kaizen offers a variety of tools for spotting problems, finding solutions, motivating workers and managers to participate in these activities, and managing cycles of planning, implementing, reviewing, and setting targets for further improvement.
Kaizen methodologies were developed in Japan during its high-growth period in the 1960s-70s, adopted by U.S. industries in the 1980s in the name of lean production, and disseminated by Japanese investments in Asian countries. Kaizen has proven to be one of the best approaches to creating discipline among workers and making them proactive and capable of upgrading their knowledge and skill sets. Now, governments in many African countries show strong interest in promotion of kaizen. In the case of Ethiopia, with the support of Japan International Cooperation Agency (JICA), the government spent $4.13 million to promote kaizen from 2011 to 2016 and calculated monetary gains of $105 million. The results of a randomized controlled trial conducted in the garment industry in Tanzania show that the combination of conceptual training in the classroom and practical training on site of kaizen leads to the sustainable growth of enterprises. The finding of the study strongly indicates that this form of management training is an effective first step for industrial development.
However, because of possible labor turnover, private entrepreneurs do not have adequate incentives to invest in the human capital of their employees. Moreover, many entrepreneurs remain unaware of the value of such investment. Thus, market forces are likely to fail to lead to adequate investment in human capital for industrial development. Governments in developing countries or their development partners should provide guaranteed high-quality training programs, nurture a number of trainers, and support the training of entrepreneurs in a sustainable fashion.
Further, we propose a logical sequence of support measures by government or development partners, beginning with kaizen training for entrepreneurs, followed by investment in infrastructure and financial support, which we call TIF strategy—training, infrastructure, and finance. We recommend the training first to strengthen entrepreneurs, because the rates of return on investment in infrastructure, as well as physical capital, will be low if there are few promising entrepreneurs. The support sequence further aims to attract foreign direct investment (FDI)—investment made by a firm or individual in one country into business interests located in another country—by developing disciplined workers, well-equipped industry parks, and competent local firms that can make some intermediate goods and services locally available. Kaizen may also facilitate entrepreneurs’ learning of advanced technologies and marketing from FDI.
Kaizen is a human-centered approach with several practical guidelines for management of enterprises and workers. One of them relates to who should be removed when productivity gains associated with kaizen generates a surplus of labor on the production floor. The worst option is to make the surplus workers redundant, because the remaining workers are unlikely to further cooperate with the process due to emerging risks related to their job security. A better way of laborsaving is to move the best workers from the production floor and to assign them to jobs that require more creativity and responsibility.
Of course, this has challenges. The commitment of top-level management to support and encourage workers to undertake activities that include kaizen is indispensable. When, through hard work and contrivance, workers succeed in bringing about improvements, top management should reward their achievements. For example, if workers request to try out a new layout for a production floor, executives should consider the proposal. Without knowing the value of kaizen, however, it is difficult for executives to commit themselves, and without having achieved success by using kaizen, it is difficult to convince them of its value.
A similar comparison can be made at the national level. Politicians must buy into the public policy measures that support a national productivity movement. But to commit to such policies, they need tangible case studies of success to be able to sell the policy model to the public. Our book, “Applying the Kaizen in Africa: A new avenue for industrial development,” sets out to provide successful cases in developing countries to prove the merit of kaizen as a path forward for industrial development in Africa.