Kaizen is a holistic management philosophy that harks back to 1950s Japan. Ever since, it has been considered the most important Japanese management method. Kaizen is probably best translated as “continuous improvement.” The fundamental aim of kaizen is to optimize existing processes and systems through incremental improvements and small adjustments, and thus minimize or – whenever possible – eradicate waste in a business. As part of his master’s degree at the School of International Business and Entrepreneurship at Steinbeis University Berlin, Stefan Kopf looked at the implementation of kaizen in the material planning of retail products at the Wendlingen-based toolmaker Festool GmbH.
As a business process, one of the aims of retail product material planning is being able to call up products as needed. The responsibilities of the material planning department thus include ensuring items are available for delivery and managing stock quantities and stock mixes. Overall, the aim is to maximize stock availability while minimizing stock levels.
Festool placed its trust fully in its MBA student and gave him an extremely simple remit: minimize waste. Stefan Kopf began his project by analyzing the status quo then defining a roadmap for the project. Goals were laid down in the project strategy plan by using a variety of portfolio techniques and matrices to capture active and passive factors. Once his project definitions were complete, Kopf started a sub-project to minimize storage area and significantly reduce the warehousing space being used in the consignment warehouse. With his team, Kopf realized that existing restrictions and processes had fallen behind modern needs and were no longer up to the job. By mapping new material retrieval processes and consignment guidelines, the sub-project successfully achieved its aims. Processed were streamlined to match future needs and long-term stock volumes were reduced.
The next sub-project, an ABC/XYZ analysis, was based on the premise that items have varying levels of importance in the sales program. Accordingly, they should be handled differently in material planning. To rank items in the ABC/XYZ analysis, the share of overall value of an item was given an A, B or C rating. The predictability of ordering was scored with an X, Y or Z. This was deemed necessary to optimize handling and manage warehouse items and stocks. By developing their own analyses and procedures, the team was able to classify items in the product portfolio precisely, without having to invest in third-party solutions.
A third sub-project was set up under the name “Automatic Ordering”. Staff working in materials handling for retail products had identified that too many people were tied up in day-to-day operations, and that staff were thus unavailable to work on improvements in internal processes and procedures. This problem can be minimized by using an SAP-based automatic reordering system. Before the project, only a small number of test components had been ordered using this process, so now the aim was to order a larger volume of products using this system. To do this, the team referred back to the ABC/XYZ analysis, which allowed them to identify suitable materials and then integrate them into the automatic ordering process.
Apart from these three sub-projects, Stefan Kopf and his team worked on a number of other ideas to support continuous improvement processes. For example, they set up regular scheduling workshops, a wiki to coordinate know-how, and a variety of supplier optimization projects. The results were a powerful reminder of the success of the project skills methods used at Steinbeis University Berlin: by partnering with leading companies like Festool, success can be shared in by all.