How does Kaizen reduce cost?

Kaizen and continuous improvement work to improve two things: processes and end results. Continuous improvement is focused on making small changes and improvements around the facility that eventually add up to major beneficial changes in the manufacturing process and quality of the product or service. The improvement in these two areas result in a reduction of waste, including the reduction of costs. Wastes in the process can often result in a very significant expense for the facility, so even small improvements can have an impact on overall costs. Whether this is a hard cost savings or soft, facilities will benefit through long term reduction in expenses. Although Kaizen’s main goal is not necessarily cutting down on costs, it can be a very beneficial outcome.

Another way that Kaizen can help with a company’s costs is through implementation. The small incremental changes that are at the core of Kaizen tend to be low-cost and easy to implement. If the change doesn’t produce the desired results, not much harm has been done since few resources went into the small change. Kaizen events are also an excellent opportunity to look at reducing costs. These events can be created with the idea of cost reduction or cost saving as the event’s focus. During the event, employees and quality circle members can meet throughout the event’s duration to develop ideas and process changes that can lead the company to saving money.

It is important to note that all improvements made my not result in direct cost savings, but they can work to make a process run smoother or make the work environment better for the people in it. At the end of the day, these small changes will build up to larger improvements in the company and bigger savings in cost.