Many businesses assume they need to “start small” when it comes to warehouse automation. Unfortunately, by focusing exclusively on small improvements, they may miss opportunities to gain competitive advantage in costs and customer service. If interim investments are not part of a planned larger final system, they could be a false start.

What Kaizen means

It is a word synonymous with improvement in organizations around the world. While the Japanese word literally means ‘improvement’, in industry and business the focus is on small, continuous steps to better processes. It is embedded in the management thinking of many organisations. While Kaizen (literally change + good) is evolutionary, Kaikaku (literally change + transform) is revolutionary. The third K in Japanese is Kakushin, which means ‘transform + new’. It is the Japanese word for Innovation.

Japanese businesses developed Kaizen practices around the 1950s, most notably Toyota as part of their Toyota Production System. After studying why the company was so successful at high-volume production of high-quality vehicles in the 1960s, Masaaki Imai wrote several books on Kaizen and formed the Kaizen Institute, spreading the knowledge and practice around the globe. Swisslog UK’s Head of Sales, Shane Faulkner, said: “There are times when Kaizen is not enough. Worse still, a small improvement can often hold an organization back, perhaps even stifling significant development – this is the Kaizen Paradox.”

The Kaizen Paradox and the issues it creates

By focusing exclusively on small improvements, an organisation may miss an opportunity to gain a competitive advantage in costs and customer service. If competitors take a big leap, an organization will be left behind, still making candles in a light bulb market.

Small improvements also commit resources that could be better spent toward a larger step forward in performance, or with more strategic planning, could have contributed to a major change. Swisslog’s Shane continues: “It is important to note that ROI limits for investment are contributing to the Kaizen Paradox that companies are experiencing. To solve this pitfall, companies should review their ROI restrictions for warehouses with existing mechanized systems already in place.”

Real Innovation

A genuine leap forward, be it Kaikaku (transformation) or Kakushin (innovation), will deliver system lifetime benefits that far outweigh Kaizen (improvement) on its own.

Paradoxically, however, when looking for opportunities for real innovation, one pathway is to apply Kaizen principles to Kaikaku technology. Indeed, it is possible to make a commitment to a Kaikaku leap forward in performance and then, in the process of investigating options in more detail and developing solutions specific to your needs, make a discovery that leads to real innovation; a new type of solution, or transformative technology combined and deployed in a new way.

“This approach can lead to another dramatic change in performance,” Shane continues. “Rather than implementing a system that keeps pace with competitors or catches up with them, it gives you market leading performance,” he says.

That is the real impact of Kakushin; a leap that takes you past all your competitors and establishes new ground.

Recommendations for thinking bigger

Before embarking on a technology path or even selecting a building, businesses should consider their long-term requirements and how technology could be implemented. Innovation may be achievable in phases if planned from the start, while use of an Industry 4.0 approach and modular systems can significantly mitigate long term business risks.

Once organisations are aware of the potential for investments that create a Kaizen Paradox, they are better able to consider potential improvements as part of a larger, longer term picture that permits genuine innovation.

Shane Faulkner explains: “Strategic improvement plans are more robust when they consider costs that could have been avoided. These could include land and buildings, equipment, labour, even the cost or service level issues associated with pick errors and returns.”

There should be agreement at senior levels that any innovative leaps identified are critical to success, and must be planned and scheduled properly to optimise ROI and avoid plateauing or future wastage.

In developing their optimal plan, organizations can develop a well-defined gap analysis, outlining the incremental improvements and innovative leaps they need to either catch up with global leaders or take the global lead in their industry. The organisation should have confidence that it has the capability to close these gaps as quickly as possible, or can engage partners with the required experience.

As part of that approach, meetings and site tours with industry leaders and technology partners can provide awareness of current KPIs that are achievable for key processes within an operation.

Shane concludes: “Businesses can always improve, but not all improvements are complementary or equal. Improvement strategy, continuously reviewed, is critical to the organisation’s long term competitiveness.”

If you would like to learn more about the Kaizen Paradox, download our whitepapers, ‘The Kaizen Paradox: How Incremental Improvements Impede Innovation’ and ‘Kaizen Paradox II – How the Application of Kaizen Principles to Transformative Technology Delivers Real Innovation.’