Role of Kaizen in Digital Transformation

Level: Beginner

What you will learn

• How Kaizen can provide a framework for avoiding common mistakes during a digital transformation
• The right Kaizen methodology to apply
• Questions to ask and tools to use to clarify goals of your digital transformation
• How to create a Kaizen culture that supports your digital transformation

It’s becoming increasingly clear that some level of digital transformation is necessary for all businesses that want to remain competitive in their field, from the smallest companies to the largest enterprises. A digital transformation leads to fundamental changes in how a business operates and delivers value to its customers. What this transformation looks like will be entirely different for every organization. For some it may mean automating processes on a manufacturing line, while for others it may mean taking file-sharing to the cloud.

What is certain is that this the outcome of this transformation is more successful when guided by defined processes that get all stakeholders on the same page and address problems before they even happen.

A Framework for Avoiding Common Mistakes

Kaizen lays out a mindset and a set of tools for carrying out improvements throughout an organization. The biggest benefit a Kaizen approach can provide to your digital transformation is that it can clarify objectives and map out the value of the transformation before you begin. Through this big-picture planning, you can prevent many of the most common mistakes companies face in these transformations. Common mistakes include:

• Excessive Automation. Is your digital transformation driven by a desire to improve value to your customer or a desire “to go digital”? You can hone the value provided by your transformation by first outlining clear objectives for the process. Doing so can prevent common results from excessive automation, including the automation of waste. If you’re simply automating already inefficient processes, then you’re adding to your waste stream and nullifying benefits gained from automation.
• Superficial Digitalization. Moving files to the cloud is a great way to free up in-house storage. But what else is it doing for your company? If you’re simply turning paper documents into digital files, you’re missing a major opportunity. Take time to consider what problems this switch can solve and how you can use these digital tools to improve decision-making.
• Data Proliferation. Data generated through the Internet of Things (IoT) can be incredibly valuable, but it also can be overwhelming. If you’re installing sensors on machinery or in certain workspaces, it’s important to have a plan for harnessing that data into insights, rather than letting it take up space in a database somewhere.

The Right Kaizen for Your Digital Transformation

The goal of Kaizen is to drive ongoing improvement. However, there are several types of Kaizen that can be used to guide the launch of a single large-scale project, such as a digital transformation.

There are four types of Kaizen methodologies:

1. Kakushin happens when an organization moves to an entirely new way of doing something. For example, this might mean shifting to a new type of technology to speed up production processes, such as a complete switch to 3D printing to create the prototypes of the new products you are planning to produce.
2. Kaikaku describes a radical transformation of existing processes. For example, this might mean a system update to a new version of software that will require training to help staff use it effectively.
3. Kaizen events are typically brief improvement projects where people, including the management team, analyze their Value Stream Map (your map of the flow of material and information as a product or service makes its way through your value stream) to solve a specific problem. Align all events with broader operational goals and processes in order to have a sustained impact.
4. Kaizen Teian drives people to participate in improving their own processes by identifying forms of waste. This type of Kaizen often is used to drive a cultural transformation because it requires everyone to think about improvement every day, everywhere.

Preparing for A Digital Transformation

As we’ve established, your digital transformation is best begun with a planning phase that lays out your objectives and the framework you can apply to achieve these goals. Begin by asking questions to get a clearer sense of the value of this undertaking:

1. What value do you expect to derive from this transformation?
2. What are the specific steps you need to take?
3. Is there a set timeline for the project?
4. Will you need to design new jobs to create a framework for your digital transformation? Or hire a consulting service?
5. What parts of your business strategy will need to change?
6. What results can the company expect to achieve?

Through process mapping, you can begin to layout the results you want to see. A Value Stream Map is a method for analyzing the current state of activities and designing a future state that will take a product or service from its beginning through to the customer with less waste. With a Value Stream Map, you can quickly identify barriers, waste or unnecessary steps in your transformation, and identify resources for driving your transformation forward. Use this tool to boost collaboration by gathering input among different parts of the organization.

Creating a Kaizen Culture to Support Your Transformation

A cultural change that supports your digital transformation is as important as the process change. In fact, your people are an essential part of your digital transformation. Technology should be used to improve your workforce’s productivity, rather than simply to replace your workers. This means that you must engage your workforce in the transformation process. Only by securing their buy-in can you successfully move this process forward.

Embracing a Kaizen approach also can help harness your frontline workforce to solve problems as they arise, smoothing your transformation. This cultural change should drive your organization to continually improve through experimentation and active problem-solving.

Next Steps

For More Information:

Kaizen Demystified: Getting Started

Integrating Lean Principles into Digital Transformation

Value Stream Mapping: An Enterprise Guide to Increasing Customer Value

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