Strategic KAIZEN: Convert Target Profit to TAKT PROFIT
Alin Posteuc?
Author of Strategic KAIZEN concept | Author | Performance Improvement Consultant | The ”Traian Vuia” Prize Laureate of the Romanian Academy
The concept of Strategic KAIZEN plays a central role in the new profitable production planning paradigm called Speed-Based Target Profit (SBTP), a paradigm that operates according to your production system.
”SBTP enables manufacturing companies to meet the takt profit and implicitly the annual and multiannual manufacturing target profit per period, regardless of future sales scenarios, increasing or decreasing, while their own production activities become maximum effective and efficient at the same time”, a / n, through Strategic KAIZEN and KAIKAKU. p. 21
The Main Goal of SBTP: TAKT PROFIT
”The takt profit is the rate at which the unitary target profit of the period must be met or in other words, the flow rate to satisfy the need for unitary profit of the company for a period, or the contribution of the unitary profit as cash at the pace sold based on bottleneck operation capacity (per minute).” ...”(...) the takt profit is the demand for profit from the shareholder (treated as profit making speed).” p. 22.
”Ideal takt profit represents the state of maximum Synchronous Profitable Operations (SPO) by concurrently ensuring the maximum effectiveness (by maximizing the effectiveness of the bottleneck operation) and the maximum efficiency (by minimizing the costs to the maximum). Usually the ideal takt profit is considered as having a 100% index.” p. 25.
The conversion of the Target Profit into TAKT PROFIT (or profit per takt minute) is done through the new SBTP paradigm of approaching operations and profitability, through Manufacturing Cost Improvement and through bottleneck profitability improvement and control in which the intensive use of Strategic KAIZEN is essential.
The calculation formula of TAKT PROFIT with an example is presented below
Thus, SBTP is the profitable production management and manufacturing improvement system for production planning which integrates productivity review and improvement directly within the planning process. In this context, the concepts of Strategic KAIZEN and KAIKAKU are decisive in fulfilling the annual and multiannual target of TAKT PROFIT simultaneously with the target of takt time.
The basic philosophy of Strategic Kaizen
”The SBTP approach is first of all an “inside out” type approach and then an “outside in” type approach (the need to fulfill the takt profit target). (...) This is why the planning of strategic improvement (a/n: Strategic KAIZEN and KAIKAKU) projects is done concurrently with the planning of production.” p. 53.
Therefore, the ”inside out” philosophy behind Strategic KAIZEN thinking in the new Speed-Based Part Profit (SBTP) paradigm of thinking and action, explicitly described in the book in the 5 basic steps of SBTP, is:
Flow,
Synchronization and
Profitability
The concept Strategic KAIZEN was originally published in the 4 books
- Manufacturing Cost Policy Deployment (MCPD) (3 books; 2017, 2018, 2019);
- Speed-Based Target Profit (SBTP) (1 book; 2020).
The concept of Strategic KAIZEN has over 20 practical applications and over 230 explicit appearances in the texts of the 4 books.
Thank you,
Dr. Alin Posteuc? – CEO, Exegens; the author of the concept of Strategic KAIZEN, the MCPD system and the SBTP paradigm.
4 Books on Strategic KAIZEN: https://lnkd.in/gtGNWtJ