By Asayehgn Desta, Ph.D.
Sarlo Distinguished Professor of Sustainable Economic Development
Dominican University of California
Tigrai Online - June 04, 2013
Faced with emerging global competition and substantial changes in consumer needs, desires, and tastes, a number of enterprises today are rapidly making adjustments to re-engineer their manufacturing processes to meet these needs. The dynamic kaizen strategy is an activity of continually revolving cycles of Plan, Do, Check and Act (PDCA) which focuses on customer-driven processes to improve productivity and quality of products and services by amassing marginal improvements over time. A number of enterprises in Ethiopia are using kaizen to retain their market share, and satisfy their domestic and prospective international consumers (Ministry of Industry, 2011 and See Desta, 2013).
Using kaizen to help them thrive, firms believe that using the kaizen organizational structure will enable them to create a bottom-up type of employee-friendly team. This team would be cross-functional to include engineers, shop managers, operators, and frontline-line employees working together on a targeted work problem. Making workers the leading actors, the kaizen process involves learning by doing through a series of brainstorming sessions to raise awareness of specific actions which are fundamental to developing kaizen capability for the improvement of productivity that could take root and make a company grow endlessly.
In short, when well established, kaizen strategies help companies to control cost, minimize workers motion, focus on zero defects and, more fundamentally, improve worker’s skills by creating a cooperative atmosphere where everyone becomes fully aware of the key goals. Each step in the process is mapped out and measured to ensure economic value to their customers. As stated by Glover et al (2008) kaizen “…event teams apply structured process tools and human creativity with a goal of substantially improving the performance of the work area, process or product.” The team workshop is purposely designed to make jobs easier by taking them apart, studying them, and making improvements, creating a culture of continual improvement with outreach to everyone in the organization (Thessaloniki (2006).
The conventional method of Total Quality Management (TQM) of production techniques is challenged for “…like obtuse principles, staff were sent back to their regular duties and told to improve the quality of their work process. No one typically thought their process was broken so there wasn’t much incentive to change anything (EPA, November 2007). Thus, while the conventional approach emphasizes individual work and mainly watches to see if the worker meets the performance objective of an industry, the kaizen techniques of production challenge the status quo and help workers internalize the work, with creativity and emphasis on institutionalizing the productivity process. In short, while the conventional approach emphasizes each worker’s performance, in kaizen, everyone is encouraged to contribute to job improvement. While being process-oriented, kaizen is based on the assumption that a company’s overall competitiveness will improve in the long run if individual variations are reduced.
Thus, the purpose of this article is to map out awareness, institutionalization of process factors and economic, social and environmental effects of the newly introduced kaizen techniques on continuous improvement and the production of quality products and services at the Wonji Sugar Company in Ethiopia.
After taking over the lands of the Nomads in 1951, the Ethiopian Government granted a concession of 5,000 hectares in Wonji in the upper reaches of Awash Ethiopia, 100km. Southeast of Addis Ababa, to a Dutch Company known as HVA (Handlers –Vereenging Amsterdam) for the establishment of a sugar estate and white sugar production (Ethiopian Investment Agency, May 2008). As the demand for sugar increased in Ethiopia, the Wonji Estate expanded to include an additional 1,600 hectares of land from Shoa, about seven km. from Wonji. The Wonji/Shoa Sugar Company then started sugar production in 1962.
At the formal inauguration of the Wonji/Shoa Factory on November 10, 1962, the late King Haile Selassie described magnanimously this first large-scale commercial investment in Ethiopia that could very well make Ethiopia self-sufficient in sugar production, as well as creating an Ethiopian export market for sugar products to its neighboring countries. In addition, Emperor Haile Selasie further claimed that with the crushing capacity of 1600 tons of cane per day (TCD), the establishment of this industry would become vital to the development of the nation with improvement of the standard of living of its people. As a source of foreign exchange it is now sold as consumer goods to the global world (The Church of Haile Selassie I, 1962) to satisfy the cravings for sweetened food (sucrose). It must be noted that though the sugar project started as a joint venture between the Dutch (HVA) firm and the Ethiopian government, the HVA owned about 90 percent of the sugar plantation and sugar factory while Ethiopia owned only 10 percent. In addition, in its operation of the sugar factory, HVA remitted 10 percent of the invested capital and 15 percent of the annual profits to its headquarters (Bondestam (1974).
With the change of government in 1974, under Proclamation No.31 of 1975, all the sugar factories in Ethiopia became nationalized and administered under the centralized bureaucratic administration of the new Military Government. Though the Wonji Company was very productive until the 1980s, it eventually stagnated because of the atrocities and red terror committed by the Military Government causing competent and effective workers to leave the factory and run for their lives.
Finally, in 1991, as the ensuing civil war completely devastated the authoritarian apparatus of the military administration in Ethiopia, the sugar corporation was dissolved by law and all existing factories were reestablished as public enterprises to be run by the Ethiopian Sugar Development Agency starting in 1992. To revive the sugar industry, the Ethiopian Sugar Development Agency was formed as a share company of the Development Bank of Ethiopia, Ethiopian Insurance company and the then existing three sugar factories (i.e., Wonji, Shoa and Metehara ) in 1998. Furthermore, under the Council of Ministers Regulation No.192/2010), in 2010, the current Ethiopian Sugar Corporation was then formed replacing the former Sugar Development Agency. The most conspicuous reasons for the establishment of the Sugar Corporation were to: 1) grow sugarcane and other sugar yielding crops, 2) process and produce sugar, sugar products, and sugar by-products, 3) sell the products and by-products in domestic and export markets, 4) encourage and support the sugar cane growers who supply their cane, and 5) cooperate with educational institutions to produce the required type, number and quality of trained manpower for the sugar industry (Sugar Corporation & Ethiopian Sugar Industry Profile, March 12, 2013).
As stated by Davison, the Sugar Corporation is currently carrying out expansion projects within the existing sugar factories at Methara, Finchaa, Tendaho, and the modernization of the Wonji/Shoa sugar factory. In addition, the government is in the process of constructing new sugar factories (i.e., at Beles in the central Amhara Region; Wolkait in the Northern Tigray area; Kesem in the Northeastern Afar regional state; and six more factories in the South Omo Zone of the Southern Nation, nationalities and Peoples’ region) by 2015 as part of the five year Growth and Transformation Plan (GTP) (September 13, 2011).
Furthermore, to become self-sufficient in sugar production by the end of 2013, and diversify the products of sugar cane into ethanol, electrical power, fertilizers, and build tissue culture laboratories, the corporation is visualizing creating the sugar industries to be competitive enough to maintain a sustainable growth pattern at the international level. In order to develop trained and disciplined employees the Ethiopian Sugar Corporation is instructing its employees in the use of the Japanese philosophy of continuous improvement by applying kaizen’s processes and technology to improve the company’s production culture and leadership. Kaizen corporate culture is a continuum off revolving cycles of “… continual, dynamic and self-motivated practice in the quest of improvements towards ever higher quality and productivity. The practice of kaizen is conducive to recreation of self-disciplined and self-innovating organizations. It also is conducive to realization of human potential of all members of the organization” (Ministry of Industry, 2011).
To implement kaizen, “Close to 7,537 members of leadership at various levels and staffs of the corporation and sugar factories have been trained on kaizen, quality control circle (QCC), the seven types of waste, their causes and their preventive measures and also on the 5S, and their application methods. The country plans to increase the sugar production of sugar from 314,000 tons in 2009 to 2.25 million tons in 2015 of which 1.25 million tons of sugar and sugar related factors are to be exported (Ministry of Industry, June 2011, and www.etsugar.gov.et/en/news/items/). Therefore, now that the Ethiopian Sugar Corporations have been reinstated to a high-priority on the national agenda, the specific question of this study is: How efficient and effective are the kaizen strategic management initiatives, tools and methods that are used at the Wonji Sugar Manufacturing Company for improving and implementing its capacity?