Kaizen Costing: A System of Cost Reduction Through Continuous Improvement

Abstract

Kaizen is a Japanese term which means continuous improvement. Kaizen costing is the sustenance of existing cost levels for the products under the manufacturing process by way of collective efforts to attain the intended cost level. Kaizen costing aims to eliminate wastes and non-value added activities, just-in-time delivery, leveling load of production in amount and type, labour standardization and using appropriate equipment. This paper shows the meaning, advantage and disadvantage of kaizen costing. This paper also shows the principle of kaizen costing and how can organization implement kaizen costing in their business.