Categorization of Gemba Kaizen Effects: Consideration from an Accounting Perspective

Abstract

Gemba Kaizen (continuous improvement) aims to improve the productivity of each factory and process on-site activities. Conventional cost accounting methods do have excellent calculation structure and characteristics. However, it is not possible to comprehensively measure all Kaizen effects using them. Gemba Kaizen Costing (GKC) was proposed for addressing such issues. In GKC, by incorporating the concept of “opportunity loss,” a calculation method to evaluate Kaizen was presented.

In this research, we further develop the conventional research, define “increased production capacity” as the Kaizen effect, present a conceptual formula that can calculate the Kaizen effect, and show a calculation example. Finally, we categorize how the Kaizen effect appears in accounting.