Kaizen Institute Presents Strategy For Revolutionizing Service Economy In India

A white paper exploring the potential of KAIZEN, a management philosophy and methodology for the services economy in India, has been released by Kaizen Institute. Authored by experts in the field, the white paper delves into the potential of implementing the KAIZEN methodology in India's service economy.

According to the official statement, it underscores the significance of the service sector in India's GDP and its continuous growth while emphasizing the need to measure and enhance efficiency in the intangible domain of services. The paper explores the successful deployment of KAIZEN principles across industries like banking, healthcare, and logistics, demonstrating how it drives continual improvement, process standardization, and cost reduction.

“It proposes extending the MSME Competitive (Lean) Scheme to the service sector and highlights the role of experienced consultants in guiding the transformation,” it added.

India has transitioned from an agrarian economy to a services-driven powerhouse. The services sector dominates India's GDP, attracting significant foreign investment and contributing significantly to exports. The Service Sector witnessed YoY growth of 8.4 per cent in FY22 and has ample scope to generate employment and contribute to India's external stability.

However, measuring output and productivity in the service economy is challenging due to its intangible nature and diverse activities. Factors like gross value added (GVA), employment generation, revenue, and labour productivity are used as measures, but a comprehensive framework for measurement is lacking.

“India's economic landscape has transformed significantly, transitioning from an agrarian foundation to a dynamic services-driven powerhouse. This evolution has witnessed a rapid expansion of the services sector, which now stands as a dominant force propelling India's economic growth. However, despite its contribution to the economy, the services sector faces a distinctive challenge —a lack of a comprehensive framework for measuring output and productivity,” said Dr. KP Krishnan, Former Secretary Ministry of Skill Development and Entrepreneurship, Government of India

“Despite its roots in manufacturing, KAIZEN has proven to be highly effective when applied to the service sector. Organisations within this sector have reaped the benefits of its principles and techniques, fostering a culture of continuous improvement driven by employees. This approach has led to significant improvements in overall efficiency and effectiveness across diverse areas such as Banking and Finance, Healthcare, Hospitality and Tourism, as well as Warehousing, Logistics, and Distribution,” said Vinod Grover, Managing Director - South Asia & Africa at Kaizen Institute.

The paper also puts forth strategic policy recommendations to facilitate the implementation of KAIZEN principles within India's service economy. It proposes the extension of the MSME Competitive (Lean) Scheme to the service sectorto enable businesses to optimize efficiency, minimize waste, and cultivate a culture of continuous improvement. It suggests that the implementation efforts will be supported by the National Productivity Council (NPC) under the aegis of the Ministry of MSME, which will create an enabling environment, assisting participants in achieving the scheme's objectives.