Application of the Kaizen Method on the Effectiveness and Efficiency of Financial Performance at Style Labels SDN BHD Manufacturing Company in 2023 (Sales Department Analysis Study)

Abstract

Financial performance measurement plays a vital role in manufacturing companies, providing essential information for managing business operations effectively and efficiently. This study aims to analyze the relationship between the application of the Kaizen method and the effectiveness and efficiency of financial performance in the Sales Department of Style Labels Sdn. Bhd., a manufacturing company located in Selangor, Malaysia. The research employs a qualitative descriptive method. Primary data were collected through online questionnaires, while secondary data were obtained from sales revenue and financial statement documentation. Data analysis utilized the Kaizen approach based on the PDCA (Plan, Do, Check, Action) and 5S (Seiri, Seiton, Seiso, Seiketsu, Shitsuke) principles, as well as measurements of effectiveness and efficiency ratios. The results of the study indicate that the implementation of Kaizen has a positive impact on the company’s financial performance. This is demonstrated by the achievement levels of PDCA implementation at 86.4% and 5S implementation at 100%. The Kaizen costing analysis yielded the most efficient cost level at RM 95,000 per month. The results of the effectiveness measurement show a Gross Profit Margin of 0.364% and an Operating Profit Margin of 0.172%. Meanwhile, the efficiency analysis recorded an input-output ratio of 1.48% and a profit-cost ratio of 0.89%. These findings confirm that the application of the Kaizen method enhances the effectiveness and efficiency of the Sales Department’s financial performance, as evidenced by significant measurable outcomes.