The role of lean Kaizen budgeting in reducing costs and improving performance: an applied study

Abstract

This research paper aims to reduce costs to enhance the overall performance of economic units. This is achieved by explaining how to employ the lean Kaizen budget, which enhances overall performance. We have noticed a clear absence of applied studies that demonstrate the impact of this budget, especially on Iraqi economic units. Therefore, we assumed that its implementation would contribute to reducing costs and improving performance. To achieve this, we relied on a descriptive and analytical research approach. We collected data through a direct visit to the Al-Majid Air Distribution Systems Factory in Mosul, and we participated in all stages of implementing the budget and analyzing the implementation results.

The study revealed key findings that confirm the significant positive impact of implementing Kaizen budgeting on the factory's financial position and operational model. The factory achieved good financial performance with significant profits and cost savings. Furthermore, implementation led to faster operations and a shift towards real value delivered to the customer. Collaboration between departments, and the establishment of a work culture that encourages learning and development. Based on these findings, the study suggests that economic units in Iraq adopt the lean Kaizen budget as a fundamental pillar of their business plans and train their employees on the use of these tools.