To achieve cost reduction goals which are generally not easy but attainable, workers take a variety of a ctions and find new ways to speed up manufacturing processes. This system starts when there is a gap between total actual cost and kaizen cost, like equation:
(Total Cost – Kaizen Cost = Gap).
According to Modarress et al. (2005) there are two ways to set kaizen cost targets in the company namely top down path and bottom up path. In the first way cost reduction targets are set by senior management according to the plans of the top management then their cost reduction target are accepted by kaizen teams after discussion. In the second way cost reduction targets are set by kaizen team members then the team presents their cost reduction targets for the approval of top and senior management.