If there is one thing any Shih Tzu owner can tell you, it would have to be that training them to do just about anything can be both frustrating and amusing at the same time. If you scold your pup by saying something like "bad dog" you are more likely to be greeted with a goofy smile, tons of tail wagging, and one of those "Who, me?" looks.
While some would have you believe that crate training any dog amounts to a form of cruel punishment akin to a human being put in jail, oddly enough, this is the exact opposite of how your pup will come to see his kennel. In the wild, he would seek out a cave for his den. In your home, the kennel will become a substitute den and if your training goes the right way your pup will come to see it this way, spending plenty of time in it on his own.
The whole point of training your pup to go in his kennel and stay there is so that you can go to the store, to work, or even to bed at night. Not only is giving your pup his own personal space important to the overall condition of your home (no accidents, nothing shredded), but it is just as important to him. In the wild, dogs have their own den; they use it for sleeping, staying out of the weather, hiding from predators, and raising their families.
Of course, in your home, your pup will never actually need a den for most of these reasons. But, at the same time, he will still benefit significantly from having a place that he can truly call his own. One that when he goes there, it's that one place where he can rest undisturbed. Bear in mind that once your pup starts using his kennel to go to in this manner, everyone in the house should be taught to leave him alone.
One good thing about having a Shih Tzu is that you can save a little money in comparison to those with a bigger breed. This is because you should only have to buy one kennel instead of two or more as your pup becomes an adult. If possible, you should try to have the kennel in place before you bring your pup home for the first time. This way it will simply be another part of his new home. You can bring a kennel in later, but having one in place beforehand makes it a little easier for your pup to get used to it.
Make the inside of the kennel as comfy as possible for your Shih Tzu pup. Go ahead and carpet the floor, add a cushy bed, maybe a blanket, definitely some toys, and a water bottle. That should just about do it. Again, make sure the kennel is the right fit for your pup. He'll need enough space to stretch out, stand up, and turn around, but not much more than that.