Kaizen: Understanding the Japanese Business Philosophy

What Is Kaizen?

Kaizen is a Japanese business philosophy that encourages continuous improvement involving employees at all levels of a company. The word kaizen is often translated as "change for the better."

The concept of kaizen encompasses a wide range of ideas. Those include making the work environment more efficient by creating a team atmosphere, improving processes and procedures, ensuring employee engagement, and making jobs more fulfilling, less tiring, and safer. Today many companies around the world practice kaizen in one form or another.

Understanding Kaizen

The goal of kaizen is to make small changes over a period of time to drive continuous improvement within a company. The kaizen process recognizes that small changes now can add up to huge impacts in the future.

Ultimately that can mean better quality control, more efficient processes, and the elimination of waste, among other benefits.

Under kaizen, improvements can be initiated by any employee at any time. The philosophy is that everyone has a stake in the company's success and everyone should strive, at all times, to help make the business better.

Many companies around the world have adopted the kaizen concept. Most famously, the automaker Toyota has long employed kaizen within its organization and describes it as one of its core values. To improve its production system, Toyota encourages and empowers all employees to identify areas of potential improvement and create viable solutions.

How Does Kaizen Work? Key Principles

Kaizen is often broken down into a set of key principles.

For example, the Kaizen Institute, founded by Masaaki Imai, author of a 1986 book that helped popularize the term, lists them as:

• Know your customer
• Let it flow (eliminating waste, or non-value-adding activities, from the workflow)
• Go to gemba (where things actually happen, such as the factory floor)
• Empower people
• Be transparent

Underlying kaizen is the recognition that the people who perform certain tasks and activities know the most about them. Empowering those people to effect change is the best strategy for improvement. Ideally, kaizen will become deeply ingrained in a company's culture.

Kaizen posits that there is no perfect end and that everything can be improved upon, so people must strive to evolve and innovate constantly.

What Are Some Benefits of Kaizen?

Kaizen offers companies many potential benefits. They include:

• Increased productivity
• Reduced waste
• Better management of resources
• Improved quality
• Better safety
• Lower costs
• Greater customer satisfaction
• Improved cooperation and communication
• Higher employee satisfaction and morale

Kaizen and the PDCA Cycle

The improvement process used in kaizen often follows the PDCA cycle format, first developed in the U.S. in the 1920s. PDCA stands for Plan-Do-Check-Act.

The Plan phase includes proposing and mapping out changes so that everyone knows what to expect when teams try to solve a problem.

The Do stage implements whatever appears to be the best solution for the problem.

The Check step involves evaluating the solution to the problem to see if it worked.

When a company Acts, it determines whether or not the solution should become a company standard or if it needs further changes. If managers decide to implement more changes, kaizen goes back to the Plan step and the process starts over again.

Just-in-Time Inventory Strategy

One of the key goals of the kaizen process is to reduce waste and increase efficiency in the production cycle. A just-in-time (JIT) inventory strategy allows management to minimize excess inventory by matching the delivery of raw materials from suppliers with production schedules.

The JIT strategy is part of the Toyota Production System (TPS), which is now used by numerous companies. JIT helps manufacturers save money by reducing inventory carrying costs. It also reduces waste because companies are not left with extra inventory should a customer cancel or postpone an order.

Another Japanese innovation, kanban is an inventory control system used in conjunction with a JIT strategy. It provides employees with visual cues that tell them when it is time to order parts and materials as they run out.

The system relies on colored cards that track production and alert employees when it's time to replenish a needed part or material. It enables employees to quickly order the correct number of parts from the supplier and have them delivered to where they are needed in the factory.

The goal of kanban is to ensure the efficient running of the factory assembly line and to prevent bottlenecks from occurring.

The Bottom Line

Kaizen is both a philosophy and a practical system for facilitating continuous improvement in a company. From its beginnings in Japan, largely as a way to improve manufacturing processes, it has spread across the world and into many different types of industries.