Kaizen: Understanding the Japanese Business Philosophy

Kaizen is a Japanese term meaning change for the better or continuous improvement. It is a Japanese business philosophy that concerns the processes that ... TableofContents Expand TableofContents WhatIsKaizen? UnderstandingKaizen HowDoesKaizenWork? BenefitsofKaizen PDCACycle JITStrategy KaizenFAQs Business BusinessEssentials Investopedia/AlexDosDiaz WhatIsKaizen? KaizenisaJapanesetermmeaningchangeforthebetterorcontinuousimprovement.ItisaJapanesebusinessphilosophythatconcernstheprocessesthatcontinuouslyimproveoperationsandinvolveallemployees.Kaizenseesimprovementinproductivityasagradualandmethodicalprocess. Theconceptofkaizenencompassesawiderangeofideas.Itinvolvesmakingtheworkenvironmentmoreefficientandeffectivebycreatingateamatmosphere,improvingeverydayprocedures,ensuringemployeeengagement,andmakingajobmorefulfilling,lesstiring,andsafer. KeyTakeaways KaizenisaJapanesebusinessphilosophythatfocusesongraduallyimprovingproductivityandmakingaworkenvironmentmoreefficient.Kaizensupportschangefromanyemployeeatanytime.Kaizentranslatestochangeforthebetterorcontinuousimprovement.Kaizen'ssmallchangescaninvolvequalitycontrol,just-in-timedelivery,standardizedwork,theuseofefficientequipment,andtheeliminationofwaste.TheKaizenmethodologyunderscoresthatsmallchangesnowcanhavebigfutureimpacts.supports. UnderstandingKaizen Someofthekeyobjectivesofthekaizenphilosophyincludequalitycontrol,just-in-timedelivery,standardizedwork,theuseofefficientequipment,andtheeliminationofwaste. Theoverallgoalofkaizenistomakesmallchangesoveraperiodoftimetocreateimprovementswithinacompany.Thatdoesn'tmeanalterationshappenslowly.Thekaizenprocesssimplyrecognizesthatsmallchangesnowcanhavehugeimpactsinthefuture. Improvementscancomefromanyemployeeatanytime.Theideaisthateveryonehasastakeinthecompany'ssuccessandeveryoneshouldstrive,atalltimes,tohelpmakethebusinessmodelbetter. Manycompanieshaveadoptedthekaizenconcept.Mostnotably,Toyotaemploysthekaizenmeaningandphilosophywithinitsorganization.Itesteemskaizenasoneofitscorevalues.Toimproveitsproductionsystem,Toyotaencouragesandempowersallemployeestoidentifyareasofpotentialimprovementandcreateviablesolutions. FastFact Toyota’sprocessofidentifyingsolutionsiscalled"kaizenblitz." HowDoesKaizenWork? Kaizeninvolvesfivekeyprinciples:knowyourcustomer,letitflow,gotogemba(ortherealplace),empowerpeopleandbetransparent. Thesefiveprinciplesleadtothreemajoroutcomes:eliminationofwaste(alsoreferredtoaseconomicefficiency),goodhousekeeping,andstandardization.Ideally,kaizenbecomessoingrainedinacompany'sculturethatiteventuallybecomesnaturaltoemployees. Thekaizenmeaningpositsthatthereisnoperfectendandthateverythingcanbeimprovedupon.Peoplemuststrivetoevolveandinnovateconstantly. Thebasicideaofkaizenisthatpeoplewhoperformcertaintasksandactivitiesknowthemostaboutthem.Empoweringthosepeopletoeffectchangeisthebeststrategyforimprovement. Teamworkiscoretokaizen,whereregularteammeetingsareheldinvolvingdiscussionsaboutimprovements,changes,andprojects. WhatAreSomeBenefitsofKaizen? Kaizenofferscompaniesmanyvaluablebenefits.Someofthemare: GreaterstaffsatisfactionImprovedcustomersatisfactionReductioninstaffturnoverStrengthenedemployeeloyaltyLowercostsGreaterefficiencyandproductivityBetterproblemsolving KaizenandthePDCACycle ImprovementsgenerallyfollowthePDCAcycleformat.PDCAstandsforPlan-Do-Check-Act.ThePlanportionincludesproposingandmappingoutchangessothateveryoneknowswhattoexpectwhenteamstrytosolveaproblem. TheDostageimplementsthebestsolutionfortheproblem.TheCheckstepinvolvesevaluatingthesolutiontotheproblemtoseeifitworked. WhenacompanyActs,itdetermineswhetherornotthesolutionshouldbecomeacompanystandardorifitneedsfurtherchanges.Ifmanagersdecidetoimplementmorechanges,kaizengoesbacktothePlanstepandtheprocessstartsover. Just-in-TimeInventoryStrategy Oneofthekeygoalsofthekaizenprocessistoreducewasteandincreaseefficiencyintheproductioncycle.Ajust-in-time(JIT)inventorystrategyallowsmanagementtominimizeexcessinventorybymatchingthedeliveryofrawmaterialsfromsupplierswithproductionschedules. TheJITstrategyisalsoknownastheToyotaProductionSystem(TPS),forthecompanythatpopularizedit,JIThelpscompaniescutcostsbecausemanufacturersdonothavetopayinventorycarryingcosts.Italsoreduceswastebecausecompaniesarenotleftwithextrainventoryshouldacustomercancelorpostponeanorder. KanbanisaninventorycontrolsystemusedinconjunctionwithaJITstrategy.Itprovidesemployeeswithvisualcuesthattellthemitistimetoorderpartsandmaterialsastheyrunout. Thesystemreliesoncoloredcardsthattrackproductionandalertemployeeswhenit'stimetoreplenishaneededpartormaterial.Itenablesemployeestoquicklyorderthecorrectnumberofpartsfromthesupplierandhavethemdeliveredtowheretheyareneededinthefactory. Thegoalofkanbanistoensuretheefficientrunningofthefactoryassemblylineandtopreventbottlenecksfromoccurring. WhatArethe5ElementsofKaizen? Thefivekaizenelementsorprinciplesare:knowyourcustomer,letitflow,gotogemba,empowerpeople,andbetransparent.Peoplealsosometimesaskwhatkaizen5Srefersto.It'saprocessoftenusedinleanmanufacturingandrelatestofivestepsofimprovement:Sort,Straighten,Sweep,Standardize,andSustain.A5Seventfollowseachofthesestepsonedayatatime. WhatIstheKaizenMethod? It'sabusinessphilosophywithguidingprinciplesandtoolsthatseekstoinvolveallemployeesinthegradualandcontinuousimprovementofvariousareasofacompany.Thekaizenmethodfocusesonengagingemployeesandusingteamworktocreateasuccessfulandenjoyableworkenvironment. WhatIsanExampleofKaizen? Toyotaisafamousexampleofacompanyusingkaizentosustainitssuccess.AnothercommonlyknownexampleofkaizeninactioninvolvesFordMotorCompany,whichembracedkaizentocutthetimeittooktocompletevariousmanufacturingprocesses. WhatAretheMainToolsofKaizen? Thekaizenmethodologyusesdifferenttoolsdependingonthegoal.Forinstance,the5Stoolisoftenusedinleanmanufacturingandtoensurethatworkplacesareefficient,productive,andsafe.JITandKanbanareusedforinventorycontrol.Thefivewhys(what,when,where,why,andwho)isatoolusedtorevealtherootcauseofaproblem.Valuestreammappingisananalytictoolthatisusedtoidentifyplacestoeliminatewaste.Follow-upeventsaretoolsusedtosustainimprovements. ArticleSources Investopediarequireswriterstouseprimarysourcestosupporttheirwork.Theseincludewhitepapers,governmentdata,originalreporting,andinterviewswithindustryexperts.Wealsoreferenceoriginalresearchfromotherreputablepublisherswhereappropriate.Youcanlearnmoreaboutthestandardswefollowinproducingaccurate,unbiasedcontentinour editorialpolicy. Toyota."ToyotaProductionSystem." KaizenInstitute."WhatIsKaizen™." UnitedStatesEnvironmentalProtectionAgency."LeanThinkingandMethods—Kaizen." KaizenConsultingGroup."Kaizen." KaizenConsultingGroup."PlanDoCheckAct(PDCA)Cycle." UnitedStatesEnvironmentalProtectionAgency."LeanThinkingandMethods—JIT/Kanban." SixSigma."WhatIsa5sEvent?" RelatedTerms WhatYouShouldKnowAboutBestPractices Bestpracticesareasetofguidelines,ethics,orideasthatrepresentthemostefficientorprudentcourseofactionforabusinessorinvestor. more ThePDCACycle:ImprovingBusinessProcesses ThePDCACycle,whichstandsforPlan-Do-Check-Act,isaproblem-solvingiterativetechniquethatusesfourstepstoimprovebusinessprocesses. more Just-in-Time(JIT):Definition,Example,andPros&Cons Ajust-in-time(JIT)inventorysystemisamanagementstrategythatalignsraw-materialordersfromsuppliersdirectlywithproductionschedules. more WhatIsTotalQualityManagement? Totalqualitymanagement(TQM)aimstoholdallpartiesinvolvedintheproductionprocessasaccountablefortheoverallqualityofthefinalproductorservice. more SixSigmaCertification SixSigmacertificationisaverificationofanindividual'scommandofawell-regardedmethodofprofessionalskillsdevelopment. more QualityManagement:DefinitionPlusExample Qualitymanagementisacomprehensiveapproachtobuildinglong-termsuccessforone'scompanybyimprovingsystems,procedures,andattitudes. more PartnerLinks RelatedArticles CompanyProfiles WhatAreSomeExamplesofJustinTimeInventoryProcesses? SmallBusiness SimpleWaystoKeepYourBusinessGoinginHardTimes Economy Employability,theLaborForce,andtheEconomy CompanyNews FormerFidelityInvestmentsCEOEdward'Ned'JohnsonIIIDiesat91 BusinessEssentials OperationsManagementTheory CareerAdvice HowtoImproveYourLeadershipSkills