Why the Japanese ‘kaizen’ works

Toyota became world-class after World War II when it adopted ‘kaizen’ throughout the company—from maintenance personnel to top management.

Kaizen (which in Chinese is pronounced “gai shan”) means “continuous improvement.”

Toyota’s production line can be stopped at any time by anyone who sees any abnormality. Everyone, particularly the line supervisor, is tasked to solve the issue as soon as possible, in the spirit of kaizen.

A kaizen cycle involves four steps: Plan-Do-Check-Act.

First, personnel plan specific steps based on goals and reviews.

Second, they do what they have planned, implementing concrete steps.

Third, they check what works or not.

Fourth, they act on the findings, refine the plan and start another cycle.

Touted as a scientific method, kaizen became known worldwide after management consultant Masaaki Imai wrote the bestseller “Kaizen: The Key to Japan’s Competitive Success” in 1986.

The kaizen concept is attributed to US statistician W. Edwards Deming, who was requested by General Douglas MacArthur to aid Japanese industries in quality control after the war. Deming, through the Japanese Union of Scientists and Engineers (JUSE), trained hundreds of engineers and managers, including Sony head Akio Morita, elevating Japanese products to world-class quality.

In 1950, JUSE established the Deming Prize, and 10 years later, the Emperor of Japan awarded Deming the Order of the Sacred Treasure.

5 Whys

Kaizen became a buzzword, adopting principles such as the 5 Whys—which asks “Why?” over and over again until the root cause of the problem is finally identified.

Let us look at how a Filipino manufacturing family business used the 5 Whys.

Problem: Product returns from its main customer tripled in the last year.

Why No. 1: Why did product returns triple?

Answer: The customer needed a different specification for a certain part, and the family business could not manufacture it well enough to satisfy customer expectations.

Why No. 2: Why could the business not meet customer requirements?

Answer: Engineers were trying their best to make the part fit specifications, but failed. So they requested new machines—which were still not purchased.

Why No. 3: Why have the new machines not been purchased?

Answer: The machines are expensive. The finance head, a third-generation family member, prefers to buy the machines secondhand. His brother, the sales head, disagrees, fearing that if the products are not made perfectly, the company will lose its main customers. The two brothers went to the company board (composed of their father and outside nonfamily members) to decide on the matter.

Why No. 4: Why has the board not made a decision?

Answer: The outside advisers take their cue from the father. The father does not want to take a stand.

Why No. 5: Why does the father not want to take a stand?

Answer: The father does not want to side with either of his sons, for fear of being accused of favoring one over the other.

Once the root cause has been identified (the father’s reluctance to hurt any of his sons), the solution is straightforward. The two sons presented the pros and cons of investing in the machines to the father, and reassured him that they would not take the decision personally.

The sons stressed the fact that the family business (including the engineers, salespeople, marketing people) has been negatively affected by the status quo.

One board member was let go, the other was retained. Another nonfamily adviser came on board to help the family. The new machines were purchased, the products done to specifications, and the customers were satisfied.