Kaizen comes from the Japanese word for “improvement.” It has become synonymous with a philosophy made famous by Japanese manufacturers such as Toyota. Kaizen suggests that big results come from many small changes accumulated over time. It is a method of involving the entire workforce to come up with many ideas for improvement. Each employee is expected to come up with and implement 3-5 improvement ideas per month.
In the 1950s, Kaizen philosophy intersected with the auto industry. After World War 2, Taiichi Ohno was assigned to set up machine shops for Toyota. Before setting up the shops in Japan, he visited the US in order to view Henry Ford’s assembly lines. Ohno realized that while the Ford assembly lines worked, the process contained a lot of waste. For example, some parts of the factory had to much inventory while others did not have enough. While in the US he also witnessed American supermarkets and was impressed how the stores only ordered what they needed. Ohno combined these 2 observations and applied the principles of Kaizen to Japanese auto manufacturing. Due to his implementation of Kaizen philosophy, Toyota is still known today as a producer of quality and reliable cars.
Both Ford and Porsche automobile companies also implemented Kaizen, in order to potentially decrease costs and increase profits. For example, up until the late 1990s, Ford Motor Co. was largely known for producing poor quality vehicles such as the Pinto. In order to change their reputation, the new CEO Alan Mulally implemented Kaizen into Ford in 2006. After 9 years of incremental improvements, Mulally took Ford from the verge of bankruptcy to one of the leading US automobile companies.
On the other hand, in 1992, Porsche was also close to bankruptcy. Their costs were extremely high and a recession had crippled sales. Therefore, Wendelin Wiedeking (Porsche’s new CEO) brought Japanese Kaizen experts from Toyota to German Porsche production facilities. Today, after implementing Kaizen, Porsche produces cars faster with fewer people and does not lose technical sophistication. For example, Porsche has reduced the assembly time for one of its speedsters from 120 to 72 hours, the number of errors per car has fallen by 50%, the work force has shrunk by 19%, and inventory has decreased so extensively that factory space has been reduced by 30%.