Revisiting the existing notion of continuous improvement (Kaizen): literature review and field research of Toyota from a perspective of innovation

Abstract

Continuous improvement (Kaizen) has been identified as a crucial factor for strengthening firms’ competitiveness in the automotive industry as well as others, and many scholars view it as detailed below. In the existing literature, from a perspective of innovation, Kaizen has often been conceived of as an accumulation of similarly small, mutually independent, incremental process innovations that are conducted by workers, work-teams, and their leaders. However, few empirical case studies examine the relevance of this conventional notion of Kaizen. Do Kaizen activities contribute only to similarly small, incremental process innovations? Does Kaizen only consist of various mutually independent innovations? Is Kaizen always achieved by workers and work-teams rather than by engineers? This paper attempts to observe those continuous improvements conducted in a certain factory for a certain period. Through longitudinal observations, this paper shows via seven case studies that (1) Kaizen consists of a series of innovations with various scales and that these scales could also be estimated by the “scope of coordination” in addition to existing scale indicators, such as the investment amount, and outcomes, such as the cost reduction effect. Additionally, (2) Kaizen sometimes induces small changes in product design and affects organizational activities of production design as a small-scale product innovation. Furthermore, (3) Kaizen activities sometimes influence other Kaizen activities. With regard to these characteristics of Kaizen, this paper implies that (4) Kaizen management needs organizational design. For example, in Toyota’s case, not only work-teams but also product/process design engineers contribute to Kaizen, and shop-floor engineers play a vital role in coordinating between shop-floors and engineering departments on the basis of the “staff-in-line structure” of organizations.