Toyota's guru spreads his philosophy of profit

Kaizen philosophy founder Masaaki Imai (right) visits the Fisher & Paykel Healthcare plant in East Tamaki. F&P has adopted the Kaizen philosophy in its business practice. Photo / Natalie Slade

A cafe in the middle of Manukau's industrial heartland sets the stage for the Herald's meeting with Kaizen Institute founder Masaaki Imai - a man who has spent decades spreading Japanese business philosophy around the globe. It is 8am.

Imai, born in 1930, has a regal presence at the table where he sits alongside a colleague from New Zealand and another from Europe and sips his tea, before discussing the benefits of the Kaizen philosophy.

"In the West, when managers think of improvement, they think it should cost a lot of money," he says.

Imai says improving a business through Kaizen will actually save money, keep workers happy, and provide a competitive edge.

Over the years Imai has formed a close relationship with the Toyota Corporation, and based one of many books on his observations of the car giant's manufacturing process.

He says Toyota used the Kaizen philosophy - quite successfully - to become a market leader.

When asked about the mess the company has found itself in lately, with millions of cars recalled, he says: "I still think Toyota is one of the best-managed companies, and its management is committed to producing good-quality products. I have no doubt of Toyota's future strength."

Imai says Toyota should return to profitability in two to three years.

Toyota used Kaizen methods to recover from a recession that nearly bankrupted the company in the 1950s, and again to weather the stockmarket crash of the early 1970s.

He says Toyota came out of those events stronger than any of its competitors, thanks to Kaizen.

"The good lesson you can learn from this is - when it comes to quality issues - even the best company can fail."

We leave for a visit to Fisher & Paykel Healthcare, where Imai has been invited to tour the factory floor and give advice on how well the company's Kaizen policies are being implemented.

In the boardroom we meet Michael Daniel, chief executive of Fisher & Paykel Healthcare, along with other members of his team. Daniel gives a briefing on the company's products, which include respiratory humidifier systems and devices to help sufferers of sleep apnoea.

He says Fisher & Paykel Healthcare has followed a philosophy of continuous improvement since the early 1980s.

"As a company we may have veered off that course for a period, and didn't put as much emphasis on continuous improvement, as we should have."

The company now has a team - known as the "Kaizen Circle" - which spends two to three hours each week discussing what improvements can be made to the manufacturing process.

The tour begins. The group gets gowned up for the sterile environment of the factory floor. Imai walks in the centre, hands behind his back, while group operations manager Desh Edirisuriya provides the sensei with a running commentary. A group of New Zealand businesspeople, including Edirisuriya, will travel to Japan this month to visit factories with Imai and learn more about Kaizen.

Scores of suited-up employees look like ghosts as they work. The place has the feel of a gigantic operating theatre, minus the blood.

One of Imai's observations is that "isolated islands" in the manufacturing process should be brought closer to the rest of the production line, to maximise efficiency.

Edirisuriya says the company is "working on it".

The company is doing well, Imai says, but there is room for improvement.

WHAT IS KAIZEN?

* Kaizen is a Japanese noun meaning "improvement".

* Through the Kaizen philosophy - also known as "lean" or "continuous improvement" - companies implement a never-ending process, involving all employees, which streamlines business practices, enhances productivity and cuts waste.