All businesses improve, or want to improve, and select their way of improving either by design or it simply has evolved naturally. Whether it’s called operational excellence, process optimization, or continuous improvement, the core goal remains the same: to enhance the effectiveness, efficiency, and adaptability of an organization. As this field has evolved over decades a wide array of terms and methodologies have been created, many of which originate from Japanese management practices that emphasize efficiency, quality, and waste reduction.
Use of these terms in everyday work can sometimes be overwhelming, particularly because many of the most frequently used words are Japanese. This introduces an added layer of complexity for professionals and teams who are new to the subject. Some of the terms like Kaizen, Kanban, and Muda are not only someone trying to impress you with Japanese words; they represent deep, process-driven philosophies that have transformed industries worldwide. In some cases translation even loses some of the important background meaning, and in future articles we will try to delve more deeply on those that require more context to be fully appreciated.
In this article, we will clarify the most common continuous improvement terminologies. From foundational methodologies like Lean and Six Sigma to essential tools such as Value Stream Mapping and the 5S System, we will go through most common ones to give you clarity and some insight.
Higher level terms
Let’s start with terminology describing more high level concepts or otherwise well established methodologies and how they relate to each other.
Operational Excellence
Operational Excellence (OpEx) is the overarching discipline that involves implementing continuous improvements to achieve sustainable stakeholder value. This strategic focus encompasses the optimization of processes, maintaining a committed workforce, and adhering to a culture of sustained improvement. The ultimate goal of OpEx is not just to improve processes but to ensure that improvements lead to tangible business outcomes like increased profitability, customer satisfaction, and employee engagement.
Continuous Improvement
This is a slightly tricky as some companies use Continuous Improvement (CI) as direct replacement for OpEx, so you could just read the above. However also CI is often considered to be a subset of Operational Excellence, focused on incremental improvements to processes, products, or services over time. Unlike some approaches that advocate for radical changes, Continuous Improvement seeks to achieve small, ongoing positive changes which cumulatively result in significant enhancements. This concept is core to many methodologies, including Kaizen, which is based on the idea that small, ongoing positive changes can reap significant improvements.
Lean
Lean manufacturing, or simply Lean, is a systematic methodology that focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity. Lean principles can be applied to improve any process by removing non-value-added activities (waste), thus ensuring that every step in a process adds value to the customer. This method has roots in the Toyota Production System and has expanded across various industries globally.
Also for Lean you may see used in much wider context, most often expanded to non-manufacturing processes. This makes perfect sense as core principles and methods used in Lean are very well applicable to many processes outside of factory floor.
Six Sigma
Six Sigma is a data-driven approach aimed at process improvement by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified value targets, such as reducing process cycle time, reducing pollution, reducing costs, increasing customer satisfaction, and increasing profits.
Lean Six Sigma
Lean Six Sigma combines the methodologies of Lean and Six Sigma. This hybrid approach aims to eliminate waste (from Lean) and reduce process variation (from Six Sigma) to improve quality and efficiency in operational processes. Lean Six Sigma projects follow a structured methodology known as DMAIC (Define, Measure, Analyze, Improve, Control) to drive operational excellence.
Agile
Originally developed for software development but now used in various departments, Agile is a methodology based on iterative development, where requirements and solutions evolve through collaboration between self-organizing cross-functional teams. It promotes flexible responses to change, which is a fundamental part of continuous improvement in rapidly changing environments.
Toyota Production System (TPS)
The Toyota Production System (TPS) is an integrated system developed by Toyota that comprises its management philosophy and practices. It organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. TPS is grounded on two main conceptual pillars: Just-in-Time (JIT), which focuses on production based on immediate demand, and Jidoka, which emphasizes automation with a human touch.
Total Quality Management (TQM)
Total Quality Management (TQM) is a management approach to long-term success through customer satisfaction. In a TQM effort, all members of an organization participate in improving processes, products, services, and the culture in which they work. The core of TQM is the customer-supplier interfaces, both internally and externally, and at each interface lie a number of processes.
Theory of Constraints (TOC)
Developed by Dr. Eliyahu M. Goldratt, the Theory of Constraints is a methodology for identifying the most important limiting factor (i.e., constraint) that stands in the way of achieving a goal and systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck. The TOC process seeks to identify the bottleneck and restructure the rest of the organization around it, through methods like drum-buffer-rope, to ensure the bottleneck’s efficiency.
Common terms for all types of processes
Very likely you have already encountered several methods, tools or otherwise constantly used terminology that necessarily doesn’t make sense. Especially if they are in Japanese.
Kaizen
Originating from Japan, the term “Kaizen” translates to “change for the better” or “continuous improvement.” This philosophy focuses on making small, incremental changes regularly to improve productivity, safety, and effectiveness while reducing waste. Kaizen involves every employee from upper management to the shop floor workers, encouraging a culture where all employees are actively engaged in suggesting and implementing improvements to the company’s processes.
Muda, Mura, Muri
These three Japanese terms are critical to understanding lean philosophy. Muda refers to any activity that consumes resources without adding value. Mura denotes variability or unevenness in process flows, and Muri focuses on overburdening people or equipment. Together, these form the framework of waste elimination strategies in lean processes.
Gemba
Gemba means “the real place” in Japanese. In the context of process improvement, it refers to the location where work is done, such as the factory floor or any place where the actual value-creating activities occur. The gemba walk, a common practice, involves leaders going to the shop floor to observe processes, ask questions, and learn about the issues and opportunities directly from those involved in the tasks.
5S
Used extensively in manufacturing, but also widely in other processes. The 5S methodology is perhaps most well known lean method, aimed at optimizing workspace efficiency, culture and safety. Originating from five Japanese terms—Seiri (Sort), Seiton (Set in Order), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain)—this systematic approach helps organizations maintain a clean and orderly environment. By sorting necessary from unnecessary items, organizing the workspace logically, cleaning the area regularly, standardizing the best practices, and instilling a culture of discipline, companies can significantly enhance their operational workflows. The implementation of 5S not only improves productivity and quality but also fosters a positive work culture and a safer workplace, making it a vital practice in various industries.
Flow
In the context of process improvement, flow refers to the smooth progression of materials, products, and information through a process. Creating flow is crucial for minimizing cycle time, increasing throughput, and eliminating bottlenecks in the production process.
VSM (Value Stream Mapping)
Value Stream Mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer. VSM helps identify and eliminate waste, making the process more efficient and less time-consuming.
PDCA
Plan, Do, Check, Act (PDCA) is a four-step management method used in business for the control and continuous improvement of processes and products. It is also known as the Deming Wheel or Deming Cycle. PDCA is used by teams to focus on growth through systematic testing of possible improvements, implementing them, measuring their effectiveness, and then deciding whether the changes should be adopted, adjusted, or abandoned.
RCA (Root Cause Analysis)
Root Cause Analysis (RCA) is a method of problem solving aimed at identifying the root causes of faults or problems. RCA is based on the belief that problems are best solved by attempting to correct or eliminate root causes, as opposed to merely addressing the immediately obvious symptoms. This approach leads to more sustainable and long-lasting improvements.
Ishikawa
Also known as the fishbone diagram or cause-and-effect diagram, the Ishikawa diagram is a tool that helps teams categorize the potential causes of a problem in order to identify its root causes. The diagram looks like a fish’s skeleton with the problem at the head and the bones representing possible causes leading back to the spine.
Kanban
Kanban is a visual management system that aims to optimize workflow by using cards or digital signals to represent work items. This method helps organizations manage the creation of products with an emphasis on continuous delivery while not overburdening the development team. Kanban promotes visibility of work in progress and helps teams adjust outputs based on the system’s capacity.
DMAIC
DMAIC stands for Define, Measure, Analyze, Improve, and Control. This data-driven quality strategy is used for improving processes and is an integral part of the Six Sigma methodology. The DMAIC framework provides a structured approach to problem-solving, starting with defining the problem area, measuring current performance, analyzing possible causes, improving the process systematically, and finally controlling the new process to ensure sustained improvements.
Hoshin Kanri
Hoshin Kanri, also known as Policy Deployment, is a strategic planning method that aligns an organization’s functions and activities with its strategic objectives. This method ensures that every level of the organization is working effectively towards the same goals, employing a systematic process to focus on achieving key breakthrough objectives over a three to five-year period. Central to Hoshin Kanri is the concept of “catchball”—a process of back-and-forth communication to refine goals and means, ensuring buy-in and clarity across all levels of the organization.
North Star
In the context of target setting, the “North Star” metaphor is used to describe a clear, long-term goal that guides all strategic decisions and initiatives within an organization. This overarching goal serves as a fixed point in the organizational sky, much like the celestial North Star, helping align and focus efforts across different levels of the organization. By setting a North Star, companies ensure that despite the complexity of operations and the variety of short-term objectives, every action and decision supports the journey towards this ultimate goal. This concept is especially powerful in maintaining coherence and unity in direction, particularly in large organizations or those undergoing significant transformations.
Obeya
Obeya, which translates to “large room” or “war room,” is a physical or virtual space that serves as a central command center for coordinating complex projects or production processes. Within the obeya, cross-functional teams gather to discuss project progress, track key metrics, and solve problems in real-time. The walls of an obeya are often lined with charts, schedules, and data, providing transparency and encouraging open communication among team members.
Terms more specific to manufacturing
Yamazumi
Yamazumi is a tool used in lean manufacturing to balance workloads among workers on a production line. The term yamazumi literally means “to stack up” in Japanese. In practice, it involves charting each step of a process in a way that quickly identifies inefficiencies and allows for effective time management and process balancing.
SMED (Single-Minute Exchange of Dies)
SMED is a systematic approach to quick changeover from one part to another in manufacturing processes. The goal of SMED is to reduce changeover time to under 10 minutes. This technique enhances flexibility in manufacturing processes by significantly reducing downtime related to equipment adjustments.
Standard Work
Standard Work refers to the detailed definition of the most efficient method to produce a product or execute a service at a balanced flow to meet customer demand. This concept forms the baseline for kaizen activities and provides a methodical way to document and instruct the best practices for a task or process. By standardizing work, organizations can ensure consistency in quality, time management, and resource use, while also providing a benchmark for future improvements.
Andon
Andon is a visual aid which highlights the status of operations in an area and signals whenever there is a problem. Typically, it involves a system of lights to indicate machine function or process problems, drawing immediate attention to issues as they occur. This prompt response allows for swift corrective actions, minimizing downtime and promoting a culture of immediate problem resolution and continuous improvement.
Jidoka
Jidoka, or “automation with a human touch,” is a quality control process that empowers machines and operators to detect when an abnormal condition occurs and immediately stop work. This capability allows for the problem to be fixed at the source and prevents defective products from proceeding down the line. Originally developed as part of the Toyota Production System, jidoka highlights the importance of building quality into processes and enabling automation to enhance rather than replace human work.
Mizusumashi
Mizusumashi, often referred to as the “water spider” in manufacturing contexts, plays a crucial role in lean environments by optimizing the flow of materials and information. The term originates from the agile movements of the water spider as it skims across the surface of water. In the workplace, a mizusumashi worker circulates among production lines or workstations, supplying materials, collecting finished products, and ensuring that all necessary resources are at hand without interruption. This role not only supports smooth production processes but also helps in identifying and eliminating inefficiencies, enhancing the overall workflow and reducing unnecessary labor.
Supermarket
In lean manufacturing, a “supermarket” refers to an inventory area that mimics a retail supermarket and operates under a pull system. This method allows processes to access parts they need, when they need them, helping to regulate production flow and prevent overproduction. The supermarket system minimizes waste by managing inventory based on actual consumption rather than forecasts, ensuring that production lines are supplied with the right quantity of components just in time. This setup enhances efficiency and adaptability in complex manufacturing environments.
And this is only the beginning…
Althought we covered some of the most common terms, and you should be able to navigate vast majority of discussions with these, this of course is not by any means a comprehensive list. But at the same time many of the terms are very easy to understand, even common sense once you read through explanations. In this blog we are going to cover very widely all topics OpEx, which by the way has to include AI tools in my opinion, and provide the possibilities to delve much deeper into each topic as time goes by. So stay tuned and come back frequently to check what new can be learned!