Kaizen is a Japanese philosophy of continuous incremental improvement involving all levels of an organization. It uses statistical process control and problem-solving techniques to continuously improve manufacturing operations on a small scale. The key principles include establishing improvement plans, testing small changes, observing results, and evaluating learnings. Kaizen focuses on understanding and improving the process rather than identifying individuals as problems. It emphasizes visual controls and standardization to reduce waste and variation through housekeeping, waste elimination, and standardization.