NoMark 13 | - Freelance Writer
Dec 04, 2015 | #1
Success of a Continuous Improvement Programme
Abstract
Thisdocument discusses the continuous improvement programme , defines critical success factors, and reviews Six Sigma, ISO, EFQM, TQM, and Kaizan.Mini-case studies are presented illustrating the use of continuous improvement, and key lessons learned are summarized for the reader.
Keywords: Continuous improvement programme, CIP, continuous programme of improvement (CPI), total quality management (TQM), continuous quality improvement (CQI), just in time (JIT)
1 What is a continuous improvement programme?
Continuous improvement is philosophy of operation and management that deals with the challenges of improving products and processes as a never ending, ever changing process. Continuous improvement programs, or (CIPs) address all phases of planning, development, implementation, review, improvement, and evaluation of a program. The continuous improvement program is sometimes referred to as Continuous Program Improvement (CPI) and may be referenced as the continuous quality improvement plan (CQI). Lynch and Cross refer to continuous improvement as a "dynamic measurement system that motivates continuous improvement in customer satisfaction, flexibility, and productivity - simultaneously." Performance measures serve as yardsticks intended to continuously measure whether "functions, departments and teams" are doing the right things, and whether or not they are doing them well. By implementing a process of continuous review, the organization is able to motivate behaviours that lead to continuous improvement. The process of continuous improvement is designed to progress in a regular and steady fashion; dramatic breakthroughs are neither planned nor expected, though they would be welcomed. Rather, the continuous improvement program can be likened to the fable of the Tortoise and the Hare: every school child learns that slow but steady wins the race. Continuous improvement is no different; steady improvement over the life cycle of a business will win over dramatic but erratic and unsustained measures of change.Watson points out that continuous quality improvement is not time limited; it is an ongoing process by which an agency or organization makes and implements decisions and evaluates the process it is making. CIP or CQI represents a complete departure from previous operating procedures for most agencies. Under a total quality and continuous improvement process, with decisions being made in a completely different fashion, changes in leadership approach will be necessary and sustained, and committed leadership will be necessary. Organizational leaders must work to establish a culture that supports learning and values knowledge, and is proactive about reinforcing change mechanisms.
2 Why should organizations embark on continuous improvement programmes?
Charles Darwin may be best well known for his contributions to the fields of biology and science, but he made one significant contribution to the business field, perhaps without ever realizing it. As McCallum points out, Darwin's Origin of the Species revolutionized how we came to think about change and about various forms of organization. With Darwin's observations from the HMS Beagle came conclusions that would revolutionize religion and point medicine in new avenues (McCallum, quoting Darwin 2001). With Darwin's remarks that it was not the smartest nor strongest species that survives, but rather the ones that adapt to change, we see the shadowy beginnings of the concept of the continuous improvement programme.
Organizations that have been slow to implement continuous improvement programmes or total quality initiatives have failed to be competitive with organizations that have integrated continuous improvement into the culture of the organization. As we will see in the case studies, implementation of continuous improvement endows employees with a sense of ownership that is frequently lacking in large organizations. This ownership can make the difference between being an organization that fails, and one that survives. Taken to greater levels of implementation, it can signify the difference between and organization that succeeds, and one that excels.
3 What are the benefits of continuous improvement?
As we will see demonstrated in the following cases, the benefits of continuous improvement extend into every facet of a business, and specific benefits will depend upon the genre of the organization. While benefits to day care organizations will differ from benefits to car dealerships, some things are stable across organizational lines: employees will exhibit a greater sense of ownership. With ownership comes responsibility. In a good programme, costs are reduced and performance is improved. The workplace process is continually improved, and waste is elimated. A 'can-do' culture is established, and human errors are forgiven, but processing errors are not. We will see the application of this concept in the case of Toyota.
3.1 Toyota
Toyota is one of the most sought after, and most reliable, vehicles in the world now, and Toyota executives state that their success is due to running lean as part of a programme of continuous improvement. Toyota can produce better cars faster, from the first inkling of a design idea to the final drivable product, than any other automotive company in the market today. Toyota boasts that it can take a car from conception to pruchase in 18 months, far surpassing the industry average.
It may appear to the reader that the issues that will be discussed are unrelated to continuous improvement, but they are not. Toyota's whole system of production is built around the process of continuous improvement, and two of those facets are total quality management and kaisan. Though, as we will see, Just in Time (JIT) may be the mode of delivery, Toyota's entire system dovetails to improve output, keep backlogs, low or non existent, end waste, decrease costs and materials costs, and increase overall product quality exponentially (Donnelly et at 2006), through the process of continuous improvement. The JIT system, or lean system, produces an order just in time; suppliers receive their orders just in time; products are delivered just in time, and the cars get to consumers just in time (Lean Resources). There is no fat, no waste; and Toyota plans on keeping it that way.
In order to understand Toyota's system of continuous improvement, it is important to understand how the just in time system works. The general idea behind JIT is to get the right part to the right place, at the right time. JIT is also referred to as 'lean' production, which is a method of production that minimizes waste of time, materials, and resources. JIT production is considered 'stockless' production because the operation endeavors to run without any extra stock or backstock. By putting all the appropriate pieces and stock in place at just the right time, production is maximized and costs are minimized. When implemented correctly, the turnover rate increases while the stock decreases; overall inventory is kept low, and product quality improves because variations in the product are reduced. Production times are reduced; lead time is cut. Cost cuts result. Excess line capacity can be utilized at any point, so there is no need to keep or produce excess inventory. In a JIT system, needed items are produced on a regular basis and each assembly station is preprogrammed with a pre-determined number of stock production items, designed to produce the product with little waste and no excess inventory.
Steady, regular production is one of the keys to a successful JIT system. Scheduled production times and practiced production results in reduced or eliminated set up times on the line. Lot sizes are reduced due to the decreased setup times. Lead time is cut as the team gets practiced in setup. Through the use of scheduled preventative maintenance and a flexable and trained group of personnel, combined with a quality raw goods supplier, the line aims for a zero defect rate (Chase et al.). A JIT production system thrives on the concept that practice makes perfect, and it reflects the concept of continuous improvement. Toyota technicians do not hesitate to stop the production line to work on problems. It is repeated practice that allows the production team to work together as a team and it is practice that enables the team to allow enough down time in the schedule for preventive maintenance. It is practice that allows the team to knock the line down and retool as necessary for different phases of the production process. The JIT team strives for the perfect product, and Toyota believes that JIT is a process that will enable them to continually improve and to become as perfect as possible.
It is striving for perfection that allows any member of the Toyota production line to stop the line by pulling the emergency cord if they believe there is a quality problem with the vehicle under production. Toyota personnel on the linepull the cord and stop the production line to fix quality problems an average of 2000 times a week (Schifferes 2007). Ford production lines are stopped only an average of two times a week to check quality issues. It doesn't seem logical that Ford would have only two quality issues a week, so the conclusion can be made that Ford lets them go through on the line. It is, perhaps, no wonder consumers joke that Ford is Found On Road Dead. Fords undoubtedly have the same quality problems as Toyotas while on the production line, but Toyota employees stop the line and fixes the problem, while Ford passes the problem on to the consumer.
Toyota takes far less hourly time than does Ford or GM to produce a vehichle, and the quality is far higher. In 1998, it took 50% longer to produce a Ford or GM (on an hourly basis) than it did a Toyota; today, GM is striving to catch up to Toyota's quality and production records. They credit their quality improvments to massive retooling in the factories and to revised process on the production lines. GM is steadily heading toward a JIT system and is attempting to implement a process of continuous improvement. GM, however, is still well behind Toyota, whose motto is "Think globally, act locally."
How will GM implement a JIT or lean production system when they are used to the standard assembly line program that was pioneered by Henry Ford? The first step is to evaluate supply chain engineering strategies. In the next step, the company will change stock levels by reducing on-hand stock. They will develop additional sourcing options for suppliers, and slowly improve the overall logistical performance of the assembly process. The entire manufacturing and operations strategies must be reconsidered. Supplier response times must be improved, perhaps in concert with integrating a computer system that reads GM's needs and transmits them to the supplier. GM's response times and manufacturing and assembly times will be improved, and modularization implemented. In the final stage of the revamp, a new and aggressive information technology strategy will be implemented. New information technology source applications will be used to improve corporate planning at all levels, to anticipate staffing needs, and interface with supply partners. Toyota excels in just such a system, and GM has begun to institute the program. Thus far, GM believes they have saved $9 billion dollars by beginning the conversion process. It is clear that GM's conversion process will be long term, a continuous improvement program..
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Reduced costs and improved performance are made possible by the workplace process framework. It is the step by step process that is continually improved upon. Rather than a repeat performance of errors, wasteful things are eliminated. Examples include:
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References:
Chase, R., Jacobs, F., Aquilano, N. Operations Management for Competitive Advantage. 11th edition. Irwin/McGraw Hill.
Donnelly, T., Morris D., and Donnelly T. Modularisation and Supplier Parks in the Automative Industry. 2006.
Lean Resources (ND). Inventory and Lean Manufacturing: Why All the Fuss?
Lynch, R., and Cross, K. Measure up! How to measure corporate performance. USA:
McCallum, J. Adapt or die. Ivey Business Journal.
Schifferes, S. The triumph of lean production BBC News Online.
Watson, P. Using continuous quality improvement to improve child welfare practice: a framework for implementation. National Child Welfare Resource Center for Organizational Improvement.
strm , K. & Wittenmark, B, Computer-Controlled Systems - Theory and Design, Prentice-Hall, Upper Saddle River, NJ, USA.
Doyle, J., Francis, B. & Tannenbaum, A, Feedback Control Theory, McMillan, New York.
Francis, B. & Wonham, W., The Internal model principle of control theory, Automatica 12: 457-465.
Figure 1 Some shapes.