Continuous Improvement Process
Continuous Improvement Process
The Continuous Improvement Process (CIP) is a means by which an organization creates and sustains a culture of continuous improvement. The organization deliberately seeks to create a positive and dynamic working environment, foster teamwork, apply quantitative methods and analytical techniques, and tap the creativity and ingenuity of its employees. Collective effort is focused to better understand and meet internal and external customer needs and to continuously increase customer satisfaction. Employing CIP in the organization can substantially improve the quality of the products and services, increase productivity, and reduce costs across a broad range of systems, products, and services.
CIP is a means through which the organization creates and sustains a culture of continuous improvement. CIP engages the total organization in improvement activity and needs management leadership to create a cultural environment which stimulates change for improvement. The process involves every member of the organization, applies to every activity, and focuses on creating and managing change to assure success and survival. The improvement process is directed by top management, which leads the effort by deliberately shaping the organizational environment to stimulate creativity, pride, teamwork, and knowledge enrichment. The process aims at achieving a shared vision and fulfilling the mission of the organization.
Management seeks to make a totally integrated effort working toward improving performance at every level and in every activity. The process entails the use of quantitative methods, disciplined application of techniques and tools, creation of individual and team ownership of the processes, and accelerated development of knowledge, skills, and human potential. These process components are focused on the achievement of top-level goals through tangible improvements in measured performance criteria such as quality, cost, schedule, manpower development, new product development, and ultimately customer satisfaction.
The organization which is committed to a continuous improvement philosophy shows substantial improvements in quality, productivity, throughput, and employee morale, with significant reductions in cost, errors, lead times, waste, and customer complaints. The CIP is the key to the long-term competitiveness and survival of the organization.
Central to CIP are mechanisms which define, assess, and improve all the significant processes within the organization and identify, reduce, and eliminate wherever possible all forms of waste. CIP addresses all forms of work and applies equally to management and administration and to knowledge worker and touch all the organizational processes. CIP includes a number of principles, practices, techniques, and tools which have proven effective in promoting change for continuous improvement. These elements have been applied with considerable success. The potential benefits of employing CIP are very large. CIP produces substantial results even in the first year of implementation. However, CIP needs a long-term commitment, deliberate and thorough planning, coordination, cooperation, and a top-down systematic process of deployment in order to get it right the first time.
CIP cannot be implemented in the organization by an executive order or by wishing for it. There are no ‘how to’ text books available for CIP implementation. An extensive program of education and training is necessary in the organization seeking a culture of continuous improvement. The organization is required to weave the elements of CIP together into a seamless improvement process which best meets its specific needs.
The Industrial Revolution ushered the world in the Machine Age. It brought the transition from the Agricultural Age to the Machine Age. This transformed the nature of work and the lives of people around the world. The Machine Age fundamentally and permanently altered manual labour processes and produced an immense increase in the production of goods and services. An equally important revolution has unfolded by information technology which again transformed the nature of work and lives. The information technology has fundamentally and permanently altered mental work processes. The changes brought by this new revolution have propelled the world into the Systems Age. It is apparent that an ever-increasing rate of technological change is an inescapable world reality. More technological change is occurring than in all of preceding history. The systems of management which were adequate in the early 1900s do not meet the present day requirements. The shortcomings of the Machine Age management systems are visible in the form of lack of competitiveness, declining manufacturing capability, and lost leadership in key technologies. The profiles of the performance improvements of the three Ages are shown in Fig 1.
Fig 1 profile of the performance improvements in three Ages
The philosophy of management which is most suitable for the new Age has evolved around the new management principles which are based on the theories of Deming, Juran, Kaoru Ishikawa, and other pioneers of Systems Age management methods. Performance has climbed dramatically in those organizations which have employed these Systems Age management technologies. Such pioneering organizations have demonstrated that significant continued performance growth is not only possible but that it is essential for survival in today’s rapidly changing environment. Today, the organization to be successful is to recognize and apply the set of principles and practices which characterize the most successful organizations. CIP is a term intended to encompass and integrate the variety of principles, practices, techniques, and tools being employed by the organizations which are leading the way in performance and quality improvement.
The concept of CIP is a broad concept which encompasses the best available management technology for the Systems Age. It is neither a fixed set of things or actions, nor it is a cookbook for the management. Rather, it is a dynamic process by which the organization can continuously change to be up-to-date with the best management practices and through which it can best manage that change. Management technology, like all other technologies, is to continuously adapt to accommodate changing realities. Likewise, the organizational management is to continuously grow to stay aware of and to employ the best available management technology.
Organizational management is to develop tailored CIP efforts which best fit the unique requirements of the organization. It has also provide the leadership, set the example by applying CIP to the working of the management, and frame goals and objectives for improvement which focuses on the efforts to improve the organizational processes. The elements of CIP are building blocks which create the challenge for the organizational management to frame a successful improvement process from these elements and other appropriate concepts. The organization is to rise to this challenge. Organizational management is to recognize that change is needed and there is the willingness to begin the change process. It is to gather momentum of CIP in the organization for the improvement of the organizational performance.
Of equal importance is to be understood that the organization has employees. The performance of the organization is affected by the performance and interaction of its individual employees and the success of the whole depends on the collective contributions of the employees. Ultimately, all the employees have a stake and a responsibility in helping the organization to learn, adapt, and improve. Likewise, the organization has a stake and responsibility to better serve its employees and, in doing so, serve its purpose more effectively. Understanding this challenge and how the management and employees respond to it shapes the collective future of the organization.
Organizational transformation starts with individual initiative and leadership. This leadership is essential, not only at the top of the organization, but also at every level and in every area. If the objective is to succeed, every employee of the organization is to be involved in the effort. At the core of the CIP is the message that the management and the employees are not to wait for the organization to guide toward change. Rather, management and employees as individuals and as teams are to lead and help to transform the organization through learning and adapting. The challenge hence is a personal one as well as an organizational one. Management is to decide how and when to begin the journey toward continuous improvement since the organizational future is influenced by this decision.
Several diverse elements interact, frequently in very delicate ways, to shape a comprehensive system of management. When a management process is subjected to the deliberate change process, managers are to be acutely aware of these delicate interactions so that it can discover and remove unanticipated road-blocks to achieve desired improvements. Such road-blocks can appear, at first instance, to be unrelated to the process targeted for improvement. CIP poses a real and personal challenge for each individual employee to be open to new ideas and new ways of seeing and to question the traditional management paradigms.
Experience has shown that one of the most essential ingredients of successful change management is recognition by the top management that change is necessary and that it requires their personal commitment and leadership. Success starts at the top. Top management is to be the first to discover what is needed to be done and how to do it, and then do it. Improvement efforts, begin at the top, flow with less resistance down into an organization since top management understands what it takes, appreciates the degree of difficulty, and provides the necessary commitment, for example, education, and support.
The management process for stimulating, supporting, and achieving continuous improvement is to be unending. The organization which embarks on the continuous improvement journey is to understand that the destination is never reached. The objectives of the management are to direct and produce deliberate continuous change in all its processes and through such change to secure the competitive advantage. Since some segment of the competition can be expected to constantly improve its products and services, the organization implementing CIP is to improve faster and more intelligently to catch up or to stay ahead. The CIP transformation affects five primary aspects of the organization namely (i) environment, (ii) structure, (iii) individual and team activity, (iv) communication, and (v) integration.
With the introduction of CIP, the environment in the organization evolves to one which nurtures the improvement process. Environmental changes include (i) increasing the emphasis and availability of education and training, (ii) tailoring the reward and recognition system to reinforce improvement-oriented behaviours, (iii) increasing the emphasis on, and wider participation in the planning process, (iv) clarifying the recognition of customers and increasing the emphasis on customer satisfaction, (v) increasing reliance on rigorous analytical methods and statistical evidence, (vi) clarifying and demonstrating attention to identifying and removing the sources of fear and insecurity and the road-blocks to improvement, and (vii) increasing respect for the capabilities and contributions of the employees.
The structure of CIP organization changes to permit the most effective employment of the practices, techniques, and tools used in the improvement-oriented culture. These structural changes include forming teams to define and implement the improvements and to define and take active ownership of work processes.
Changes can also include relocating functions to reduce process times or to better address customer needs. In the production shops, structural changes frequently include reorganization of floor space and layout to accommodate improved production techniques, including group technology, cellular processing, and ultimately automation, robotics, or flexible manufacturing technology. Individual and team activity in the CIP organization generates improvement. The changes in individual activity include (i) creating and implementing ideas and suggestions for improvement and differentiating between the necessary and the unnecessary, including making an effort to straighten up, (ii) put things in order and clean up, and (iii) maintain equipment. Employees are given greater responsibility for managing, maintaining, and controlling their immediate work environment. Changed team activity includes (i) regular team meetings, definition, analysis, and, improvement of team-owned processes, (ii) creation and management of team process performance measurement systems, (iii) interaction with team customers, and (iv) development of team process improvement strategies.
Arenas and forms of communication change to become more open, personal, and relevant. Special effort is made to improve the frequency, timing, and quality of communication in both the vertical dimension (to upper and lower management levels) and in the horizontal dimension (to other equivalent levels) of the organization. The changes affecting communication include (i) policy deployment, a communication mechanism to focus and guide team activity toward achieving top level goals, (ii) quality function deployment (QFD), a communication mechanism to better integrate product or service development efforts, and (iii) improvement project reporting to spread and share improvement experience and results. Systems for reporting performance data are changed by moving the responsibility for information analysis and response to lower levels and communicating to higher levels any data relevant to higher level goals and objectives. Financial accounting methods are changed to better communicate the true costs associated with producing a product or service and to recognize the value of investing in improvement technology.
The other aspect of the organization which is affected by CIP is the integration of functions and disciplines. One dramatic change which affects integration is the reduction of organizational and functional barriers in terms of both social divisions and physical locations. Managers, engineers, technicians, and administrators who are to regularly communicate are frequently co-mingled in a common work space. Reduction in the number and diversity of job codes, job grades, and work specialties is encouraged, and higher emphasis is placed on generalization and flexibility.
Many traditional functions are integrated back into the general work force. For example, quality assurance becomes part of every employee’s job, systems engineering becomes a routine consideration for every process-improvement team, and process teams assume responsibility for performance measurement. Just-in-time concepts permit inventories to be reduced to levels at which inventory management is integrated with production processes.
Each of the above aspects of organizational change is shaped by a variety of principles, practices, techniques, and tools, which are the elements of CIP. Since the improvement process is to continue to embrace the broad array of technologies which contribute to real improvement opportunity, the inventory of CIP elements is dynamic and flexible. Many of the elements of CIP have been identified from the practices and experience of pioneering organizations which successfully seek change for improvement. The pioneering experience of each organization is unique. However, their aggregate lessons learned provide a clear road map for both the transition to, and the maintenance of, a culture of continuous improvement.
Each organization which pioneered CIP started from a unique position and employed different tools and techniques, frequently in a trial-and-error way, to create change for improvement. Interestingly, each approach, no matter how limited, quickly produced results which were considered successful. Most of the approaches, however, soon ran out of steam or were found to be incomplete. To maintain the momentum of improvement, each organization was to integrate new or additional techniques and tools into its efforts. The collective picture of their individual patchwork approaches shows that they are all converging on a common set of technologies which are clearly the most effective and which comprises ClP.
Among the many individual elements which comprise CIP is (i) a philosophy, which contains the purpose, vision, and theory underlying CIP activity, (ii) management principles, which contain the fundamental concepts, rules, and assumptions guiding CIP decisions and actions, (iii) practices which are the repeated demonstrations of CIP behaviours through action, and (iv) techniques, which are the technical methods for accomplishing specific CIP aims, and tools, which are items or devices used in performing a CIP activity. These four elements inter-relate in a hierarchical manner (Fig 2). The philosophy provides a focal point and purpose for the pursuit of CIP. The principles serve as a framework which shapes and guides CIP decisions and actions. Practices in turn are the repeated actions which put the principles into effect. The tools and techniques support or are required in the execution of the CIP practices.
Fig 2 Inter-relationship of the elements of CIP
A key principle underlying CIP is ‘for surviving and thriving, the organization is to continuously and successfully adapt to its changing environment’. The organization can exercise a significant degree of control over its destiny. However, here the role that knowledge has influence on the outcomes. The world has left the Industrial Age and entered the Information Age. This new Age is characterized by new realities, including an exponentially increasing rate of technological change, more sophisticated and demanding customers, and an increasingly competitive market-place for all goods and services. Economic constraints in this new Information Age no longer permit the organization with inefficient or inflexible systems to compete successfully and survive. In this Information Age, the organization is required to anticipate changing customer requirements, respond quickly to technological advances, and adopt flexible strategies and processes. It is also required to adopt a philosophy which unifies the employees in the process of continuous improvement.
The philosophy of the organization is its shared system of values, motivating principles, and concepts. Traditionally, the organizational management gives little consideration to the importance of philosophy or to its role in shaping organizational culture. The organization implementing CIP, on the other hand, deliberately examines its shared values, principles, and concepts to ensure that it promotes continuous improvement and customer satisfaction and ultimately result in competitive survival. Such organization seeks to adopt a philosophy which unites and energizes its employees. The five components which are key to such philosophy are (i) a theory which defines the need for collective action, (ii) a common purpose which unifies the employees and defines their mission, (iii) a vision which focuses the employee’ actions on a desired transformation, (iv) a set of values which establishes limits of acceptable behaviour, and (v) policies which codify and communicate the key concepts of the philosophy of the organization.
The foundation of the philosophy of the organization implementing CIP is some theory which crystallizes the need for improvement. When survival is the issue for the organization, a theory to which the organizations can subscribe is ‘organization which understands the needs of its customers and which continuously improve its processes, products, and services accordingly survives’. A theory which defines the organization’s need to improve is equally important in competitive and non-competitive environments.
The organization implementing CIP takes time to develop a management consensus for its theory and makes certain that the theory is widely disseminated to the work force. The subsequent improvement effort is in essence an open test of the theory. The organization which attempts continuous improvement without articulating a theory loses an important motivating factor and ultimately lacks the basis for assessing their overall result. However, even such organization is to have an implicit theory, although unrecognized, if it is to construct its improvement effort intelligently.
Theories for competitive organizations are normally more clear and straightforward than those for non-competitive organizations. Competitive organizations are to develop strategies for improvement sufficiently early to enable them to stay in step with their competition. Those who postpones can find it nearly impossible to recover. Since the present era is of the Information Age with its global marketplace, it is clearly in the interest of the organization to maintain its competitive ability. The organizational management is to grip with the theories which define the needs in order to improve and respond to those needs with philosophies and strategies that impel the organization towards continuous improvement. The organization is to quickly come to grips with several broad issues namely (i) expressing an organizational purpose, (ii) communicating a vision of its future, (iii) undertaking an assessment of its values, and (iv) defining a unifying mission to which each employee of the organization can enlist. These elements of the organizational philosophy are to be thoughtfully and carefully crafted, officially codified, and broadly communicated both within and outside the organization.
The organization is to have a clear sense of purpose which is understood and shared by all its employees. The purpose is to be captured in a written statement drafted to provide continuity over a substantial time period. The purpose statement is to be simple and straightforward. For example, a statement can be a single sentence like, ‘the organizational purpose is to ensure long term security for each stakeholder through continuously improving customer satisfaction end competitive position, increasing market share, employment opportunities and job security, and providing a competitive return on long-term investments’.
The purpose statement is normally drafted by a select team of senior managers only after they have become thoroughly conversant in the principles and concepts of continuous improvement. The familiarity helps t o ensure that the team gives adequate consideration to each stakeholder in the organization, including the employees. The purpose statements are designed to provide a stabilizing influence and to give continuity and direction to decisions and actions over the long term even during the constantly shifting tides of environmental change. Ultimately, a purpose is an ideal final objective, one which is never reached but which drives and frames all other organizational goals and objectives.
A clear and accepted organizational purpose is a rallying point for the management and the work force. A properly constructed purpose statement is to give each employee of the organization a stake in its fulfillment. The purpose statement persuades all the employees of their individual stakes and through them the ownership in the organizational purpose. Hence, the organization implementing CIP rejects the short-sighted concepts of purpose and adopt ideas such as staying in business over the long haul, providing secure employment, and generating a fair and satisfactory return on investment for each employee with a stake in the organization. The new concepts of purpose promote decisions and behaviours which serve the long-term interests of all the people involved. The organizational behaviour is to reflect and support its stated purpose.
The organization which fails to express and pursue a clear long-term purpose is frequently driven by constantly shifting short-term issues and demands. Several organizations typically seek to maximize short-term profit. Decisions and behaviours based only on short term results have led several organizations to the brink of failure. Managements which practice hit-and-run behaviour by operating without a long term strategy make a significant contribution to the decline of competitiveness. Management is to be held accountable for the long-term effects of its actions, and through a clear and present purpose which is kept alive by examination, discussion, and use as a decision-making benchmark, management can be constantly reminded of the long-term accountability.
The purpose can be conveyed through separate statement of mission and objectives. A mission statement defines the organizational business. It can also identify a broad and unifying theme or goal which applies to everyone. Some examples of mission-goal statements can include establishing of a culture of continuous improvement, increasing market share and building a base of customers who not only buy a product but show off to others about owning it, or fully engaging every employee and supplier in CIP within a specified time. Once the management has defined the organizational reason for existence through its statement of purpose, it is then to turn its attention next to providing a vision of what it seeks to become.
The philosophy of the organization implementing CIP includes a clear and shared vision of where the organization is headed and what it is striving to become. The vision is documented, disseminated, and understood by every employee of the organization. Several organizations fail to appreciate the importance of a shared vision in focusing the thinking and effort of their employees. Ultimately, the vision is required to become both a corporate vision and a personal vision for the organizational employees.
The vision establishes a desired future state for the organization. A vision is to reflect an ideal for the organization. Examples can be (i) the recognized leader in a chosen technology, (ii) to be the supplier of choice among a targeted customer base, or (iii) to become the premier model among other organizations in the industry as visualized by customers, employees, and suppliers. A common theme of vision statements is a striving for excellence, to be the best within a specific competitive field as defined by the customer. The vision statement, like the purpose, is generally prepared by top management’s select management team. It is to be made to be compatible with the purpose and is to be relevant to the organization and each of its employees.
The values of the organization implementing CIP extend beyond the requirements for legal behaviour to include the more indistinct domain of ethics. The organization implementing CIP seeks to make clear that striving for improvement is bounded by expectations of ethical behaviour. It seeks to communicate behavioural expectations to its employees through clear statements and management actions. The set of organizational values includes management’s fundamental beliefs and expectations about fairness, honesty, and the rules of behaviour. Those beliefs and expectations are to be defined by the organization within its own context and not be a polished-over repeat of someone else’s values.
Values are to be reinforced through the reward and recognition system, the signals communicated by management, and daily decisions and actions. A common theme among the organizations implementing CIP is that managers, employees, suppliers, and customers all are to come to recognize that maintaining the highest standards of business conduct, ethics, and integrity is paramount and can be more important to long-term business health than profit, schedule, or other measures of performance.
The long-term survival of the organization and its business relationships depends on trust, respect, and good will. Disregarding or systemic breaches of ethical behaviour can quickly undo years of carefully developed public perception. Top management normally codifies its values both in its policies and in clear and simple statements about integrity. The policies of the organization implementing CIP make clear that unethical behaviour is not tolerated. Clearly stated policies also provide an important window through which to distinguish all aspects of the philosophy of the organization.
The organizational policies address a wide spectrum of issues and reflect a substantial cross section of its philosophy. The organization implementing CIP deliberately examines its entire body of policy (both explicit and implicit) to assure that it is in harmony with continuous improvement. The policy review task is normally performed by a select management team which has been trained in the principles and practices of continuous improvement. Prior CIP training is particularly important for this effort, for the team members to have the knowledge and skills to recognize potential road-blocks for CIP or counter-productive signals hidden in existing policies. In case, the existing policy is not sufficient on its own to support continuous improvement, then separate policy statements is needed to specifically address continuous performance improvement.
The organization implementing CIP creates policies to address the key topics for which clear guidance is needed. However, it attempts to limit the propagation of policies and avoids over-whelming the work force with paper and rules. The policy review team seeks to streamline policy statements and to remove entirely any policies deemed unnecessary.
The philosophy of the organization as expressed in its purpose, vision, values, and policy statements is supported and bolstered by a more specific set of principles which govern and modulate day-to-day decisions and actions.
Principles are broad statements which provide a framework of general rules to shape the organizational thinking. These apply equally to every area, function, and employee in the organization. Fundamental management decisions affecting the organization are to be tested against the core principles and rejected when found to be in violation of those principles. The principles of the organization implementing CIP are formally documented, widely disseminated, frequently discussed, and consistently deployed. They define the framework for judging behaviour and the basis for assessing the organizational culture.
The principles at the heart of CIP include (i) constancy of purpose, (ii) commitment to quality, (iii) customer focus and involvement, (iv) process orientation, (v) continuous improvement, (vi) system-centered management, (vii) investment in knowledge, (viii) teamwork, (ix) conservation of human resources, (x) total involvement, and (xi) perpetual commitment. These principles are compatible and mutually supporting.
The relationships among these principles are important since their synergy is crucial to the success of CIP. The principles work together in a logical and holistic manner to give substance and energy to the continuously improving culture. The holistic view of CIP is shown in Fig 3.
Fig 3 Elements of the continuous improvement process
Constancy of purpose and commitment to quality unite in an overriding, all consuming focus on the customers of the organization, their needs, and their requirements. This focus is translated into the organizational practice through a process orientation, through continuous improvement, and through system-centered management. Employees in the organization are empowered in these broad skills and their more specific subsets through an investment in knowledge which is achieved through the teamwork. Conservation of human resources assures the most valuable asset of the organization (the employees) remain as such. Total involvement in a perpetual commitment to improvement lays the groundwork for sustaining the effort.
Other logical relationships exist among the principles, and the full range of their dynamic interplay is both subtle and complex. Experience indicates, however, that each principle plays an essential part in the success of CIP, and CIP failures can frequently be attributed to the inadequate application of one or more of these principles. Fig 3 shows some additional connective inter-relationships among the various principles.
While the diagram given in Fig 3 can initially appear complex, the connections can be simply described as (i) constancy of purpose is centered on promoting teamwork, customer focus, and continuous improvement, (ii) teamwork is a major driver for investment in knowledge, which in turn fosters greater process orientation, (iii) process orientation is the key to customer involvement and to focus on the customer’s needs and expectations, (iv) the needs and expectations impel teams toward continuous improvement, which is the manifestation of management’s commitment to quality, (v) the commitment to quality needs management to become system-centered and to concentrate on improving the systems it manages, (vi) system-centered management is both process-oriented and people-oriented and in its people-oriented role seeks to conserve its human capital through investing in their knowledge and seeking their total participation in team process-improvement activity, and (vii) the total participation leads to the perpetual commitment of individuals and teams to quality and continuous improvement, which completes the cycle back to the constancy of purpose.
The constancy of purpose principle is a core concept for continuous improvement. For the organization implementing CIP, constancy of purpose is normally expressed by management through a broad statement of organizational purpose. This statement provides employees with a steady and consistent vision of where they are going, what is expected of them, and what they expect of themselves. Likewise, a constancy of purpose demonstrated consistently by the behaviour of the management enables the employees to construct a reliable mental road map on which to base their decisions and actions.
As shown in Fig 3, three key principles which are closely linked to constancy of purpose are (i) teamwork, (ii) customer focus and involvement, and (iii) continuous improvement. These principles are ideally be implied by the purpose statement of the organization. Additionally, these are difficult or impossible to sustain in the organization which lacks a constant purpose. As an example, continuous improvement very often results from a long series of small and deliberate process changes. Planning and guiding these process changes for optimal effect toward a common goal needs a stability of purpose over time. Without a stable framework of purpose, improvement decisions and actions can conflict and the effort spent on continuous improvement cannot be optimal.
Top management is responsible for providing constancy of purpose. It is to be provided from the highest possible level so that it can be infused throughout all parts of the organization. It is conveyed by a clear statement of a ‘vision for the organization’ with a set of consistent goals and objectives and is supported by strategic and tactical plans. The constancy of purpose is reinforced by the ongoing stream of management signals and actions which nurture and support the realization of the vision.
The organization displaying constancy of purpose has the elements namely (i) documented, well disseminated statements of purpose and vision, (ii) a set of long-range, medium-range, and short-range goals and objectives clearly linked to the purpose and vision, (iii) a set of strategic and tactical plans as road maps for achieving the goals and objectives, (iv) a consistent awareness among all the employees of the purpose, vision, goals, objectives, and plans and of their personal roles in achieving them, and a shared belief among the employees that the behaviour of the management clearly signals its commitment to, and supports the achievement of, the vision. Constancy of purpose is supported by (i) planning, (ii) goal setting, (iii) policy deployment, (iv) perpetual commitment, (v) efficient resource allocation, (vi) economic implementation, and (vii) long-term contracting.
Commitment to quality is a corner stone of the continuous improvement culture. However, several organizations experience difficulty in defining quality. The definitions range from very narrow ones such as ‘conforming to specifications’ to the very broad ones such as ‘an intangible but perceived inherent goodness’. In the context of continuous improvement, quality is to embrace these extremes and everything in between. Since the customer’s overall perception of the quality is formed from a complex integration of many factors, defining it simplistically results into a strategic error. A simple definition which limits the apparent responsibility of the management for quality serves only to make the organization falsely believing that it has the quality under control.
The concept of quality improvement is to encompass both measurability and the customer’s perceptions of usefulness. Improvement implies a comparison with past performance. Quality improvement implies increasing degrees of excellence with reference to specific and accepted points of reference. These points of reference include specifications, cost, performance, schedule, responsiveness, and the available competitive alternatives. Quality is required to address not only the organizational products and services but also the organizational processes from which they result.
A commitment to quality is to begin with top management. Consistent with its constancy of purpose, working within the corporate philosophy, top management is to identify the external customers for the organizational products and services. Top management is to understand the customer’s needs and expectations and assure that they are translated into the attributes and characteristics of the products or services. Top management is to direct the resources of the organization toward continuously improving the product or service with respect to the customer-relevant attributes.
Committing to quality means to commit to constantly improving every process, enhancing its resulting product or service with respect to any and all factors identified as relevant to customer perceptions of excellence. This means much more than simply complying with specifications themselves. It requires improving the specifications, reducing cost and processing times, enhancing communication, and simplifying processes while doing so enhances the customer’s overall perception of excellence.
Quality is the sum of the impressions made on the customer which influence his judgment and decisions about a product or service. What is considered by the customer to be of high quality at one time can be viewed as poor quality in a different time or context. Since the customer’s perception of quality is constantly evolving, the organization implementing CIP is to have a means of continuously staying attuned to the voice of the customer.
Committing to quality also means to commit to nurturing productive change in all the products and services produced by the organization. Changes are made in response to customers, and they are also be targeted to produce desired response behaviours in customers. Changes which produce no response behaviour in any customer have little apparent value. However, customers normally respond to generalized impressions of quality so it is always not be feasible to predict specific customer responses. Hence, some means of quickly and efficiently estimating the probable effects of a change on customer’s quality perception is needed to discriminate among the change options.
A commitment to quality needs the serious study of processes to understand their relationship with quality. For example, the level of inventory has a direct bearing on quality. A large inventory is subject to higher degrees of handling damage and degradation through aging, as well as adding to product cost by increased overhead. A large inventory also tends to mask many production process problems and inefficiencies which can actually degrade quality. The design process is another area which is strongly linked to product quality. If the design parameters and tolerances are not carefully selected, the product cannot be sufficiently robust to meet a broad range of diverse customer requirements. Traditionally, higher quality has been equated with higher cost and longer development time. In the organization implementing CIP, the opposite is true. High-quality products flow from high-quality processes and high-quality processes, by definition, produce the right things correctly the first time with minimal scrap, rework, or waste, and require minimal inventory, time, and cost.
The organization which commits to quality has the elements namely (i) a clear statement and ongoing visible actions from top management which reflect the commitment of the organization to quality through nurturing change for continuous improvement, (ii) a strategy for identifying customer needs and expectations and for translating them into guidance to focus decisions and change action, (iii) a means to disseminate within the organization the attitudes and behaviour which are consistent with a commitment to quality; that is, those which result in continuous improvement in the product and service attributes that have relevance to the customer, and (iv) a dynamic and structured process for examining and improving all major processes including design, manufacturing, inventory management, service, and administration. The principle of commitment to quality is supported by (i) customer research, (ii) open communication, (iii) quality function deployment, (iv) robust design development, and (v) inventory reduction.
Without customer focus and involvement, both constancy of purpose and commitment to quality become meaningless. Attracting, serving, and retaining customers are the ultimate purpose of any organization, and those customers help the organization frame its quality consciousness and guide its improvement effort. A process, product, or service has no relevance without customers. Everything done in the organization is done for the customers. The quality of a product or service is defined by customer behaviour and response. Process improvement is to be guided by a clear understanding of customer needs and expectations.
Increased customer satisfaction is the ultimate result of customer focus and involvement. The responsibility for assuring customer focus and involvement starts with a top management focus on the organization’s external customers and extends down through every level of activity to involve all customers in the improvement process. CIP emphasizes satisfying all customers, both internal and external. Every employee is both an internal customer for other organizational processes and a producer/supplier. Each producer/supplier is to know his customers (internal and external) and establish meaningful channels of communication with them. Once customer needs and expectations are defined, they are be translated into measures of performance and are to be directly related to the processes which create products and services.
Just as the organization is dynamic, so are its customers. Customer requirements change for a variety of reasons, frequently uncontrollable and unpredictable. Hence, to serve its customers adequately, the organization is to continually reassess its customers’ needs and requirements and factor them into its improvement efforts. Failure to consider customers and to actively involve them in the improvement effort is a fatal flaw in any organizational philosophy.
The organization which focuses on its customers and involves them has the elements namely (i) a clear identification of its external customers, (ii) a current and accurate means for assessing external needs and expectations of the customers with respect to the offered products or services, (iii) a set of performance measures which indicates the external customers’ response to those products and services, (iv) a means for identifying internal customers and defining their needs and expectations, (v) a set of performance measures linked to the internal products and services to indicate the degree to which internal customer requirements are satisfied, and (vi) a means to integrate and ensure the alignment of internal requirements and measures with those of the external customers. The principle of customer focus and involvement is supported by (i) policy deployment, (ii) customer research, (iii) customer polling, (iv) team building, and (v) process standardization.
The most effective means for the organization to address customer needs and improve itself is to focus improvement efforts on its processes. Process orientation needs a significant change in thinking for the management. Management practices, particularly quality functions, have traditionally focused primarily on the post production identification and rejection of defective products. While this approach can be reasonably successful in preventing unsatisfactory products from reaching customers, it does little to change the processes which create defects.
CIP directs the management to think in terms of process rather than in terms of finished product. Everything which is done in the organization is accomplished through a process comprised of definable stages, steps, or activities. As shown in Fig 4, each step in a defined process is a producer and a customer. The customer is always the step subsequent to the producer. Hence, the principle of customer focus and involvement provides a precise means for defining the purpose (and often the means) of the process.
Fig 4 Customer supplier relationship
The quality of the products and services delivered is a direct result of the quality of the processes which produce them. Product defects occur because of defective processes. Correcting defective products through scrap and rework is a costly process. Correcting defective processes is both more intellectually challenging and more cost-effective in that it prevents future defects and eliminates the costs of inspection and correction activities which do not add value to the product.
In a product-oriented regime, post production inspection is used by quality control personnel to sort good products from bad. Under a process orientation, however, performance measurement is used by the production personnel to verify that their processes are operating as they are supposed to be. Process knowledge enables an employee to identify or even anticipate problems from measurement data and to take timely corrective action. Statistical techniques for the process management can help improve processes, reduce defects, or prevent defective products from being produced and can improve, cost, lead time, reliability, and other factors important to the customers. A major difference between a post production inspection approach and a process-oriented approach lies in the collection, timing, feedback, and management response to measurement data.
The organization which focuses on the processes has the elements (i) employees are trained in process analysis and familiar with the process in which they work and for which they are responsible, (ii) all processes are documented by process flow diagrams and written process descriptions, (iii) customers are identified for each stage of a process and their needs and expectations defined for the products or services they receive, (iv) performance measures which indicate process adequacy are defined for each process stage, and (v) a means for using product and process measurement data systematically is available to control and improve process performance. The principle of the process orientation is supported by the practices of (i) process improvement- team creation, (ii) training, (iii) process standardization, and (iv) process simplification.
Continuous improvement is the fundamental principle around which CIP is centered. It complements and animates the principles of process orientation and customer focus and involvement with certain recognition that no process, product, or service ever attains perfection and that neither the customer’s expectations nor the quality of the competition remains static. A deliberate positive change (improvement) is needed to win and hold a customer base or to remain economically competitive. Devotion to continuous improvement is a demonstration of constant, purposeful commitment to quality.
Continuous improvement depends on both innovative and small incremental changes. Innovation is characterized by large dramatic changes resulting from new technologies or new ways of thinking and is frequently the product of research and development. However, the introduction of an innovation frequently raises performance to new levels, with the new standard of performance can rarely be sustained without a concerted maintenance effort. As a consequence, performance levels tend to subside somewhat after the introductory period, as shown in Fig 5.
Fig 5 Concept of continuous improvement
Organizational managements have traditionally focuses on innovation as the primary engine of improvement. The organization implementing CIP also recognizes the importance of innovation for developing new processes, products, and services. It also recognizes small incremental improvements as essential for maintaining and building on the new performance standards achieved through innovation (Fig 5). The organization implementing CIP seeks a better balance between innovation and small incremental improvement.
Frequently, the savings which accrue from small incremental improvements and reduced waste can be directed toward funding more and better research, which can lead to deliberate, directed innovation. Hence, the organizational management is required to consciously integrate frequent incremental small improvements and large innovative changes to optimize competitive advantage. Eventually the opportunities for small incremental process improvements reach a point of diminishing returns. Before this occurs, the organization is to be prepared to introduce the next level of innovation and to begin again the incremental improvement cycle. The balance between innovation and incremental improvement is a key for growth and is illustrated by the growth curves in Fig 5.
The period immediately following an innovative change in a process or product is normally characterized by a large amount of process variation, which is responsible for waste and defects. By applying techniques to reduce variation and eliminate waste, the process can be constantly improved. The customer can thus be provided with ever- increasing quality at lower cost.
The essence of continuous improvement is well captured in the Japanese concept of Kaizen, which means ‘continuous improvement by doing little things better, and setting and achieving ever-higher standards’. The strength of continuous improvement lies in the cumulative effect of its many small changes, which can occur so frequently but in such small increments that the steps are not readily visible. It has frequently being stated that, ‘the approach to perfection is through millions of trivial strokes, yet to approach perfection is by no means trivial’. This is the essence of continuous improvement.
The organization pursuing continuous improvement has the elements (i) an improvement strategy which integrates and stimulates incremental changes with the innovation process, (ii) a management team which is sensitive to and eager to listen to even the smallest ideas or suggestions for improvement, (iii) a training program to educate all employees in the principles, techniques, and tools which support the incremental improvement process, and (iv) a means to quickly and easily facilitate a continuous stream of many small improvements. This means moving the authority to screen and approve simple change actions to the lowest organizational levels possible. The principle of continuous improvement is supported by (i) innovation, (ii) improvement projects, (iii) performance measurement, (iv) variation reduction, (v) supplier base reduction, (vi) defect prevention, and (vii) upstream management.