Navigating The World of Continuous Improvement

The Ultimate Guide To Achieving Operational Excellence

Guide to Continuous Improvement

Everything you need to know about continuous improvement

Continuous improvement is an organized approach to finding opportunities that can help a business meet its goals for increasing profits, reducing costs and driving innovation.

The continuous improvement discipline has existed for over 80 years and takes many guises, covering an array of tools and techniques all designed to improve customer experience (delivering the greatest value).

For a number of highly successful organizations, such as Toyota, GE, Ford, Motorola and Nike, the world of process improvement has underpinned their success. But it isn’t the exclusive domain of these conglomerates.

Spanning well-known tools, techniques and theories including Lean, Six Sigma, PDCA, Kaizen and beyond, improvement is the language of professionals concerned with increasing efficiency and eliminating wastage in their processes.

But what does continuous improvement mean? What is its relationship with Lean, Six Sigma and other techniques? What are the common challenges with process improvement and how can you overcome them?

Crucially, how can business process management be optimized to ensure your business can remain competitive in a COVID-19 world?

This is your guide to continuous improvement and how it can help your organization lead the pack when it comes to delivering customer value.

What is continuous improvement?

Continuous improvement (CI) is an organization-wide approach to your business making its products / services and processes better by reducing waste or improving quality.

The world of continuous improvement consists of different frameworks and tools, including Lean, Six Sigma, Kaizen, PDCA and root cause analysis.

It empowers entire businesses to be involved in improving a customer's experience and can be referred to as process excellence, process improvement, business excellence and business process management.

With the right culture, systems and mentality, improvement becomes part of everyday work, and can provide incremental value to businesses seeking a new route of competitiveness and achieving operational excellence.

what does continuous improvement mean?

Continuous improvement cheat sheet

Get to grips with the improvement world with this jargon buster

i-nexus Strategic Planning

3Cs: Three questions to correct a problem – concern, cause and countermeasure.

7 wastes: The 7 types of waste in a process – transport, inventory, motion, waiting, over-processing, over-production, and defects.

Affinity diagram: A means to organize data and ideas relating to your process.

Cause and effect diagram: A problem-solving tool used to form relationships between effects and causes. The effect is revealed via branches (fishbones) showing different causes of it.

Control charts (Shewhart charts): A chart that shows if a process is in control.

COPQ: What is the cost of failing to meet a customer’s expectation, covering views such as internal, external, inspection, prevention and missed opportunities.

Countermeasure: The actions taken to address the root causes of problems which prevent you from achieving your goals.

Continuous improvement: Increasing business effectiveness by reducing inefficiencies, frustrations, and waste (time, effort, material, etc.).

Daily management: Giving daily attention to issues which occur within business as usual.

DMAIC: A main concept of Six Sigma methodology, a process covering define, measure, analyze, improve and control.

Flow: The state of a process in which the parts move from one step to the other in a steady, continuous stream without reducing quality.

Lean: The striving of avoiding waste, boosting quality and driving continuous improvement in all processes.

Operational excellence: The destination of continuous improvement activity is reaching a state of operational excellence, where all employees can see the flow of value to the customer, and fix that flow before it breaks down.

PDCA: Plan-Do-Check-Act is a four-step business management method to continuously improve processes and products.

Root cause: The core reason for an issue with a process.

SIPOC: A tool to summarize inputs and outputs of processes. It covers suppliers, inputs, process, outputs, and customers.

Six Sigma: Management techniques to improve processes by reducing likelihood of errors / defects. It’s directly connected to the DMAIC system.

Value stream mapping: A process map that captures information, process flow and performance data and looks at current vs future states of a process.

Voice of the Customer: The “Voice of the Customer” is the term used to describe the stated and unstated needs or requirements of the customer.

Yokoten: The Japanese phrase for horizontally deploying learnings / method is all about identifying issues, using a process, sharing results and then applying this elsewhere to create a larger impact on the business.

Continuous improvement & COVID-19

The source to competitive advantage in ever-changing markets?

2020 has been unprecedented. The reach of COVID-19 global. The long-term impact unclear. What hasn’t changed is your business remains in a hyper-competitive space, and that’s only going to intensify. So, what can you do?

Is the answer innovation? Adjusted positioning? Increased sales volume? Or is it about delivering a better customer experience?

The unobvious answer is to seek operational excellence through a continuous improvement mentality. The business management approach where you improve your customers’ experience by analyzing the processes which are used to deliver your product / service.

Economies have been shocked to the core, with social distancing and lockdown measures crippling consumer confidence. That has had an immediate knock on effect on the revenue of businesses, almost indiscriminate of industry.

With revenue projections needing reassessment, other streams of value must be found by your business, all the while not compromising on customer experience. After all, customers are central to every business, and with reduced confidence our buyers become more frugal.

The environment we find ourselves in is one where a continuous improvement, process optimization mentality can thrive and should become de-facto in how we approach developing our business.

Working traditions are being shattered, and it places a heightened focus on remote / virtual working. But that shift doesn’t spell the end of continuous improvement – often associated with observing production lines, looking at A3 sheets of paper to map out and investigate processes, or conducting morning huddles.

Video conferencing tools, Microsoft Office and continuous improvement software are pathing the route to the next evolution in business process improvement, and the information that follows has never been more appropriate.

More importantly, changing market conditions, with COVID-19 as a prime example, present an opportunity for you to reconsider how you manage through crises and this guide will help you to think about finding a stronger, more robust position.

It presents a sizeable opportunity for your organization to refresh its approach, its culture, and utilize the opportunity that digitalization brings to improve processes, understand results and ensure that you focus on what is important to the business.

It is your chance to deliver a better customer experience.

It’s time to seize competitive advantage.

The pillars of continuous improvement

Let’s take a closer look at the origins of continuous improvement, the common frameworks used and the simple steps to take to achieve improvement.

To be truly continuous means:

1) A commitment to process
2) Enabling cross-organization collaboration
3) Embedding a culture of measurement, learning and communication
4) Adopting technology to find efficiencies within the improvement process

These are the ingredients for the 4 pillars of improvement.

continuous improvement history timeline

Improvement origins

From Gosset’s statistical test to Motorola’s Six Sigma success, the seeds of continuous improvement were planted in the 1700s

The history of continuous improvement splits in two – Lean and Six Sigma.

Lean is synonymous with Toyota in the first half of the 1900s, and its eventual transplant to Western management thanks to the seminal book, ‘The Machine that Changed the World’ and the NBC special covering the work of Deming in Japan and his PDCA model.

Six Sigma began with Guinness brewery and shot into the conscience of business leaders with Motorola in the 1980s, with their success inspiring the likes of GE to seek operational excellence.

Click the infographic to view over 300 years of continuous improvement history.

Continuous improvement frameworks

Whilst navigating the world of improvement it is helpful to categorize the different theories / approaches to conducting improvement, what we call ‘frameworks’.

Lean Management

Lean focuses on shared responsibility and leadership for identifying and eliminating waste across your business. It has 5 steps:

  1. Identifying value: What do you deliver to customers and what doesn’t give them value?
  2. Mapping value stream: Map out the people, actions, outputs and systems involved in a process.
  3. Creating flow: Apply techniques to address problems, bottlenecks etc. and remove them.
  4. Establishing pull: Shift your business to optimize resources and process based on demand.
  5. Continuously improving: Monitor and control the performance of your new process.

Kaizen

Kaizen comes from two Japanese words: ‘kai’ meaning ‘change’ and ‘zen’ meaning ‘good’. To summarize the Kaizen approach:

  1. Toyota: The approach originated in the 1980s from Toyota, the originators of Lean.
  2. Empower: Employees are encouraged to suggest ideas and solutions for process flow.
  3. Grassroots: It is a bottom-up approach where small improvements create big change.
  4. Silo busting: Kaizen promotes cross-team working and alignment to one goal – improvement.
  5. Events: A flagship element of the approach, here teams hone in on projects to address particular issues.

Six Sigma

Six Sigma (6σ) is a statistical approach to minimizing defects in a process. 4 things you need to know about Six Sigma:

  1. 6 principles: Customer focus, understand the how, make processes flow, reduce waste, stop defect variation, collaborate and create data-informed systems.
  2. DMAIC: This is the go-to method for problem-solving.
  3. Toolset: Many tools are used here, but control charts, FMEA and process mapping are prominent – disagreement exists over what tools are involved, however.
  4. DPMO: The measurement of improvement – six sigma means 3.4 defects per million opportunities.

Continuous improvement tools

As your business seeks operational excellence there are tools that can be applied throughout the process, often what is referred to as the different steps towards continuous improvement. These are some popular options.

Kanban Project Management Continuous Improvement Software

Kanban

The Kanban board is a way to visualize blockers in your workflow and is a useful way to easily spot where improvements might be needed.

A3 management Continuous Improvement Software

A3

A3 refers to A3 paper reports which address lessons post PDCA, covering current state problems, solutions and a plan to address these issues.

Plan do check act Project Management Continuous Improvement Software

PDCA

Plan: Define your goals
Do: Implement plan
Check: Assess results
Act: Adjust plan

Just Do It Project Management Continuous Improvement Software

Just Do It

A log of actions, context, results and expected benefit. Involving action plans and concern & countermeasure sheets.

Value Stream Management Continuous Improvement Software

Value Stream Mapping

A process map that captures information, process flow and performance data, involving current state (what is the issue right now) and future state (ideal scenario) map.

Root Causes Analysis Continuous Improvement Software

Root Cause Analysis

Covering tools such as FMEA, 5 Whys and Fishbone, root cause analysis seeks the core reasons your process is stuttering and offers tools to identify the cause.

Kaizen events

Kaizen Events

A short structured problem-solving event, typically over a week, where 100% of the time is spent identifying how to improve a process.

Work breakdown schedule management

Gemba Walks

An observation of the process in situ, meaning managers watch the actual production process and use it as a human way to capture data and ideas on how to achieve greater improvement.

Benchmarking

Benchmarking

A means of setting existing performance metrics and then comparing future performance to these. Benchmarks can be internal or external.

Continuous improvement applications

Two core applications of continuous improvement exist – daily management and improvement projects.

Daily management

Daily management

Several top-level continuous improvement cycles exist, but none are more prevalent than Deming’s Plan, Do, Check, Act model.

This can be used in what is referred to as daily management, daily kaizen or just ‘good ops’.

Upfront effort will be spent working with teams to establish a base level of operational discipline to provide a foundation to understand what the plan should be.

By applying techniques such as the below you can establish a baseline of quality which can then be continually monitored and improved:

  • Demand profiling
  • Capacity planning
  • Root cause analysis
  • Performance dashboards
  • Observation scheduling
  • Visual management
  • Skills and training matrices
  • Leader standard work

These tools are used in order for you to:

  1. Understand how the work should be done
  2. Gauge the level of performance expected
  3. Do the defined work
  4. Check and review performance
  5. Review and act on any improvement needed
Improvement as a project

Improvement as a project

Once you have a baseline of performance, you can turn to improvement methods and tools for projects which drive sustainable change.

How you manage improvement is important as it will help ensure you are delivering the right improvement in the right way to give you sustainable results.

There are several approaches to delivering improvement:

  1. Just do it: as covered above, here it’s about logging what you’ve done, the results and improving.
  2. Countermeasures: Implement a quick fix and investigate the root cause. Apply another fix and then analyze.
  3. Root cause problem solving: Define your problem by using tools such as value stream maps, 5 whys and FMEA, fix and then form an action plan to address the root cause, measure the impact and repeat.
  4. DMAIC: Define, measure, act, improve and control the process improvement, involving SIPIOC, stakeholder analyses, pareto chart, process mapping etc.
  5. Project management: An organized approach to take your activity from definition through to completion.
  6. Diagnostic: Define your problem and apply a Six Sigma toolset, including process capability and measurement system analysis.
  7. Intervention: Apply Lean tools such as 5s, Kanban, Takt, mistake proofing and theory and constraints.
  8. Kaizen event: A week-long analysis of a problem and concentrated effort to make a clear improvement.

Building an improvement culture

When seeking operational excellence through continuous improvement, you cannot escape the importance of building an improvement culture.

Try these suggestions for ensuring your culture is one of collaboration, openness, and learning:

Preach continuous improvement

Preach

  • Communicate the value of improvement projects
  • Give examples of where it has worked
  • Support and take part in projects
Enable continuous improvement

Enable

  • Create virtual suggestion boxes
  • Use visual management techniques
  • Carve out time for improvement projects
Reward continuous improvement

Reward

  • Document projects and replicate
  • Communicate success
  • Incentivize participation with reward schemes and career progression

Building a process improvement team

Your improvement team exists to manage your journey to operational excellence and focus on implementing improvements in your business.

Improvement is wide-reaching, meaning many people form your landscape:

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Improvement Champion

Coaches improvement and supports cultural change, among other duties
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Improvement Process Owner

The individual who owns the process post-project
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Individual

Receives education and openly participates in improvement culture
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Improvement Leadership Team

Establishes the improvement culture and shepherds resources
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Company Leader

Accountable for achieving improvement goals
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Project Leader

Lead project teams, create project plans and share learnings
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Project Team

Plan project, execute, measure and install new processes
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Project Sponsor(s)

Individuals, Supervisors, and Process Leaders who support project
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Stakeholders

Agencies, Organizations, Teams, Individuals, and Customers impacted by project
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Subject Matter Expert

Consulted for knowledge on a topic

Engaging stakeholders

As a leader of continuous improvement, you are overseeing a complex portfolio of change.

That change ranges overall transformation of operations, to empowering individuals to participate in real improvement, all the way to overhauling processes.

To that end, there is a landscape of stakeholders who will influence your efforts. To successfully navigate these you must analyze the different influencers, and that begins with a stakeholder mapping exercise using an Excel template.

Stakeholder-Engagement-Anaylsis-header
challenges of implementing continuous improvement

Continuous improvement implementation challenges

Overcome these process improvement barriers

Common challenges with continuous improvement:

1. Reason and purpose
The reason you are there and the shadow it can cast – you may be seen as being in the business to cut heads.

2. Leadership mentality
Are your leaders there to embrace change and support you, or will they act as resistors?

3. Existing knowledge and capability of people
Not every member of your improvement team will have the same capabilities or knowledge. Empower and nurture when appropriate.

4. The base operational standards as a stable foundation (including data availability and quality)
How available is data in your business, is it treated as gold dust, or is there a reluctance to listen to data and instead focus on narrative?

5. Fit for purpose method
Do not over-engineer, nor cut corners, and certainly do not apply an improvement framework ill-suited to the business.

6. Business as usual
Be it securing the right people for your improvement team, or simply winning the hearts and minds of staff who are in constant firefighting mode, the day to day can
take the spotlight over your improvement initiatives if not addressed effectively.

7. The risk and opportunity of technology solutions
We’re living in a COVID-19 world and that means there is plenty opportunity to embrace virtual continuous improvement, ensure your platforms links your improvement to your business’ strategy and demonstrates ROI.

The ROI of continuous improvement

The value of continuous improvement is about more than financial gain…

There are two sources of value when it comes to continuous improvement:

1. The what – the outcomes or benefits that can be delivered
2. The how – how it feels for the organization to deliver the above outcomes in an improvement driven way

Let’s take a look at 4 stats to prove the need for improvement, and 4 more that show you the benefits of continuous improvement.

Continuous improvement stats you need to know

0
%

of organizations fail to realize the benefits of their projects

Wellingtone

0
%

of CEOs are confident revenue will grow within 12 months

PwC

0
%

of projects fail from a lack of defined objectives

PMI

0
%

of professionals struggle to link improvement to strategy

PEX

The benefits of continuous improvement

1. Increase employee engagement

Companies with a high level of employee engagement are more profitable by a factor of 21% (Smarp, 2020)

2. Reduce staff turn over

On average, the cost of staff turnover is $30,000 (Sodexo Engage, 2020)

3. Excellence as a standard

Pouring your team's voices into your product / service means you're striving toward excellence on a daily basis.

4. New day = new opportunity

Learning is the bedrock of improvement, siloes disappear, and you constantly seek growth opportunities, all for your customers' benefit.

Continuous improvement templates, eBooks, blogs, webinars and more

Learn more about continuous improvement with our dedicated resource hub.

From jargon busters and case studies to webinars, this is the home of continuous improvement knowledge.

Leader's guide to improvement

eBook

Lead improvement in your business

Download this eBook to discover how continuous improvement can be used by your business to drive competitive advantage and delight your customers.

Guide

A comprehensive guide to CI

Jargon Buster

The ultimate guide to improvement jargon

Trends

See where CI is heading

Resources

The resources you need for process improvement

Spreadsheets vs Software

Are spreadsheets good enough?

Comparison

DMAIC v Lean v Six Sigma

Explainer

The definitive answer to 'What is CI?'

Explainer

The 8 principles of continuous improvement

Explainer

What is a Kaizen Event & how can you prepare?

Explainer

10 process improvement tools you need to know

Explainer

Lean Management explained

Explainer

Six Sigma explained

Template

Download a root cause analysis template pack

Template

Download an FMEA Excel template

Template

Download a Fishbone template

Template

Download a SIPOC Excel template

Template

Download a Pareto Chart Excel template

Template

Download a stakeholder engagement template

Advice

Why you must build culture for CI to thrive

Advice

6 reasons you should try value stream mapping

Advice

8 improvement capability questions to ask

Improvement Webinars

Join Kaizen Institute's look into continuous improvement's future

Maturity Model

Use our model to assess your organizations's continuous improvement maturity

Software

Explore how our continuous improvement software helps people like you

Continuous improvement software

Learn all about continuous improvement software and how i-nexus helps organizations like yours

Coordinate and digitalize your improvement process

Continuous improvement software helps your business successfully embed the world of process improvement into its DNA.

The software in this space covers a number of purposes and functionality.

Why you may want continuous improvement software

  • Demonstrating the ROI of projects
  • Implementing improvement projects or programmes
  • Ideation and idea management in one location
  • Running a project from charter to end delivery
  • Underpinning change in a business unit / organization
  • Process mapping
  • Hoshin Kanri
  • Standardize improvement methodology
  • Upskill and managing team capabilities

Functionality to look for from continuous improvement software

  • Idea management and project initiation
  • Process mapping
  • Stakeholder engagement
  • Root cause analysis
  • Governance and compliance
  • Project and portfolio management
  • Impact analysis and benefits management
  • Reporting cadence
  • Learning and capability management

The benefits of using continuous improvement software

1. Standardized improvement

Project replication and standardized reporting at all levels of method application, making it easier for your teams to deliver improvement as you wish.

2. Increased strategic value

Increased strategic value of improvement activities through a clear alignment of investment with business priorities.

3. Reduced project cycle times

Reduced project cycle times and subsequent increased project success rates through standard detailed plans and the ability to track progress of delivery.

4. Greater productivity

Greater productivity through the elimination of non value-adding effort via the automation of reporting and governance preparation and distribution.

Introducing i-nexus continuous improvement software

Discover how the i-nexus Strategy Execution Management platform is the complete solution to managing the end to end process of improvement and aligning your team’s projects to your business strategy.

i-nexus overview video

i-nexus for continuous improvement video

Discover how the i-nexus Strategy Execution Management’s platform revolutionizes your continuous improvement management to help standardize and maximize your projects with our short overview video.

i-nexus software datasheet

i-nexus continuous improvement datasheet overview

Learn how i-nexus digitalizes and centralizes your process improvement initiatives, from charter to reporting realized value in a continuous improvement solution that underpins your methodology and culture.

Continuous improvement case studies

Learn how these organizations have used the i-nexus platform for continuous improvement

SAS Automotives case study
CASE STUDY

Automotives

Read how SAS Automotives standardized its processes and promoted a continuous improvement culture with i-nexus

casestudies-thyssenkrupp-600x375
CASE STUDY

Engineering

Read how Thyssenkrupp replicated and standardized its project management framework across its business using i-nexus

casestudies-flex-600x375
CASE STUDY

Manufacturing

Read how Flex managed its performance scorecards in i-nexus to help prioritize their improvement initiatives.

i-nexus continuous improvement software demo
DEMO I-NEXUS

See how you can digitalize your continuous improvement

See how you could manage improvement in your business in the i-nexus Strategy Execution Management platform using your data, applying your methodology and with your strategic targets in mind.