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.
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.
3Cs:Â 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:Â 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:Â 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.
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.
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.
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.
Lean focuses on shared responsibility and leadership for identifying and eliminating waste across your business. It has 5 steps:
Kaizen comes from two Japanese words: ‘kai’ meaning ‘change’ and ‘zen’ meaning ‘good’. To summarize the Kaizen approach:
Six Sigma (6σ) is a statistical approach to minimizing defects in a process. 4 things you need to know about Six Sigma:
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 refers to A3 paper reports which address lessons post PDCA, covering current state problems, solutions and a plan to address these issues.
Plan: Define your goals
Do: Implement plan
Check: Assess results
Act: Adjust plan
A log of actions, context, results and expected benefit. Involving action plans and concern & countermeasure sheets.
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.
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.
A short structured problem-solving event, typically over a week, where 100% of the time is spent identifying how to improve a process.
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.
A means of setting existing performance metrics and then comparing future performance to these. Benchmarks can be internal or external.
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:
These tools are used in order for you to:
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:
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.
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.
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.
of organizations fail to realize the benefits of their projects
Wellingtone
of CEOs are confident revenue will grow within 12 months
PwC
of projects fail from a lack of defined objectives
PMI
of professionals struggle to link improvement to strategy
PEX
Companies with a high level of employee engagement are more profitable by a factor of 21% (Smarp, 2020)
On average, the cost of staff turnover is $30,000 (Sodexo Engage, 2020)
Pouring your team's voices into your product / service means you're striving toward excellence on a daily basis.
Learning is the bedrock of improvement, siloes disappear, and you constantly seek growth opportunities, all for your customers' benefit.
From jargon busters and case studies to webinars, this is the home of continuous improvement knowledge.
eBook
Download this eBook to discover how continuous improvement can be used by your business to drive competitive advantage and delight your customers.
A comprehensive guide to CI
The ultimate guide to improvement jargon
See where CI is heading
The resources you need for process improvement
Are spreadsheets good enough?
DMAIC v Lean v Six Sigma
The definitive answer to 'What is CI?'
The 8 principles of continuous improvement
What is a Kaizen Event & how can you prepare?
10 process improvement tools you need to know
Lean Management explained
Six Sigma explained
Download a root cause analysis template pack
Download an FMEA Excel template
Download a Fishbone template
Download a SIPOC Excel template
Download a Pareto Chart Excel template
Download a stakeholder engagement template
Why you must build culture for CI to thrive
6 reasons you should try value stream mapping
8 improvement capability questions to ask
Join Kaizen Institute's look into continuous improvement's future
Use our model to assess your organizations's continuous improvement maturity
Explore how our continuous improvement software helps people like you
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.
Project replication and standardized reporting at all levels of method application, making it easier for your teams to deliver improvement as you wish.
Increased strategic value of improvement activities through a clear alignment of investment with business priorities.
Reduced project cycle times and subsequent increased project success rates through standard detailed plans and the ability to track progress of delivery.
Greater productivity through the elimination of non value-adding effort via the automation of reporting and governance preparation and distribution.
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.
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.
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.
Read how SAS Automotives standardized its processes and promoted a continuous improvement culture with i-nexus
Read how Thyssenkrupp replicated and standardized its project management framework across its business using i-nexus
Read how Flex managed its performance scorecards in i-nexus to help prioritize their improvement initiatives.
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.
