QM

Lecture 04

Continuous Improvement

AHJ
Continuous Improvement
Continuous Improvement is an ongoing effort to
improve products, services or processes. These
efforts can seek “incremental” improvement
over time.

– Continually seeking ways to improve operations,

– Not unique to quality – also applies to other process
improvements,
– Never-ending process of achieving small wins.
 Continuous or Continual
Improvement ?
The terms continuous improvement and continual improvement are
frequently used interchangeably. But some quality practitioners make
the following distinction:

• Continual improvement: a broader term preferred by W. Edwards

Deming to refer to general processes of improvement and
encompassing “discontinuous” improvements—that is, many different
approaches, covering different areas. To make changes and
improvements in the existing systems to produce better outcomes either
by adopting new technologies or methodologies.

• Continuous improvement: a subset of continual improvement, with

a more specific focus on linear, incremental improvement within an
existing process. Some practitioners also associate continuous
improvement more closely with techniques of statistical process
control.
Steps to Undertaking Continual
Improvement
1. Establish a need to improve.
2. (Obtain commitment and ) define the improvement objective.
3. Organize the diagnostic resources.
4. Determine current performance.
5. (Carry out) research and analysis to discover the cause of current
performance.
6. Define and (test) solutions that will accomplish the improvement
objective.
7. Produce improvement plans (which specify how and by whom the
changes will be implemented.)
8. Identify and overcome resistances (to the change.)
9. Implement the change.
10. Put in place controls to hold new levels of performance, and
repeat the above processes.
 Areas for Continuous Improvement
 Machinery
 Materials
 Labor utilization
 Production methods
 What is Benchmarking???

•A method for identifying and importing best practices in order to

improve performance.
•evaluate or check (something) by comparison with a
standard
•The process of learning, adapting, and measuring outstanding
practices and processes from any organization to improve
performance.
Types of benchmarking
 Benchmarking can be internal (comparing performance between different
groups or teams within an organization) or external (comparing
performance with companies in a specific industry or across industries).

 Within these broader categories, there are three specific types of

benchmarking:

1) Process benchmarking,
2) Performance benchmarking and
3) Strategic benchmarking. These can be further detailed as follows:
Types of benchmarking

Process benchmarking - the initiating firm focuses its observation and

investigation of business processes with a goal of identifying and observing the
best practices from one or more benchmark firms.

Financial benchmarking - performing a financial analysis and comparing the

results in an effort to assess your overall competitiveness and productivity.

Performance benchmarking - allows the initiator firm to assess their

competitive position by comparing products and services with those of target
firms.

Product benchmarking - the process of designing new products or upgrades

to current ones.
Types of benchmarking

Strategic benchmarking - involves observing how others compete. This type is

usually not industry specific, meaning it is best to look at other industries.

Functional benchmarking - a company will focus its benchmarking on a single

function to improve the operation of that particular function.

Best-in-class benchmarking - involves studying the leading competitor or the

company that best carries out a specific function.

Energy benchmarking - process of collecting, analyzing and relating energy

performance data of comparable activities with the purpose of evaluating and
comparing performance between or within entities.
Benchmarking Process

Identify
problem areas

Implement new and Identify other

improved business industries that have
practices similar processes

Visit the "best practice"

Identify organizations that
companies to identify
are leaders in these areas
leading edge practices

Survey
companies for
measures and
practices
1. Identify problem areas
• Select the process to be benchmarked

• Benchmarking can be applied to any business process or function

and a range of research techniques may be required. They
include informal conversations with customers, employees, or
suppliers; exploratory research techniques such as focus groups;
or in-depth marketing research, quantitative
research, surveys, questionnaires, re-engineering analysis,
process mapping, quality control variance reports, financial ratio
analysis, or simply reviewing cycle times or other performance
indicators.

• Before embarking on comparison with other organizations it is

essential to know the organization's function and processes; base
lining performance provides a point against which improvement
effort can be measured.
2. Identify other industries that
have similar processes

• For instance, if one were interested in improving a

particular process or performance, one would
identify other fields that also have same
challenges.
3. Identify organizations that are
leaders in these areas

• Look for the very best in any industry and in any

country. Consult customers, suppliers, financial
analysts, trade associations, and magazines to
determine which companies are worthy of study.
4. Survey companies for measures
and practices

• Companies target specific business processes

using detailed surveys of measures and practices
and its used to identify business process
alternatives and leading companies. Surveys are
typically masked to protect confidential data by
neutral associations and consultants.
5. Visit the "best practice"
companies to identify leading
edge practices
• Companies typically agree to mutually exchange
information beneficial to all parties in a
benchmarking group and share the results within
the group.
6. Implement new and improved
business practices
• Take the leading edge practices and develop
implementation plans which include identification
of specific opportunities, funding the project and
selling the ideas to the organization for the
purpose of gaining demonstrated value from the
process
The Benefits of Benchmarking

Benefits include:
·Better performance in meeting customer needs &
requirements.
·Establishing effective business goals and objectives.
·Measuring true productivity.
·Becoming competitive
·Identifying & implementing best practice in business
processes
 What does successful benchmarking
require?
In practice, the main requirements for success are:
 A strong and active commitment from senior management to
lead and implement the benchmarking process
 A willingness to change and adapt based on the
benchmarking findings.
 A realisation that the competition is constantly changing.
 An openness to new ideas, creativity and innovativeness in
their application to existing processes. ·
 A continuous benchmarking effort.
 A willingness to share information with benchmarking
partners (e.g. other organisations)
What is Lean?

Lean is a philosophy that seeks to eliminate waste

in all aspects of a firm’s production activities:
human relations, vendor relations, technology, and
the management of materials and inventory.

Lean manufacturing or lean production, often

simply "lean", is a systematic method for the
elimination of waste ("Muda") within a
manufacturing system. Lean also takes into account
waste created through overburden ("Muri") and
waste created through unevenness in work loads
("Mura").
Objectives of Lean management.

Some commonly mentioned goals are:

• Improve quality: To stay competitive in today's
marketplace, a company must understand its
customers' wants and needs and design
processes to meet their expectations and
requirements.

• Eliminate waste: Waste is any activity that

consumes time, resources, or space but does not
add any value to the product or service.
Objectives of Lean management.

• Reduce time: Reducing the time it takes to

finish an activity from start to finish is one of the
most effective ways to eliminate waste and lower
costs.

• Reduce total costs: To minimize cost, a

company must produce only to customer
demand. Overproduction increases a company’s
inventory costs because of storage needs.
Principles of Lean Manufacturing

• Elimination of Waste
– Continuous Improvement
• Respect For Humanity
– Levelized Production
» Just In Time Production
• Quality Built-in
Benefits of lean manufacturing
• Improved quality – A lot of the activity in a lean environment is
geared towards improving quality. As quality issues arise, problem
solving techniques are used to root cause the problem. From
there, mistake proofing is put in place to strengthen the process
and prevent recurrence. As a result, the quality of your product
will be improved.
• Improved Visual Management – Another benefit of lean
manufacturing is management by sight. If done correctly, your
plant will be set up so you can evaluate an entire area with a
visual scan. Any abnormalities will stand out and be easy to
identify as a problem.
• Increased efficiency – Line balancing will ensure each person in
the process is working in the most efficient manner. Standardized
work will ensure they are doing it correctly following the same
method every time. This leads to repeatability and increased
efficiencies.
Benefits of lean manufacturing
• Manpower reductions – One of the major benefits of lean is getting more
done with less people. With standardized work and increased efficiencies,
the ability to do the job with less people becomes a very real possibility.
This does not mean you have to send these people to the unemployment
line. The concept of lean would have these freed-up people utilized to
perform further kaizen activity, training to enhance skill level, or
maintenance of the system once it is implemented.

• Easier to manage – The work instructions and standardized work let

people know what they have to do and when. This makes managing an
area much easier. And problems will still arise. But they will be much easier
to deal with in a team environment where the support groups are eager to
help solve problems.

• Total Company Involvement – Lean is meant to involve the whole

company. It is not intended to be put into action in only one area. It is a
management philosophy which should include every part of your
organization. This helps promote the concept that everyone in the
company is part of the team.
Benefits of lean manufacturing
• Problem Elimination – Lean manufacturing forces you to attack
an issue and continue to investigate it until it has been eliminated.
Root cause analysis and cross-functional teams are utilized to
ensure a problem receives the level of attention it deserves to
correct it.

• Reduced Space – As part of the waste reduction process, space

will be created. Reduction of finished and raw inventory will save
space vertically in your racking as well as horizontally across your
floor.

• Safer Work Environment – Visual management and 5S will help

identify when things are out of place. When unnecessary elements
are removed from the operation, the workplace becomes much
more organized. And an organized work environment is a safe
work environment.
Benefits of lean manufacturing
• Improved employee morale – This is a benefit that may
not be realized during the initial stages of your
implementation (see resistance below). But once the
concept of lean starts to get accepted by the employees,
you will see employee morale on the rise. Employee
involvement and empowerment will make all members of
your company feel like a contributing part of the team. And
the reduction of uncertainty in the workplace, as a result of
lean, will reduce stress in your team members and lead to
improved employee morale.
What is 5S???

• Developed by the Japanese, Housekeeping

System, helps to Create a Better Working
Environment and a Consistently High Quality
Process.

• The 5S‘s are simple but effective methods to

organise the workplace.
– Seiri (Organisation/Sort out)
– Seiton (Straighten/ Orderliness)
– Seison (The Cleaning/Shining)
– Seiketsu (Systematise/ Standardize)
– Shitsuke (Sustain)
What is Six Sigma???
Six Sigma is a management philosophy developed by Motorola that
emphasizes setting extremely high objectives, collecting data, and
analyzing results to a fine degree as a way to reduce defects in
products and services.

The Greek letter sigma is sometimes used to denote variation from a

standard. The philosophy behind Six Sigma is that if you measure
how many defects are in a process, you can figure out how to
systematically eliminate them and get as close to perfection as
possible. In order for a company to achieve Six Sigma, it cannot
produce more than 3.4 defects per million opportunities, where an
opportunity is defined as a chance for nonconformance.

Defects per million (chances/opportunities)

2 sigma = 308,537
3 sigma = 67,000
4 sigma = 6,200
5 sigma = 233
6 sigma = 3.4
Six sigma Methodologies
• There are two Six Sigma processes: Six Sigma
DMAIC and Six Sigma DMADV, each term derived
from the major steps in the process.

• Six Sigma DMAIC is a process that defines, measures,

analyzes, improves, and controls existing processes
that fall below the Six Sigma specification.

• Six Sigma DMADV defines, measures, analyzes,

designs, and verifies new processes or products that
are trying to achieve Six Sigma quality.
What is DMAIC?

• Define,
• Measure,
• Analyze,
• Improve &
• Control
Define
• Define the Customer, their Critical to Quality
(CTQ) issues, and the Core Business Process
involved.

• Define who customers are, what their

requirements are for products and services, and
what their expectations are,

• Define project boundaries (scope) ­ the stop and

start of the process ,

• Define the process to be improved by mapping

the process flow.
Measure
• Measure the performance of the Core Business
Process involved.

• Develop a data collection plan for the process ,

• Collect data from many sources to determine

types of defects and metrics,

• Compare to customer survey results to

determine shortfall.
Analyze
• Analyze the data collected and process map to
determine root causes of defects and
opportunities for improvement.

• Identify gaps between current performance and

goal performance ,

• Prioritize opportunities to improve ,

• Identify sources of variation.

Improve
• Improve the target process by designing
creative solutions to fix and prevent problems.

• Create innovate solutions using technology and

discipline,

• Develop and deploy implementation plan.

Control
• This is the last step in the DMAIC methodology.

• Control ensures that any variances stand out and

are corrected before they can influence a process
negatively causing defects.

• Control the improvements to keep the process

on the new course.

• Prevent reverting back to the "old way“

What is DMADV?

• Acronym for:

 Define the project

 Measure the opportunity
 Analyze the process
options
 Design the process
 Verify the performance
What is DMADV?
• The DMADV project methodology, known as DFSS
("Design For Six Sigma”)
– Define design goals that are consistent with
customer demands and the enterprise strategy.
– Measure and identify CTQs (characteristics that
are Critical To Quality), measure product
capabilities, production process capability, and
measure risks.
– Analyze to develop and design alternatives
– Design an improved alternative, best suited per
analysis in the previous step
– Verify the design, set up pilot runs, implement the
production process and hand it over to the process
owner(s).
When should six sigma be used?

Its usage depends on the type of business.

In general,

“If there are processes that generate a lot

of negative customer feedback, whether
that customer is internal or external, the
components of six sigma should be
considered as a means to study and rectify
the problem.”
Where can Six Sigma be applied?
Service
Design
Management

Purchas
e

Administrati Six Sigma

on Methods Production

IT
Quality
Depart.
HRM M&S
Benefits of six sigma

• Generates sustained success,

• Sets performance goal for everyone,
• Enhances value for customers,
• Accelerates rate of improvement,
• Promotes learning across boundaries,
• Executes strategic change.

The End