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The Concept of Continuous Improvement

By October 16, 2018 No Comments

Continuous Improvement has been around for a lot longer than people realize. In fact, many businessmen were using what we consider “Continuous Improvement” today long before it was called Continuous Improvement.

In reality though, it came to the world stage through the genius of Henry Ford (Ford Motors). He was the son of an Irishman and had a famous saying…

“People can have the Model T in any color – so long as it’s black.”

Ford made production simple and visual. He converted Batch Production to Flow Production (sequenced processes) and implemented the concept of Standard Work, where employees worked the same way to achieve the same results – only then could you truly measure your efficiencies. This was truly revolutionary for its day. Ford spent his days as a true leader on the shop floor as opposed to hiding behind a desk hoping things would magically be perfect. Everyday Ford would ask his employees why certain items were not moving and why finished cars in the warehouse were not being shipped to customers. Through this, along with his employees, they developed strategies to keep everything moving along the entire process all the way to the customer depot. From this, Ford coined the following great term…

“If it’s not moving or not being shipped to the customer it’s not adding value.” Click to Tweet

Moving forward

Continuous Improvement Principles have evolved greatly from the days of Henry Ford. As we know it today, it derives from the Japanese car manufacturer Toyota – The Toyota Production System. The philosophy is simple – Ruthless elimination of the 8 Wastes. Sounds easy, yes? However, what is waste and how we do we eliminate it? Rest assured that those 2 questions come fully loaded!

Toyota have mastered these 2 questions!

Enter RESPECT for people!

Toyota’s approach is not to implement this as a ‘Tools & Technique’ exercise, but rather a mechanism for improving the culture of the company. They give their employees on the shop floor autonomy and accountability. What are the results? Innovate Problem-solving real-time, a culture on wanting to do things better, a culture of collaboration, a culture of continuous improvement and growth. The results of this speak from themselves – they are the largest car manufacturing company in the world!

We’ve seen Continuous Improvement being implemented across many sectors and many companies, and we’ve seen some great examples and some tough ones. Why are there tough ones? They have misunderstood the true value of Continuous Improvement and haven’t used it effectively.

Here are some examples of what Continuous Improvement should be and what Continuous Improvement should not be:

It is not a cost-cutting exercise.

It is a mechanism for providing exceptional value to your clients at the lowest possible cost which in turn leads your business to profitability and sustainable growth.

Continuous Improvement used solely as a cost-cutting exercise will lead to a company entering the cost cutting spiral – this in turn leads to the business shrinking.

It is not a mechanism to remove people from an operation.

It is a vehicle for increasing capacity within a business so that you can do more work with the same resources – not the same amount of work with less resources. It is a totally different strategy.

A lot of businesses generally don’t suffer from a lack of business (a lack of getting paid more like)! In a lot of cases, businesses actually turn down work. So, how would you like your business to be able to take on more work without having to take on any new resources? Spare resources should be redirected, retrained and developed so that they can add value in other aspects of the business.

It is not a set of tools which you tell people to use in a “like it or lump it” style approach.

It is a forum for opening up discussions with all of your employees and creating a sense of engagement and participation for all involved.

The people who know your processes like the back of their hands are the people on the front line: the operators, line leaders, the supervisors. Treat them with RESPECT, work with them, teach them, give them a voice and listen to them. When you engage these people and empower them, they begin to use both sides of their brain and that’s where your best process improvement ideas will come from. And guess what, if it’s their ideas, how transparent will the implementation process be? Picture that against a team of middle managers dictating what changes are going to be made next and how! It’s not a pretty sight!

temporary solution to a permanent problem.

It is a permanent mindset and should be embedded in all aspects of the business.

At the heart of Continuous Improvement is getting to the Root Cause of a problem and implementing what is called the “100 Year Fix” – that is, you should never see this problem again. Once you fix one problem, move onto the next. However, are you sure you are focusing on the right problems that are causing you the most headaches?

Enter Pareto

Yes, the 80 – 20 rule again! Conduct a Pareto Analysis on your problems so that you know you are targeting the biggest issues your business is having. THis ensures that you are maximizing your results and using your resources in the most effective manner.

So many businesses focus Continuous Improvement only in the manufacturing / operational process. Yes, you will make improvements. However, you will never realize the true potential it can offer. Waste is everywhere and in many cases more abundant in the support functions of the business.

It is not a process that has an end point.

It is a Continuous Improvement Process.

Therefore, there is no end point! Once you reach your initial goal, then you review and improve again. You are probably familiar with the process.

1. Understand the Current State – know where you are today

2. Create your Future State – decide where you want to be

3. Create a Plan to achieve – implement your Process Improvement initiatives

4. Achieve Future State – this is now your new Current State

5. Repeat Steps 1 -4

More opportunities always come to light when you make improvements, and again following this process only improves the relationship with your employees.

It is not a methodology that is just used for manufacturing companies.

It’s a philosophy that can be applied to any process in any company in any sector – the principles are always the same!

Speaking of Principles, James P. Womack, Daniel Roos, and Daniel T. Jones have popularized 5 Value Principles through their book, “Lean Thinking”, back in the 1990s. While many have developed and tweaked these principles, they still hold strong today. They are as follows

1. Specify Value from your Client’s perspective

a. not from where you are standing or from what your perceptions of value are.

2. Integrate the Value Stream from your first supplier to your last customer

a. Continuous Improvement is not limited to the 4 walls of your building. It calls for seamless collaboration between all clients and suppliers. Why wouldn’t anyone want to do this – we all want to achieve the same result?

3. Make the product Flow

a. as Henry Ford says, the product must flow fluidly until it reaches the client, it must not stop.

4. At the pull of the customer

a. only make what the customer wants, not what you think they want to build and stock.

5. In the pursuit of perfection

a. continually strive for perfection. Make this a core principle for your business. Never settle for the status quo, your company deserves more!

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