1. Continuous Improvement: Overview and Steps Unit 4

2. Unit Objectives Discuss the overview of continuous improvement. Discuss quantum of improvement and improvement potential. What are the continuous improvement Strategies? Discuss the various continuous improvement method/approach.

3. The Objective of any Quality Management System (QMS) is….

4. Improve To raise to a better quality or condition. To make better. To make something more valuable. Improve on means to do or make better than as by additions or changes.

5. Improvement connotes or denotes 1. A betterment. 2. An increase in excellence of quality or condition. 3. Profitable use. 4. Progression, upgrading 5. An addition or change that improves something. 6. Representing a higher degree of excellence. 7. A change or addition to something to make it more valuable (an increase in value).

6. Continuous A series of improvement - no end point, on going effort

7. Traditional notion of Improvement has always been concern with removing defects, overcoming problems, putting faults right (negative orientation of western thinking).

8. New notion of improvement is to look at something which seems perfect and then set about improving it (is not only limited to putting things right).

9. Continuous Improvement Thinking (CIT) continually building quality incorporate consistent adjustments to quality. accepts the notion that all product and services can be continually improved. This is the thinking that must be accepted in the organization. This thinking should be developed and instilled so employees are always in a mode of trying to improve quality. If we established this thinking of always striving to improve the quality of products or services, then we have adopted CIT to obtain the highest level of satisfaction for our customers on an ongoing basis.

10. Many opportunities for improvement exist Organizations should also consider improving employee morale, satisfaction, and cooperation; Improving the design of products with features that better meet customers needs, and which achieve higher performance, higher reliability, and other market-driven dimensions of quality; and Improving the efficiency of manufacturing systems by reducing worker idle time, and unnecessary motions, and by eliminating unnecessary inventory, unnecessary transportation and material handling and scrap and rework.

11. Closing the Gaps through Continuous Improvement (Exhibit 1)

12. Closing the Gaps through Continuous Improvement Organizations involve a myriad of processes & virtually all processes are linked to other processes. For any process (process A), the inputs to that process are outputs of other processes in the organization. So Process A is a supplier to the next customer and a customer to its suppliers.

13. Closing the Gaps through Continuous Improvement The customer of process A has some requirement, needs or expectations for the output of process A. On other hand, the output of process A has some characteristics that are relevant to these customer expectations. These are technically called the quality characteristics of the output.

14. Closing the Gaps through Continuous Improvement To the extent that there is a gap between these characteristics and the customer’s expectations, there is a quality problem. This quality problem is the responsibility of the owner of process A. Continuous improvement is a frame of mind that continually forces us to systematically search for those gaps and systematically close them as long as it is feasible to do so.

15. Quantum of Improvement - Exhibit 2

16. Quantum of Improvement and Improvement Potential- Exhibit 3

18. Continuous Improvement and Breakthrough Approaches to Customer Satisfaction The Japanese practice of ongoing, small-scale continuous improvement (Exhibit 4a) has also been contrasted with the typically American search for large scale breakthroughs (Exhibit 4b). These two approaches were thought for sometime to be rather mutually exclusive. There are now consider to complementary and the better results of the combined approach which Deming has called continual improvement (Exhibit 4c).

19. Continuous Improvement Strategies - Exhibit 5

20. Continuous Improvement Strategies Three combined strategies or approaches have emerged for CI: 1. Incremental CI 2. Benchmarking 3. Reengineering (Breakthrough)

21. Incremental CI (ICI) ICI is an approach used on an ongoing basis for incremental gains ICI is also known by the Japanese term Kaizen It is ladder – step by step approach

22. Benchmarking Search for and emulates the best available practices and processes. Generally requires more resources than ICI and can usually be expected to provide larger gains. Benchmarking advocates encourage periodically repeating benchmarking efforts to close gaps between “what is” and “what could be”.

23. Reengineering Unlike ICI or benchmarking, reengineering is intended to totally change something. It is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. Rather than incremental gains of two or even 20%, reengineering is used to break through to new levels. However, improvements of this magnitude are not easily obtained and requires both justification and determination.

24. Basic Idea of Continuous Improvement Find weakness Set a goal for improvement Make a plan to achieve the goal Implement the plan --- keep track Check for progress Start over

25. Continuous Improvement Method/Approach The Kaizen The PDCA Cycle The Breakthrough (Juran's Improvement Program) Motorola Six-step approach (Stretch Goals) The Universal Seven-Step Method

26. KAIZEN The Japanese incremental continuous improvement

27. What is Kaizen? Kaizen means improvement Kaizen means ongoing improvement involving everyone, including both managers and workers Kaizen philosophy assumes that our way of life – be it our working life, our social life, or our home life – deserves to be constantly improved The message is “not a day should go by without some kind of improvement being made somewhere in the organization” Simply staying in business required unending progress, and Kaizen has become a way of life

28. WESTERN VS JAPANESE APPROACH Western West’s innovation-and results-oriented thinking Innovation strategy is technology driven and thrives on fast growth and high profit margins Practice of reviewing people’s performance strictly on the basis of results and not rewarding effort made Japanese Japanese kaizen and its process-oriented way of thinking Its messages is one of improvement and trying to do better It does not mean that innovation can or should be forgotten. Both innovation & Kaizen are needed

29. JAPANESE MANAGEMENT Has two major components: 1. Maintenance – activities directed toward maintaining current technological, managerial and operating standards 2. Improvement – those directed toward improving current operating standards 3. Improvement can be broken down into KAIZEN and INNOVATION

30. JAPANESE MANAGEMENT Kaizen signifies small improvements made in the status quo as a result of on going efforts Innovation involves a drastic improvement in the status quo as a result of large investment in new technology and/or equipment

31. WESTERN MANAGEMENT Western perception of management is given in Figure 3 There is little room for KAIZEN concept The worst companies are those which do nothing but maintenance – no internal drive for kaizen or innovation

32. Comparison of Innovation and Kaizen-based Strategy Innovation: Creativity Individualism Specialist-oriented Attention to great leaps Technology-oriented Information: closed, proprietary Functional (specialist) orientation Seek new technology Line + staff Limited feedback Kaizen: Adaptability Teamwork (systems approach) Generalist-oriented Attention to details People-oriented Information: open, shared Cross-functional orientation Build on existing technology Cross-functional organization Comprehensive feedback

33. Important Elements of Kaizen 1. A systematic and collaborative approach to cross- functional problem-solving 2. A custom-driven strategy for improvement – seek to satisfy the customer and serve customer needs 3. A system approach and problem-solving tools 4. A process-oriented way of thinking and people’s process-oriented efforts for improvement 5. A gradual rather than abrupt change 6. Everybody’s business

34. The Kaizen Umbrella Customer orientation TQC (total quality control) or CWQC (Company-wide Quality Control) Robotics QC (Quality Control) Circles Suggestion system Automation Discipline in the workplace TPM (Total Productive Maintenance) Kamban (signboards, cards or chits) Quality improvement Just-in-time (JIT) Zero defects (ZD) Small-group activities Cooperative labor- management relations Productivity improvement New-product development

35. Problem-solving is the Starting Point of KAIZEN The starting point of kaizen is to recognize the need This comes from recognition of a problem If no problem is recognized, there is no recognition of the need for improvement Complacency is the arch enemy of KAIZEN It emphasizes problem-awareness and provides clues for identifying problems Once identified, problems must be solved Thus Kaizen is a problem-solving process Kaizen requires the use of various problem-solving tools Improvement reaches new heights with every problem is solved – the improvement must be standardized

36. 1.Select and describe problem 2.Study present system 3.Identify possible causes 1.Select and describe problem 2.Study present system 3.Identify possible causes 4. Plan and implement solution 5. Evaluate effects 6. Standardize solution 7. Reflect on process and develop future plans 6. Standardize solution 7. Reflect on process and develop future plans PDCA SEVEN-STEP METHOD

37. Continuous Improvement of Quality through PDCA Through continued application of the cycle, the organization gets to higher and higher quality levels.

38. Continuous Improvement of Quality through PDCA In other words, PDCA is a system for making continuous improvements to achieve the target or ever-higher performance levels. The PDCA cycle is always shown as a circle to indicate the continuous nature of improvement. All types of improvement and improvement maintenance require iteration.

39. Continuous Improvement of Quality through PDCA The PDCA principle of iteration gives you a system for making improvements in a step-by-step way, doing the best job you can within relatively short improvement cycles. In that way you can try an improvement and get real feedback regarding the direction and distance of targets or goals. It is important to get improved products or services rapidly to markets or in the hands of the next process, in order to get this user feedback.

40. The Breakthrough (Juran's Improvement Program)

41. Joseph Juran emphasized the importance of developing a habit of making annual improvements in quality and annual reductions in quality-related costs. Juran defined breakthrough as the accomplishment of any improvement that takes an organization to unprecedented levels of performance. Breakthrough attacks chronic losses or, in Deming's terminology, common causes of variation.

42. The Breakthrough (Juran's Improvement Program) All breakthroughs follow a common sense sequence of discovery, organization, diagnosis, corrective action, and control. This "breakthrough sequence" is described and formalized in a 16-session videotape/workbook series entitled Juran on Quality Improvement, which is summarized below.

43. The Breakthrough (Juran's Improvement Program) 1. Proof of the need 2. Project identification 3. Organization for breakthrough 4. Diagnostic journey 5. Remedial journey 6. Holding the gains

44. 1. Proof of the need Managers, especially top managers, need to be convinced that quality improvements are simply good economics. Through data collection efforts, information on poor quality, low productivity, or poor service can be translated into the language of money - the universal language of top management - to justify a request for resources to implement a quality improvement program.

45. 2. Project identification All breakthroughs are achieved project by project, and in no other way. By taking a project approach, management provides a forum for converting an atmosphere of defensiveness or blame into one of constructive action. Participation in a project increases the likelihood that the participant will act on the results.

46. 3. Organization for breakthrough Organization for improvement requires a clear responsibility for guiding the project. The responsibility for the project may be as broad as an entire division with formal committee structures or as narrow as a small group of workers at one production operation. These groups provide the definition and agreement as to the specific aims of the project, the authority to conduct experiments, and implementation strategies. The path from problem to solution consists of two journeys: one from symptom to cause (the diagnostic journey) and the other from cause to remedy (the remedial journey), which must be performed by different individuals with the appropriate skills.

47. 4. Diagnostic journey Diagnosticians skilled in data collection, statistics, and other problem-solving tools are needed at this stage. Some projects will require full-time, specialized experts while others can be performed by the work force. Management-controllable and operator- controllable problems require different methods of diagnosis and remedy.

48. 5. Remedial journey The remedial journey consists of several phase an alternative that optimizes total cost (similar to one of Deming implementing remedial action, and dealing with resistance to change)

49. Holding the gains This final step involves establishing the new standards and procedures, training the work force, and instituting controls to that the breakthrough does not die over time.

50. Motorola Six-steps approach to Continuous Improvement (Stretch Goals) 1. Identify the product or service: What work do I do? 2. Identify the customer: Who is the work for? 3. Identify the supplier: What do I need and from whom do I get it? 4. Identify the process: What steps or task are performed? What are the inputs and outputs for each step? 5. Mistake-proof the process: How can I eliminate or simplify tasks? What poka-yoke devices can I use? 6. Develop measurements and controls, and improvement goals: How do I evaluate the process? How can I improve further?

51. THE SEVEN-STEP METHOD FOR CONTINUOUS IMPROVEMENT There are many variants of the seven-step method. The description of a typical variant might look very much as follows (Rao, Carr, Dambolena, Kopp, Martin, Rafii & Schlesinger, 1996).

52. THE SEVEN-STEP METHOD FOR CONTINUOUS IMPROVEMENT Step1. Select a problem and describe it clearly. Step 2. Study the present system. Step 3. Identify possible causes. Step 4. Plan and implement a solution. Step 5. Evaluate effects. Step 6. Standardize any effective solutions. Step 7. Reflect on process and develop future plans.

53. Step1. Select a problem and describe it clearly A meaningful and relevant problem is selected. The problem is defined in terms of a gap between what is currently happening and what would be happening under ideal circumstances. The importance and relevance of the problem are underscored. Any preliminary data that are relevant to the problem are put forth. Metrics that will be used to measure progress are determined. Any necessary operational definitions are developed. Goals are set, a team is formed, a leader is chosen, and a schedule is developed.

54. Step 2. Study the present system The present system is flowcharted. Data are collected on how the current system operates, including data on the metrics that were selected for measuring progress. Variables that may be related to the problem are identified, and data are collected on those variables. All data are examined to find any relevant relationships. )

55. Step 3. Identify possible causes Potential causes for the problem are identified through brainstorming by workers familiar with the process. A cause-and-effect diagram is developed. Most likely causes are singled out by those same experienced workers.

56. Step 4. Plan and implement a solution A list of possible solutions is developed, also through brainstorming. The solutions are evaluated. One or more solutions are selected for implementation. The implementation is planned and the solutions are implemented.

57. Step 5. Evaluate effects Data on the metrics selected for measuring progress are collected again. Other relevant data are also collected. The data are analyzed, and a determination is made on the effectiveness of the solutions that were implemented.

58. Step 6. Standardize any effective solutions Solutions that proved effective are adopted permanently. They are made part of standard operating procedures. The possibility of instituting those better methods elsewhere is considered and analyzed.

59. Step 7. Reflect on process and develop future plans The problem-solving effort just completed is reviewed in order to draw as many useful general conclusions as possible. A summary is made of what was learned. A decision is made on whether further improvement is needed on the problem that was just tackled; if not, other problems on which work is needed are identified.

60. Quality Control System for CI

61. Principles/Philosophies of Continuous Improvement Thinking (CIT) 1. Undertake improvement regularly and on long- term basis in the production and service systems. 2. CIT needs a conducive and supportive climate for creativity and innovation. 3. The direction and purpose of improvement need be clear and/or well communicated to relevant parties or members involved. 4. Total commitment and involvement of top management and all relevant parties are required for a successful implementation of CIT. 5. Learn, understand and apply the principles and philosophies of CIT.

62. Principles/Philosophies of Continuous Improvement Thinking (CIT) 6. Create CIT awareness through education and training. 7. Eliminate complacency and ‘tidak apa’(couldn’t be bothered) attitude and instill a need for continuous improvement of the production and service systems. 8. Understand all the elements as well as be able to identify relevant elements in various situations needed for successful implementation of the CIT. 9. Teach, institute and promote creativity organization- wide. 10. Institute a well plan recognition and reward program for CIT.

63. Principles/Philosophies of Continuous Improvement Thinking (CIT) 11. CIT does not always start with an issue, a crisis or problem, but is also used to enhance the existing production and service systems and optimizing opportunities. 12. CIT applies creativity thinking to produce quality and valve-added products and services. 13. CIT need not be a “top-down” approach but can also start from various levels across the organization or initiated by individuals. 14. “Sense of ownership” is very vital or essential for a successful implementation of CIT. 15. Be proactive to achieve CIT.

64. Thank You