Chapter Nineteen: Continual Improvement

1. Chapter Nineteen:Continual Improvement

2. Rationale for Continual Improvement • The rationale for continual improvement is that it is necessary in order to compete in the global marketplace. • Just maintaining the status quo, even if the status quo is high quality, is like standing still in a race. • Customer needs are not static. They change continually. • A typical example is the personal computer.

3. Management’s Role • Management’s role in continual improvement is leadership. • Executive-level managers must be involved personally and extensively. • The responsibility for continual improvement cannot be delegated. • Moral support manifests itself as commitment • Physical support comes in the form of the resources needed to accomplish the quality improvement objectives. • Building continual quality improvement into the regular reward system including promotions and pay increases

4. Essential improvement activities • Essential improvement activities include the following: • Maintaining communication • Correcting obvious problems • Looking upstream • Documenting problems and progress • Monitoring change

5. Essential improvement activities • Maintain Communication Communication is essential to continual improvement. This cannot be overemphasized. Communication with improvement teams and between teams is a must. • Correct Obvious Problems Often process problems are not obvious and a great deal of study is required to isolate them and find solutions. • This is the typical case and it is why the scientific approach is so important in a total quality setting. • However, there will be times when there is a problem with a process that is obvious. In such cases, the problem should be corrected immediately. • Spending days studying a problem for which the solution is obvious just so that the scientific approach is used will result in ten-dollar solutions to ten-cent problems. • Look Upstream Look for causes, not symptoms. • This is a difficult point to make with people who are used to taking a cursory glance at a situation and putting out the fire as quickly as possible without taking time to determine what caused it.

6. Essential improvement activities • Document Problems and Progress Take the time to write it down. • It is not uncommon for an organization to continue solving the same problem over and over because nobody took the time to document the problems that have been dealt with and how they were solved. • A fundamental rule for any improvement project team is “document, document, document.” • Monitor Changes Regardless of how well studied a problem is, the solution eventually put in place may not solve it or may only partially solve it. • For this reason, it is important to monitor the performance of a process after changes have been implemented. • It is also important to ensure that pride of ownership on the part of those who recommended the changes do not interfere with objective monitoring of the changes.

7. Structure for Quality Improvement • Structuring for quality improvement involves the following: • Establishing a quality council • Developing a statement of responsibilities • Establishing the necessary infrastructure

8. The Scientific Approach • Using the scientific approach means: • Collecting meaningful data • Identifying root causes of problems • Developing appropriate solutions • Planning and making changes. • The scientific approach makes decisions based on data, looking for root causes of problems, and seeking permanent solutions instead of relying on quick fixes.

9. Identification of Improvement Needs • Ways of identifying improvement needs include the following: • Multivoting • Seeing customer input • Studying the use of time • Localizing problems.

10. Development of Improvement Plans • Developing improvement plans involves the following steps: • Understanding the process • Eliminating obvious errors • Removing slack from processes • Reducing variation in processes • Planning for continual improvement.

11. Development of Improvement Plans • Understand the Process • Before attempting to improve a process, make sure every team member thoroughly understands it. How does it work? What is it supposed to do? What is the best practices known pertaining to the process? The team should ask these questions and pursue the answers together. This will give all team members a common understanding, eliminate ambiguity and inconsistencies, and point out any obvious problems that must be dealt with before proceeding to the next stage of planning. • Eliminate Errors • The team may identify obvious errors that can be quickly eliminated. Such errors should be eliminated before proceeding to the next state. This stage is sometimes referred to as "error-proofing" the process. • Remove Slack • This stage involves analyzing all of the steps in the process to determine whether they serve any purpose, and if so, what purpose they serve. In any organization, processes exist that have grown over the years with people continuing to operate them without giving any thought to why things are done a certain way or if they could be done better another way, or if they need to be done at all. There are few processes that cannot be streamlined.

12. To effectively manage, measure and improve something, it must first be understood

13. Mapping Business Processes An effective, simple way to improve understanding of the business process is by developing a graphic representation of all the activities and relationships with thin the process • Creates common understanding of the activities, results and who performs the steps • Defines the boundaries of the process • Can be a training tool • Provides baseline to measure improvement

14. Relationship Map

15. Detailed Process Map Identifies the specific activities that make up the process. Basic steps are: • Identify the entity that will serve as your focal point: • Customer? • Order? • Item? • Identify clear boundaries, starting and ending points • Segment of the process? • Keep it simple • Does this detail add any insight? • Do we need to map every exception condition?

16. Detailed Process Map • Document the process “as is”, not how it should be or how it is remembered • May be necessary to observe, monitor &/or follow the process • Need to map in manageable, logical segments • Keep the focus relatively small • Only areas which you have managerial control

17. Start or finishing point Step or activity in the process Decision point (typically requires a “yes” or “no”) Input or output (typically data or materials) Document created Delay Inspection Move activity Mapping Symbols Typical, but others may be used as appropriate

18. Detailed Process Map Example

19. Facts of the Case I Process • Dealer faxes order to DC. One out of 25 orders lost because of paper jams. • Fax sits in “In Box” around 2 hours (up to 4) until internal mail picks it up. • Internal mail takes about one hour (up to 1.5 hours) to deliver to the picking area. One out of 100 faxes are delivered to the wrong place. • Order sits in clerk’s in-box until it is processed (0 to 2 hours). Processing time takes 5 minutes.

20. Facts of the Case II • If item is in stock, worker picks and packs order (average = 20 minutes, but up to 45 minutes). • Inspector takes 2 minutes to check order. Still, one out of 200 orders are completed incorrectly. • Transport firm delivers order (1 to 3 hours).

21. Paper Dealer Order Sits Order Sits Clerk Internal Mail Order Faxes In Fax In Clerk’s Processes Delivers Fax Created Order In Box In Box Order 0 to 2 hours 5 minutes 0 to 4 hours 4% of 1 hour on average orders lost 2 hours on average 0.5 to 1.5 hours 1 hour on average 1% of orders lost 10 to 45 minutes 20 minutes on average Dealer Inspector Worker YES Transport Firm Is Item Receives Checks Picks Delivers Order In Stock? Order Order Order NO 2 minutes 1 to 3 hours 0.5% of orders incorrect 2 hours on average Clerk Notifies No history of lost, Dealer and damaged, or incorrect Passes Order deliveries On to Plant One Possible Solution

22. Paper Dealer Order Sits Order Sits Clerk Internal Mail Order Faxes In Fax In Clerk’s Processes Delivers Fax Created Order In Box In Box Order 0 to 2 hours 5 minutes 0 to 4 hours 4% of 1 hour on average orders lost 2 hours on average 0.5 to 1.5 hours 1 hour on average 1% of orders lost 10 to 45 minutes 20 minutes on average Dealer Inspector Worker YES Transport Firm Is Item Receives Checks Picks Delivers Order In Stock? Order Order Order NO 2 minutes 1 to 3 hours 0.5% of orders incorrect 2 hours on average Clerk Notifies No history of lost, Dealer and damaged, or incorrect Passes Order deliveries On to Plant Is there room for improvement? • Order spends 6.45 hrs in process • 3 hrs is waiting • 5% of orders are lost before picking • 1 out of 200 will be shipped with wrong items or amounts

23. Development of Improvement Plans • Reduce Variation Variation in a process results from either common causes or special causes. • Common causes result in slight variations and are almost always present. • Special causes typically result in greater variation in performance and are not always present. • Plan for Continual Improvement By the time this step has been reached, the process in question should be in good shape. • The key now is to incorporate the types of improvements made on a continual basis so that continual improvement becomes a normal part of doing business. • The Plan-Do-Check-Act cycle applies here. With this cycle, each time a problem or potential improvement is identified, an improvement plan is developed (Plan), implemented (Do), monitored (Check), and refined as needed (Act).

24. Common Improvement Strategies • Commonly used improvement strategies include the following: • Describing the process • Standardizing the process • Eliminating errors in the process • Streamlining the process • Reducing sources of variation • Bringing the process under statistical control • Improving the design of the process.

25. Common Improvement Strategies • Describe the Process • make sure that everyone involved in improving a process has a detailed knowledge of the process. Usually this requires some investigation and study. • The steps involved are: establish boundaries for the process; flowchart the process; make a diagram of how the work flows; verify your work; and correct immediately any obvious problems identified. • Standardize the Process • In order to continually improve a process, all people involved in its operation must be using the same procedures. • The steps involved in standardizing a process are: identify the current best known practices and write them down; test the best practices to determine if they are, in fact, the best, and improve them if there is room for improvement; make sure that the newly standardized process is being used by everyone; keep records of process performance, update them continually, and use them to identify ways to improve the process even further on a continual basis. • Streamline the Process • The strategy of streamlining the process is used to take the slack out of a process. • This can be done by reducing inventory, reducing cycle times, and eliminating unnecessary steps. • After a process has been streamlined, every step in it has significance, contributes to the desired end, and adds value.

26. Common Improvement Strategies • Reduce Sources of Variation The first step in the strategy of reducing sources of variation is identifying sources of variation. • Such sources can often be traced to differences among people, machines, measurement instruments, material, and sources of material, operating conditions, and times of day. • Regardless of the source of variation, after a source has been identified, this information should be used to reduce the amount of variation to the absolute minimum. • Improve the Design of the Process There are many different ways to design and layout a process. Most designs can be improved on. • The best way to improve the design of a process is through an active program of experimentation. In order to produce the best results, an experiment must be properly designed.

27. The Kaizen Approach • Kaizen is the name given by the Japanese to the concept of continual incremental improvement. It is a broad concept that encompasses all of the many strategies for achieving continual improvement and entails the following five elements: • Straighten up • Put things in order • Clean up • Personal cleanliness • Discipline

28. Goldratt’s Theory of Constraints • Goldratt’s theory of Constraints is another approach used to achieve continual improvement in the workplace. It involves the following steps: • Identify • Exploit • Subordinate • Eliminate restraints • Overcome inertia

29. Goldratt’s Theory of Constraints • The following tools are used in applying Goldratt’s Theory of Constraints: • Effect-cause-effect • Evaporating clouds • Prerequisite trees • The Socratic Method