Continuous Improvement

1. Continuous Improvement Frances Jørgensen Frances@plan.aau.dk

2. Then and Now Perspectives THEN • Higher quality Higher costs • Larger quantities Lower costs • Employees = 2 hands • NOW • Higher quality Lower costs • Smaller quantities Lower costs • With every 2 hands comes a free brain!

3. Kaizen (Imai, 1986) • Kaizen: • Process-oriented: results can only be improved if processes are improved • People-oriented: based on the belief that people’s natural desire for quality and value, and that it will pay for itself in the long run. • Standard-oriented: standards are required in order for improvement to occur.

4. What is CI? CI is “the planned, organised, and systematic process of ongoing, incremental and company-wide change of existing practices aimed at improving company performance” (Boer et al., 2000).

5. CI • is based on… • Continuous development & learning • Full utilization of employee potential • Employee responsibility for improvement

6. Balancing Radical Change & CI continuous improvement Practice or performance standard maintenance continuously improved practice or performance standard radical innovation maintained practice or performance standard practice or performance standard development without maintenance radical innovation Time Kilde: Imai, 1986

7. FEATURES KAIZEN INNOVATION Effect Long term and long lasting, undramatic Short term but dramatic Pace Small steps Big steps Timeframe Continuous and incremental Intermittent and non-incremental Change Gradual & constant Abrupt and volatile Involvement Everybody Select champions Approach Collectivism, systems approach Individual ideas and efforts Kaizen/Innovation Comparison (Cole, R., CI2000 Conference, Aalborg)

8. Kaizen/Innovation Comparison (cont’d) FEATURES KAIZEN INNOVATION Maintenance & Improvement Mode Scrap and Rebuild Spark Conventional know how Tech breakthrough Practical Requirements Requires little investment, lots maintenance Requires great investment, little maintenance Effort Focus People Technology Evaluation Criteria Process focus Results focus Works well in slow growth economy Suited to fast growth economy Advantage

9. Key Aspects of CI • Suggestions, support of recognition, pay, and educational systems • Application of production techniques & quality-related management methods, tools, and techniques. • Individual & group-based contribution (within and across functions) • Not “obligatory” or “volunteer”; rather, normal, daily activities. • Organization-wide support & involvement (production, management, departments e.g. product/process development)

10. Key aspects of CI (cont’d) • Top down / bottom up; planned, strategy driven and “emergent” contributions to strategy development. • Various levels of integration between action and reflection: PDCA cycle (problem identification/solution proposals in Japan/USA); full ownership of entire cycle (analysis, solutions, implementation in Scandinavia). • Encourage individual & organizational learning as part of daily activities • Numerous projects occurring simultaneously; not hit and miss • Not just in production; moving into service areas • Not just internal processes; moving into supply chain and networks

12. Benefits of CI • Small improvements in quality, costs, delivery time, safety, job improvement, etc. • Establishes foundation for other (larger) improvements (i.e. radical changes) • Maintenance & improvement of larger changes (e.g. Lego maintenance of BPR project results) • Development of competencies, learning, self-management (e.g. Coloplast autonomous teams)

13. Plan Do Check Act Planning and preparation, based on an analysis of existing practices and performance Plan Act: The new practices are standardized but opportunities for further improvement remain open Do: Implementation of the plan Check Check whether changes have resulted in expected improvements

14. 1 technician from each of 4 teams goes to the manager’s office at least once each day Accounting : • workdays i 1997 = 230 days • Distance to office = 2x90 =180 m there and back • 4*180*230 =165.600 m ~165 km Conclusion • If these trips are cut by just one ½, 83 km walking is saved. What about coordinating the teams? What about another form of communication?

15. 5 Strategic CI 4 Proactive/Self-driven CI 3 Goal Directed CI 2 1 Systematic CI ‘Natural’ CI TIME CI Development CI Maturity Levels CI Maturity Model (Bessant & Caffyn, 1997)

16. The Maturity Model • Natural CI: No formal CI structure, problem-solving is seldom & often conducted by specialists. • Systematic CI: Formal attempts at creating, supporting, and maintaining CI; formal problem-solving procedures are used and supported by basic CI tools. CI often run parallel to work processes. • Goal-oriented CI: In addition to above, formal diffusion and application of strategic goals, with monitoring & measuring of CI in relation to these goals. • Pro-active/self-driven CI: In addition to above, with the responsibility for CI being assumed by the problem-solving units themselves (department, groups, etc.) • Strategic CI: Full implementation…the learning organisation, a dominate lifestyle involving all in organisation. Active learning occurs naturally and is shared automatically. Combined large & small innovations

18. Problems with CI • If you don’t see any problems, you won’t look for improvements… • Lack of continuous training and development • Lack of a ”CI strategy” • Small improvements lack glamour • Lack of true management commitment • Lack of systems, procedures, practices to support CI • Lack of other enablers (e.g. communication, change agents, common understanding)

19. Want more? • America’s Most Successful Export to Japan: Continuous Improvement Programs by Schroeder, D. and Robinson, A. (1991), Sloan Management Review, Spring, pp. 67-81. • CI Changes: From Suggestion Box to Organisational Learning, CI in Europe and Australia by Boer et al. (Eds.) (2000), Aldershot: Ashgate. • A Journey through Self-Assessment, Learning, and Continuous Improvement, yours truly….2003.