Continual improvement processA continual improvement process (CIP or CI), also often called a continuous improvement

process (usage preference discussed below), is an ongoing effort to improve products, services, or

processes. These efforts can seek "incremental" improvement over time or "breakthrough" improvement

all at once.[1] Delivery (customer valued) processes are constantly evaluated and improved in the light of

their efficiency, effectiveness and flexibility.

Some see CIPs as a meta-process for most management systems (such as business process

management, quality management, project management, and program management). W. Edwards

Deming, a pioneer of the field, saw it as part of the 'system' whereby feedback from the process and

customer were evaluated against organisational goals. The fact that it can be called a management

process does not mean that it needs to be executed by 'management'; but rather merely that it makes

decisions about the implementation of the delivery process and the design of the delivery process itself.

Some successful implementations use the approach known as Kaizen (the translation of kai (“change”)

zen (“good”) is “improvement”). This method became famous by the book of Masaaki Imai “Kaizen: The

Key to Japan's Competitive Success.”

The core principle of CIP is the (self) reflection of processes. (Feedback)

The purpose of CIP is the identification, reduction, and elimination of suboptimal processes.

(Efficiency)

The emphasis of CIP is on incremental, continual steps rather than giant leaps. (Evolution)

Contents

  [hide] 

1   Key features

2   Implementation

3   Continual improvement in environmental management

4   "Continuous" versus "continual"

5   See also

6   References

[edit]Key features

Key features of Kaizen include:

Improvements are based on many, small changes rather than the radical changes that might arise

from Research and Development

As the ideas come from the workers themselves, they are less likely to be radically different, and

therefore easier to implement

Small improvements are less likely to require major capital investment than major process changes

The ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or

equipment – any of which could be very expensive

All employees should continually be seeking ways to improve their own performance

It helps encourage workers to take ownership for their work, and can help reinforce team working,

thereby improving worker motivation.

The elements above are the more tactical elements of CIP. The more strategic elements include deciding

how to increase the value of the delivery process output to the customer (Effectiveness) and how much

flexibility is valuable in the process to meet changing needs.[2][3]

[edit]Implementation

The involvement of all workers require training, it is necessary to be able to distinguish between symptom

and ailment so that efforts are spent solving the root causes of the problem.

One example of broad training in continuous improvement techniques is Facila, the southern

European Lifelong Learning program where students learn to apply mathematics to everyday situations

by preparing Kaizen style projects.

[edit]Continual improvement in environmental management

The CIP-concept is also used in Environmental Management Systems (EMS), such as ISO

14000 and EMAS. The term "continual improvement", not "continuous improvement", is used in ISO

14000, and is understood to refer to an ongoing series of small or large-scale improvements which are

each done discretely, i.e. in a step-wise fashion. Several differences exist between the CIP concept as it

is applied in quality management and environmental management. CIP in EMS aims to improve the

natural consequences of products and activities, not the products and activities as such. Secondly, there

is no client-orientation in EMS-related CIP. Also, CIP in EMS is not limited to small, incremental

improvements as in Kaizen, it also includes innovations of any scale (Gastl)[4]

[edit]"Continuous" versus "continual"

In English-language linguistic prescription there is a common piece of usage advice that the word

"continuous" should be used for things that are continuous in a way literally or figuratively equal to the

mathematical sense of the word, whereas the word "continual" should be used for things that continue in

discrete jumps (that is, quantum-wise). When this distinction is enforced, it is more accurate to speak of

"continual improvement" and "continual improvement processes" than of "continuous improvement" or

"continuous improvement processes".

Meanwhile, for several decades it has been common usage in the linguistic corpus of business

management to use the one set term, "continuous improvement", to cover both of those graph shapes in

umbrella fashion. It is merely the way the word has been conventionally used in this context, in a common

understanding that existed regardless of prescriptive preferences. However, ISO has chosen the more

careful usage for its standards including ISO 9000 and ISO 14000; so it may be reasonable to expect that

usage among business managers will evolve in coming decades to conform to the preferred usage (and

in some cases, already has)

Benchmarking

Benchmarking is the process of comparing one's business processes and performance metrics to

industry bests and/or best practices from other industries. Dimensions typically measured are quality, time

and cost. In the process of benchmarking, management identifies the best firms in their industry, or in

another industry where similar processes exist, and compare the results and processes of those studied

(the "targets") to one's own results and processes. In this way, they learn how well the targets perform

and, more importantly, the business processes that explain why these firms are successful.

The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place

someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is used to

measure performance using a specific indicator (cost per unit of measure, productivity per unit of

measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of

performance that is then compared to others.[citation needed]

Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in

management and particularly strategic management, in which organizations evaluate various aspects of

their processes in relation to best practice companies' processes, usually within a peer group defined for

the purposes of comparison. This then allows organizations to develop plans on how to make

improvements or adapt specific best practices, usually with the aim of increasing some aspect of

performance. Benchmarking may be a one-off event, but is often treated as a continuous process in

which organizations continually seek to improve their practices.

Contents

  [hide] 

1   Benefits and use

2   Collaborative benchmarking

3   Procedure

4   Costs

5   Technical/product benchmarking

6   Types

7   Tools

8   Metric benchmarking

9   See also

10   References

[edit]Benefits and use

In 2008, a comprehensive survey [1] on benchmarking was commissioned by The Global Benchmarking

Network, a network of benchmarking centers representing 22 countries. Over 450 organizations

responded from over 40 countries. The results showed that:

1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of

organizations of 20 improvement tools, followed by SWOT analysis(72%), and Informal

Benchmarking (68%). Performance Benchmarking was used by 49% and Best Practice

Benchmarking by 39%.

2. The tools that are likely to increase in popularity the most over the next three years are

Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking.

Over 60% of organizations that are not currently using these tools indicated they are likely to use

them in the next three years.

[edit]Collaborative benchmarking

Benchmarking, originally described as a formal process by Rank Xerox, is usually carried out by individual

companies. Sometimes it may be carried out collaboratively by groups of companies (e.g. subsidiaries of

a multinational in different countries). One example is that of theDutch municipally-owned water

supply companies, which have carried out a voluntary collaborative benchmarking process since 1997

through their industry association. Another example is the UK construction industry which has carried out

benchmarking since the late 1990s again through its industry association and with financial support from

the UK Government.

[edit]Procedure

There is no single benchmarking process that has been universally adopted. The wide appeal and

acceptance of benchmarking has led to the emergence of various benchmarking methodologies. One

seminal book on benchmarking is Boxwell's Benchmarking for Competitive Advantage (1994).[2] The first

book on benchmarking, written and published by Kaiser Associates,[3] is a practical guide and offers a 7-

step approach. Robert Camp (who wrote one of the earliest books on benchmarking in 1989)[4] developed

a 12-stage approach to benchmarking.

The 12 stage methodology consists of:

1. Select subject

2. Define the process

3. Identify potential partners

4. Identify data sources

5. Collect data and select partners

6. Determine the gap

7. Establish process differences

8. Target future performance

9. Communicate

10. Adjust goal

11. Implement

12. Review and recalibrate

The following is an example of a typical benchmarking methodology:

1. Identify problem areas - Because benchmarking can be applied to any business process or

function, 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 hand offs in addiction treatment one would try to identify other fields that also have

hand off challenges. These could include air traffic control, cell phone switching between towers,

transfer of patients from surgery to recovery rooms.

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 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.

[edit]Costs

The three main types of costs in benchmarking are:

Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.

Time Costs - Members of the benchmarking team will be investing time in researching problems,

finding exceptional companies to study, visits, and implementation. This will take them away from

their regular tasks for part of each day so additional staff might be required.

Benchmarking Database Costs - Organizations that institutionalize benchmarking into their daily

procedures find it is useful to create and maintain a database of best practices and the companies

associated with each best practice now.

The cost of benchmarking can substantially be reduced through utilizing the many internet resources that

have sprung up over the last few years. These aim to capture benchmarks and best practices from

organizations, business sectors and countries to make the benchmarking process much quicker and

cheaper.

[edit]Technical/product benchmarking

The technique initially used to compare existing corporate strategies with a view to achieving the best

possible performance in new situations (see above), has recently been extended to the comparison of

technical products. This process is usually referred to as "technical benchmarking" or "product

benchmarking". Its use is well-developed within the automotive industry ("automotive benchmarking"),

where it is vital to design products that match precise user expectations, at minimal cost, by applying the

best technologies available worldwide. Data is obtained by fully disassembling existing cars and their

systems. Such analyses were initially carried out in-house by car makers and their suppliers. However, as

these analyses are expensive, they are increasingly being outsourced to companies who specialize in this

area. Outsourcing has enabled a drastic decrease in costs for each company (by cost sharing) and the

development of efficient tools (standards, software).

[edit]Types

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. Activity analysis will be required where the objective is to benchmark cost and efficiency;

increasingly applied to back-office processes where outsourcing may be a consideration.

Financial benchmarking - performing a financial analysis and comparing the results in an effort to

assess your overall competitiveness and productivity.

Benchmarking from an investor perspective- extending the benchmarking universe to also

compare to peer companies that can be considered alternative investment opportunities from the

perspective of an investor.

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. This

process can sometimes involve reverse engineering which is taking apart competitors products to

find strengths and weaknesses.

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. Complex functions such as Human Resources, Finance and

Accounting and Information and Communication Technology are unlikely to be directly comparable in

cost and efficiency terms and may need to be disaggregated into processes to make valid

comparison.

Best-in-class benchmarking - involves studying the leading competitor or the company that best

carries out a specific function.

Operational benchmarking - embraces everything from staffing and productivity to office flow and

analysis of procedures performed.[5]

Energy benchmarking - process of collecting, analysing and relating energy performance data of

comparable activities with the purpose of evaluating and comparing performance between or within

entities[6]. Entities can include processes, buildings or companies. Benchmarking may be internal

between entities within a single organization, or - subject to confidentiality restrictions - external

between competing entities.

[edit]Tools

Benchmarking software can be used to organize large and complex amounts of information. Software

packages can extend the concept of benchmarking and competitive analysis by allowing individuals to

handle such large and complex amounts or strategies. Such tools support different types of benchmarking

(see above) and can reduce the above costs significantly.

[edit]Metric benchmarking

Another approach to making comparisons involves using more aggregative cost or production information

to identify strong and weak performing units. The two most common forms of quantitative analysis used in

metric benchmarking are data envelope analysis (DEA) and regression analysis. DEA estimates the cost

level an efficient firm should be able to achieve in a particular market. In infrastructure regulation, DEA

can be used to reward companies/operators whose costs are near the efficient frontier with additional

profits. Regression analysis estimates what the average firm should be able to achieve. With regression

analysis firms that performed better than average can be rewarded while firms that performed worse than

average can be penalized. Such benchmarking studies are used to create yardstick comparisons,

allowing outsiders to evaluate the performance of operators in an industry. A variety of advanced

statistical techniques, including stochastic frontier analysis, have been utilized to identify high performers

and weak performers in a number of industries, including applications to schools, hospitals, water utilities,

and electric utilities.[7]

One of the biggest challenges for metric benchmarking is the variety of metric definitions used among

different companies and/or divisions. Definitions may also change over time within the same organization

due to changes in leadership and priorities. The most useful comparisons can be made when metrics

definitions are common between compared units and do not change over time so improvements can be

verified.

KaizenKaizen (改善?), Japanese for "improvement", or "change for the better" refers to philosophy or practices

that focus upon continuous improvement of processes in manufacturing, engineering, game development,

and business management. It has been applied in healthcare,[1]psychotherapy,[2] life-coaching,

government, banking, and other industries. When used in the business sense and applied to the

workplace, kaizen refers to activities that continually improve all functions, and involves all employees

from the CEO to the assembly line workers. It also applies to processes, such as purchasing

and logistics, that cross organizational boundaries into the supply chain.[3] By improving standardized

activities and processes, kaizen aims to eliminate waste (see lean manufacturing). Kaizen was first

implemented in several Japanese businesses after the Second World War, influenced in part by American

business and quality management teachers who visited the country. It has since spread throughout the

world[4] and is now being implemented in many other venues besides just business and productivity

.

Contents

  [hide] 

1   Introduction

2   History

3   Implementation

o 3.1   The five main elements of kaizen

4   See also

5   References

6   Further reading

7   External links

[edit]Introduction

Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a

process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and

teaches people how to perform experiments on their work using thescientific method and how to learn to

spot and eliminate waste in business processes. In all, the process suggests a humanized approach to

workers and to increasing productivity: "The idea is to nurture the company's human resources as much

as it is to praise and encourage participation in kaizen activities."[5] Successful implementation requires

"the participation of workers in the improvement."[6] People at all levels of an organization participate in

kaizen, from the CEO down to janitorial staff, as well as external stakeholders when applicable. The

format for kaizen can be individual, suggestion system, small group, or large group. At Toyota, it is usually

a local improvement within a workstation or local area and involves a small group in improving their own

work environment and productivity. This group is often guided through the kaizen process by a line

supervisor; sometimes this is the line supervisor's key role. Kaizen on a broad, cross-departmental scale

in companies, generates total quality management, and frees human efforts through improving

productivity using machines and computing power.[citation needed]

While kaizen (at Toyota) usually delivers small improvements, the culture of continual aligned small

improvements and standardization yields large results in the form of compound productivity improvement.

This philosophy differs from the "command and control" improvement programs of the mid-twentieth

century. Kaizen methodology includes making changes and monitoring results, then adjusting. Large-

scale pre-planning and extensive project scheduling are replaced by smaller experiments, which can be

rapidly adapted as new improvements are suggested.[citation needed]

In modern usage, a designed to address a particular issue over the course of a week is referred to as a

"kaizen blitz" or "kaizen event". These are limited in scope, and issues that arise from them are typically

used in later blitzes.[citation needed]

[edit]History

After WWII, to help restore Japan, American occupation forces brought in American experts to help with

the rebuilding of Japanese industry while The Civil Communications Section (CCS) developed a

Management Training Program that taught statistical control methods as part of the overall material. This

course was developed and taught by Homer Sarasohn and Charles Protzman in 1949-50. Sarasohn

recommendedW. Edwards Deming for further training in Statistical Methods.

The Economic and Scientific Section (ESS) group was also tasked with improving Japanese management

skills and Edgar McVoy was instrumental in bringing Lowell Mellen to Japan to properly install

the Training Within Industry (TWI) programs in 1951.

Prior to the arrival of Mellen in 1951, the ESS group had a training film to introduce the three TWI "J"

programs (Job Instruction, Job Methods and Job Relations)---the film was titled "Improvement in 4 Steps"

(Kaizen eno Yon Dankai). Thus the original introduction of "Kaizen" to Japan. For the pioneering,

introduction, and implementation of Kaizen in Japan, the Emperor of Japan awarded the 2nd Order Medal

of the Sacred Treasure to Dr. Deming in 1960. Consequently, the Union of Japanese Science and

Engineering (JUSE) instituted the annual Deming Prizes for achievement in quality and dependability of

products.

On October 18, 1989, JUSE awarded the Deming Prize to Florida Power & Light Co. (FPL), based in the

US, for its exceptional accomplishments in process and quality control management. FPL was the first

company outside Japan to win the Deming Prize.

Reference: US National Archives - SCAP collection - PR NewsWire

[edit]Implementation

The Toyota Production System is known for kaizen, where all line personnel are expected to stop their

moving production line in case of any abnormality and, along with their supervisor, suggest an

improvement to resolve the abnormality which may initiate a kaizen.

The PDCA cycles[7]

The cycle of kaizen activity can be defined as:

Standardize an operation and activities.

Measure the standardized operation (find cycle time and amount of in-process inventory)

Gauge measurements against requirements

Innovate to meet requirements and increase productivity

Standardize the new, improved operations

Continue cycle ad infinitum

This is also known as the Shewhart cycle, Deming cycle, or PDCA. Other techniques used in conjunction

with PDCA include 5 Whys, which is a form of root cause analysis in which the user asks "why" to a

problem and its answer five successive times. There are normally a series of root causes stemming from

one problem,[8] and they can be visualized using fishbone diagrams or tables.

Masaaki Imai made the term famous in his book Kaizen: The Key to Japan's Competitive Success.

Apart from business applications of the method, both Anthony Robbins and Robert Maurer have

popularized the kaizen principles into personal development principles. In his book,One Small Step Can

Change Your life: The Kaizen Way and his eight CD set, The Kaizen Way to Success, Dr. Maurer looks at

both personal and professional success using the kaizen approach.[9]

In their book The Toyota Way Fieldbook, Jeffrey Liker, and David Meier discuss the kaizen blitz and

kaizen burst (or kaizen event) approaches to continuous improvement. A kaizen blitz, or rapid

improvement, is a focused activity on a particular process or activity. The basic concept is to identify and

quickly remove waste. Another approach is that of the kaizen burst, a specific kaizen activity on a

particular process in the value stream.[10]

WebKaizen Events, written by Kate Cornell, condenses the philosophies of kaizen events into a one-day,

problem solving method that leads to prioritized solutions. This method combines Kaizen Event tools

with PMP concepts. It introduces the Focused Affinity Matrix and the Cascading Impact Analysis. The

Impact/Constraint Diagram and the Dual Constraint Diagram are tools used in this method.[11]

Key elements of kaizen are quality, effort, involvement of all employees, willingness to change, and

communication.

[edit]The five main elements of kaizen

This unreferenced section

requires citations to

ensureverifiability.

Teamwork

Personal discipline

Improved morale

Quality circles

Suggestions for improvement

Continuous Improvement or Kaizen

Continuous improvement or Kaizen is central to delivering Lean operations. The term originates from Maasaki Imai who wrote a book of the same name and made Kaizen popular in the West. According to Imai, Kaizen comprises several elements and is both a philosophy and a set of tools.

The Philosophy of KaizenQuality begins with the customer; but customers' views are continuously changing and their expectations rising. Therefore continuous improvement is required to maintain and improve customer service. Kaizen is dedicated to continuous improvement, in small increments, at all levels in the organisation and across all processes in the value stream… forever onwards in the pursuit of perfection!

Everyone has a role to play, from the boardroom to the shop floor: To achieve continuous improvement it is necessary that the culture of the organisation must change to

embody the philosophy of Kaizen, driven from the boardroom down and right back up again. Only then can management allocate the resources, establish strategies, systems, procedures and organisational structures necessary for the tools of Kaizen to work.

Middle managers are responsible for implementing Kaizen. They must monitor performance of the continuous improvement programme, and ensure that employees are educated in the use of the necessary tools.

Supervisors are responsible for applying Kaizen. They must maintain the rate of incremental by encouraging suggestions, coaching operative, and improving communications.

Operatives must make suggestions, learn new jobs, use the tools, and generally participate in continuous improvement activities individually and in teams without fear.

Flow versus Process ImprovementKaizen can be further categorised in terms of flow and process improvement;

Flow Kaizen is about value stream improvement, getting flow going, and should be a major concern of management. This is often but not exclusively where radical changes are found.

Process Kaizen is about the elimination of lower level tangible waste, and is more often the responsibility of supervisors and operatives.

Remember, in the Kaizen philosophy every level in the organisation has a responsibility for both, flow and process improvement but the emphasis changes.

Guiding Principles of Continuous ImprovementWithout active attention, the gains made through improvements in flow and process will deteriorate overtime, as customer needs and expectations change, resulting new wastes will appear. So Kaizen involves building on past gains by continuing experimentation and innovation every single day.

The guiding principles of Kaizen include: Questioning the rules – standards and targets are necessary but they are there to be beaten and must be

beaten with time.

Developing resourcefulness – it is a management priority to develop the resourcefulness and participation of everyone in the organisation.

Try to get to the Root Cause – try not to solve problems superficially and this may often break down functional barriers.

Eliminate the whole task – question whether a task is even necessary; in this respect Kaizen encourages radical thinking in the pursuit of flow.

Reduce or change activities – be aware of opportunities to combine tasks or redistribute effort.

Measure actual performance – performance measurement is important in understanding that the changes implemented have resulted in incremental improvement.

Customer-Centric Continuous Improvementimproving customer value continuously is difficult in almost any organization. That's true partly because

so many organizations are still organized around functional silos, which are managed to optimize their

own performance rather than to deliver value to customers.

If internal feuds don't sabotage things, 

Process Attention Deficit Disorder   will. An astonishing number of executives think of service

improvements as the slow, boring route to competitive advantage.

Then there's a third killer of continuous improvement: the performance management system. A single-

minded focus on next quarter's numbers is sure to crowd out costly, ongoing investments in process

improvement.

Leading organizations use some powerful long-term techniques to get around these problems. I

categorize these as tools of the heart, head, ears, and feet.

Inspire people to improve customer value — Heart. Organizations whose people share a clear sense

of who they are and the impact they are trying to have on the world can overcome internal barriers to

improving customer value.

For example, hospitals attract employees who care about people, want to provide better patient care, and

are proud of their professionalism. They aren't motivated by cost reduction, and they aren't likely to

embrace cost-saving approaches. But they will enthusiastically adopt approaches that eliminate waste

and improve patient experiences.

Focus on achieving a distinctive customer value proposition — Head. Not all organizations take the

same approach to creating customer value, nor should they. Having a clear strategy helps an

organization focus its efforts. One strategy is to eliminate inefficiencies and waste so that you're providing

consistent, reliable, low-cost services. Another is to tailor your offerings for each individual customer,

based on deep knowledge of her unique needs. A third is to offer cutting-edge, technically innovative

products and services.

I once helped the Dana-Farber Cancer Institute define its customer value proposition; one of the

organization's objectives turned out to be world-class service delivery. This understanding, in turn, led to

a concentrated focus on improving the process for scheduling patient appointments.

Build online communities with customers to drive product and service improvements —

Ears. Online customer communities (interactive websites where customers collaborate with the

organization and one another) are a relatively new phenomenon. According to my friends Vanessa

DiMauro of Leader Networks   and Bob Buday of The Bloom Group, these communities can help

organizations tap into customer trends and thereby develop better products and services.

In September 2009 the Palladium Group, founders of the Balanced Scorecard, launched "XPC — The

Execution Premium Community" for senior strategy professionals worldwide. It now has 2,700 company

members who can access Palladium's resources around the clock, share knowledge and experiences,

and join in discussions with Palladium Group strategy consultants. The community has helped the

Palladium Group understand which topics customers need help with, to gather ideas about what new

offerings might look like, and to test those offerings before marketing them broadly.

Take a personal interest in improving processes to meet customer expectations — Feet.Employees

learn what managers value by watching what they spend time on. If they see you listening for and solving

customer problems, they'll follow suit.

In my post What the C-Suite Needs to Do for Process Improvement I described how Jeff Bezos and other

Amazon.com executives spend time listening to customers' problems and visiting distribution centers.

Mickey Drexler, CEO of J. Crew (and CEO of The Gap during its go-go years), is famous for anonymously

visiting his stores to observe and talk with shoppers and staff. He personally answers shoppers' emails

and telephone calls and makes at least five store visits per week.

Continuously improving processes to deliver more customer value often conflicts with optimizing

departmental performance or delivering aggressive short-term returns. But there are powerful techniques

that can leverage an organization's heart, head, ears, or feet to better connect it to customers. Different

companies will find different approaches work better for them, and smart ones will use a combination.

What systemic approaches to improving customer value have you seen organizations build? Did they play

to employees' hearts, heads, ears, and feet? Have you seen an organization manage more than one

approach at a time?

The Concept of Continuous Improvement by TQM

TQM is mainly concerned with continuous improvement in all work, from high level strategic planning and decision-making, to detailed execution of work elements on the shop floor. It stems from the belief that mistakes can be avoided and defects can be prevented. It leads to continuously improving results, in all aspects of work, as a result of continuously improving capabilities, people, processes, and technology and machine capabilities.

Continuous improvement must deal not only with improving results, but more importantly with improving capabilities to produce better results in the future. The five major areas of focus for capability improvement are demand generation, supply generation, technology, operations and people capability.

A central principle of TQM is that mistakes may be made by people, but most of them are caused, or at least permitted, by faulty systems and processes. This means that the root cause of such mistakes can be identified and eliminated, and repetition can be prevented by changing the process.

There are three major mechanisms of prevention:

1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke).2. Where mistakes can't be absolutely prevented, detecting them early to prevent them being

passed down the value added chain (Inspection at source or by the next operation).3. Where mistakes recur, stopping production until the process can be corrected, to prevent the

production of more defects. (Stop in time).

The basis for TQM implementation is the establishment of a quality management system which involves the organizational structure, responsibilities, procedures and processes. The most frequently used guidelines for quality management systems are the ISO 9000 international standards, which emphasize the establishment of a well- documented, standardized quality system. The role of the ISO 9000 standards within the TQM circle of continuous improvement is presented in the following figure.

Continuous improvement is a circular process that links the diagnostic, planning, implementation and evaluation phases. Within this circular process, the ISO 9000 standards are commonly applied in the implementation phase. An ISO 9000 quality system also requires the establishment of procedures that standardize the way an organization handles the diagnostic and evaluation phases. However, the ISO 9000 standards do not prescribe particular quality management techniques or quality-control methods. Because it is a generic organizational standard, ISO 9000 does not define quality or provide any specifications of products or processes. ISO 9000 certification only assures that the organization has in place a well-operated quality system that conforms to the ISO 9000 standards. Consequently, an organization may be certified but still manufacture poor-quality products.