Continuous Improvement Frances Jørgensen

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!

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.

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).

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

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

Kaizen/Innovation Comparison (Cole, R., CI2000 Conference, Aalborg) Individual ideas and efforts Collectivism, systems approach Approach Select championsEverybodyInvolvement Abrupt and volatileGradual & constantChange Intermittent and non- incremental Continuous and incremental Timeframe Big stepsSmall stepsPace Short term but dramatic Long term and long lasting, undramatic Effect INNOVATIONKAIZENFEATURES

Kaizen/Innovation Comparison (cont’d) Suited to fast growth economy Works well in slow growth economy Advantage Results focus Process focus Evaluation Criteria Technology PeopleEffort Focus Requires great investment, little maintenance Requires little investment, lots maintenance Practical Requirements Tech breakthroughConventional know how Spark Scrap and Rebuild Maintenance & Improvement Mode INNOVATIONKAIZENFEATURES

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)

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

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)

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

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 = 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?

Strategic CI TIME ‘Natural’ CI Systematic CI Goal Directed CI Proactive/Self-driven CI CI Maturity Levels CI Development CI Maturity Model (Bessant & Caffyn, 1997)

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

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)

Want more? America’s Most Successful Export to Japan: Continuous Improvement Programs by Schroeder, D. and Robinson, A. (1991), Sloan Management Review, Spring, pp 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.