Continuous Improvement

Kaizen Management

Demings PDCA Cycle

Kaizen Management
Management a different approach

Management has two major components:

1. Maintenance 2. Improvement

Under the maintenance function, the management must

first establish policies, rules, directives and standard
operating procedures (SOPs) and then work towards
ensuring that everybody follows SOP.

Under the improvement function, management works

continuously towards revising the current standards, once
they have been mastered, and establishing higher ones.
 Management - Improvement

Improvement can be broken down between

innovation and Kaizen .

Innovation involves a drastic improvement in

the existing process and requires large
investments.

Kaizen signifies small improvements as a

result of coordinated continuous efforts by all
employees. Kaizen (the translation of kai
(change) zen (good) is improvement ).
Kaizen refers to philosophy or practices that focus upon continuous
improvement of processes in manufacturing, engineering, supporting
business processes, and management.

By improving standardized activities and processes, kaizen aims to

eliminate waste.
 KAIZEN 5S Techniques
SEIRI Sorting making the difference
between necessary and useless things .
SEITON Ordering/Arrangement the ordering
of all the items after SEIRI.
SEISO Cleaning and disturbance detection
the working areas/equipments will be clean.
SEIKETSU - Standardizing the extension of the
cleaning concept to each individual alongside
with the continuous practice of the three steps
3S.
SHITSUKE Disciplining getting self-discipline
and getting used to be each involved in the 5S
actions through standard application.
Seiri
Seiton
Seiso
Kanban Control
Kanban = Card
Production Kanban: Authorizes the manufacturing of a container of
material
Withdrawal Kanban: Authorizes the withdrawal and the move of one
container
Demings PDCA Cycle
Foundations of the PDCA Cycle

The foundations of the PDCA cycle by Demings consist of the following three
principles:

1.Customer Satisfaction: Satisfying customers needs should be paramount

for all workers in the organization.

2.Management by Fact: Decision making must be made on data collected

from operations and analyzed using statistical tools. Decision makers must
practice and encourage a scientific approach to problem solving.

3.Respect for People. A sustainable problem solving and continuous

improvement approach should be based on the belief that employees are self-
motivated and are capable of coming up with effective and creative ideas.
 Steps of PDCA: The Plan step

Recognize the problem and establish priorities.

Problem may be outlined in very general terms based on information from several sources.
Form the problem solving team.
Interdisciplinary teams of individuals close to the problem are best.
Define the problem and its scope clearly.
Who, What ,Where and When.
Analyze the problem/process.

Identify possible solutions.

Brainstorm to find solutions.
Evaluate potential solutions.
Focus on solutions that address root causes and prevention of problem occurrence.
Solutions should be cost-effective; achieving group consensus is important.
 Steps of PDCA (continued)
The Do step
Implement the solution or process change
Monitor results and collect data

The Check step

Review and evaluate the result of the change
Measure progress
Check for any unforeseen consequences

The Act step

If successful,
Standardize process changes
Communicate to all involved
Provide training in new methods
 Tools of Continuous Improvement

1. Check Sheet. A simple tool for collecting data about problems or complaints.
Example:
 Tools (continued)

2. Histogram. A graph which presents the collected data as a frequency distribution

in bar-chart form. Example
 Problem Solving Tools (continued)

Flowchart. A visual representation of a process which can help in identifying points where
failures may occur and intervention is useful. Example
BENCHMARKING

For Best Practices

 What is Benchmarking

A method for identifying and importing best practices in order to improve

performance.

The process of learning, adapting, and measuring outstanding practices

and processes from any organization to improve performance.

Used to compare performance between different organizations or different

units within a single organizations undertaking similar processes on a
continuous basis.
A measurement of the quality of an organization's policies,
products, programs, strategies, etc., and their comparison
with standard measurements, or similar measurements of
its peers.

We compare our turnover rate against the ten largest companies

in our industry when we are benchmarking our organization.
 THE BENEFITS OF BENCHMARKING

Performance Improvement
Benchmarking allows the organization to dene specic
gaps in performance and to select the processes to
improve.

It provides a vehicle whereby products and services are

redesigned to achieve outcomes that meet or exceed
customer expectations.

The gaps in performance that are discovered can provide

objectives and action plans for improvement at all levels
of the organization and promote improved performance
for individual and group participants.
Benchmarking Process

Planning

Improving Collecting
Practices Data

Analysis
 1. Planning

Determine the purpose and scope of

the project
Select the process to be benchmarked
Choose the team
Develop a flow chart for the process
Establish process measures
Identify benchmarking partners
 2. Collecting Data
Conduct background research to gain thorough
understanding on the process and partnering
organizations.
Use questionnaires to gather information
necessary for benchmarking.
Conduct site visits if additional information is
needed.
Conduct interviews if more detail information is
needed.
3. Analysis

Analyze quantitative data of partnering

organizations and your organization
Analyze qualitative data of partnering
organizations and your organization
Determine the performance gap
 4. Improving Practices

Report findings
Develop an improvement implementation
plan
Implement process improvements
Monitor performance measurements and
track progress
Mould the process as needed
 Benchmarking
Framework
Change

Measurement Review

Benchmarking Framework
Types of Benchmarking

31
INTERNAL BENCHMARKING
Establishing good practice organization
Comparison of similar functions in different
Operating units within the organization

Example: Tata Steels Colliery divisions benchmarking

their maintenance practices with that of the
Maintenance division inside the Steel Works at
Jamshedpur
 Performance Benchmarking

Performance benchmarking enables managers to assess their

competitive positions through product and service comparisons.
Performance benchmarking usually focuses on elements of price,
technical quality, product or service features, speed, reliability, and
other performance characteristics.

FMCGs comparing with each other for Market share, Retention rates,
profits, costs
 Process Benchmarking

Process benchmarking focuses on discrete work processes and

operating systems, such as the customer complaint process, the
order-and-fulfillment process, or the strategic planning process.

Process benchmarking seeks to identify the most effective

operating practices from many companies that perform similar
work functions.

1 in higher education-enquiry management, enrolment

2 in Logistics- delivery, safety
3 in hotelshousekeeping, customer care
 Strategic Benchmarking

Strategic benchmarking examines how companies

compete and is rarely industry-focused. It rove across
industries seeking to identify the winning strategies that
have enable high-performing companies to be successful
in their marketplaces.
Strategic benchmarking influences the longer-term
competitive patterns of a company. Consequently, the
benefits may accrue slowly.
Benchmarking against organizations which have won awards
or some other distinctions
Benchmarking in the Context of TQM

TQM Key principles include:

Comparisons with best practice
A Strong emphasis on meeting the needs of the
customer (internal and external)
The importance of efficient, effective business
processes
The need for continuous improvement
The TQM System
Objective Continuous
Improvement

Principles Customer Process Total

Focus Improvement Involvement

Leadership
Education and Training
Elements Supportive structure
Communications Reward and recognition
Measurement