What is Continuous Improvement?
Continuous Improvement is a systematic approach to taking a product, process or service that currently exists, and improve it to obtain a better outcome. Why should we improve what we currently do? Why not leave things as they are? Organisations are always required to do more with less – more cost savings, more efficiency, greater output, greater customer service, etc.
However, with pressures on organisations to be able to compete in the market, or simply to provide what customers need, the resources available might in fact decrease. All of this means that it is everyone’s responsibility to improve the current situation. The following table provides some ideas of how we can improve products and services, and how we can improve processes and people. See if you can add to the list as well!
Kaizen is a Japanese word for the practice of continuous improvement. It was first coined by Masaaki Imai in his book ‘Kaizen: The Key to Japan’s Competitive Success’. Kaizen is made up of two Japanese words as follows:
According to the above website, Kaizen has ten main principles:
- Improve everything continuously.
- Abolish old, traditional concepts.
- Accept no excuses and make things happen.
- Say no to the status quo of implementing new methods and assuming they will work.
- If something is wrong, correct it.
- Empower everyone to take part in problem solving.
- Get information and opinions from multiple people.
- Before making decisions, ask “why” five times to get to the root cause.
- Be economical. Save money through small improvements and spend the saved money on further improvements.
- Remember that improvement has no limits. Never stop trying to improve.
Now have a look at the video below which describes how Japanese companies have embraced Kaizen.
The Secret Behind Japanese Productivity | 4:16mins
After you’ve watched the video, make some of your own notes on the main issues raised.
Improving Products Using Value Analysis
In Topic 2, we discussed quality by design; that is, ensuring that quality is designed into all new products. In this section, we are looking at improving existing products. As a result of customer feedback and bench-marking with other products and organisations, we strive to improve each product over time. Consider the iPhone for example, since its first introduction as the iPhone 3G, to the current version iPhone 7. Apple made vast improvements over this time, based on what customers are looking for, available technology and what competitors such as Samsung are including in their phones. This is a normal part of product development.
Value Analysis (also called value engineering) is a way to improve products, but its focus is on reducing cost. When an organisation can reduce its product’s costs, it can do several things:
- Sell it for the same price, thereby increase the profit margin on the product;
- Sell it for a reduced price, thereby aiming to capture more market share (which in turn will generate profits); or
- A combination of both – reduce the price somewhat and increase profits.
However, any cost reduction achieved through redesigning the product must in no way compromise what the customer expects or wants from the product. For example, if Apple built an iPhone without a camera, it would reduce cost and be able to sell it cheaper; however, no-one would buy it, as customers expect a camera as part of a smartphone. Therefore, removing the camera is not an improvement.
In implementing value analysis on a product, there are a number of questions that need to be asked:
- What is the product (or component) to be improved?
- What does the product (or component) currently cost to produce/buy?
- What does the product (or component) do? What function does it serve? In determining this, further questions could be asked:
- Can it be eliminated?
- Does it contribute value?
- What is it used for?
- Is it reliable?
- How does it perform?
- What features does the customer want?
If needed, what else could perform that function? Here again, some further questions could be asked:
- Can a standard manufactured item be used?
- Are all the features and components required?
- Does the product have excess capacity?
- Can the product’s weight be reduced?
- Can different materials be used?
- Can less expensive materials be used?
What would the improved alternative product (or component) cost?
Obviously, we would need to undertake considerable research to gather the relevant data to answer the questions above. Let’s take some time to have a look at doing this yourself!
Value Analysis Activity
Using the Value Analysis Template available on MyLO (Find the table in the link below), find a product (with some complexity), that you can improve, and complete the table to the best of your ability. You are not likely to have all the data you need, but just use your best guesstimates!
Reading One is a very good Value Analysis Handbook, which you can download and access yourself. It is very long, but you probably will only need to read the first 47 pages to give you some more detailed ideas of what value analysis involves:
Reading Two is a highly detailed Continuous Improvement Handbook published by the UK’s National Health Service, which you can download and access yourself. You don’t need to read the whole handbook, but you will get some great ideas, particularly for your major assignment: