Operational profitability : systematic approaches for continuous improvement
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Below are some of the tools and systems used on individual projects, larger scale analyses, and full-company cultures.
Systematic Approaches for Continuous Improvement
Image Courtesy Getvetter. Also known as the Deming Cycle or the Shewhart Cycle, this process involves four steps for carrying out change. The steps function as follows:. Given the simple framework for this concept, it is most effective at tackling small problems for incremental improvements on many fronts. It can be used for streamlining a repetitive work process, developing a new product, process or service, or as a proof-of-concept for larger ideas. Its cyclical style makes it ideal for incorporating small changes into different iterations of tests, allowing great flexibility when starting a new improvement project.
PDCA is also good for planning structures to collect and analyze data from a series of tests to identify issues and their causes. Originally developed in the s by Walter Shewhart, Statistical Process Control SPC is a way of monitoring process behavior primarily through the use of control charts. A control chart allows for swift notice when a process returns a result different from the norm. CCV is the inherent imperfection in any process that cannot be avoided. SCV stems from external factors that push the process outside statistical control.
Continuous Improvement Bibliography
Tests can determine when a SCV has occurred. However, when more tests are used, the probability of a false alarm actually rises. Companies still use this system today, and it is an important component of other Continuous Improvement systems like Six Sigma. Data-gathering instruments and statistical analysis software have also enhanced the accuracy and precision of SPC. Six Sigma is a detailed and intensive process intended to counter major production problems and inefficiencies in manufacturing companies.
The system provides organizations a set of tools to increase performance and reduce variation in process and product. Using this system, plants can increase profits, reduce defects, and improve employee morale. This reference to karate evokes both the discipline required by this method, and the strict hierarchy of belts and other Six Sigma roles.
Operational Profitability: Systematic Approaches for Continuous Improvement
DMAIC stands for:. Finally, Six Sigma requires a management structure that fosters these programs, provides consistent training, and is flexible to changes suggested by project groups. While often paired with Six Sigma when executing continuous improvement projects, lean manufacturing is a different process with a different goal. Lean Six Sigma is becoming a more popular term over time, but where the primary goal of strict Six Sigma lies in reducing variation, the core idea of lean manufacturing is introducing tools and processes that reduce waste.
There are seven types of waste usually identified by lean manufacturing:. To further minimize loss, highly intensive applications of this method require that company suppliers and subcontractors also follow lean principles to achieve maximized results. The toolset of lean manufacturing involves more holistic than technical approaches, including kaizen, workplace organization and visual checks. These blend well with the statistical data analysis, experimental design, and scientific test method of Six Sigma to create powerful, company-restructuring solutions.
Total Quality Management is a long-term strategy for success based on the idea of customer satisfaction. TQM involves the entire company, with every worker participating in making products, processes, and services better, as well as improving the company culture. This approach is described by the 8 principles of TQM:. Customer-Focused Goals — The customer is the final judge as to whether the Continuous Improvement strategies are effective in improving quality.
Process-Oriented Thinking — Identifying and measuring steps in systems to find areas of improvement. Integrated System — A detailed understanding of how each department interacts for each worker is key. Systematic Approach — Creating action plans when starting improvement projects. Continual Improvement — Both analytical and creative solutions are found to meet the expectations of both customers and shareholders.
Fact-based decisions — Data analysis is used to accurately pinpoint trends and make projections for the future. Communication — Good communication drives worker morale and motivation, and keeps all parts of the company driving towards the same objective. Many companies will use these principles as a core function of day-to-day operations, building Continuous Improvement into the fabric of the culture. For companies implementing TQM, a framework can be found in W. The food industry derives its revenue from low profit margins balanced against high-volume sales.
Continuous Improvement can help ensure that companies stay profitable even with unforeseen circumstances, especially in an increasingly competitive environment. The strategies offered by Continuous Improvement provides flexibility during market changes, streamlines work, and reduces waste. A complete how-to program. The examples and checklists are excellent. It has saved my clients millions. Operational Profitability Add value to services and increase revenue while giving your clients more of what they need Operational Profitability, Second Edition explains in complete detail how to conduct a management audit that will give clients the essential information they need in today's fiercely competitive marketplace.
The Memory Jogger: A Pocket Guide of Tools for Continuous Improvement
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