Continuous improvement in the context of management refers to an ongoing and persistent endeavor to identify and eradicate the underlying causes of issues. This process typically involves a series of small, gradual improvements rather than a single groundbreaking innovation. Within Japanese business culture, continuous improvement serves as the foundation, permeating their mindset. It is a philosophy that strives for the ongoing enhancement of all aspects connected to the conversion process (converting inputs into outputs).
It involves everyone, management and labor, in finding and eliminating waste in machinery, labor, materials and production methods. The Japanese word for continuous improvement, kaizen, is often used interchangeably with the term continuous improvement. From the Japanese character kai, meaning change, and the character zen, meaning good, taken literally, it means improvement. Although kaizen is a Japanese concept, many U.S. firms have adopted it with considerable success by combining the best of traditional Japanese practices with the strengths of Western business practice, in other words, by merging the benefits of teamwork with the creativity of the individual. Some refer to its implementation in the West as lean manufacturing since, when combined with the principles of just-in-time (JIT), kaizen or continuous improvement forms the foundation for the concept of lean manufacturing. HISTORY OF CONTINUOUS IMPROVEMENT
After Japan lost in World War II, the United States aimed to motivate the country to rebuild. Similar to the Marshall Plan in Europe, General MacArthur invited several prominent American experts to visit Japan and offer guidance on the reconstruction efforts. Among these experts was Dr. W. Edwards Deming, a statistician with experience in census work who had been tasked with establishing a census in Japan. During his time in Japan, Deming observed the challenges faced by the nascent industries.
Many Japanese manufacturers faced significant challenges due to a lack of investment funds, raw materials, and components, as well as low morale among the nation and workforce. Drawing from his recent experience in reducing waste in U.S. war manufacturing, he started offering advice to them. By the 1950s, he visited Japan frequently, teaching businesses to focus on processes rather than outcomes. He encouraged everyone in the organization to continually improve imperfections at every stage of the process.
By the 1970s, many Japanese organizations had adopted Deming’s recommendations and were swiftly reaping the rewards. A prominent example is the Toyota Production System, which gave rise to various business enhancement techniques widely employed in Japan, such as JIT and TQM. Although many of the fundamentals of continuous management and other Japanese concepts originated in the U.S., Western companies displayed little interest until the late 1970s and early 1980s.
The success of Japanese companies inspired other firms to reevaluate their own strategies, leading to the emergence of kaizen or continuous management in the U.S. This coincided with the growing adoption of Japanese techniques like JIT and TQM. Continuous improvement is a central principle and objective in JIT, as well as one of the two key components of TQM (the other being customer satisfaction). In certain organizations, quality circles have transformed into continuous improvement teams with greater authority and empowerment than traditional quality circles.
In the Western management consulting, the term “kaizen” is often used to encompass various management practices that are typically associated with Japan. These practices have been instrumental in enabling Japanese companies to excel in continual improvement rather than focusing on innovation. A key factor for successful implementation of kaizen is having the right attitudes, which most Japanese people possess either innately or through training. Their innate attention to detail and sense of obligation to ensure smooth operations enhances the effectiveness of kaizen, both in work and personal settings.
In the Western world, the typical scenario is different. To foster the kaizen mindset, organizations need a significant shift in their corporate culture. This entails acknowledging problems, promoting a collaborative approach to problem-solving, empowering employees with responsibility, and emphasizing continuous training and personal growth. The impetus behind kaizen stems from a discontentment with the current state of affairs, even if the firm is considered successful. Remaining stagnant will give an opportunity for competitors to surpass and outperform any complacent company.
The founder of Honda once said, “In a race where split seconds matter, the difference at the finish line determines if you win or lose. Understanding this means that even the smallest improvement cannot be ignored.” Continuous improvement may involve small changes that aren’t immediately noticeable, but they can have a significant impact over time. Experience can enhance organizational performance by providing valuable knowledge. Mistakes serve as learning opportunities and reduce the chances of them being repeated, while successes motivate workers to try similar methods or explore new ones.
In order to achieve long-term improvement of the system, continuous improvement is essential. This can be accomplished by effectively learning from past experiences and applying this knowledge to enhance performance. Experimentation, including trying new approaches, exploring different methods, and testing fresh ideas, is vital in facilitating this learning process and promoting organizational growth.
Worker-led experiments come with a level of risk that needs to be acknowledged. If management is risk-averse, they may hesitate to allow any experimentation. It is important for management to avoid disrupting production or endangering workers’ safety. However, eliminating all risks can restrict the vision of those involved in the improvement process. Generally, progress in improvements occurs gradually and in small increments.
It is important for management to recognize that failure is a natural part of learning and not criticize those who propose new ideas that do not succeed. Some people even argue that it is essential to foster an environment that promotes taking risks. This means ensuring that management always has a positive outlook on change and empowers employees. Achieving continuous improvement requires a long-term mindset and the support of senior management. Equally crucial is the active backing and participation of all levels of management.
To ensure successful adoption, it is necessary to establish appropriate support structures such as training, management, resource allocation, measurement, and reward and incentive systems. This entails being willing to provide financial support and acknowledge accomplishments. It is advantageous to involve workers in formulating goals, publicizing them, and documenting achievements. These goals provide tangible targets for workers to aspire to, while recognition helps sustain their interest and morale. Additionally, all employees in the organization must be engaged in the Kaizen process.
It is essential for every employee to have the motivation to embrace kaizen as a strategy for the company to gain a competitive edge in the market. All individuals involved should consistently strive to improve their skills and surpass their previous achievements in every aspect. One effective approach that Japanese companies have adopted is the formation of teams comprising of both workers and managers. These teams work together regularly to solve problems. Additionally, workers are encouraged to share any issues or potential problems with the teams, as their input holds equal importance to that of management.
Workers need to receive comprehensive training in statistical process control, quality improvement, and problem solving in order to develop a problem-solving mindset. Problem solving plays a crucial role in driving continuous improvement and should be ingrained in both management and worker thinking, becoming a part of the organizational culture. As part of their training, workers are taught how to identify issues that disrupt or could potentially disrupt the workflow. Swift resolution of these problems is essential.
Workers in a continuous improvement system are trained to seek improvements in inventory reduction, set-up time and cost reduction, increasing output rate, and generally decreasing waste and inefficiency. However, they experience more stress compared to workers in traditional systems due to added authority and responsibility and the fast pace of the system. The system has little slack built in and there is a continual push to improve. As a result, firms focusing on continuous improvement have faced severe criticism from certain labor unions.
BENEFITS OF KAIZEN The advantages of continuous improvement are evident in various ways. In an article published in August 2004, Perry Flint discussed the significant improvements observed at American Airlines’ Tulsa MRO base as a result of implementing continuous improvement initiatives. This base, which spans 300 acres and includes 8,000 employees and 3 million square feet of docks and shops, is the largest facility of its kind in the world.
Continuous Improvement teams in their components and avionics shop have achieved a reduction of $1.5 million in inventory requirements, while also freeing up 11,600 sq. ft. of shop space. By opting to repair broken cargo door torque tubes instead of purchasing new replacements, the company has saved $250,000 per year. Turnaround times for overhauls have improved by more than 38%, and a savings of $100,000 has been achieved by replacing parts only as needed on the 737NG. These achievements have been made possible through employee and union buy-in, the establishment of employee-led work teams, and the actualized benefits resulting from employee-recommended improvements and streamlined procedures.
The success of the Continuous Improvement process relies on the employee-driven improvements, as these changes are not imposed by management. Due to this, employees are more accepting of the changes and understand the importance and benefits of implementing these alternative methods. A successful example of implementing kaizen training and updating a continuous improvement program can be seen in the case history of Pace Micro Technology, which involved a complete revamp of intranet support for continuous improvement activities.
After just nine months, the improvements made resulted in 238 ideas being registered on the continuous improvement intranet. These ideas were either in action or waiting for teams to start working on them. Among these ideas, 39 teams successfully completed their work, leading to a financial benefit of £1.1 million. Additionally, there was an impressive 71 percent involvement across the entire organization. The success at Pace can be attributed to leadership at all levels of the organization. Individuals within the organization have taken the lead by demonstrating desirable behaviors, encouraging and enabling others to take action, inspiring a shared vision, challenging the existing norms, and embracing risks.
By implementing kaizen or continuous improvement, companies can enhance their product and service offerings while still maintaining low prices, ultimately leading to increased customer satisfaction. This approach also ensures long-term benefits such as improved reliability, higher quality, advanced features, lower costs, and increased customer appeal. Additionally, this concept is closely linked to Japanese management, lean manufacturing, just-in-time production, quality management, quality gurus, statistical process control, and six sigma.
