Continuous Improvement

Strategies

2-1
KAIZEN
 What is Kaizen?
Kaizen is a Japanese word for the Philosophy that
defines managements role in continuously encouraging
and implementing small improvements involving
everyone. It is the process of continuous improvement
in small increments that make the process more efficient
, effective, Under control and adaptable.

The Kaizen improvement focuses on the use of:

Value added and non value added work activities
Muda which refers to the seven classes of waste-
a. Overproduction
b. Delay
c. Processing
d. Wasted Motion
e. Inventory
f. Transportation
g. Defective parts
CONTINUOUS IMPROVEMENT
STRATEGIES
Continuous improvement is a vital component of
an effective performance management system

Measuring performance will not result in system

improvements. It requires a strategy for linking
performance measurement to the implementation
of specific system improvements
Benefits
98% on-time delivery
15+% productivity improvement
50% reduction in shop lead time
50% reduction in inventory
25% reduction in scrap and
rework
Achievement of a World Class
look

2-6
CONTINUOUS IMPROVEMENT
STRATEGIES
Basic tips for continuous improvement strategies -
Start by questioning current practices
Come away from conventional fixed ideas
Think of how to do it, not why it cannot be done
Do not seek perfection at the first instance
If you make mistake, correct it
Do not spend money, use your wisdom
Ask WHY? and seek root causes
Seek the wisdom of more people rather than the
knowledge of one
DEMING WHEEL

PLAN
Identify the process which requires continuous
improvement
Locate the problem area
Define the problem
Project expected results
Identify the best method for solving
Set targets for solving the problems
Preparing the resources
Preparing the time schedule
DEMING WHEEL (CONTD.)
DO
If training is required then it has to be taken up as
first activity
Improvement activity should be taken up
Commitment of top management has to be
ensured
CHECK
The methodology followed and the outcome
achieved are compared with the plans. Identifying
gaps if any exist
ACT
If there is compliance then steps have to be taken
to ensure that solution methodologies are made a
ZERO DEFECT CONCEPT
The zero defect concept has gained momentum in
many developed countries
Emphasizes on preventive techniques rather than
corrective techniques
Attaining zero defect is not a one time affair, this
is a slow process requiring continuous
improvement
Initially the current status and the desired future
status of the process are to be clearly defined. The
difference between these two indicate the quality
improvement
ZERO DEFECT CONCEPT
(CONTD.)
Once this exercise is over the next step of quality
improvement has to be planned
Now the final quality status attained in the first
exercise becomes the current status. A new
desired future status is fixed. As before the
difference between these two will become the
new quality improvement which has to be
introduced in the process
This exercise is again continued
After a prolonged exercise the gap will reduce and
one can hope to achieve the zero defect at the
end
How soon the zero defect status will be reached
depends on how creative the ideas are ..
BENCHMARKING
 What is benchmarking?
Ifa company is loosing the market or
customers, the company has to realize that
somebody is doing well ahead. So it is
necessary to find out the way to get their
competitors level and have to beat them to
retain the market and customers. An idea
tool to meet this level is benchmarking.

Benchmarking is not copying or imitating, it

involves observing and learning.
Benchmarking is not a time bound event. It is
a continuous journey and on going process
without end, till the company exist.
BENCHMARKING (CONTD.)

INTERNAL BENCHMARKING
Within their business: same location, other
location
Different business: same company

EXTERNAL BENCHMARKING
With main competitor: same location, other
location
With similar industries: different companies, any
location
Best practice: any process, any company, any
industry, any location
 Step model for
Benchmarking:
Maturity

Action
Integratio
n
Analysi
s
Planni
ng
STEP MODEL FOR
BENCHMARKING
PLANNING
Identifying benchmarking subject
Identifying benchmarking partners
Determining data collection method
Collecting data
ANALYSIS
Determining current competitive gap
Projecting future performance
INTEGRATION
Communicating findings and gain acceptance
Establishing functional goal
STEP MODEL FOR
BENCHMARKING
ACTION
(CONTD.)
Developing action plan
Implementing plans and monitor progress
Recalibrating benchmark
MATURITY
Attaining leadership
Practicing benchmarking continuously
SIX SIGMA

World Class Performance

With 99 % Quality With Six Sigma

Quality
For every 300000 3,000 misdeliveries 1 misdelivery
letters delivered

For every week of TV 1.68 hours of dead air 1.8 seconds of dead air
broadcasting per (no sound or video)
channel

Out of every 500,000 4100 crashes Less than 2 crashes

computer restarts

Source: The Six Sigma Way by Peter Pande and Others

SIX SIGMA
Business Definition
A break through strategy to significantly improve customer
satisfaction and shareholder value by reducing variability in every
aspect of business.

Technical Definition
A statistical term signifying 3.4 defects per million opportunities.
 What is Six Sigma?
Six Sigma is originally developed by Motorola in 1986.[Six Sigma
became well known after Jack Welch made it a central focus of his
business strategy at General Electrics in 1995, and today it is used
in different sectors of industry.
It uses a set of quality management methods, including statistical
methods, and creates a special infrastructure of people within the
organization who are experts in these very complex methods. Each
Six Sigma project carried out within an organization follows a
defined sequence of steps and has quantified financial targets (cost
reduction and/or profit increase)
Six sigma accuracy means that the process is 99.999998% accurate.
in quality practice six sigma means 3.4 defects per million
SIX SIGMA DEFINITION
(CONTD.)
Sigma Defects Per Million Rate of
Level Opportunities Improvement
1 690,000
2 308,000 2 times

3 66,800 5 times

4 6,210 11 times

5 230 27 times

6 3.4 68 times
GOALS OF SIX SIGMA
To reduce variations
To reduce defects
To improve productivity
To enhance customer satisfaction
To improve market reputation
To increase shareholder value
Six Sigma DMAIC
DMAIC
Define the project goals and customer (internal and
external) deliverables
Measure the process to determine current performance
Analyze and determine the root cause(s) of the defects
Improve the process by eliminating defects
Control future process performance
When To Use DMAIC
The DMAIC methodology, instead of the DMADV
methodology, should be used when a product or
process is in existence at your company but is not
meeting customer specification or is not performing
adequately.
Six Sigma DMADV
DMADV
Define the project goals and customer (internal and
external) deliverables
Measure and determine customer needs and
specifications
Analyze the process options to meet the customer needs
Design (detailed) the process to meet the customer
needs
Verify the design performance and ability to meet
customer needs
When To Use DMADV
A product or process is not in existence at your company
and one needs to be developed
The existing product or process exists and has been
optimized (using either DMAIC or not) and still doesn't
meet the level of customer specification or six sigma
level
PROCESS CAPABILITY (CP)
We have to quantify the extent to which a process
is capable of meeting its specifications
PROCESS CAPABILITY (CP)
(CONTD.)
PROCESS CAPABILITY INDEX
(CPK)
The Process Capability Index Cpk is the ratio of the
range of values permitted on one side of the mean
to three times the standard deviation
In some cases the output of a capable process can
be non-conforming if the process is not properly
centered. Cpk helps to measure it
PROCESS CAPABILITY INDEX
(CPK) (CONTD.)