These course notes are for use in conjuction with the
Continuous Improvement Team Project of MG 476 - Services Management
Project Menu
Introduction to Continuous Improvement Team Project
This activity will consist of a Continuous Improvement project carried on jointly by two (or three) class members, entirely over the Internet. This will simulate a real-life assignment that you might get working in two different locations, in different states, or different nations. It is expected that the entire project, will be completed in the three week timeframe, with a fourth week allocated to Peer-Review activities. Hardship cases will be discussed with the individuals involved.
The following section discusses the process of selection of project teams for this activity. Look it over carefully and begin to think about how the activity will flow. Then, read the material on Continuous Improvement. This comes from the Quality literature. Many of you will have seen much of the material before, it will be completely new to others. Some of the material has been adapted from the booklet I used for a one-hour class on Continuous Improvement and it is also very similar to the material used in my Operations Management class. Become familiar with the various tools and processes. You will want to use a set of them for your project.
The next section discusses the reporting process for the project team, followed by the peer-review process we will use on the projects.
Selection and Introduction - Partner(s) in CI Team Project
The first part of this project is to do a sorting out to match up people for the projects. By this time, hopefully, we will all have gotten to know a little about each other. Probably, some of you will have had private discussion by e-mail, or otherwise. Some of you know each other from before the start of class...others do not, of course.
I encourage you to think about the benefits and detractions from working with someone familiar and someone not so familiar. It would be best if we could develop common interests around which to form the Project Teams.
One source of information on other class members is the WebQuest pages and the other is the Assignment 1-3 comments (this page also has the e-mail links for all class members). Use each of these to your advantage.
Communicate individually, as you like. When you think you have a project and a team of two or three, submit a "bid" as Activity 2-1(Please note that this is Activity 2-1, NOT Assignment 2-1). I will need to arbitrate, in some cases. Everyone needs to be on a team. I would prefer not to need to make an assignment, I think. Talk it out, by e-mail, with each other, individually. I will mediate, as necessary.
When you have a project and partners in mind, based on the above, you are ready to proceed.
Send me an e-mail message suggesting your project, in about a paragraph (including justification, if you feel that is appropriate), cc the other partner(s). This is your "bid." It may be accepted, it may be modified, as to either content, direction, or participants. You may revise your "bid" based on my response to your "bid." Good luck.
Be sure to specify MG 476, Activity 2-1, as the subject
of your e-mail.
Continuous Improvement Concepts
This section is adapted from a booklet used in a One-Hour Course and also in workshops conducted by the Center for Business and Economic Development.
Continuous Improvement by William L. Smith
Continuous improvement is a management philosophy that approaches the challenge of product and process improvement as a never-ending process of achieving wins, both small and large. It can accurately be stated that continuous improvement is as much an attitude as it is a management philosophy. This certainly is true where continuous improvement processes are successful. Some pundits of continuous improvement approaches do not include the "breakthrough" type of "improvements" in their systems. Here, however, all types of improvements are sought. If they are "breakthroughs," as long as they are improvements, they are sought and positive. Small, steady improvements are the primarily goal, however.
In this booklet, I have chosen to segregate benchmarking for emphasis. Often benchmarking is included as just another method or tool of continuous improvement. I believe benchmarking can now be used by many more companies in many more situations. Therefore, I would recommend that all companies include benchmarking as a source of ideas for their continuous improvement programs on a regular basis.
Finally, this booklet is not intended to be comprehensive. Rather, it is a guide to many of the essential elements of a continuous improvement approach. Some more comprehensive references are included in the resources recommended and from other sources. Happy improvement hunting!
I am convinced that if the rate of change inside an institution is less than the rate of of change outside, the end is in sight.
John F. Welch, Chairman and Chief Executive Officer, General Electric
This booklet will direct your focus on continuous improvement processes, methods and tools. There are three sections to this booklet on continuous improvement:
In Definitions we will look at definitions for both the terms "continuous improvement" and "benchmarking." The second section of the booklet will look at continuous improvement processes, particularly those first suggested by Edward Deming, along with a number of methods and tools to use in your program. In the last section of the booklet, we will examine the process called "benchmarking" in more detail.
A. Continuous Improvement
The following definition of continuous improvement has been adapted from the award criteria used for the top quality award made in the United States, the The Malcolm Baldridge National Quality Award:
Achieving the highest levels of quality and competitiveness requires a well-defined and well-executed approach to continuous improvement. The term continuous improvement refers to both incremental and "breakthrough" improvement. The approach to improvement needs to be "embedded" in the way the company functions. Embedded means that:
Opportunities for improvement have four major sources:
Improvements may be of several types:
Thus improvement is driven not only by the objective to provide better product and service quality, but also by the need to be responsive and efficient - both conferring additional marketplace advantages. To meet all of these objectives, the process of continuous improvement must contain regular cycles of planning, execution, and evaluation. This requires a basis - preferably a quantitative basis - for assessing progress, and for deriving information for future cycles of improvement. Such information should provide direct links between desired performance and internal operations.
Notice that this definition places an emphasis on the continuous improvement process being "embedded" in your work life. Embedded means that:
Acceptance and adoption of this approach must result in an attitude that there are possibilities in every aspect of our work for improvement. This then becomes something we look for every day as we go about our activities, whatever our job description may say we are to do. Improvements will only be real and continuous if we seek to eliminate the problem at the source.
Too often, we treat symptoms, not the real problem. Continuous improvement processes are directed at identifying the source of problems and providing solutions with long-term as well as short-term benefits. It is important to take notice that improvement is driven by opportunities to do better, as well as by problems that must be corrected. This means that you must seek out opportunities for improvements not just deal with problems to solve as they show up, and they will, of course. Again, you can see that attitude is very important in this process. It takes a strong, positive attitude to continuously be on the alert for opportunities to make improvements.
The next part of the definition suggests that there are opportunities for improvement from four major sources:
This booklet treats benchmarking separately, but let's take a closer look at the other three sources.
Employees ideas should be incorporated in the continuous improvement process, of course, because they are the closest to the processes of whatever business you are in. The key here is to assure that the ideas that employees to have are aired, discussed, considered, and supported wherever they can be shown to generate improvements. Many employees will not volunteer their good ideas. A critical part of a successful continuous improvement process is to enact activities and incentives to draw out their ideas and find a way to implement the ones that provide improvement to the operation.
Research and development activities must include consideration of improvements to existing products and services as well as new product and service development. Special programs and incentives may need to be developed in order for this to occur. For instance, it may be appropriate to invite a member of the R & D staff to attend meetings of a quality circle in your department or of a task force of representatives from several departments organized to seek solutions to a particular problem or opportunity.
Customer input should always be considered in continuous improvement processes. Sometimes the customer should be consulted directly by use of interview, survey or focus group. Other times, customer information is available through normal routines of the organization. The key is to use the data that will generate the improvement sought.
Our definition of continuous improvement states that improvements may be of several types, such as these five, specifically:
The definition further states that improvement is driven not only by the objective to provide better product and service quality, but also by the need to be responsive and efficient - both conferring additional marketplace advantages.
B. Benchmarking
- is the search for industry "best practices" that lead to superior business performance. This technique is based on the idea that companies with superior business processes will manufacture, deliver, and service products better than the competition will. In benchmarking, a company identifies processes that are important to its competitive position and then attempts to identify other companies or areas within the same company that are known for superior performance in this process.
Continuous Improvement Processes, Methods and Tools
The improvement process will consist of a number of phases in which various methods and tools are used. Various theorists and practitioners may recommend six, seven or eight steps.
The following is an outline of an eight-step process:
Some of the method and tools that can be used in the improvement process include the the following:
A. The Deming Wheel -the Plan, Do, Check, Act cycle
A1. The Deming Wheel - the PDCA cycle: Plan
Before making any changes be sure everything is documented and standardized. This requires that the current process be studied carefully and recorded using appropriate methods and tools. Then use appropriate tools to identify problems and opportunities for improvement. Analyze the data and develop a plan for improvement. Specify measures for evaluating the plan.
A2. The Deming Wheel - the PDCA cycle: Do
Implement the plan, on a small scale if possible. Document any changes made during this phase. Collect data systematically for evaluation.
A3. The Deming Wheel - the PDCA cycle: Check
Evaluate the data collected during the Do phase. Analyze the data to determine if the revised process has achieved results which match the original goals of the Plan phase.
A4. The Deming Wheel - the PDCA cycle: Act
If the goals have been achieved, standardize and document the changes and the new methods used. Communicate the new method to all others who could benefit from similar changes. Implement training for the new method. If the goals have not been achieved, determine why not and proceed accordingly. This may mean a repeat of the process or abandoning the project.
B. The 5W2H Model
Asking questions about the current process can lead to important insights about why the current process isn't working as well as it could, as well as potential ways to improve it. See the table on the next page for details of this approach.
C. Flowcharts
Word descriptions of the current process and of proposed revisions are essential. However, in terms of visualizing the process, a graphic depiction can be extremely useful. A flowchart is a visual representation of the key steps in a process. The process might be a physical process, such as the movement of materials through a production operation, or it might be a decision process, portraying the decisions that are made about a certain activity.
D. Check Sheets
One of the most widely used tools of process improvement is the check sheet. Many of us use check sheets every day but do not think about it. Simple grocery lists and invitation lists are examples of check sheets. Most often, people use check sheets for collecting data about a process. For example, after brainstorming and flowcharting (sometimes also called process mapping) to understand the process, it may be useful to collect certain data by using check sheets. For instance, if the process involves an office where the telephone rings constantly, it may be useful to develop check sheets to determine frequency, source, and person being called. If the check sheet data shows that many calls are for persons in another office and must be transferred, the telephone process would become subject of an improvement project.
E. Pareto Analysis
- is a technique for focusing attention on the most important problem areas. The Pareto concept, named after the 19th-century Italian economist Vilfredo Pareto, is that a relatively few factors generally account for a large percentage of the total cases (e.g., complaints, defects, problems). The idea is to classify the cases according to degree of importance, and focus on resolving the most important, leaving the less important. Often referred to as the 80-20 rule, the Pareto concept states that approximately 80 percent of the problems come from 20 percent of the items. For instance, 80 percent of the machine breakdowns come from 20 percent of the machines, and 80 percent of the product defects come from 20 percent of the causes of defects. Pareto analysis is a problem identification and problem-solving tool that is often used by problem-solving teams. The idea is to separate the "vital few" from the "trivial many." Usually Pareto analysis is based on organizing the data into a diagram, called a Pareto chart, so that the major problems or problem causes can be identified.
F. Quality Circles
The circles comprise a number of workers who get together periodically to discuss ways of improving products and processes. Quality circles are usually less structured and more informal than teams involved in continuous improvement. In some organizations, however, quality circles created to seek solutions to a specific problem evolve into continuous improvement teams.
G. Cause-and-Effect Diagrams
Among the most useful tools for analyzing data and problem solving are cause-and-effect diagrams, also referred to as fishbone diagrams, because of their shape. They are also sometimes called Ishikawa diagrams after Kaoru Ishikawa, the Japanese professor who developed the approach to help workers overwhelmed in problem solving by the number of factors that needed to be examined. The diagrams help organize problem-solving efforts by providing several layers of categories that may be factors in causing problems. Often, cause-and-effect diagrams are used after brainstorming sessions to organize the ideas generated. A common set of categories used include Methods, Materials, Equipment, and Personnel. The Head of the fish is the effect, or problem. Each factor listed under each category is considered a potential source of the problem under investigation. Each of these must be examined in more detail, then, to determine whether it is a source of the problem that can be solved by the improvement process.
H. Scatter Diagrams
A Scatter Diagram is another form of graph. However, a scatter diagram is most useful when variations in one factor are the direct result of variations in another variable. For example, assume there is a problem of medication errors in a hospital. Suppose we want to determine whether the number of medication errors is related to the number of patients assigned to each nurse. A scatter diagram will likely indicate if there is a relationship by demonstrating a trend line-like plot.
I. Process Control Charts
Control charts can be used to identify problems in a process. A control
chart is a statistical tool used to monitor a process to determine if any nonrandom (i.e.,
correctable) causes of variation are present. Process control charts are designed to
detect shifts in the mean value of a process so that an analyst can find assignable causes
and the company can take corrective action. By applying the concepts of sampling, risk
analysis, and other statistical process controls, the company can measure some quality
characteristics of products in order to make an inference about the state of the process.
Process control data also are useful in determining the capability of a process.
- involves selecting a demonstrated standard of performance that represents the very best performance for processes or activities that are similar to yours. The benchmark partner may not even be in the same industry, it need only be superior at the given process. Develop a target at which to shoot and then a standard or benchmark against which to compare your performance. Steps for developing benchmarks:
Companies considering benchmarking should exercise caution. According to recent research, benchmarking can actually hurt companies that are just beginning the quality quest. In order to have the best chance to prevent or minimize this possibility, the company may want to use a more comprehensive approach, such as the following ten step, five stage plan.
Ten Step, Five Stage, Benchmarking Process
Planning Stage:
Step 1 - Identify what is to be benchmarked
Step 2 - Identify competitive companies
Step 3 - Determine data collection methods; collect data Analysis Stage
Step 4 - Determine current performance gap
Step 5 - Project future performance levels Integration Stage
Step 6 - Communicate benchmarking findings; gain acceptance
Step 7 - Establish process improvement goals Action Stage
Step 8 - Develop action plans
Step 9 - Implement specific actions and monitor progress
Step 10 - Recalibrate benchmarks; return to 1
Maturity Stage: Leadership position attained Benchmarking practices are fully integrated into organization
"Benchmarking World-Class Performance," McKinsey Quarterly, 1991, No. 1, p. 7, Steven Walleck, David O'Halloran, Charles Leader
Competing in World-Class Manufacturing: American's 21st-Century Challenge, Irwin, Ted Olson, Craig Giffi, Aleda V. Roth, Gregory M. Seal
Modern Approaches to Manufacturing Improvement: The Shingo System, Productivity Press, Alan Robinson
Operations Management: Concepts in Manufacturing and Services, West Publishing, Robert E. Markland, Shawnee K. Vickery, Robert A. Davis
Operations Management: Concepts, Methods, and Strategies, Third Edition, West Publishing, Mark A. Vonderembse, Gregory P. White
Production / Operations Management, Fifth Edition, Irwin, William J. Stevenson
Production & Operations Management: A Life Cycle Approach, Sixth Edition, Irwin, Richard Chase, Nicholas J. Aquilano
Production and Operations Management: Strategic and Tactical Decisions, Fourth Edition, Prentice-Hall, Jay Heizer, Barry Render
The Benchmarking Book, AMACOM, Michael J. Spendolini
Total Quality Management: Three Steps to Continuous Improvement, Addison- Wesley, Arthur R. Tenner, Irving J. DeToro
Deming's 14 Points for Implementing Quality Improvement
1. Create consistency of purpose.
2. Lead to promote change.
3. Build quality into the product; stop depending on inspections to catch problems.
4. Build long-term relationships based on performance instead of awarding business on the basis of price.
5. Continuously improve product, quality, and service.
6. Start training.
7. Emphasize leadership.
8. Drive out fear.
9. Break down barriers between departments.
10. Stop haranguing workers.
11. Support, help, and improve.
12. Remove barriers to pride in work.
13. Institute a vigorous program of education and self- improvement.
14. Put everybody in the company to work on the transformation.
CI Team Project Reporting Criteria
Each Project should include at least one model and one tool with each process. More may be used as appropriate for your team project. KEEP IT SIMPLE. The objectcive is to IMPROVE A PROCESS. Show how it was before. Show what improvement you are making, why, on what basis, and how. Show how it is after your improvement.
Each Project Team will have a unique project which will likely call for a unique presentation of the project to the class as a whole. The presentation should be in the form of a (or a set of) web page(s), prepared by the Project Team, with only minimal assistance from the instructor. The ability and/or accessability of web page construction capabilities may have a small role in team member selection. We do not want anything too fancy. It must be reasonably simple, yet meaningful.
Provide the output of the Project Team Project, with a Project Name, in the form of a (or a set of) web page(s), to the instructor, or, if already loaded on a server, the URL, to share with the class.
Be sure to specify MG 476, Activity 2-2, as the subject of your e-mail.
Activity 2-3 - to be done by each individual, not by the team.
Please choose two Projects, by Name, at random (not your own!), to review, near the end of the Activity 2, when you are near completion of the Learning Modules. Write a brief set of positive comments and improvement suggestions on the two projects, doing a brief compare and contrast analysis. These Peer-Reviews will be published on a web page for all to see. Be constructive and realistic.
Send your review of the two projects assigned to you, by e-mail, to the instructor, by 2 p.m. Wednesday, July 20, at smithwil@emporia.edu
Be sure to specify MG 476, Activity 2-3, as the subject of your e-mail.
This concludes the CI Team Project.
You should next be working on your Electronic Journal Article.
William
L. Smith Teacher Home Page Service Management Home Page Emporia State University
If you have comments or suggestions, email me at smithwil@emporia.edu
This page last updated July 13, 1999.