Essay On Continuous Business Improvement

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CONTINUOUS PROCESS IMPROVEMENT

The business environment is currently very competitive, and it is imperative that organizations invest in different aspects if they are to remain competitive. The Continuous Process Improvement has been fronted as a possible concept that can help firms achieve the much needed competitive edge. CPI gives firms an approach that is structured, and this is critical for analyzing their performance and what needs to be improved.

This consequently ensures that tasks are performed effectively and efficiently in an ongoing basis. It is a field that is ever evolving, and which has made notable contributions in the manufacturing field. There are three main contributions that it has made, especially in the areas of Lean, theory of constraints, as well as Six Sigma. Lean focuses on eliminating process waste, customer value and work flow. Six Sigma focuses on meeting customer requirements, controlling variation and reducing waste.

Theory of constraints largely concerns itself with improved throughput and systems thinking, and this is done by addressing system constraints (Baker, 2010). CPI therefore represents a performance improvement tool that is proven, and which can be used to ensure time, reliability, reduced energy consumption, improved safety and optimized costs.

Over the past few decades, various perspectives have been fronted on the most efficient ways to execute Continuous Process Improvement programs. This is especially so in manufacturing industries. Although CPI programs are driven by forces that are real; they have often posted mixed results. Various factors have been put forward to explain this. In many manufacturing organizations, Continuous Performance Improvement is viewed is regarded as an initiative and not an integral process.

Many CPI programs focus on team activities improvement, but they never really provide the root causes of problems. Evidently, the processes and concepts related to Continuous Process Improvement can be instrumental in adding significant value to manufacturing operations (Bland, 2009). However, a fundamental change is needed to verify that they business processes which are integral.

Significance

This study seeks to develop the body of knowledge relating to CPI within organizations. This will consequently increase the understanding of factors that are needed to ensure the sustainability of Continuous Process Improvement, the steps that should be followed, as well as the perception of how the said factors contribute to CPI within firms. These needs will be fulfilled by this research through the expansion of the existing knowledge on CPI (Chang, 2009). Further, the research will propose various recommendations that practitioners can use to sustain their CPI programs. This report will seek to satisfy the following objects:

Develop recommendations and guidelines that can be used by manufacturing firms to sustain their CPI tolls and programs

To identify factors that are critical in the sustenance of Continuous Process Improvement

To test the relationship that exist between the factors that have been identified

To Construct and validate a measurement tool that can be used in evaluating workers perception about CPI sustainability

Literature Review

The continuous process improvement is formally an improvement and problem-prevention system credited to the developer George Robson, to empower natural work teams across the planet (Robson, 1991). In essence, it is process composed of a set of logical steps, focusing on simplifying the critical elements of the work flow process, while eliminating the parts of no value (Robson, 1991). In this research paper I have acquired information from several sources and plan on discussing the challenges faced in manufacturing, by stating the background and significance of CPI.

As CPI is used in numerous industries and businesses across the planet I want to only dissect CPI in the manufacturing industry. Some examples of local manufacturing companies that use this method are ZF Lemforder, BMW, and Michelin. These three companies are highly reputable companies located in Greenville County, South Carolina that sought a need to satisfy millions of customers and consumer’s. In order to satisfy this need, new techniques needed to be applied in order to maximize profit.

In a research article by Eren Watkins, two questions are proposed for conducting the study. The first question proposed is how are companies and organizations able to stay relevant and competitive? The second is how companies and organizations explore ways to streamline process while continuing to deliver quality products and/or services to their customers (Watkins, 2014).

The answers to these two questions are simple; two hallmarks of process improvement are the “Lean” principle, with its focus on speed, and the “Six Sigma” principle with its focus on quality (Watkins, 2014). When the two principles, Lean Six Sigma (LSS) are combined it complements CPI problem-solving methodology used in the business and manufacturing industries to improve the speed, quality, and cost of products (Watkins, 2014).

Studies show that LSS is typically associated with manufacturing, and over the past decade LSS has been used to improve information technology.

Information technology is becoming the foundation for most manufacturing industries in this era. Reports, products, and services are no longer documented through paper filing; instead they are documented electronically via information technology or (IT). I.T. is now sought as a benefit to numerous organizations, because the costs of storage, human capital, and human resources have tremendously been reduced because of technological advancements. In this era information and management concepts have focused more on how available knowledge is exploited to improve organizational performance, especially in flexible manufacturing systems (Nicolae, 2014).

In order to have this improved organizational performance, changes in organizational culture must be implemented. Some examples of manufacturing organizational culture include: continual improvement culture, employee involvement, operations-based focus, a metrics-driven, supply chain investment, and a whole systems view (Popa, 2012). A continual improvement culture is focused on identifying and eliminating waste throughout the production process, while the employees are involved in the continual improvement process (Popa, 2012).

The operations-base focuses on activity and involvement; a metrics-driven is an operational setting that emphasizes rapid performance feedback and leading indicators (Popa, 2012). It is very important to include the supply chain investment because of how it improves enterprise-wide performance, giving a whole systems view and thinking for optimizing performance (Popa, 2012).

The real question is why does CPI work and what is its significance? The real reason why it works is because most approaches or methods take months or even years to see the positive or negative outcome. But CPI can seek incremental breakthroughs all at once. In the case of a previously mentioned company name BMW that is located in Greenville, South Carolina. This company uses a result of CPI called “Just in Time” or (JIT).

This approach is based on a philosophy to build only on the next requirement (Abler, 2010). This implies that only the items required are produced in required quantities in a required time and with the desired quality (Abler, 2010). This is a pure example of CPI in manufacturing because this concept relies on the supply chain as well as key components of process improvement (Morris, 2012).

CPI is directly correlated to manufacturing because organizations are continuously looking for methods to save money, use less resources, and maximize profitability. In an article by Jeffrey Brewer he analyzes the Navy International Programs Office (NIPO), CPI program. Jeffery states that in year 2005, NIPO built its CPI Program around Lean Six Sigma (LSS) principles, emphasizing Lean efforts to improve cycle time and reduce costs (Brewer, 2009). Through time and proper implementation NIPO was able to offset a $350 thousand dollar reduction in funding for three technology security process areas (Brewer, 2009).

Kristine Sturkie of the Navy Exchange Service Command (NEXCOM), states that the organization successfully completed its first continuous process improvement project. The reason why it was needed is because NEXCOM sought a need to analyze and improve the year-end inventory process. A lean Six Sigma green belt delegate named Stephen Hatfield defines Lean Six Sigma (L6S) is a systematic approach to identify process and cost improvement that leads to waste reduction and elimination (Sturkie, 2009).

He also goes on to reiterate that as part of the continuous process improvement cycle; L6S mitigates projects risks by using DMAIC methodology. Hatfield decided to coordinate a team of subject matter experts from merchandising, finance, store operations, distribution and information systems (Sturkie, 2009). Their charter was to figure out a way to minimize the impact and disruption to NEX operations, resources and time imposed by the annual inventory process (Sturkie, 2009). Now NEX are implementing standards, making it easier to track data and identify savings through CPI, L5S, and DMAIC.

Kenneth Shere provides information on Lean Six Sigma (LSS), as a combination of historical methods for process improvement that focuses on the bottom line and critical-to-customer requirements (Shere, 2003). He gives a vivid description of how the government can benefit from using LSS thinking in system acquisition; activities required by LSS; importance of LSS for the military; and phases of LSS (Shere, 2003).

In this literature review I have acquired information from several sources and discussed the challenges faced in manufacturing, by stating the background and significance of CPI. Many companies credit their success to these methodologies, as they should rightfully do so.

For any CPI program to be successful, there are certain key elements that must be ensured. For instance, the CPI implementation method has to be structured and broad based. This implies that the improvement plan has to be sound, as this will go a long way in ensuring the best solution is implemented and determined. At all stages of process improvement, there should be strategic planning, so as to ensure that performances across different manufacturing sectors are aligned. It must also be ensured that the CPI program has an outcome-based metric. Any goal that has already been achieved, or is still being pursued through the CPI program has to measured by a performance metrics that is result oriented.

This will ensure that demands are met more effectively, and in a timely manner. It must be ensured that CPI projects are aligned strategically with the metrics of an organization. Particular focus should be paid on targeted effectiveness, reduced process cycle times, as well as improved reliability. Further CPI projects in any manufacturing firm should put emphasis on the management.

The management approach that is preferred should be one that is effective, as this will go a long way in encouraging results, as well as achieving results. In any manufacturing firm, the role that the CPI project plays can therefore not be underscored, especially when it comes to measuring organizational maturity. There are various principles that the CPI is associated with. An effective CPI thinking includes:

Determining an organizations current situation by use of data analysis that is objective and fact-based

Assessing the existing process against 5S criteria

Using the DMAIC process to analyze problems and determine the appropriate action to be taken

 Setting goals to address root causes of problems holistically. This will also ensure the avoidance of sub-optimization because focus will be placed on process sub-elements

Focusing the resources and work on systems, machines and people in order to add value.

Using continuous controlled experimentation to improve processes

Using long term improvement strategies to base any decisions, as this will also be instrumental in ensuring unnecessary costs are reduced.

Problem statement

Preliminary research that has been conducted in this field concludes that the ability to produce innovative products can be extremely significant, especially when it comes to supporting economic growth. Innovation, it must be noted, is related to various practices which all recognize the significance of the Continuous Process Improvement philosophy. As a philosophy, the CPI still witnesses numerous challenges, and the most notable of the challenges is to remain sustainable (Persse, 2006).

Although CPI tools have gained popularity in recent times, especially when it comes to achieving better results, evidence still lacks which suggests how it can be sustained effectively by manufacturing industries. The existing CPI management models have been found to lack any longitudinal analysis, and this implies that a gap of knowledge exists.

SWOT Analysis

CPI implementation is a process that is complex and highly dynamic. Through it, a manufacturing firm can realize several benefits which occur in environments that are multidimensional. It must be appreciated that the processes are critical in improving various organizational aspects (Mahadevan, 2011). The first notable benefit is reinforcement of organizational learning. Research indicates that the Continuous Process Improvement encourages manufacturing firms to undergo the all important learning process, and this consequently helps in selecting optimal solutions.

It forces manufacturing firms to re-evaluate their values and assumptions, and this encourages the creation of better problem solving approaches. With regards to workforce learning, it also supports integrated educational and training programs. The program’s main aim is to develop skills in areas like statistical control processes, leadership, team building and problem solving (Madison, 2005). Instead of merely creating CPI awareness, this education is critical because it also ensures that a conclusive understanding of the elements is acquired.

Propose solution

Lean Sigma represents a combination of Six Sigma and Lean Enterprise. These tools are not only complementary; they are also powerful when it comes to business management systems. They can be used by companies that seek to create the all important culture of continuous improvement. Consequently, this will increase profitability dramatically, while also improving the marketplace position. Both systems are true in that they have been tried and proven effective for large, small and medium firms globally.

Six Sigma is a problem solving, fact based and systematic methodology that gives firms the skills and tools to reduce processes variations (Bland, 2009). The DMAIC process remains a critical element of Six Sigma. This largely concerns itself with controlling, defining, improving, measuring and analyzing processes. It is a methodology that is disciplined metric and rigorous that ensures the management system runs smoothly. It focuses on meeting and understanding customer requirements, driving sustainable and rapid business processes improvements, as well as analyzing major business processes. It also utilizes rigorous data analysis in a bid to ensure variations are minimized.

The role played by Lean Enterprise when it comes to waste elimination cannot be underscored. It ensures that non-value added activities are identified and eliminated across the operations of an organization (Bland, 2009). Through Lean Enterprise, manufacturing companies are effectively helped to maintain a competitive position while also increasing productivity in the market place.

The Value Stream Mapping is the Lean Enterprise tool that is regarded as most fundamental. Others include Total Productive Maintenance, 5S Workplace Organization, Poka Yoke Mistake Proofing and Cellular Flow Manufacturing. Lean Sigma projects have been proven to get results. It must be noted that every firm has its distinctive characteristics that can affect possible results. Lean Enterprise projects come with certain guarantees. They include; space utilization, Lead Time Reduction, quality improvement, productivity increases, as well as Work-In-Process Reduction (Chang, 2009).

The DMAIC processes have particularly been noted to give extraordinary and rapid results. Problems within firms which were previously seen as unsolvable can be addressed conclusively using the Six Sigma. This can be instrumental in addressing large scale organizational need which affects profitability, growth and market share (Bland, 2009). This approach to work ensures that small and incremental changes are achieved systematically.

This goes a long way in improving both quality and efficiency. If properly implemented, the Continuous Process Improvement ensures that a vigorous education program is instituted, and this consequently ensures that all employees endeavor to achieve a common goal. To be “lean” simply means shedding unnecessary waste so as to increase competitiveness. The production system is often made costly and inefficient by certain kinds of waste.

They include; over-processing, over-production, defects, transportation, unnecessary movements and transportation that is non-value. In process manufacturing, over-process, defects and waiting are particularly rampant. In a value stream that is perfect, products are produced efficiently and reliably, in sufficient quantity, and with satisfactory quality (Persse, 2006). There is no perfect production value stream, and this implies that all manufacturing processes will show some kind of waste.

DMAIC-3

DMAIC is a quality strategy that is data driven, and is instrumental in improving processes. It is an iterative process which comes in handy in giving guidance and structure for improving productivity and processes. For key metrics of any venture to be improved, these appropriate analysis tools must be followed (Baker, 2010). This will ensure that processes are optimize and improved, variations are reduced, and that metrics are established.

The end product is increased productivity and efficiency, fewer errors and improved performance. In any manufacturing process that aims at improving its initiative, the true backbone is the DMAIC steps. The steps have a logical sequence, are easy to comprehend, and are also relevant in any manufacturing setting. They are preferred because they enable manufacturing teams to scope the problem adequately, implement changes for sustainability, measure current performances verify and test improvement recommendations, and analyze root causes of inefficiencies and problems (Bland, 2009). Each step has to be undertaken conclusively for the desired result to be realized.

Define

At this stage, the problem is identified clearly, and its financial impacts determined. The right individuals are selected to solve using the most appropriate tools. Tools at this point could include voice of the customer, value mapping, as well as project chartering. In this step, various elements that are deemed essential are implemented. They include attaining sponsorship, conducting and planning kickoff meetings, establishing the project charter, establishing team rules, and identifying stakeholders.

Measure

Various measurement techniques are used by the project team to understand the process better. The techniques could include capability analysis, flow charting, Pareto charting, and measurement system analysis. Most manufacturing stems have often skimmed over tis step, and this normally proves costly. In this step, key metrics are identified, charts are made to reduce defects, a data collection plan is developed, baseline charts are established, and data is stratified.

Analyze

This stage largely seeks to establish a problem’s root cause. Attention, therefore, should be paid to the root cause rather than just the symptoms. Appropriate techniques and tools should be utilized in gathering clues that can be used for improvements. The verification of effect and cause is a critical phase that the manufacturing team should not overlook.

Improve

At this step, solutions might need to be implemented, tested and identified. There are various tools that could be used by the team for this purpose. They include production smoothing and design of experiments. This phase gives the manufacturing team the chance to be innovative, especially after going through the prior phases successfully. All the creative solutions can effectively be tested and developed using the different piloting techniques and experiments. There has to be statistical evidence when it comes to sustained improvement. Stakeholders are more likely to be encouraged by improved performance that has been proven, and it is only through this means that the team’s recommendations will be implemented.

Control

This step largely concerns itself with sustaining of the goals that have been achieved through the implemented improvements. They include standard work procedures, statistical processes and control plans. The control step represents the DMAIC’s real strength. It ensures that all the hard work that has been put in by the manufacturing team improves both the results and the process. It ensures a smooth transition, as well as a successful implementation of the recommendations. This consequently guarantees the attainment of long term success.

Solution

For the CPI to be implemented successfully, it is imperative that the customer’s requirements be understood. This provides the only sure way in which the value stream map can be developed by companies. This will also ensure that non-values activities are identified early enough. For CPI to be effective, there are certain interrelated dimensions that have to be considered.

The company will have to adopt initiatives and concepts which support each other, as this will be instrumental in the reduction of waste. Another tool that has often been useful is the 5S. it has numerous functions including; reducing costs, sustaining housekeeping activities, increasing quality, standardizing work procedures, improving safety, ensuring accurate equipment performance, and ensuring tidiness. For successful implementation to be realized there is also need to develop metrics. Examples of metrics with regards to this include inventory turnover, lead time, manufacturing cycle efficiency, customer reject rate, first time yield, as well as cycle time.

Strategic planning

As companies expand, they face new difficulties and challenges in their bid to remain sustainable. Customer awareness has been raised through globalization, and the expectation of services and products is currently higher (Mahadevan, 2011). Increasingly, firms have been put under the spotlight, and they are searching for ways that are novel which can ensure that the new expectations are satisfied, while continuing to profit.

Since success has no known magic formula, firms have to constantly do with the trial-and-error loop in their bid to register excellence. Firms can embrace the Continuous Process Improvement program which is a continuous process. This ensures that value is added to what is offered, and through the innovation that it encourages, traditional management structures are all broken.

Conclusion

The competition being witnessed globally has warranted the production of cheap and quality products. As a driver for success, the role being played by innovation cannot be underscored. Manufacturing organizations are quickly realizing how complex innovation is as a tool for continuous growth (Baker, 2010). It is therefore crucial that a supportive environment be fostered so that innovation can be created.

One proven way in which innovation can be ensured is through incorporating the Continuous Process Improvement program. In order to continue profiting and stay competitive, the relationship between CPI and innovation has to be understood. Customers want value, and any services or goods that do not guarantee them this value will be quickly shunned. It is this waste that most manufacturing firms have been targeting. This include factors like; idle time, excess of labor, transportation, inappropriate design, overproduction, excessive inventory, unnecessary motions, as well as errors and defects (Madison, 2005). The CPI ensures that it is from the customer’s perspective that value is defined.

References

Baker, E. (2010). Process Improvement and CMMI® for Systems and Software. Chicago: CRC Press.
Bland, V. (2009). Continuous Improvement in the Healthcare Manufacturing Industry: A Practical Guide. Chicago: CRC Press.
Chang, R. Y. (2009). Continuous Process Improvement: A Practical Guide. New Jersey: Wiley.
Madison, D. (2005). Process Mapping, Process Improvement, and Process Management: A Practical Guide for Enhancing Work and Information Flow. New York: Paton Professional.
Mahadevan, B. (2011). Operations Management: Theory and Practice. Delhi: Pearson Education India.
Persse, J. R. (2006). Process Improvement Essentials: CMMI, Six Sigma, and ISO 9001. New York: O'Reilly Media, Inc.
Abler, R., & Warren, T. (2010). Stealth CPI: Managing Work Products to Achieve Continuous Process Improvement. Crosstalk: The Journal Of Defense Software Engineering, 23(1), 22-25.
Banker, Rajiv, Gordon Potter, and Roger Schroeder (1993, Feb 15). Web format.
Brewer, J. (2009). Looking Forward Using Lean Six Sigma in Navy International Security Assistance: The Next Step. DISAM Journal Of International Security Assistance Management, 31(3), 21-23.
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