What is Process Improvement
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noun
1. a series of actions or steps taken in order to achieve a particular end.
"military operations could jeopardize the peace process"
LAW
2. a summons or writ requiring a person to appear in court.
verb
3. perform a series of mechanical or chemical operations on (something) in order to change or preserve it.
"the salmon is quickly processed after harvest to preserve the flavour"
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noun: improvement; plural noun: improvements
1. an example of improving or being improved.
"an improvement in East–West relations"
• the action of improving or being improved.
"there's still room for improvement"
• a thing that makes something better or is better than something else.
"home improvements"
What this is
Process improvement refers to the adaptation of processes in order to enhance productivity, streamline workflows, address evolving business requirements, or improve profitability.
Why this is important
The significance of process improvement lies in the necessity for businesses to embrace change and innovation. By adapting processes to meet customer needs, organisations can foster growth. Failure to adapt, innovate, and respond to customer demands can result in stagnant growth and eventual decline.
How we do it : the methodologies and models
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Originally developed in the 1930s by Sakichi Toyoda, a Japanese inventor, industrialist, and founder of Toyota Industries, the "5 Whys" method is an integral part of the Toyota Production System (TPS). Taiichi Ohno, the architect of TPS, described this method as the foundation of Toyota's scientific approach, where repeatedly asking "Why?" five times helps to reveal the true nature of a problem and its corresponding solution.
The technique is straightforward: it involves asking "Why?" five times to identify the root cause of an issue. Ohno provided an example of a welding robot malfunction to illustrate the effectiveness of this method in uncovering the underlying problem through persistent inquiry (source: Toyota Myanmar):
Why did the robot stop? The circuit has overloaded, causing a fuse to blow.
Why is the circuit overloaded? There was insufficient lubrication on the bearings, causing them to lock up.
Why was there insufficient lubrication on the bearings? The oil pump on the robot is not circulating enough oil.
Why is the pump not circulating enough oil? The pump intake is clogged with metal shavings.
Why is the intake clogged with metal shavings? Because there is no filter on the pump.
Since its development, the 5 Whys method has gained widespread adoption and is now employed in various methodologies such as Kaizen, lean manufacturing, lean construction, and Six Sigma.
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An American engineer and statistician at Bell Labs, Walter Shewhart, developed statistical methods for quality analysis and control in the 1930s. These methods eventually evolved into Total Quality Management (TQM), including statistical quality control, and the Plan-Do-Study-Act (PDSA) cycle as a problem-solving tool within TQM.
The PDSA cycle, also known as the 'Shewhart Cycle' or PDCA (Plan-Do-Check-Act), is a system designed to rigorously test organisational changes to assess their effectiveness. However, during the economic boom years before and after World War II in the United States, where iterative and careful quality control was not a necessity, these models were not widely adopted.
Shewhart served as a mentor to W. Edwards Deming, an engineer and statistician who began working as part of the American occupation government in Japan in 1945. Deming's teachings on TQM and PDCA methods for statistical analysis and quality control greatly contributed to the broader adoption of Total Quality Management, emphasising product and management quality.
Deming's success in implementing TQM and PDCA in Japan earned him the "Order of the Sacred Treasure, Second Class" award from Japan's Prime Minister Nobusuke Kishi at the time. The medal citation recognised Deming's contributions to Japan's industrial rebirth and global success.
As a result, The Deming Prize was established in 1951 as the longest-running and most esteemed award for TQM. It is bestowed upon Japanese corporations that excel in a rigorous quality control competition, named in tribute to Deming. It was not until the 1980s that American corporations embraced TQM to enhance their competitiveness in the global marketplace.
TQM, which preceded Six Sigma, is a management system that prioritises employee engagement, product enhancement, and maintaining high standards throughout all facets of a company's operations. It accomplishes this by consistently identifying, reducing, or eliminating errors in manufacturing, streamlining supply chain management, enhancing the customer experience, and ensuring employees receive sufficient training. TQM ensures that all stakeholders in the production process are responsible for the overall quality of the end product or service.
The PDCA cycle, a precursor to kaizen, serves as a problem-solving tool within TQM. It enables a systematic and methodical approach to implementing solutions through four iterative steps:
PLAN (design): Identify and understand the problem or opportunities, explore relevant information, generate ideas, and develop an implementation plan with measurable success criteria, if possible.
DO: Execute the plan by implementing the proposed steps, test the changes on a small scale to assess their effectiveness, and gather data.
CHECK: Evaluate the results by analysing the information against the criteria defined in the planning phase. If the idea was successful, proceed to the next step. If not, return to the planning phase.
ACT: Implement the solution based on the decisions made using the results. Continuously seek opportunities for improvement.
By following the PDCA cycle, organisations can systematically identify, test, and implement improvements to enhance their operations.
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Developed by Taiichi Ohno as part of Toyota's Toyota Production System (TPS), Kanban was designed as a straightforward planning system to effectively control and manage work and inventory at each stage of production. Its ultimate goal is to ensure smooth operations throughout the value chain, from suppliers to end consumers, to prevent supply disruptions and overstocking. The focus is on avoiding bottlenecks that could hinder the production process, aiming to increase throughput and reduce delivery lead times.
Since its inception, Kanban has found applications beyond production, such as software development and knowledge work. Researchers, academics, and business consultants have expanded upon its concepts, including the pull system, queuing theory, and flow, over the years:
The pull system synchronises material and information flow across disconnected processes, enabling just-in-time production and serving as a method for resource flow control.
Queue theory, based on "Little's Law," defines the relationship between Work in Progress (WIP), throughput, and lead time, aiding in performance measurement and improvement.
Flow management focuses on the continuous improvement of productivity and workflow efficiency.
The Kanban Method, as it is known today, follows a set of principles and practices for managing and enhancing workflow. It emphasises an evolutionary and non-disruptive approach to gradually improve organisational processes.
Foundational Principles of Kanban:
Start with the current state of work.
Agree to pursue incremental, evolutionary change.
Initially, respect existing roles, responsibilities, and job titles.
Encourage acts of leadership at all levels.
Core Practices of Kanban:
Visualise the flow of work.
Limit Work in Progress (WIP).
Manage flow.
Make process policies explicit.
Implement feedback loops.
Improve collaboratively and evolve experimentally.
One of the widely used practices of Kanban today is the visual representation of work. This can be as simple as a whiteboard with sticky notes or cards, where each sticky note or card represents a task and is placed in one of three columns on a Kanban board:
"To Do": Tasks that have not yet started (also known as the backlog).
"Doing": Tasks that are in progress.
"Done": Tasks that have been completed.
This straightforward visualisation provides transparency regarding work distribution and bottlenecks, enabling teams to manage their work effectively and adopt a mindset of continuous improvement.
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This form of process improvement is known by various names, with lean manufacturing being the most common. It is also referred to as lean production or just-in-time (JIT) production. However, these terms are not exactly interchangeable.
JIT is an element of lean manufacturing, which is a broader philosophy aimed at eliminating all forms of waste in a process to create a streamlined and highly efficient system that delivers low-cost, high-quality products to meet customer needs. While JIT focuses on efficiency, lean manufacturing (which is an adaptation of JIT) focuses on how efficiency adds value for the customer. JIT can be implemented on its own or as a step within the lean manufacturing process.
The origins of JIT can be traced back to Henry Ford's production line and his recognition of the drawbacks of inventory. In 1913, Ford revolutionised mass production by introducing flow lines (the first moving assembly line) to improve the overall flow and timing of products throughout operations.
The method was subsequently adopted in other industries such as beverages and ammunition, where production lines generated large volumes of identical products in large batches. However, this system lacked flexibility and was not responsive to demand levels. It was generally accepted that flow lines could only be implemented when the required quantities justified dedicating equipment to a single product.
In post-war Japan, Taiichi Ohno ("Father of JIT"), an engineer at Toyota, took Ford's ideas to the next level and adapted the JIT system to handle smaller batch sizes and accommodate greater variety in the parts used for assembling. This led to the development of the Toyota Production System (TPS), initiated in 1952, with the full implementation of the Kanban pull system occurring by 1962.
This socio-technical system for production and operation bridged the gap between production and continuous improvement and became the foundation of lean manufacturing as it is known today.
The Lean model
The lean manufacturing model/system adopted by Toyota was built on two pillars:
Just-in-time inventory management
Automated quality control
The goal of this model is to meet consumer demands with minimal delays by ordering and receiving materials only as they are needed in the production process. The aim is to reduce waste and costs by saving money on overhead inventory expenses. The concept of "wastes" ("muda" in Japanese) was formulated by Shigeo Shingo, a colleague of Ohno. Shingo identified categories of wasteful manufacturing practices, which became known as the "seven wastes”. They are as follows:
waste of superfluous inventory of raw material and finished goods
waste of overproduction (producing more than what is needed now)
waste of over-processing (processing or making parts beyond the standard expected by customer)
waste of transportation (unnecessary movement of people and goods inside the system)
waste of motion (mechanising or automating before improving the method)
waste of waiting (inactive working periods due to job queues)
the waste of making defective products (reworking to fix avoidable defects in products and processes)
The Principles of Lean
The model and resulting methods underwent extensive research, and from the mid-20th century, the term "Lean" started to be used. This term was first introduced in the article "Triumph of the Lean Production System" (1988) by John Krafcik, who was a lean production researcher at MIT at the time and currently serves as the CEO of Waymo (Google's self-driving car project). Krafcik stated in his article:
"Lean manufacturing plants have higher levels of productivity/quality than non-Lean."
"The level of plant technology seems to have little effect on operating performance."
The article further emphasised that the risks associated with implementing Lean could be reduced by developing a well-trained and flexible workforce, creating product designs that are easy to build with high quality, and establishing a supportive, high-performance supplier network. The concept of Lean was further expanded upon in the book "Lean Thinking" (1996) by James Womak and Daniel Jones. They defined Lean as a way to achieve more with less human effort, equipment, time, and space, while continuously moving closer to providing customers with exactly what they want. They translated this concept into five key principles:
Value: Specify the value desired by the customer. Form teams for each product to remain dedicated to that product throughout its entire production cycle and engage in dialogue with the customer (e.g., Voice of the Customer).
The value stream: Identify the value stream for each product that provides that value and challenge the wasteful steps (generally nine out of ten) currently necessary to provide it.
Flow: Ensure the continuous flow of the product through the remaining value-added steps.
Pull: Introduce a pull system between all steps where continuous flow is possible.
Perfection: Strive for perfection by continually reducing the number of steps, time, and information required to serve the customer.
Evolution of Lean
Since the early days at Toyota, lean principles have gone on to become a core business and management philosophy for creating the sustainable, agile, and data driven, productive organisations of today. It’s core principles can now been seen across many genres of business such as; lean thinking, lean process improvement, lean six sigma, lean project management, lean enterprise, lean construction and more.
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Six Sigma is a collection of techniques and tools developed by Bill Smith, an engineer and former employee of Motorola, in 1986. It aims to improve process efficiency by reducing variability in manufacturing and business processes. By utilising empirical and statistical data, Six Sigma enables business leaders to evaluate the effectiveness of their processes and identify areas for optimisation.
Projects following the Six Sigma approach adhere to specific methodologies and set value targets, such as enhancing customer satisfaction or reducing pollution. The performance and maturity of these processes are often measured using a sigma rating, which indicates the percentage of defect-free products or services. For instance, a process is considered optimal if it produces less than 3.4 defects or errors per one million cycles.
One notable proponent of Six Sigma was Jack Welch, the former CEO of General Electric, who made it a central component of the company's strategy. Welch claimed significant cost savings, initially at $350 million and later reaching $1 billion, through the implementation of Six Sigma methodologies. As a result, many Fortune 500 organisations followed suit, adopting Six Sigma initiatives to enhance quality and reduce costs.
In recent years, practitioners have integrated the principles of Six Sigma with lean manufacturing, two disciplines influenced by Japanese business culture, to create Lean Six Sigma. This combined methodology views lean manufacturing, which focuses on process flow and waste reduction, and Six Sigma, which emphasises variation and design, as complementary approaches that promote operational excellence within businesses. Six Sigma emphasises the following key points:
Continuous efforts to stabiliSe processes and achieve consistent results, including reducing process variation, are crucial for business success.
Manufacturing and business processes possess identifiable characteristics that can be measured, analysed, improved, and controlled.
Sustained improvement in quality can only be achieved when the entire organisation, particularly top-level management, is fully committed to the process.
Six Sigma distinguishes itself from other quality-improvement methods through several key features:
Focus on achieving measurable and quantifiable financial returns.
Emphasis on management leadership and support.
Commitment to making informed decisions based on verifiable data and statistical methods, rather than assumptions and guesswork.
Six Sigma utilises two primary project methodologies inspired by W. Edwards Deming's Plan-Do-Study-Act Cycle:
DMAIC (Define, Measure, Analyse, Improve, Control) - used for improving existing processes.
DMADV (Define, Measure, Analyse, Design, Verify) - employed for developing new products and processes.
In the DMAIC process improvement methodology, the following steps are considered:
Define the opportunity for improvement by identifying the system, understanding the voice of the customer and their requirements, and setting project goals.
Measure the performance of the existing process by collecting relevant data and measuring key aspects to determine the current capability.
Analyse the process, considering various factors and relationships to identify defects and determine root causes.
Improve or optimise the processes based on data analysis, utilising techniques like design of experiments, poka yoke (mistake-proofing), and standard work. Pilot runs may be conducted to establish process capability and address root causes.
Control the improved future state processes by implementing control systems such as statistical process control, production boards, visual workplaces, and continuously monitoring process performance. Deviations are corrected until the desired quality levels are achieved.
On the other hand, DMADV (also known as DFSS - Design for Six Sigma) is employed for new product or process designs. The steps involved in the DMADV methodology are as follows:
Define design goals aligned with customer demands and organisational strategy.
Measure and identify critical-to-quality (CTQ) characteristics, measure product and production process capabilities, and assess risks.
Analyse and develop alternative designs based on the information gathered in the previous step.
Design improved alternatives based on the analysis, considering the identified CTQ characteristics.
Verify the design by setting up pilot runs, implementing the production or business process, and handing it over to the process owner(s).
Six Sigma Certification:
Six Sigma certification programs were pioneered by GE and Motorola as part of their Six Sigma initiatives. Subsequently, many organisations developed their own certification programs in the 1990s. In 2008, Motorola University collaborated with the Lean Six Sigma Society of Professionals to establish standardised lean certification standards. Certification typically involves six "Six Sigma belt levels" awarded based on practical experience and position-specific training within an organisation:
White Belt: Awarded upon completion of an entry-level overview.
Yellow Belt: Awarded for providing assistance at a practical level in a project.
Green Belt: Awarded for learning the principles of Six Sigma and implementing them under the guidance of a Black Belt.
Black Belt: Plans and executes projects using Six Sigma principles.
Master Black Belt: Manages the implementation of Six Sigma projects across different functions.
Champions: Upper-level executives responsible for implementing Six Sigma across all departments.
However, it's important to note that while many corporations and colleges offer Six Sigma programs, there is currently no standardised curriculum or unifying organisation to establish common standards for "belt" certification.
Evolution of Lean Six Sigma
Lean Six Sigma has evolved into a hybrid continuous improvement model that combines Lean Thinking and Six Sigma techniques. It emphasises a commitment to ongoing waste elimination, engagement of employees at all levels of the organisation, and minimising variation in company output through the use of statistical process control.
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Developed by McKinsey consultants Thomas J. Peters and Robert H. Waterman, the framework outlines a constellation of interrelated factors that influence an organisations ability to change. These factors are as follows:
Style: Referring to the culture and leadership of an organisation, this factor encompasses "the way we do things around here." It emphasises the importance of informal rules of conduct.
Skills: This factor focuses on the individual and institutional skills possessed by the staff. Given globalisation and increased specialisation, skill acquisition and determining what tasks should be performed internally versus by suppliers or customers are critical considerations.
Systems: Beyond electronic processing systems, this factor encompasses the definition and improvement of business processes (e.g., HR, risk, client management systems). It addresses how to prevent losses from occurring.
Structure: Originally illustrating authority relationships within an organisation, structure has become a critical diagnostic tool in today's complex and complicated organisational landscape. Identifying and clarifying these complex relationships and establishing lines of authority present opportunities for improvement.
Staff: Referring to the people within the organisation, this factor emphasises their intrinsic talents and how they are nurtured and developed. It considers factors such as the quantity and quality of talent within hierarchical structures, turnover models, and diversity (both global and gender) to build strength and achieve economies of scope.
Strategy: This factor focuses on the company's approach to gain a competitive advantage over rivals. The organisation itself can be a source of strategic strength or weakness. Strategy has evolved from a traditional visionary model to a complex-adaptive model that aims to evolve and be dynamic. Strategy and organisation are now seen as interconnected, adapting together.
Shared values: This factor delves into what the organisation aims to achieve. While standards may be elevated over time, the fundamental goals of an organisation typically remain unchanged. The inclusion of social missions is becoming more common, as they can affect corporate reputation (a valuable asset) and influence staff engagement. Setting overarching goals helps reinforce what the organisation wants to achieve.
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Business Process Management (BPM) recognises processes as valuable assets for an organisation. It emphasises the understanding, management, and development of processes to deliver value-added products and services to customers. This approach shares similarities with methodologies such as Total Quality Management (TQM) and continuous improvement, as they employ techniques to discover, model, analyse, measure, improve, optimise, and automate business processes.
Business processes can exhibit both structured and repeatable patterns as well as unstructured and variable elements. The sequence of work can vary across instances, involving gateways, conditions, business rules, and more. The International Organisation for Standard (ISO) has established the ISO 9000 standard, which encourages the adoption of a process-oriented approach in developing, implementing, and improving the effectiveness of a quality management system to enhance customer satisfaction by meeting their requirements.
BPM facilitates the streamlining and automation of business processes by addressing inefficiencies, such as bottlenecks, and identifying opportunities for manual work automation. Workflow-level automation can be achieved through the use of application programming interfaces (APIs) or dedicated scripting languages, enabling a series of actions to be automated. Task-level automation is also possible through Robotic Process Automation (RPA), where repetitive activities performed by humans are recorded and executed by software robots or artificial intelligence (AI) / digital workers. Organisations that leverage both technologies often achieve superior results in their BPM improvement efforts.
The BPM lifecycle consists of five key steps, forming a systematic and continuous strategy for process improvement also known as the business process management lifecycle :
Design: Identify existing processes ("as-is") and define the goals to be achieved through BPM.
Modelling: Select the desired processes ("to-be"), describe their requirements, and outline how they will operate in various scenarios to fulfil the design goals.
Execution: Put the modelled processes into action.
Monitoring: Continuously monitor and analyse the processes to evaluate the effectiveness of the implemented changes in meeting the design goals.
Optimisation: Implement improvement measures based on the insights gained. Similar to methodologies like Kaizen or Six Sigma, the primary focus is on monitoring and continuously improving factors such as throughput time, cost efficiency, error rates, and other key performance indicators, including the automation of process connections.