TASK-3

Company Information

Himal Tech Pvt. Ltd is a manufacturing company based in Melbourne mainly involved in manufacture
of refrigerators. Company aims to be a leading refrigerator manufacturer in coming years by
providing customers with affordable and energy efficient refrigerators. Company has different
departments who are involved in smooth operation of business such as administrative department,
accounting department, human resource department and production department.

Business Overview

The company is involved in continuous research of improving the attributes of refrigerator without
compromising in the quality and standard of manufacturing to survive in the competitive industry of
manufacturing. The daily activities of the company are the managing production rate according to
market demand, the production of refrigerators and supply of the manufactured products.

Purpose and Background

The main purpose of this proposal is suggesting the idea of the continuous improvement to the
company as one of the mega forces such as fossil fuels may affect the growth of business as well as
environment sustainability by limiting the supply of fossil fuels, which is the main source of the
energy for the production, in the next ten years or so. By employing Kaizen, this proposal would
suggest various methods to tackle the problem of business and environment sustainability thereby
helping the company to improve continuously in a long run.

Concept of continuous improvement

Continuous improvement is an ongoing action to improve the product, services or processes. It can
be employed throughout several phases of the business as even the small changes made can lead to
the big result in the favour of the business in a long run. Modern businesses practice continuous
improvement as a part of the survival in the competitive world. There are various methods of the
continuous improvement such as Six Sigma, Lean, Total quality management etc.

Continuous Improvement (CI) models and theories

Nonstop change could be a mindset where organisations endeavour to continuously trying to find
superior ways to do things – this hunt for way better ways of doing things leads to the advancement
of items, administrations, workflows and other angles of the association so they ended up more
ideal and effective over time. Historically the concept has been connected to fabricating with the
ultimate end objective being the disposal of waste (be that time, raw materials, labour) from the
manufacturing process so that the final outcome would be more economic and effective.

Some of the models and theories of CI are listed and discussed below:

 Kaizen: Kaizen is a process to implement small and gradual changes that helps an
organization to improve its productivity and operation ensuring the long run of the business.

 PDSA Cycle: PDSA cycle stands for Plan-Do-Study-Act cycle. This is a continuous
improvement process which is a very simple yet effective approach for dealing with
problems and managing change in an organization. The whole process is circling around the
idea of testing the solution and analysing the results obtained and improving the overall
process.

 Six Sigma: This is a statistically driven approach to eliminate defects in a product and
improve the operation process. The Six sigma approach use the principle of DMAIC which
stands for Define, Measure, Analyse, Improve and Control to solve its operation issues.

Proposed Solution and Expected Benefits

The issue we are expecting in the near future would be the scarcity of fossil fuels and other natural
gases which are burned in the process of manufacturing and producing refrigerator parts. Upon
discussing with all the possible approach of which CI method to use we come up with a solution to
go with two of the approach:

 Kaizen approach
 Lean Manufacturing
CI will not straight away fix the issue, but it emphasizes on continuous improvement of the current
operation to deal with the mega force. This will include continuous research of alternative method
to use for the production. Also, instead of burning fuel we can use equipment that can operate
through solar power.

By implementing Kaizen as CI approach in our manufacturing plant we will analyse the current
operation process involved in the plant. We will have continuous review of the process and involve
each of the employees and discuss the possible solution. Implementing kaizen will slowly but
effectively reduce the use of extra fossil fuels and energy as we will continuously improve our
production plan to energy efficient and burn less fuels. This could be done by using solar power to
operate bigger equipment rather than burning fuel. The Kaizen approach will be supported with lean
manufacturing model in order to track our progress in the step of reducing the waste. This will
benefit our company in various aspects by making our company environmentally friendly and
building a good customer relationship. The use of solar is way much economic and will improve the
production increasing the profit in the long run. Plus, the implementation of solar powered
equipment will resolve the negative health issue that employees were having while working under
fuel burning machinery and equipment.

Apart from those two CI methods we will use the approach of PDSA cycle in order to analyse and
implement any changes required. This will be very important approach as it determines the
effectiveness of the small improvements done in our company. This will study the pattern of impact
of such changes and if anything is not working according to the plan, we can propose any changes
while there is still enough time. Our company is expecting 30-40% increase in sales and 20% cut off
in cost of sales it the proposed CI is implemented successfully.

CI Strategies

In order to stay competitive, businesses need to continually enhance their goods, services and
procedures, yet many businesses are struggling in this region. Using a continuous model of
enhancement facilitates the process, but it requires perseverance and persistence. It takes time for
improvements, and small changes are required in order to see significant improvements over time.
Continuous enhancement strategies contribute considerably throughout the process. Continuous
enhancement strategies provide the required outcomes when correctly applied and frequently used.

Our company will follow the strategy of kaizen where each employee’s ideas and views are valued
and considered important in every decisions made. There is a culture of trust among the team
members which make any changes very effective and error free. There can be a regular team
meeting and seminars where new ideas and solutions can be brainstormed to reach out and find the
best possible solution.The Lean management focuses on keeping one's product quality while
eliminating waste and decreasing the workload of the worker. Areas addressed include wasted
resources, wasted time and wasted cash when using this method. Companies witness enhanced
customer satisfaction when using this method, an increase in staff morale, and more effective and
trouble free process.
Continuous procedures of enhancement and strategies to be used must be regularly reviewed by
company owners to guarantee that they continue to work. The method is continuous and can be
altered at any moment to remove those approaches that do not produce the required outcomes and
incorporate fresh ones that may be beneficial. Do not hesitate to remove a Continuous Strategy for
Improvement that does not work and attempt a fresh one. This process is not a solid one, as each
company has distinctive requirements, and there is not a common model that is effective for all
companies.

Key Performance Indicators (KPIs)

Key Performance Indicator (KPI) is a measurement tool that demonstrate the effectiveness of the
proposed change and if the companies objectives are met.
Below are the list of KPI that will be in assistant to measure the performance and effectiveness of
the CI models:
 Total sales
 Labour cost
 Production and output rate
 Reject and complaint ratio
 Customer satisfaction ratio
 Training hours
 Stocks and Inventory level
 Net revenue
 Equipment utilization rate

Continuous improvement implementation and communication

First of all, a culture of trust will be developed in the company. All the individuals involved in the
manufacturing of the refrigerators will be made familiarized with the term Kaizen. We would
implement the current idea of solar systems for energy purpose on a small production unit which is
made only to find the difference in the production capacity and the worker experience. All the
measurable feedbacks and results from customers and stakeholders after employing Kaizen will then
be analysed by the management team. After analysing the result, the company shall decide on if the
changes will be permanent or if further adjustments are needed. Also, all the staffs would be
encouraged to find the new ways of further improvement.

The company would also organise social gatherings or meetings to communicate the changes made
in the process or to get honest feedbacks from the experts working in the production. Also, the
changes made will be communicated to all the stakeholders through emails and company’s notice
boards. Apart from those, Promotion techniques can be used like marketing saying our products are
environmental friendly and we are more focused on CSR.