Continuous Improvement and TQM

Continuous improvement (CI):

The act of making incremental,

regular improvements and
upgrades to a process or product
in the search for excellence.
 Purposes- CI

 To continuously refine the processes of manufacturing or service, not simply to focus on

the quality of the goods or services produced
 To incorporate improvement into the processes themselves, not merely to subject
processes to periodic reviews and audits
 To define achievable goals and set quantitative measures to chart progress toward
reaching those goals
 To empower workers by involving everyone in the assessment and improvement of the
processes they oversee, manage, or carry out
 To increase productivity
 The CI model

The concept of continuous process improvement can also be applied to

the design of a supply chain. This model is used to analyze, assess, plan,
and implement changes that will improve the supply chain and its
processes. The continuous improvement model we’re using here, shown
in Exhibit 3-48, builds upon other supply management concepts, such as
benchmarking and change management.
 Continuous Improvement Model
 Stage 1: Process analysis. The initial step in continuous improvement requires taking a hard look at

internal and external supply chain design to find locations where waste or non-value-added

activities could occur.

 Stage 2: Process assessment. In this stage, think about the various key performance indicators (KPIs)

that might be used to measure how the supply chain is performing. Benchmarks can be used to set a

specific performance goal, such as reducing manufacturing time along the supply chain by a set

percentage.

 Stage 3: Project planning. Now you are ready to develop a realistic schedule for the design,

development, and review of the proposed supply chain. Responsibilities and accountability are

assigned, needed resources are identified, and a budget and schedule are created and approved.

 Stage 4: Implementation and change management. Once the design is completed, it will need to be

implemented and shared with other supply chain partners who are stakeholders in the process.
 Reasons for adopting continuous improvement

 Supply chain management is process-oriented. The basic units of the supply chain are not
products or services that emerge from the chain; they are the processes that flow along the
supply chain among functions and partners.
 Supply chains are dynamic. A supply chain constantly expands, contracts, and incorporates
new stakeholders and new products. A constantly changing system requires continuous
reengineering and process improvement.
 Supply chains evolve. Supply chains have evolved from functional isolation, to cross-functional
cooperation, to global networks linked by electronic communications and enterprise software.
As supply chains evolve across new frontiers of organization, scope, and technological
complexity, they are in constant need of process improvement and, potentially, redesign.
 Continuous improvement of the supply chain design can reduce the costs of poor quality.
 Personnel improvement

Personnel improvement involves working to develop supply chain

personnel’s knowledge, skills, and abilities over time. Knowledge is the
information needed to perform a task correctly

Informal, on-the-job, and cross training

Formal or informal coaching or mentoring
Internal or external training courses
Online training
Evaluating training
 Process improvement initiatives

Customer responsiveness
Perfect customer orders
Performance improvement (by supply chain, function, teams, supplier groups, etc.)

Increased productivity
Strategic and financial alignment
Asset management
System infrastructure
 Optimizing visibility
Visibility means being able, figuratively, to see what’s happening
in the supply chain. The APICS Dictionary, 16th edition,
defines supply chain visibility as
sharing information throughout the supply chain to create
transparency among supply chain partners.

Process analysis
Continuous improvement is directed from the top down and
implemented from the bottom up. Selecting processes for
improvement is a job for top management.
Continuous Improvement Tools (7+7)
Continuous improvement teams use a number of techniques and
methods for continuously improving supply chain processes:
Pattern identification—pinpoints a pattern of variability within a
process
Defect measurement—identifies the number of defects that
represent product or service failures
Root cause analysis—identifies the root cause (versus the
symptoms) of a problem with an unacceptable rate of defects
Benchmarking—sets goals at specific levels by reference to an
outside performance standard
 Seven Basic Tools of quality
 Process mapping (process map, flow process chart or process chart)—describes a process in depth and
then analyzes the process to find the root causes of inferior process.
 Pareto chart (Pareto analysis or diagram)—“a bar graph that displays the results of a Pareto analysis. It
may or may not display the 80-20 variation, but it does show a distinct variation from the few compared to
the many” (APICS Dictionary, 16th edition
 Control Chart- compares performance data with statistical control limits.

 Cause-and-effect diagram (fishbone or Ishikawa diagram)—helps organize causal factors that affect a
problem or process being investigated.
 Histogram—a bar graph that displays the frequency distribution of measurement data.

 Check sheet—a simple and easy-to-use tool for summarizing a tally count of event occurrences.

 Scatter chart (cross plot, scatter diagram, or scatterplot)—a tool for showing the relationship of two
variables in terms of whether they are interdependent and to what extent.
 Process map

Process Map of the Order Fulfillment Process

 A Control Chart

A Control Chart
Pareto Chart

Pareto chart
Cause-and-Effect Diagram
Histogram
 Check sheet
Check Sheet
Scatter chart
 Seven new tools
 Affinity diagram
 Tree diagram
 Matrix diagram
 Process decision program chart
 Relationship diagram
 Matrix data analysis chart
 Activity network diagram.
 Affinity diagram
Affinity Diagram
Tree diagram
 Matrix diagram

Exhibit 3-58: Matrix Diagram of Customer Specifications for Component #4572

Specification Customer A Customer B Customer C

Width ≤0.789 cm ≤0.790 cm ≤0.785 cm

Length ≤1.11 cm ≤1.20 cm ≤1.01 cm

Thickness ≤0.55 cm ≤0.575 cm ≤0.545 cm

Color (Pantone) #127 #130 #129

Process decision program chart
Relationship diagram
Matrix data analysis chart
 Activity network diagram

•Nonquantitative tools: process flow chart or mapping, cause-and-

effect (fishbone) diagram, affinity diagram, tree diagram, process
decision program chart, relationship diagram, activity network
diagram

•Combination tools: matrix diagram (if using points on the diagram

that reflect measured data)

•Quantitative tools: scatter diagram, Pareto chart, run chart,

histogram, control chart
 Lean and Just-in-Time

Explain four major approaches to continuous improvement

Lean
Six sigma
The theory of constraints
Total quality management
 Lean, Six Sigma and HOQ

Lean: Wastes and Traditional Vs Lean

Six Sigma

House of Toyota
Six Sigma
The goal of Six Sigma is to achieve a level of quality that is nearly perfect, with only 3.4 defects per million opportunities.
House of Quality