Continuos improvement on the shop floor: lessons from small to midsize firms

Business Horizons, Nov-Dec, 1997 by Thomas Y. Choi, Manus Rungtusanatham, Ji-Sung Kim

CI may not be as fashionable as, say, reengineering. But it is a low-cost way to improve quality and productivity, once you get past the six critical milestones.

The last two decades have witnessed waves of popular prescriptions preaching organizational change for the betterment and, ultimately, the survival of companies. Hearing these siren voices, businesses have plunged headlong down the paths of reengineering, restructuring, and downsizing. According to the CSC Index and Dataquest Europe, about 70 percent of the top 600 European and American firms had implemented at least one reengineering initiative as of 1994.

In the midst of this frenzy of drastic transformations, however, the proponents of quality management have stood firm in reminding both scholars and practitioners of the importance and necessity of making incremental and continuous changes that can accumulate and have a large and lasting impact on an organization.

Adding credence to this message is the negative publicity associated with reengineering and downsizing projects. At least seven out of ten programs fail to achieve their goals, whereas fewer than one in three companies increase profits as much as expected. Mutual Benefit Life, an early hero of the reengineering movement, later went bankrupt, costing its policy holders dearly.

In contrast, encouraging news has been reported about continuous improvement (CI) changes. Industry Week identified ten winners of the "America's Best Plant" survey and reported on their CI practices. One winner, Wainwright Industry, had reduced waste and increased quality and productivity, not in one large swoop, but over a period of five years. It also decreased manufacturing costs by more than 20 percent over six years. Another winner, U.S. Steel, cut its in-plant reject rates, cycle times, and work-in-process inventory in two to three years' time.

CI requires, a priori, the involvement of rank-and-file workers who take the lead in creating a dynamic work environment on the shop floor, where physical values are born. It involves all members of the organization working as a collective intelligence and, as Schroeder and Robinson (1991) put it, "unleash[ing] employee experience and creativity to improve both products and processes." Kiyoshi Suzaki, author of The New Manufacturing Challenge (1987), asserts that CI is "a kind of meditation technique that reveals its profundity only through ceaseless repetition" and change (Poe 1991). Deming (1986) also advocated the importance of continuous and incremental repetition of the plan-do-check-act (PDCA) cycles.

Manufacturing plants attempting to initiate continuous improvement programs (CIPs) typically face six milestones. Culled from the experiences of seven small and medium-sized plants in implementing a CIP on the shop floor, these milestones represent critical decision points whose outcomes have the potential to either foster or sink CIP efforts. The seven firms were attracted to CI because although they were interested in working toward lean manufacturing, they realized the financial as well as operational difficulties of such a move. So they joined a CI users group (CIUG) in the fall of 1990, which met every six weeks at one of the seven plants on a rotating basis, and tried to implement suggested changes during the time between meetings. Information from these seven plants were collected and analyzed over a period of a year.

The names of the seven companies have been changed to ensure anonymity and to describe specific characteristics of each:

* "Progressive Engineering and Manufacturing," a maker of springs and small brackets, was given this name because it is the most progressive and advanced of the firms.

* The workers at "Sunshine Incorporated," which manufactures sunroofs, seem more cheerful than workers at other companies.

* "Fixer Machine Company" makes nuts and bolts and emphasizes the explicit justification of its CI changes.

* "Heat Incorporated" produces commercial test heating equipment.

* "Topheavy Tool and Manufacturing Company" had focused largely on training managers for its CIP, and its two CI-related committees did not include line workers.

* "Small Metal Stamping and Manufacturing" is the smallest of the seven firms.

* "Mom & Pop Manufacturing" is a family-owned company that produces stamping parts.

Some of the plants, of course, were more successful than others at CI. Our objective, however, is not to evaluate their CIP activities but to derive insights from their collective experiences that can guide others in their efforts to engage in continuous improvement.

THE SIX MILESTONES

Using a time-based process, Figure 1 describes the six key milestones encountered in initiating CI. The way in which top management perceives CI is absolutely critical to its success or demise. So we first consider the different roles top managers can play in implementing CI and discuss how to provide a structure for overseeing such a process. Then, because companies generally use teams to implement CI, we explain the dynamics of CI team organization. Once the process of implementation had begun at these firms, each had a certain activity or project on which to focus. So various types of initial focus projects are touched on next.