What does continuous improvement mean?
The continuous improvement process has its roots in the automotive industry of the 1950s, more specifically in the Japanese principle of "Kaizen", which means "change for the better". A defining characteristic of Kaizen is that improvement should be incremental and small-scale. As a consistently pursued path of small progress, which is always repeated and never ends. Kaizen or CIP is not designed for short-term success. Companies are successful in this if they consistently pursue the principle and work permanently on improvements.
Important prerequisites for the continuous improvement process
In order to achieve long-term success through the use of the continuous improvement process, an organization needs everyone involved to pull together and be willing to continuously make small improvements in their respective work context. For this to happen, it is important that the framework conditions are right.
Top management must make a conscious decision in favor of CIP and consolidate it in the corporate culture. This can be done through further training measures, by integrating the PDCA cycle into processes and workflows, and by making working time available.
All those involved must be aware that with the continuous improvement process, there are no sudden changes. Instead, it is about gradually optimizing and perfecting the most important areas of a company.
Who is involved in the continuous improvement process?
An important feature of the continuous improvement process is that improvements are planned and implemented not only by managers, but primarily by the employees themselves. This direct implementation by all those involved in the processes is of great importance in the CIP.
The CIP method aims to motivate employees to actively participate in the continuous improvement process, thus making it their task to identify and implement improvements in their area. In the long term, these small optimizations lead to increased quality in products and processes, but also in service.
What are the benefits of a continuous improvement process?
Through CIP, all existing processes in the company can be streamlined and simplified. Costs are saved through more efficient workflows, products and/or services are geared more closely to customer requirements, service improves, and waste of all kinds is reduced.
If individual implementations are not possible, the top management must explain why in a comprehensible manner. A successful continuous improvement process requires an appropriate corporate culture and the active demonstration of CIP by the management team. Then everyone benefits from the results of a continuous learning process.
How to manage the CIP?
The cycle of small steps is reflected in the PDCA cycle. To this day, it is the most important control instrument for continuous improvement. PDCA stands for Plan-Do-Check-Act. PDCA is the process of continuously identifying and solving problems in four steps.
A related method is the SDCA method (Standardize-Do-Check-Act).
How did the PDCA cycle come into being?
The PDCA cycle is a process that is repeated over and over again, theoretically infinitely, and provides the basis for continuous improvement of a management system. The beginnings of the model, also known as the Shewhart Cycle or Deming Cycle, date back to the early 1930s.
The initially three-step model of the American physicist and statistician Walter Andrew Shewhart was later supplemented by a fourth step by his student William Edward Deming.
The Deming circle was used in World War II for military purposes with regard to improving the quality of war equipment, but after 1945 it failed to gain acceptance in the civilian sector either in the USA or in Europe.
The model finally reached the East Asian country in the early 1950s as part of the reconstruction of the Japanese economy and industry on Deming's initiative, where it became a success story.
It was not until the 1980s that the model reappeared in the West under the name PDCA cycle chosen by Deming. With the ISO 9001 quality management standard, the PDCA cycle finally found its way into the world of management systems, where it has since been successful worldwide as a holistic corporate approach.
How is the PDCA cycle related to ISO management system standards?
Since the common basic structure of the ISO management system standards (High Level Structure - HLS) was introduced in 2012, the assignment of the standards chapters to the four phases of the PDCA cycle has been clearly recognizable. However, this only came to the attention of standards users worldwide with the revision of ISO 9001 and ISO 14001 in 2015. ISO standards see Chapter 4 (Context of the organization) as the framework for the management system in which the PDCA cycle operates. Highlighting the responsibilities and duties of top management in a management system, Chapter 5 is now located at the center of the PDCA cycle.
The PLAN phase comprises Chapter 6 (Planning), where meeting the standard requirements from Chapters 4 and 5 is a prerequisite for meaningful and promising planning in Chapter 6. Chapters 7 (Support) and 8 (Operation) are assigned to the DO phase. Chapter 9 (Evaluating Performance), with the performance of internal audits and management reviews, represents the CHECKphase, and Chapter 10 (Improvement) marks the ACT phase.
In managing the company's processes and their continuous improvement along the PDCA cycle, the focus is on risk- and opportunity-based thinking (Chapter 6).
The four phases of the PDCA cycle
Plan - Do - Check - Act. In the PLAN phase, the first step is to identify problems, i.e., to determine the current state. At a minimum, the following questions are asked:
- What is the nature of the problem?
- How often does it occur?
- When does it occur?
- What is the cause?
In the next step, the problem is first narrowed down, i.e. described in concrete terms, on the basis of the previously determined actual state, and then analyzed. The analysis allows the setting of appropriate goals, including the measures necessary to achieve the goals.
In the Do phase, the measures defined in the Plan phase are initially implemented on a test basis by all company employees involved in the existing problem. The decisive factor is that the measures are not yet implemented across the board, i.e. definitively, but that (market) reactions are still awaited.
In this phase, the central question is: Has the company achieved its goal in the test phase? To answer this question appropriately, the data collected in the Do phase is evaluated and subjected to an assessment. If there is still a need for adjustment, action must be taken at this point, and if necessary a measure must be withdrawn. Before moving to the Act phase, all issues must be resolved.
In the Act phase, standardization takes place with regard to strategies, concepts, activities and objects. This creates a new actual state, which represents the measure of things for the near future, with a view to all processes, and must be carefully documented. The actual state is usually the basis for a management system certification.
In principle, the PLAN phase already begins anew with standardization - the PDCA cycle repeats itself, continuous improvement is underway.
Where are CIP and the PDCA cycle used?
In many German companies and organizations, the continuous improvement process has found its way into the corporate culture over the last three decades and is controlled via the PDCA cycle. Today, the continuous improvement process is a component of all modern management system standards, for example in quality management, environmental management, and information security management. The PDCA cycle has also long since ceased to be limited to production and is used across all industries, in services as well as in the administrative structures of companies.
Related concepts are, for example, Active Change Management (AVM), idea management and company suggestion schemes, but also the Toyota Production System, because this company succeeded in becoming a sought-after brand by using the continuous improvement process.
One way of establishing continuous improvement processes in organizations is through quality circles as in-house working groups or projects based on the Six Sigma methodology, in which a qualified specialist acts as project manager.