Continuous Improvement

I was challenged recently to think about continuous improvement, which prompted me to put these thoughts together in one place.

Continuous Improvement has its roots in the work of W Edwards Deming and TQM in post war Japan. This approach lead the revolution in manufacturing management as it spread widely in the 70’s and 80’s, evolving into the “Toyota Model”, and what is broadly now called Lean Manufacturing. I was introduced to it in the mid 80’s as a response in quality control. The idea being that every quality complaint that was received would be investigated, a root cause analysis carried out, and a permanent corrective action implemented. Over time, all the causes of quality faults would be removed, through a process of “continuous improvement”, and product quality would cease to be an issue.

However, in practice, I’ve seen many examples where the root cause of a quality failure was put down to operator error, and the corrective action was to “counsel the operator”. ?Not surprisingly, nothing changed, and the fault reoccurred. In other operations with a similar root cause finding, the response has been to add more quality checks. A checker, checking the person that is doing the job and supposed to be checking their own work. Often this “checker” is less qualified than the person doing the job, but now, a level of bureaucracy exists, and the person doing the job is alleviated of responsibility for their quality, because someone else is checking. Now you have added cost, and not improved quality, often it’s worse. This second response is in direct opposition to what Deming promoted, ie to remove the dependence on inspection to achieve quality.

The expression, “don’t just do something, stand there” comes to mind. In the rush to do “something”, very little is achieved. Perhaps the first response should be, to stop, look, and think before acting. ?And if your answer to your root cause analysis “why” question can be answered in a more fundamental way, ?you haven’t got to the bottom.

But as is so often the case in the modern world “scope creep”, or the gradual migration away from the original meaning occurs, and continuous improvement is applied to any operational improvement.?Interestingly, again referring to Deming, he formulated a 14-point philosophy, (https://deming.org/explore/fourteen-points/)??key amongst them is a focus on people. Leadership, driving out fear, breaking down barriers between departments. In today’s world, I doubt whether many managers would have the courage to implement many of Deming’s philosophies.?Can you image your business removing quotas, eliminating management by objective. And yet Deming and Lean seek to achieve consistency, improved quality, at low cost, delivering those things customers value, and removing those things they do not, by removing variation, and allowing people to be successful. Deming’s approach to leadership, was that it is there to assist the people and machines to be successful.?Peter Senge’s Learning Organisation approach, and that of a shared vision aligns closely to Deming’s philosophy of consistency of purpose.

I see few places that have adopted these values more fully than the extreme competitiveness of the world of formula 1. Ten teams are challenged with delivering 2 original design cars built to a set of very strict rules and be better than everyone else in the world.?These teams have access to incredible technology, processing vast amounts of data, and yet rely on people, creativity, ingenuity, and team work to achieve their goals. There are few places where leadership is so visible, and so accountable for the results of the team. ?Nothing demonstrates this better than the pit stop.?Thirty years ago, a “quick” pit stop took around 8-10 seconds. In 2022 an average pit stop took around 2.5 seconds.?New rules have been implemented in 2023 to make the pit stop more human and will slow the pit stop to around 3 seconds.

And while the human element is critical to optimizing the performance of the equipment an operation has, and often targeted as the area of weakness in a business, are management giving those individuals the best equipment they can have to be successful ?

I’ve seen many businesses that are operating 30 year old machinery, and writing back what should be depreciation and calling it profit, when a disciplined leader would ensure he or she is operating a sustainable business, that can afford to replace equipment as it needs to be updated. There is old adage that goes, if you’re not moving forward, you’re going backwards, and while executive bonuses are targeting profit as a KPI, and not asset replacement as a KPI, this danger exists. COVID aside, I’d be intrigued to know the depreciation schedule at Qantas, versus its executive bonus scheme. I myself have worked in businesses that historically didn’t understand the need for a sustainable business, and gave away margin, that should have been capital investment and/or depreciation and removed their capability to update machinery as required.?It takes courage and commitment and a look term perspective to tell a board you need to replace equipment which won’t have an immediate EBIT uplift or clear payback period, simply because you need to keep the business moving forward.

If you don’t disrupt yourself, someone else will!

So when you say “continuous improvement”, what do you mean??

ANDREW MCKINNA 2023