What is Continuous Improvement?

Have you arrived? If you answer yes to this question, you're not improving. If you think there is no more growth left, then you're frittering away. Living organisms grow...or they die. This reality has led successful companies to adopt principles of Continuous Improvement. One of the most advanced of these is the Deming Principle, developed by Dr. W Edwards Deming, and utilized by the Toyota Company and Sony Corporation to change their culture from that of cheap, poorly made products to valuable, high quality products. The Deming Principle has multiple levels to it, but at the heart is the Plan>Do>Check>Act cycle, which is the never ending process of continuous improvement.

We'll review several levels of the Deming Principle as well as a few other elements of Quality Management to get a grasp on how comprehensive Continuous Improvement is. Simply put, Continuous Improvement is the never-ending journey of reducing variations in your products and processes. There are many ways to improve even the most basic processes, but there must be a desire to improve and the discipline to see it done.

 

14 Points for Management

by Steven Brown

When I say made in Japan, what's the first thing that comes to your mind? I think of quality, high quality products made efficiently. Companies like Toyota and Sony set the standard for quality around the world. But it hasn't always been that way. When I was growing up, made in Japan meant poor quality. Japan was famous for making very inexpensive electronics that didn't last very long, like transistor radios. When the radio quit working, you just threw it away and bought another cheap one. It took a long time for Japan to transition from making junk to making high quality products. Dr. W. Edwards Deming was a big part of that change, thanks to his philosophy for managing quality. In fact, the highest award a Japanese company can earn is called the Deming Prize. Deming's philosophy focuses on reducing variability. The thought is that consistency can not only help companies design more reliable products and services, but can also lower costs. Deming's approach involves an integrated 14-point strategy to help manage quality in companies. You'll notice I said manage because Deming believed management must drive every quality program. I won't go into detail on all of his strategies, so you can print out the document called Deming's 14 Points in the exercise files. That gives you a brief explanation of each one. But I would like to talk about one point specifically. Point five of the Deming philosophy is to improve constantly and forever. If you're familiar with Lean principles, this is the foundation of Kaizen, which is the Japanese word for improvement. In business, Kaizen means to continuously make small, incremental improvements to every process. To accomplish this, Japanese companies adopted a four-step model called the Deming Cycle. This guides you first to develop a plan for improving a specific process, product, or service, then to try out the idea, execute the plan you developed. Next, analyze the results, and implement any changes that gave you improvements in the process. This last step is, of course, the longest and each change may take some time to put into place. Toyota's a good example here. It took many years to implement Deming's principles and become a world standard for quality. The most important aspect of the Deming Cycle is that, once you have completed the last step, you start the cycle again. This is the foundation of a continuous improvement culture. Take a close look at Deming's 14 points. You may find some of these practices in your organization, but with a different name. Specifically look for the plan, do, check, act cycle. It's the heart of many quality improvement teams. It's the heart of many quality improvement teams.

 

Download a copy of Deming's 14 Points.

The PDCA Cycle

Plan > Do > Check > Act

The Deming Cycle is the heart of Continuous Improvement. It is a methodical, controlled system of improvement. It is also called the PDCA Cycle.

  • P - Plan
  • D - Do
  • C - Check
  • A - Act

Plan is the first step in the cycle. Make a plan to do something, anything. Any process that needs improvement, sit down and make a plan for how to improve. The plan won't be perfect and that's the point. It's just the first plan or many. Make a plan.

Do is the second step in the cycle. Carry out your plan. Don't try to control the results, but rather let things play out naturally. Pay attention to every result from every angle. Fulfill the plan completely, so you can later assess the full results. Do your plan.

Check is the third step in the cycle. How did your plan work? What successes did you experience? What failures took place? What were the unintended consequences? Can you modify your plan and try it again? Or do you need to scrap the plan and come up with a different plan? Check your plan after it's done.

Act is the forth step in the cycle. Make the adjustments needed to your plan or create a new plan. Unless your first plan was total nonsense, you probably will just make adjustments to it and try again. There are times when a new plan is required, but don't jump to that action unless it's necessary. The point is to reduce variations in your outcome, so it makes sense to refine plans rather than start with new ones unless you must start over. Act on your checked plan.

Then the cycle started over. Work out your new/revised plan. Do your new/revised plan. Check your new/revised plan. Act on your new/revised plan. Keep doing this until every process is working as effectively and with as few variation as possible.

The PDSA Cycle

Plan > Do > Study > Act


PDSA is a similar cycle to PDCA. Plan, Do Study, Act are the four elements of this cycle. The third step is Study rather than Check. While similar, they are not exactly the same. The use of Study instead of Check includes more in-depth review of the results from the Do stage. The PDSA grew out of the PDCA as Dr W. Edwards Deming focused on more detailed reflection of the data being studied. It's not just enough to check whether your plan worked. You need to measure it and document it.

 

PLAN - In the Plan stage, you plan out a course of action and predict what you expect to happen. There is a purpose behind the plan of action. You are hoping to accomplish something specific. Maybe you want to improve the quality of product coming from a specific device. Or maybe you want to reduce the amount of times spent between jobs on a specific device. So, you plan out what it will take to accomplish that and write down what you expect to happen. Let's say you want to improve a fold on a note card. The fold is pretty good, but it's not centered on the art perfectly. To formulate a plan you might say, "If we reduce the programmed trim size by 1/16th of an inch, hopefully the fold will be centered correctly." There's the plan, there's the prediction. Write it down and start to track your progress. Keep the plan simple. Make as few changes as possible. If you change multiple things at the same time, you might not be able to identify what change had what result. Aim small, miss small.

DO - In the Plan stage, you carry out the details of the plan. With the purpose of improving the fold on a note card, you execute your plan. You reduce the trim size in the folder program by 1/16th of an inch. You expect that with the slightly shorter trim size programmed, the fold will be placed in the center of the card. Once you have programmed the change in the folder, you run a few cards through to see where the fold is on the note card.

STUDY - In the Study stage, you compare your planned predictions to the result produced in the Do stage. In our example, you measure the score or fold on the note cards you ran through after making the adjustments in the folder program. You measure each side. You measure each note card. Is the fold exactly centered? If not, was the adjustment too much or too little? Is the fold consistent on the test note cards that you ran through after the change? If not, could the machine be in error and need its own troubleshooting and/or maintenance? Let's say the machine is producing consistent results and the fold on the note card needs to move back a little.

ACT - In the Act stage, you adapt, adopt, or abandon your plan. In our example, the plan needs to be adapted, as is usually the case. You determine from your study that the fold is the same distance from the center, but now on the other side of the art. So, you start over the PDSA cycle with a new plan to change the programming on the folder by negative 1/32th of an inch. This cycle is repeated until the fold is in the center.

 

The PDSA cycle is used unofficially all the time. You're probably recognizing it as something you've done or do frequently. In reality this is something you do regularly when you’re trying to trouble shoot any problem at work or at home. The difference is the documentation and the way this process interacts with other processes to improve an organization as a whole. Even in work situations, it is usually done without physical tracking overall progress of our organization and is limited to a localized process. The PDSA cycle is meant to be documented and used over and over until it can't be used on one process and then moved to another process, constantly improving. Just because a process was focused on and improved in the past doesn't mean it doesn't need improvement now or in the near future. Equipment changes, materials change, operators change, instructions change, and ultimately the process needs to be put through PDSA again until it is optimized again. And as the PDSA cycle is utilized it is to be documented. This documentations helps you keep track of all the pertinent details and strengthens accuracy. Documentation though serves a deeper purpose, it is built into the entire systems continuous improvement documentation that tracks all processes and coordinates their efforts for large scale improvement. Each PDSA cycle is a brick in the foundation of a growing and improving organization.

The Red Bead Experiment

Willing Workers Doing Their Best


The Red Bead Experiment performed by Dr. W Edwards Deming is an excellent illustration of why willing workers doing their best will not alone improve quality. The individual worker's job is to produce white beads from material that comes in the form of white and red beads. Each worker is instructed very specifically on how to "produce" a tray of white beads and is graded based on their "quality" which is determined by how many beads in the tray are white and how many are red. No questions are asked, no suggestions are made. Management has already figured out what needs to be done and the instructions are passed to the willing workers, and they are asked to do their best. One of the problems identified in this experiment is the dividing of workers into individual units producing the same thing with the same predictably random results. There's no teamwork. There's no focus on quality in the actual process. There's no process improvement. No reliable trends can be established. It's a random and individual crap shoot.

One can easily imagine a far superior process, forming the individual willing workers into a team or multiple teams. Each team member would have a role in the process of producing white beads. One worker would filter out red beads. One worker would dip the tray and "produce" white beads. One worker would double check the tray and replace any red beads that might have made it through with white beads. PDSA cycles could be used by the team to continually improve the process to make sure that the company produced only white beads. Improvements could be made in the rate at which they are produced and the quality of the beads. This overly simplified experiment might be a little maddening to watch but consider how compartmentalized things naturally become and try to recognize how important teamwork is to continuous improvement.

The System of Profound Knowledge

Curiousity, Knowledge, Learning, Improvement


The System of Profound Knowledge applied to Sales/Marketing at a Printing Company

Steven Haedrich is the owner of New York Label & Box Works (NYLB), a packaging printer that has been in continuous operation since 1878. Steven is the third generation of his family to run the company that was purchased by his grandfather in the Great Depression of 1930. NYLB specializes in innovative packaging such as re-sealable labels, UV inks on clear films and folding carton packaging. NYLB recently has been recognized as a leader in brand protection and anti-counterfeiting technology for high value products. Their clients are mainly in the vitamin, cosmetic and food industries.

Below are notes from the video presentation above given by Steven Haedrich. This is more of a success story of using the System of Profound Knowledge, than a description of the System of Profound Knowledge.

Marketing Plan

  • Yearly Calendar
  • Social Media Activity/Campaigns
  • Monthly Mailer, demoing and stressing innovation

Biggest Challenges

  • Getting rid of bad customers
  • You can't be all things to all people
  • Had a lot of bad clients drawing time, draining energy, were not a good fit and mucked up the system
  • Customers who are a bad fit must be told no or charged a much higher price
  • We're not the best fit for this project
  • Here is a different company that would be a better fit
  • We can do your job, but the price is going to be higher (then actually charge a lot more, so it's worth your time)
  • Knowing who the right customers
  • Get the right customers
  • Build your business around the right customers from a technological standpoint
  • The Customer is PART of your system
  • What are their needs?
  • How can you delight them?
  • You have to have your systems in place so your customers are actually bragging about you.
  • Educate your customers
  • What you can and can't do
  • How to save money
  • It's not just about the label or the carton, but about improving their systems and operations

Seven Deadly Diseases

What's Killing Companies in America


The Seven Deadly Sins

Dr W. Edwards Deming identified 14 Points for Management that are positive points for managers to follow. He also identified 7 Deadly Sins that are destroying companies in America. In fact, Dr Deming viewed America as being the Number 1 for underdevelopment.

In this video Dr Deming addresses 5 of these Diseases. Number 6 & 7 were added in his book Out of the Crisis and of them he said they were "Peculiar to industry in the U.S., and beyond the scope of this book."

  1. Lack of Constancy of purpose to plan product and service that will have a market and keep the company in business, and provide jobs.
  2. Emphasis on short-term profits: short-term thinking (just the opposite from constancy of purpose to stay in business), fed by fear of unfriendly takeover, and by push from bankers and owners for dividends.
  3. Evaluation of performance, merit rating, or annual review
  4. Mobility of management; job hopping
  5. Management by use only of visible figures, with little or no consideration of figures that are unknown or unknowable.
  6. Excessive medical costs. As reported by Dr. Deming in Out of the Crisis (page 97-98), executives shared with him that the cost of medical care for their employees was amongst their largest overall expenses, not to mention the cost of medical care embedded in the purchase price of what they purchased from their suppliers.
  7. Excessive costs of liability, swelled by lawyers that work on contingency fees.

 

These seven are oddly specific; conditions that Dr Deming observed and identified as diseases that needed to be healed in order to properly develop industry in a U.S. company.

 

The first one is certainly being recognized by many companies, but perhaps misapplied. Executives and owners try to dream up vision and mission statements that they can rally their employees under. Some grand and pithy phrase that doesn't end up meaning a lot when compared to the actual operations within the company. The Toyota company has a true forward thinking constancy of purpose. "Toyota will lead the future mobility society, enriching lives around the world with the safest and most responsible ways of moving people." It is going to lead. And what is it going to lead? The future mobile society. It's not locked into cars. It is in the business of being a leader in future market(s) of mobilizing people. Do you think their planning development for things other than cars? I bet they are. It's who they are. They are going to be in business for a long time (all things being equal) because they have a clear and meaningful constancy of purpose.

 

The second sin is one that most every company seems to be have to some degree, emphasis on short-term profits. What's our gross margin? What are our financial targets? And Deming coins a phrase that sums up a bunch of messes "Creative Accounting." Not curious about the true nature of things. Not acquiring accurate knowledge or knowledge about how to sustain. Not learning what the underlying issues are that may be contributing to financial trouble. No improvement because the only thing that needs to improve is the bottom line, this month, this year. What about next year? What about the next decade? What about the next century? Who's planning for the future?

The Funnel Experiment

Describing the adverse effects of making changes to a process without first making a careful study of the possible causes of the variation in that process.


Funnel Experiment

Every stable system has inherent variability. Attempts to “fix” missing the target without observing it long enough and understanding the broad picture of its variability will only make things worse. This sort of behavior is common and what Dr Deming calls Tampering.

Before you can make any meaningful changes, you must understand the process fully. All variability will happen within one of these areas of the process:

  1. People (Manpower)
  2. Materials
  3. Method
  4. Materials
  5. Measurements
  6. Environment
  7. Money
  8. Maintenance

These areas of the process can be easily visualized using a fishbone diagram.

There are three types of tampering that only serve to complicate things in a progressive manner.

  1. Tweaking - Reacting to the last point of information - Type 2 error – execute process, see what the result is, and adjust your process based on how far your last result was from the previous result.
  2. A complaint is made, and you adjust per the complaint.
  3. A survey is sent out and you adjust per the responses.
  4. Adjustments have been made to the schedule and you adjust per the results of the adjustments.
  5. Type 3 error – execute process, see what the result is, and adjust your process based on how far your last result was from the target.
  6. Supply and demand – As supply and demand shift, you shift your strategy based on the current supply and demand.
  7. The Stock Market changes, and everyone adjusts based on the results of the changes. If a stock goes up, everyone buys and increases demand which makes the stock value go up. On the contrary, if a stock goes down, everyone sells and decreases the demand which makes the stock value go down.
  8. Farmers plant a lot of one crop one year, demand goes down in the short term, so they plant a different crop the following year that has a higher demand. In the meantime, the demand for the crop goes up as fewer farmers produce it.
  9. Aim at Last Target – Worst type of tampering.
  10. Train the trainer – Train somebody, they don’t get it all. Then they train someone else. And after this pattern is followed, the process is lost over the course of time.
  11. Passing down information – Information passed from person to person. The information is changed over the course of each transmission. People are left out and don’t get any information.
  12. Meeting times – Meeting is planned at 8. People don’t show up till 8:15. So, you change the meeting time to 8:15. People don’t show up till 8:30. So, you change the meeting time to 8:30. People still don’t show up on time, so you cancel the meeting.

 

Rather than tampering, it is best to observe over a period of time as much of the variability as is possible.

 

Deming Funnel

How best intentions can make things worse


Teamwork Reimagined

Imagine the possibilities of a world powered by teamwork, guided by a culture of “we” not “me” thinking and actions.


Imagine the possibilities of a world powered by teamwork, guided by a culture of “we” not “me” thinking and actions. Kevin Cahill, Executive Director of The W. Edwards Deming Institute®, explores a new vision of teamwork and the limitless potential and connecting power of a collaborative society. Kevin Cahill volunteers full-time as the Executive Director of The W. Edwards Deming Institute®, a non-profit organization dedicated to enriching society through The Deming Philosophy. He also serves on the Board of Trustees as their President and is Dr. Deming’s grandson. Kevin is responsible for guiding the global efforts of The Deming Institute.

A key takeaway from Kevin's talk, Teamwork Re-imagined, is the dire need for Constancy of Purpose. In this video at about 6:26, Kevin shares a story about a time he started a company and was meeting with the 12 people working for him. He asked what everyone was working hard on and giving their best efforts towards. They all said they were working towards The Aim. He had them all right down what The Aim was on a piece of paper and every single one of them had a different understanding of The Aim. This lack of constancy of purpose was pulling 12 people in potentially 12 different directions. How many directions is Peczuh being pulled? Do we know what it will take to establish Constancy of Purpose?