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Importance of Continuous Improvement: Stay Ahead of Your Competition

By Alan Gehringer

    Thu, Dec 12, 2019 @ 11:00 AM Strategies for Growth

    How effective are your continuous improvement efforts? Stay ahead of your competition with continuous improvement efforts

    I focus a lot of my attention on top-line growth these days, but that by no means undermines the importance of improving what you do. I love cars of all types, especially sports oriented cars and exotic cars, but there is one automaker who is the king of continuous improvement and you probably guessed who it is - Toyota, of course. I have owned many of their autos and currently, have two in the stable along with a little something German. (You do have to infuse a little fun into things, right?) Toyota has created the strongest culture of continuous improvement on the planet. They continue to do what they do better every day, and every employee in the organization owns it. I like to tell the story of visiting their plant in Kentucky several years ago and as we gathered in the lobby to prepare for our tour, the person coordinating us asked us to form two lines and arrange ourselves alphabetically so that she could process us efficiently. I had to smile as these guys get continuous improvement and what most of us call Lean practices today. 

    The term "Lean" was coined to describe Toyota's business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle Program. It is the idea of maximizing customer value while minimizing waste. It got a lot of attention in the manufacturing world but is just as important in the front office or in any type of business as it is on the manufacturing floor. In fact, there are usually more gains to be found these days in an office setting than on the shop floor. It is a way of thinking and an approach to how you run your organization. 

    I have heard a lot of companies tell me they practice Lean through the years, but very few actually do it to the level Toyota does. I had a local client put it off for years by believing they were doing just fine with their improvement efforts. Once I finally got them started on the Lean Journey, the gains were impressive. Two years in, they were saving 1-1.5 million dollars a year. These savings went straight to the bottom line and continue year after year. Not to mention, improving their processes made a difference in the value the customer received and the experience they had.

    "Just as a carpenter needs a vision of what to build in order to get the full benefit of a hammer, Lean Thinkers need a vision before picking up our lean tools," said Womack. "Thinking deeply about purpose, process, people is the key to doing this."

    House of Lean

    So, let’s take a look at the “House of Lean” as it sometimes called. Here are the usual components that make it up.

    House of Lean

    There are more detailed diagrams available, and there are a lot more tools in the arsenal, but this is a good example to get started on your journey.

    The Lean Basics include:

    • Value Stream Mapping
    • 5S – Sort, Set in Order, Shine, Standardize and Sustain
    • Total Productive Maintenance
    • Single Minute Exchange of Dies – SMED or Quick Changeover
    • Standardized Work
    • Point of Use Storage – POUS
    • Quality at the Source
    • Cellular Work Layouts
    • Reducing Batch Size to strive for Single Piece Flow
    • Creating a visual environment that is easier to understand and work with
    • Pull/Kanban Systems 

    How do you get started?

    I have guided many companies through the process and it usually starts with some basic Lean education like a Lean 101 course and having team members read one of the foundational works like Lean Thinking by Womack and Jones. The training can be done on site by a qualified Lean specialist. It is also important to assign a Lean Champion who will be responsible for leading the charge and coordinating the efforts, and you must have top down buy in from leadership to be successful.

    The next step is to choose an area in the company that has the most opportunity. Some refer to this as picking the low hanging fruit. It’s important to take this approach for two reasons, first you want to be successful to begin building momentum and gain followers. Secondly, it’s advantageous to capitalize on the monetary gains from the effort and improve the value the customer experiences. Once you identify the area to start in, perform a value stream map. This process will analyze the existing processes, flow, and wait times to establish a baseline while providing guidance on what tools to use to begin improving the value chain.

    Womack and Jones recommend that managers and executives embarking on lean transformations think about three fundamental business issues that should guide the transformation of the entire organization:

    • Purpose: What customer problems will the enterprise solve to achieve its own purpose of prospering?
    • Process: How will the organization assess each major value stream to make sure each step is valuable, capable, available, adequate, flexible, and that all the steps are linked by flow, pull, and leveling?
    • People: How can the organization ensure that every important process has someone responsible for continually evaluating that value stream in terms of business purpose and lean process? How can everyone touching the value stream be actively engaged in operating it correctly and continually improving it? 
      (Source: Lean Enterprise Institute)

    Here are 7 easy steps for continuous improvement:

    1. Take a close look at your organization to determine where you need to improve value from the customers' view and where the greatest opportunity lies.
    2. Perform a value stream map of the current process.
    3. Develop a plan to begin making improvements and determine what tools will be used. 
    4. Schedule the Kaizen events.
    5. Establish a pull system based on process needs and your customers' requirements
    6. As you make improvements, document them.
    7. Start all over to reach for additional improvements once you achieved your initial goals.

    Starting the Lean journey is not difficult, it just requires commitment and the willingness to change. I have yet to see a company that hasn’t achieved gains once they began.

    So get started if you haven’t already and good luck on your Lean journey and developing a culture of continuous improvement. Remember, this is not optional in today’s competitive environment, it’s table stakes. If are not improving, your competition is, and you are falling further behind. 

    Share your stories as I would love to hear how your improvement efforts are going. Alan

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    Photo Credit: iStock by Getty Images

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